SpareBank 1 SR-Bank ASA (SRBANK); A good underlying result and a substantial one-off financial gain
SpareBank 1 SR-Bank posted a pre-tax profit of NOK 1,323 million at the end of the first quarter, compared with NOK 668 million for the same period last year. The result was affected by good underlying operations and a substantial one-time financial gain of NOK 460 million. The gain resulted from the completed merger between SpareBank 1 Skadeforsikring AS and DNB Forsikring AS, which now make up Fremtind AS. The return on equity after tax was 21,2%, compared with 10.3% for the same period in 2018. Excluding the overall effect of the one-off financial gain, the return on equity for the quarter was 12.8%. The bank’s common equity tier 1 capital ratio was 14.7% as at 31 March 2019.
“I am very satisfied with the result, which was due to both good, efficient operations in the group’s many business areas and a substantial one-off financial effect. The level of activity in Southern and Western Norway is now back to a normal level, which in turn is shown by the lower unemployment figures. In 2018, we established a branch in Oslo and at the same time focused on increased activity in existing markets. This has resulted in both new customers and greater demand for our products and services,” says Arne Austreid, the chief executive of SpareBank 1 SR-Bank.
The group's operating costs amounted to NOK 583 million in the first quarter of 2019, compared with NOK 539 million for the same period last year. The increase was due to increased activity in the group, and new priorities that were implemented during the course of 2018. The cost/income ratio at the end of the quarter was 29,8%, compared with 42.1% for the same period last year. Less one-off effects, the cost/income ratio was 39.0%.
“In line with the group’s strategy, we are constantly striving to systematically improve our total range of customer services. We are doing this by investing in and introducing more customer-friendly digital solutions, while strengthening our physical presence in new markets. This results in higher costs, which we expect to benefit from in the form of improved profitability going forward. Our underlying cost-effectiveness is nevertheless good,” says Arne Austreid.
- Pre-tax profit: NOK 1,323 million (NOK 668 million)
- Net profit for the year: NOK 1,146 million (NOK 518 million)
- Return on equity after tax: 21,2% (10.3%)
- Earnings per share: NOK 4.48 (NOK 2.03)
- Net interest income: NOK 938 million (NOK 800 million)
- Net commissions and other operating income: NOK 341 million (NOK 368 million)
- Net income from financial investments: NOK 676 million (NOK 113 million)
- Operating costs: NOK 583 million (NOK 539 million)
- Impairments on loans and financial liabilities: NOK 49 million (NOK 74 million)
- Total lending growth over last 12 months: 8.7% (3.1%)
- Growth in deposits over last 12 months: -0.6% (7.0%)
- Common equity tier 1 capital ratio: 14.7% (15.0%)
- Tier 1 capital ratio: 16.0% (16.0%)
(Q1 2018 in brackets)
The group recognised NOK 49 million in net impairment on loans and financial liabilities in the first quarter of 2019, compared with NOK 74 million in the same period last year and NOK 92 million in the fourth quarter of 2018.
“In spite of the fact that the overall level of activity in Southern and Western Norway is high, some oil-related businesses are still facing challenges,” emphasises Arne Austreid.
The full interim report is available for download from www.sr-bank.no.
Stavanger, 9 May 2019
Arne Austreid, CEO, Tel. +47 900 77 334
Inge Reinertsen, CFO, Tel. +47 909 95 033
Stian Helgøy, Vice President Investor Relations, Tel. +47 906 52 173
Thor-Christian Haugland, Executive Vice President Communications, Tel. +47 480 31 633
This information is disclosed in compliance with section 5-12 of the Securities Trading Act