SpareBank 1 SR-Bank ASA (SRBANK); A strong result marked by good operations, increased activity and lower losses

SpareBank 1 SR-Bank posted a pre-tax profit of NOK 2,216 million as at 30 September 2018, compared with NOK 1,910 million for the same period last year. The results were marked by good operations, increased activity in the corporate market, greater demand for mortgages and lower losses compared with the same period last year. The return on equity after tax was 11.7%, compared with 10.9% per the third quarter of 2017. Impairment losses on loans and guarantees totalled NOK 232 million, compared with NOK 423 million in the same period last year.

The pre-tax profit for the quarter seen in isolation was NOK 794 million, compared with NOK 750 million last year, which is equivalent to a return on equity after tax of 12.6%, compared with 12,9% for the third quarter of 2017.

The group’s operating costs amounted to NOK 1,653 million, an increase of NOK 56 million compared with the same period last year. This corresponds to a cost/income ratio of 40.3%, down from 40.6% in the same period last year.  

“The increase in costs was primarily due to increased activity in several areas in the group. We have also focused on and built up our startup factory, FinStart Nordic. This company is now rigged to make further investments in new companies and help to develop these such that our overall market provision will be better and even more tailored to the customer’s needs,” says the chief executive of SpareBank 1 SR-Bank, Arne Austreid.  

Lending growth in the last 12 months was 6.1% compared with 1.2% at the end of the third quarter of last year.  

“Demand for credit is growing, both from companies and private individuals. Including also in Rogaland now, due to increased activity and greater optimism in that part of our market area. In addition to this, profitable growth is being affected by the fact that we have been well-received in the market in and around Oslo, where we established a presence in March this year,” says Arne Austreid. 

Year-to-date as at 30 September 2018

• Pre-tax profit: NOK 2,216 million (NOK 1,910 million)
• Net profit for the quarter: NOK 1,769 million (NOK 1,527 million)
• Return on equity after tax: 11.7% (10.9%)
• Earnings per share: NOK 6.92 (NOK 5.98)
• Net interest income: NOK 2,513 million (NOK 2,343 million)
• Net commissions & other operating income: NOK 1,087 million (NOK 1,157 million)
• Net income from financial investments: NOK 501 million (NOK 430 million)
• Operating costs: NOK 1,653 million (NOK 1,597 million)
• Impairment losses on loans: NOK 232 million (NOK 423 million)
• Total lending growth over last 12 months: 6.1% (1.2%)
• Growth in deposits over last 12 months: 1.7% (13.0%)
• Common equity tier 1 capital ratio: 14.7% (14.8%)
• Tier 1 capital ratio: 16% (15.8%)
  (Year-to-date as at 30 September 2017 in brackets)
  

Q3 2018 – in isolation

• Pre-tax profit: NOK 794 million (NOK 750 million)
• Net profit for the quarter: NOK 634 million (NOK 610 million)
• Return on equity after tax: 12.6% (12.9%)
• Earnings per share: NOK 2.48 (NOK 2.39)
• Net interest income: NOK 871 million (NOK 820 million)
• Net commissions & other operating income: NOK 349 million (NOK 386 million)
• Net income from financial investments: NOK 175 million (NOK 198 million)
• Operating costs: NOK 542 million (NOK 530 million)
• Impairment losses on loans: NOK 59 million (NOK 124 million)
  (Q3 2017 – in isolation – in brackets)

“After several years of declining activity in Rogaland, there are now clear signs of improvement among many companies in the oil industry. The expectation going forward is that this positive trend will continue. We believe this will result in increased turnover, increased investments and more jobs. This, combined with the fact that the levels of activity in Hordaland and the Agder counties are expected to remain good, means that we can see many opportunities for continued profitable growth going forward,” says Arne Austreid.

The full interim report is available for download from www.sr-bank.no.

Stavanger, 25 October 2018

Contact people:
Arne Austreid, CEO, Tel. +47 90077334
Inge Reinertsen, CFO, Tel. +47 90995033
Stian Helgøy, Vice President Investor Relations, Tel. +47 90652173
Thor-Christian Haugland, Executive Vice President Communications, Tel. +47 48031633