SpareBank 1 SR-Bank ASA (SRBANK); A very good result marked by good operations, low losses, and significant financial income
SpareBank 1 SR-Bank achieved a pre-tax profit of NOK 2,432 million in the first half of 2019, compared with NOK 1,422 million in the same period last year. The results were marked by good operations, a higher influx of customers, low impairment losses, and a significant contribution from the bank’s financial investments. The return on equity after tax was 18.8%, compared with 11.4 % for the same period in 2018. With the effects of the Fremtind Forsikring AS merger taken into account, the return on equity after tax was 14.7%.
Impairment losses on loans and guarantees totalled NOK 30 million, compared with NOK 173 million in the same period last year. The total includes receipts of NOK 92 million on previous impairments losses following a judgement handed down by Borgarting Court of Appeal on 13 May being made legally enforceable in June.
The group’s operating costs amounted to NOK 1,185 million, an increase of NOK 74 million compared with the same period last year. The increase was mainly attributable to increased activity, investments in new technology, and the growth of Regnskapshuset SR AS and FinStart Nordic AS. The cost/income ratio was 32.5%, down from 41.1% in the first half of 2018.
Net income from financial investments amounted to NOK 1,016 million, compared with NOK 326 million in the same period last year. The increase was due to both merger income amounting to NOK 460 million in connection with the establishment Fremtind Forsikring AS and a higher profit contribution from SpareBank 1 Gruppen amounting to NOK 107 million.
“The group’s results for both the quarter in isolation and the first half of the year were very good. The profitability from ordinary operations was very good and there were also significant one-off effects during the half-year. I am particularly pleased that we are seeing a higher influx of customers in all markets thanks to the good work of all of our employees in the group’s many business areas,” said Arne Austreid, chief executive of SpareBank 1 SR-Bank.
The pre-tax profit for the quarter seen in isolation was NOK 1,109 million, compared with NOK 754 million last year, which is equivalent to a return on equity after tax of 16.2%, compared with 12.3% for the second quarter of 2018.
First half-year 2019
- Pre-tax profit: NOK 2,432 million (NOK 1,422 million)
- Net profit for the first half-year: NOK 2,046 million (NOK 1,135 million)
- Return on equity after tax: 18.8% (11.4%)
- Return on equity after tax, excl. Fremtind Forsikring AS merger effects: 14.7%
- Earnings per share: NOK 8.00 (NOK 4.44)
- Net interest income: NOK 1,906 million (NOK 1,642 million)
- Net commissions and other operating income: NOK 725 million (NOK 738 million)
- Net income from financial investments: NOK 1,016 million (NOK 326 million)
- Operating costs: NOK 1,185 million (NOK 1,111 million)
- Impairment losses on loans and financial commitments: NOK 30 million (NOK 173 million)
- Total lending growth over last 12 months: 7.3% (5.0%)
- Growth in deposits over last 12 months: -3.0% (6.1%)
- Common equity tier 1 capital ratio: 14.4% (14.8%)
- Tier 1 capital ratio: 15.8% (15.7%)
(H1 2018 figures in brackets)
“Total lending to our customers throughout Southern Norway has now exceeded NOK 207 billion. During the second quarter, the growth in lending to retail customers has increased, whereas the pace of the growth in lending to corporate customers has fallen in accordance with our plans. Going forward, slightly lower lending growth in the corporate market, coupled with continued good profitability, will strengthen our common equity tier 1 capital ratio in accordance with our established goals,” said Arne Austreid.
The full half-yearly report is available for download from www.sr-bank.no.
Stavanger, 8 August 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