SpareBank 1 SR-Bank ASA: Stable operating income, good cost control and low losses
The group posted a pre-tax profit of NOK 1,669 million as at 30 September 2015 compared with NOK 2,048 million in the same period last year. Its financial performance was characterised by stable operating income, good cost control, continued loss losses and less income from financial investments. The return on equity after tax was 10.9% compared with 15.0% for the same period in 2014. The pre-tax profit for the quarter in isolation was NOK 489 million (NOK 577 million), equivalent to a return on equity after tax of 9.3% (12.2%).
"I am pleased that we are maintaining our level of net interest income, despite serious competition for customers. We are constantly implementing different measures to maintain good cost-effectiveness, which is reflected by the fact that operating costs are falling. Many of our corporate customers are experiencing challenging times with many having to take the appropriate steps. This, together with close follow-up from the bank's capable advisers, means that our losses remain low and that we have a record low level of non-performing commitments," says Arne Austreid, the chief executive of SpareBank 1 SR-Bank.
The group's net interest income, including commissions and profit contributions from SpareBank 1 Boligkreditt and SpareBank 1 Næringskreditt, amounted to NOK 2,240 million compared with NOK 2,204 million for the same period in 2014. The results for the first three quarters of 2014 were affected by the non-recurring effect of NOK 202 million in connection with the bank's sale of its stake in Nets Holding AS.
Key figures as at 30 September 2015:
Pre-tax profit: NOK 1,669 million (NOK 2,048 million)
Net profit for the period: NOK 1,304 million (NOK 1,647 million)
Return on equity after tax: 10.9% (15.0%)
Earnings per share: NOK 5.10 (NOK 6.45)
Net interest income: NOK 1,915 million (NOK 1,749 million)
Net commissions and other operating income: NOK 1,160 million (NOK 1,327 million)
Net income from financial investments: NOK 317 million (NOK 662 million)
Operating costs: NOK 1,495 million (NOK 1,526 million)
Impairment losses on loans: NOK 228 million (NOK 164 million)
Total lending growth over last 12 months: 7.4% (3.5%)
Growth in deposits over last 12 months: 9.5% (14.9%)
Common equity tier 1 capital ratio: 12,2 % (11.3%)
(As at 30 September 2014 in brackets)
"Technological developments mean that more of our customers are meeting us in digital channels. This will increase going forward. Given that activity in the region has flattened out, we will implement further measures going forward to streamline costs to ensure continued good profitability. This will result in 50 fewer full-time equivalents during 2016. Earnings in our overall portfolio of loans will be increased and, combined with lower credit growth, will ensure that we achieve the authority's capital adequacy requirements," concludes Arne Austreid.
The full interim report is available for download from www.sr-bank.no.
Stavanger, 29 October 2015
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