SpareBank 1 SR-Bank reports strong result

The group has reported the best result in its history, a result created by a motivated and efficient organisation and not least by a significantly strengthened market position. During the past year the group has acquired 15,000 new retail customers and 1,200 new corporate customers. At the same time, EiendomsMegler 1 sold some 1,000 housing units more than in 2008.

On 2009, SpareBank 1 SR-Bank achieved a pre-tax profit of NOK 1,432 million (NOK 643 million in 2008). The tax charge was NOK 321 million. This gives a profit after tax of NOK 1,111 million (NOK 480 million in 2008) and a return on equity after tax of 17.5 per cent (8.0 per cent in 2008).

"I am well satisfied. The group has come through a turbulent year in a good manner. The 2009 result is extremely good, especially taking into consideration the uncertainty we experienced at the beginning of the year", says Terje Vareberg, SpareBank 1 SR-Bank's chief executive.  

The underlying banking operations developed well in 2009. The interest margin has gone down a little as result of economic fluctuations and higher funding costs. The positive performance of the finance markets contributed to the net return on the group's investment securities rising sharply from 2008 to 2009. In 2009, loan loss provisions were slightly lower than in 2008.    

Through capital inflow from the market, the capital base was strengthened, by new equity amounting to NOK 1,228 million and a Tier 1 perpetual bond issue of NOK 800 million. The core capital ratio rose during 2009 from 6.4 per cent to 9.6 per cent in 2009.

"The fact that private investors place their capital at our disposal, and view SpareBank 1 SR-Bank as an attractive investment must be seen as a vote of confidence. It was therefore unnecessary to avail ourselves of capital from the Norwegian State Finance Fund", says Vareberg.

The profit before tax in the 4th quarter of 2009, seen in isolation, was NOK 437 million (NOK 10 million in the 4th quarter of 2008). Return on equity after tax was 18.2 per cent (2.0 per cent). Provisions for loan losses were moderate.

Key figures 2009:

• Group profit before tax: NOK 1,432 million (NOK 643 million).  

• Profit after tax: NOK 1,111 million (NOK 480 million). 

• Return on equity after tax: 17.5 % (8.0 %).  

• Net loan loss provisions: NOK 368 million (NOK 386 million). 

• Net interest income: NOK 1,676 million (NOK 1,644 million). 

• Net commission and other income: NOK 998 million (NOK 796 million). 

• Net return on investment securities: NOK 705 million (NOK 42 million). 

• Growth in lending last 12 months (incl. Boligkreditt): 5.3 % (20.2 %)  

• Growth in deposits last 12 months: 2.4 % (5.5 %).    

• Earnings per equity certificate: NOK 6.88 (NOK 3.00).  

• The Board proposes a dividend of NOK 1.75 (NOK 0.83) per equity certificate.   

• The Board proposes that NOK 158 million (NOK 20 million) be allocated to the Endowment Fund.  

• Core capital ratio (taking into account the Board's proposal relating to dividend): 9.6% (6.4%).
  (2008 in parentheses) 

The group is well positioned for growth and new business opportunities. The market is showing clear signs of improvement, national and international.

"Most countries in the Western world are now out or on their way out of recession. The levels of petroleum investments, which are important for the activity in the group's market areas, are expected to remain high. We are ready to exploit such positive market development", says Vareberg, who is impressed by the effectiveness of the group's employees.

"During the year under review we reduced manpower by about 80 man-years. Simultaneously, sick-leave declined. Lending grew by 5 per cent. On top of which we got 15,000 new private customers and 1,200 new corporate customers. This shows that we are an efficient and forward looking organisation", says Vareberg.

The full report can be downloaded from the following link: www.sr-bank.no.

Stavanger, 4 February 2010

Contacts:
Terje Vareberg, Chief Executive Officer, telephone: +47 911 00 448
Thor-Christian Haugland, Executive Vice President, Communications and Public Relations,
Telephone: 47 480 31 633
Kyrre M. Knudsen, IR-Manager, Telephone: 938 83 518