Strong result with higher income, lower losses and good cost control

SpareBank 1 SR-Bank ASA (SRBNK) achieved a pre-tax profit of NOK 880 million for the first quarter of 2021, compared with NOK 247 million for the same quarter last year. The result was characterised by increased income, efficient operations and significantly lower impairment losses compared with the same period last year. 

The return on equity after tax was 11.6%, compared with 3.4% for the same quarter last year. This is also an improvement on the previous quarter when the return on equity after tax was 9.7%.

Impairment losses on loans and guarantees amounted to NOK 121 million, compared with NOK 560 million in the same quarter last year and NOK 270 million in the previous quarter.

“We are finding that most of our customers are doing well, in spite of less activity due to the Covid-19 pandemic. Our corporate market advisers were in close contact with our customers throughout the first quarter and conducted no fewer than 2,000 advisory interviews with them. More than 90% of the companies have not required any form of payment deferral. In addition, a majority of our corporate customers say that they believe economic developments are as good or better than before the pandemic. Most of our customers have a good basis for continued good profitable development,” says Benedicte Schilbred Fasmer, CEO of SpareBank 1 SR-Bank.

The group’s operating costs amounted to NOK 612 million, which represents a moderate increase from NOK 592 million for the same period last year. Operating costs in the previous quarter were NOK 629 million.

“Both EiendomsMegler 1 and ForretningsPartner significantly improved their results this quarter compared with the same quarter last year. EiendomsMegler 1 saw the greatest improvement, which indicates that the housing market is strong. ForretningsPartner acquired the company Tveit Regnskap in March. This acquisition has provided us with a good basis for developing ForretningsPartner into a dominant actor in the industry with a presence across large parts of Southern Norway. Going forward, the acquisition will significantly increase turnover in the merged company, while at the same time it will be of major strategic significance for the development of our corporate market division,” says Benedicte Schilbred Fasmer, CEO of SpareBank 1 SR-Bank.

Q1 2021

• Pre-tax profit: NOK 880 million (NOK 247 million)
• Net profit for the quarter: NOK 718 million (NOK 221 million)
• Return on equity after tax: 11.6% (3.4%)
• Earnings per share: NOK 2.74 (NOK 0.77)
• Net interest income: NOK 995 million (NOK 1,081 million)
• Net commissions and other operating income: NOK 402 million (NOK 346 million)
• Net income from financial investments: NOK 216 million (NOK -28 million)
• Operating costs: NOK 612 million (NOK 592 million)
• Impairments on loans and financial liabilities: NOK 121 million (NOK 560 million)
• Total lending growth over past 12 months: 2.3% (5.3%)
• Growth in deposits over past 12 months: 21.4% (6.6%)
• Common Equity Tier 1 capital ratio: 18.1% (17.7%)
  (Q1 2020 in brackets) 

At the end of the first quarter of 2021, the Common Equity Tier 1 capital ratio was 18.1%, compared with 17.7% at the same time last year. On 28 April 2021, the annual general meeting granted the board special authorisation to approve payment of a dividend for the 2020 financial year of up to NOK 3.10, if the government’s rules permit this a later date. No potential dividend for 2020 has been included in the stated capital adequacy.

The group’s Common Equity Tier 1 capital ratio target is 16.7%, which is significantly above the authorities’ requirement of 15.2%.

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

Stavanger, 6 May 2021

Contact persons:
Benedicte Schilbred Fasmer, CEO, Tel. +47 950 60 034
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.