The accounts are set up in accordance with the new Accounting Act. The main changes refer to consolidation of subsidiaries by the equity method in the parent bank and to entry of net deferred tax benefit in the balance sheet. See also note 1.
Unless otherwise stated, the comments and figures below refer to the Sparebanken Midt-Norge Group.
Best performance ever
Sparebanken Midt-Norge's result of ordinary operations came to NOK 437 million in 1999, i.e. NOK 106 million up on last year. The ordinary result measures 1.82 % of average total assets (ATA) compared with 1.52 % in 1998. Return on equity, after estimated tax, was 18.9 % compared with 14.3 % last year.
The result for the fourth quarter alone was NOK 76 million.
The good performance is ascribable to sound growth, im- proved net interest income and price gains on securities.
The cost trend is satisfactory. Relative operating expenses measure 2.34 % of ATA and 53 % of income, i.e. a fall of 6 percentage point on 1998.
Loan losses total NOK 106 million, net, compared with NOK 38 million in 1998.
The result effect of FöreningsSparbankens entry into SpareBank 1 Gruppen AS is entered as income in an amount of NOK 51 million.
The post-tax result was NOK 331 million, i.e. NOK 87 million higher than at the end of 1998.
Proposed application of the profit
Of the profit of NOK 331 million, the Directors proposes a cash dividend of NOK 17 per primary capital certificate, i.e. NOK 102 million; NOK 92 million to be set aside to the dividend equalisation fund and the remainder, NOK 137 million, to be transferred to the savings bank's fund.
In connection with the new Accounting Act the opening balance was reworked.
In 1999 the bank raised a new subordinated loan of NOK 150 million.
Strong growth in deposits and lending
At year-end total assets came to NOK 26.4 billion, i.e. an increase of NOK 3.8 billion on the end of 1998.
Lending growth totalled NOK 2.8 billion or 13.8 %, breaking down to 15 % on corporate customers and 13 % on personal customers. As at 31.12.99 loans to personal customers accounted for 56.8 % of the total. Customer deposits amounted to NOK 15.2 billion, i.e. an increase of NOK 1.3 billion or 9.5 %. The sound growth is above all attributable to a stronger focus on higher deposits from and loans to the personal market.
Improvement in 2001
In April the Directors implemented a comprehensive programme to improve deposit and lending growth and sales of investment and insurance products, above all on the personal customer front. Steps were also taken to enhance quality. The programme has incentive schemes attached, and good results triggered employee bonuses varying according to the degree to which the programme's objectives were achieved.
Higher net interest income
Net interest income rose NOK 60 million from 1998 to 1999, and at year-end came to NOK 767 million. The relative interest margin in the fourth quarter showed no change on the second and third quarter, i.e. NOK 189 million. The relative interest margin was 3.20 % for the year as a whole compared with 3.26 % at the end of 1998. The fourth quarter figure was 2.94 %.
Price gains and commission earnings
Price gains on securities and dividend came to NOK 94 million compared with NOK 18 million the previous year. Of the gains on securities, NOK 36 million is attributable to a change in accounting principles allows the bank to take to income unrealised gains on securities in the trading portfolio as from 1999.
Commission earnings total NOK 235 million, i.e. an increase of NOK 25 million over 1998.
Operating expenses
The bank's operating expenses totalled NOK 560 million, breaking down to NOK 286 million to personnel expen-ses and NOK 274 million on other operating expenses. Personnel expenses were NOK 33 million higher than in 1998 owing to a costly wage round and expensing of a bonus of NOK 20 million in 1999.
Person-years worked in the parent bank came to 601 as at 31 December 1999, an increase of 11 on the end of 1998. At the same point Group staff totalled 818 employees, equivalent to 675 person-years.
Other operating expenses rose by NOK 4 million from 1998 to 1999. Total operating expenses measured 2.34 % of ATA in 1999 compared with 2.42 % in 1998.
Loan losses
Net loan losses for 1999 were recorded in an amount of NOK 106 million compared with NOK 38 million in 1998.
Specified loan losses came to NOK 109 million, breaking down to NOK 31 million on personal customers and NOK 78 million on corporate customers. Incomings on previously verified losses and reduction of specified loss provisions total NOK 59 million. Additional loss upon resulting from new loss verification came to NOK 10 million. Specified loss provisions amount to NOK 448 million. General loss provisions totalled NOK 46 million in 1999, of which NOK 17 million refers to the last quarter. General loss provisions came to NOK 302 million at year-end, equivalent to 1.32 % of the bank's outstanding loans.
Defaults in excess of 30 days were reduced by NOK 128 million to NOK 754 million over the year. The reduction breaks down to NOK 62 million on personal customers and NOK 66 million on corporate customers.
Subsidiaries
Subsidiaries and associated companies contributed a total of NOK 16 million, i.e. NOK 3 million more than the previous year. Of this figure, NOK 8 million constitutes the bank's share of Sparebank 1 Gruppen AS's ordinary operating profit.
For full report including tables, follow the enclosed link:
