Thanks to good banking operations and reduced loan losses, SpareBank 1 SMN posted its first ever post-tax profit in excess of NOK 1bn.
SpareBank 1 SMN achieved a profit of NOK 1,022m in 2010, an improvement of NOK 85m compared with the previous year. The annual accounts reflect strong growth and low losses and therefore good earnings on ordinary banking operations. This is accompanied by particularly solid profit contributions from SpareBank 1 Gruppen and EiendomsMegler 1 Midt-Norge. The bank's operating expenses were reduced in 2010 mainly as a result of the write-back of provision for AFP (early retirement) liabilities.
"We are very pleased with the highest ever profit recorded by the bank and with the fact that it is largely attributable to sound growth and a splendid effort on the part of the entire group. We note a good supply of customers, and the bank stands out as the growth winner during and after the financial crisis. This confirms that our choice of strategy in autumn 2008 has been crowned with success", says CEO Finn Haugan at SpareBank 1 SMN.
"We opted to focus on good customer service and normal lending practice in a period when
most of our competitors decided on a lower level of activity as a result of the financial crisis. The consequence is a large number of new customers and an enhanced reputation", says Mr Haugan.
The Board of Directors recommends the Supervisory Board to set a cash dividend of NOK 3.00 per equity capital certificate for 2010.
Highest growth in Norway
As of the third quarter 2010 SpareBank 1 SMN had the largest credit growth of all large and mid-sized banks in Norway with a 24% increase in aggregate outstanding loans. This rate of growth was maintained in the fourth quarter. The bank can point to an influx in 2010 of 5,500 new retail customers and 1,000 new corporate customers.
Over the course of last year SpareBank 1 SMN strengthened its position as leader of the field in Trøndelag and in Møre and Romsdal. Overall lending growth in the corporate market was 17.9% over the last 12 months compared with a general credit growth, according to Statistics Norway, of 3.7%. Just over half of the bank's lending growth is accounted for by loans taken over from BN Bank in Ålesund.
SpareBank 1 SMN maintains a solid position in the retail market with 9.9% growth in lending for residential purposes. The bank is making inroads in this market too, cf. figures from Statistics Norway showing a generalised growth of 6.5% among households in the same period.
Loan losses were halved compared with 2009, measuring a mere 0.16% of total loans. The cost-reduction programme "170 million in 2012" has had a substantial impact with savings of NOK 140m since the programme was launched in 2008. The bank's subsidiaries are also showing good growth and good proftability.
Fourth quarter 2010 - highlights:
· Profit before tax: NOK 1,282m (NOK 1,147m as of the fourth quarter 2009)
· Profit after tax: NOK 1,022m (NOK 937m)
· Return on equity: 14.6% (16.2%)
· Growth in lending: 13.2% (8.6%)
· Loan losses: NOK 132m (NOK 277m)
· Growth in deposits: 14.9% (5.5%)
· Tier 1 capital adequacy: 10.9% (10.5%)
· Earnings per equity capital certificate: NOK 6.43 (NOK 6.73)
SpareBank 1 SMN's total assets as of the fourth quarter are NOK 115.8bn, including loans transferred to the part-owned SpareBank 1 Boligkreditt.
Establishment of a foundation
The Board of Directors recommend the bank's Supervisory Board to set up a savings bank foundation. The object of the foundation, whose proposed name is Sparebankstiftelsen SMN, will be to assure long-term ownership of SpareBank 1 SMN through participation in private placings. The foundation will be allocated, by decisions of the Supervisory Board, parts of the provision for gifts for non-profit purposes.
Of the year's provision for gifts, 50% is proposed for allocation to the foundation, equivalent to NOK 96m. The same amount will be allocated to gifts for non-profit purposes.
Trondheim, 2 February 2011.
Contact persons at SpareBank 1 SMN:
CEO Finn Haugan on +47 900 41 002
Executive Vice President, Finance, Kjell Fordal on +47 905 41 672
Executive Vice President, Corporate Communications, Hans Tronstad on +47 941 78 322
About SpareBank 1 SMN
SpareBank 1 SMN is the region's leading financial services group. It leads the retail and corporate market, and is positioned in 43 localities across the region with a total of 54 offices.
We aim to be the recommended bank for customers in Trøndelag and in Møre and Romsdal, and as a local, independent savings bank we feel a special responsibility for stimulating growth and prosperity in the region. We base our business on closeness to our customers, good accessibility, a full product range and comprehensive financial advisory services.
Our head office is in Trondheim. The Group employs about 1,100 staff and includes the following subsidiaries: SpareBank 1 SMN Finans, EiendomsMegler 1 Midt-Norge, Allegro Finans and SpareBank 1 SMN Regnskap. It is the largest shareholder in BN Bank with a 33% stake.
SpareBank 1 SMN is one of six owners of SpareBank 1 Gruppen. For further information, visit our website at www.smn.no.
