SpareBank 1 SMN posted a net profit NOK 1,024m in 2012, an improvement of NOK 2m compared with the previous year.
The Board of Directors recommends the Supervisory Board to set a cash dividend of NOK 2.00 per equity capital certificate for 2011.
The annual accounts reflect well-run core business, positive income growth, low losses, high return on financial assets, a strong financial position, very good lending growth in the retail market and high growth in household and corporate deposits alike.
"We are gratified by the good profit achieved by the bank in 2011 and by the fact that this is due to solid banking and high financial return. We note a good supply of customers, with net growth of 3,600 new retail customers and 600 new corporate customers last year. SpareBank 1 SMN strengthened its market leader position in Trøndelag and in Møre and Romsdal over the course of the year", says Group CEO Finn Haugan at SpareBank 1 SMN.
Net interest income came to NOK 1,281m, an increase of NOK 71m. The increase is mainly due to higher lending and deposit volumes, increased commissions and the fact that banks are exempt from payment of levies to the Banks' Guarantee Fund for 2011.
Strong growth in home mortgage loans
Overall growth in lending to the retail market was 10.9% in the last 12 months compared with general household credit growth of 7.3%, according to Statistics Norway. High growth is in evidence throughout the market area, with particularly good net customer growth in Trondheim.
SpareBank 1 SMN retains its solid position in the corporate market with 5.7% growth in lending. Here too the bank is gaining new market shares, as reflected by Statistics Norway figures showing a general growth of 5.3% in the same period.
Net loan losses amounted to NOK 27m in 2011 compared with NOK 132m in 2010. Net losses measure only 0.03% of total outstanding loans. No reason has been found to revise collectively assessed write-downs. Moreover, the bank's subsidiaries show sound growth and sound profitability.
High activity levels in the bank and the subsidiaries EiendomsMegler 1 Midt-Norge and SpareBank 1 SMN Regnskap produced higher costs compared with the previous year.
Preliminary annual accounts 2011 - highlights:
· Profit before tax: NOK 1,279m (NOK 1,282m in 2010)
· Profit after tax: NOK 1,024m (NOK 1,022m)
· Return on equity: 12.8% (14.6%)
· Growth in lending: 8.6% (13.2%)
· Growth in deposits: 11.9% (14.9%)
· Loan losses: NOK 27m (NOK 132m)
· Tier 1 capital adequacy: 10.4% (10.9%)
· Earnings per equity capital certificate: NOK 6.61 (NOK 6.43)
· Recommended dividend per equity capital certificate: NOK 2.00 (NOK 3.00)
SpareBank 1 SMN's total assets as of the fourth quarter are NOK 123.5bn, including loans transferred to the part-owned SpareBank 1 Boligkreditt.
Equity capital to be strengthened
The Board of Directors of SpareBank 1 SMN proposes to carry out an equity capital increase of up to NOK 1,010m.
This will be done through an underwritten rights issue of up to NOK 750m in favour of existing ECC-holders, a private placing of up to NOK 60m with employees of the Group and board members of the bank, and a private placing of up to NOK 200m mainly with the foundation Sparebankstiftelsen SpareBank 1 SMN.
The bank intends through these issue proposals to strengthen core capital and the financial basis for profitable growth and for exploiting business potentials in its market area. The bank considers it valuable for employees of the group and the bank's directors to have the opportunity to subscribe for equity capital certificates through a private placing. A private placing with the foundation will be in keeping with bank's strategy behind the establishment of Sparebankstiftelsen SpareBank 1 SMN.
SpareBank 1 SMN's objective is a tier 1 capital ratio of 11%, a target that was revised in autumn 2011 in light of the forthcoming increase in regulatory capital requirements. The planned stock issues are expected to raise the tier 1 ratio to 11.6%.
Trondheim, 1 February 2012
Contact persons at SpareBank 1 SMN:
Group CEO Finn Haugan on +47 900 41 002
Chief Financial Officer 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's municipalities with a total of 54 offices.
We aim to be the recommended bank for customers in Trøndelag and in Møre and Romsdal. Being 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.
