SpareBank 1 SMN achieved a net profit NOK 272m in the first quarter 2012, an improvement of NOK 17m over the same period last year. The Bank strengthened its market position, in particular in the market for home mortgage loans.
The first quarter accounts are marked by a sound trend in the Bank's ordinary operations, positive income growth, a very low default rate and low losses, good return on financial assets, a robust financial position, very good lending growth in the retail market and high growth in household and corporate deposits alike.
"We are pleased with the Bank's performance thus far in 2012. Strong growth combined with very low losses have contributed to one of the best quarters ever delivered by the Bank. We are also gratified by the fact that a recently completed rights issue was heavily oversubscribed. This provides an even better basis for further profitable growth. The strengthening achieved in the Bank's market position, especially in the highly competitively exposed home loan market, confirms that our capable staff are delivering on a high level", says Group CEO at SpareBank 1 SMN, Finn Haugan.
First quarter accounts 2012 - highlights:
- Profit before tax: NOK 340m (325m in Q1 2011)
- Profit after tax: NOK 272m (255m)
- Return on equity: 13.0% (13.2%)
- Growth in lending: 9.9% (11.4%)
- Growth in deposits: 14.2% (14.1%)
- Loan losses: NOK 8m (-6m)
- Tier 1 capital adequacy: 10.3% (10.6%)
- Earnings per equity capital certificate: NOK 10.3 (10.6)
Strong growth in home mortgage loans
Overall 12-month growth in lending to the retail market was 12.4% compared with general household credit growth of 7.3% as of end-February 2102, according to Statistics Norway. High growth on the part of SpareBank 1 SMN is in evidence throughout the market area. In the period under review the Bank has intensified its effort above all in Trondheim where are now seeing particularly good net customer growth. A total of 550 new retail customers joined the Bank in the first quarter 2012.
SpareBank 1 SMN retains its solid position in the corporate market with 6.7% growth in lending. The Bank gained 150 new corporate customers in the first quarter, many of whom are the result of a systematic recruitment drive targeting particularly interesting firms and lines of business.
The Bank's subsidiaries continue to make solid progress. The largest of them - Eiendomsmegler 1 Midt-Norge, SpareBank 1 SMN Finans and SpareBank 1 SMN Regnskap - are strengthening their market position and profitability. Among the affiliates, SpareBank 1 Gruppen is singled out for its best ever profit performance. Both BN Bank and Bank 1 Oslo Akershus are showing profit growth.
Very low losses
Net loan losses came to NOK 8m in the first quarter 2012 compared with NOK 6m, net, taken to income in the same period last year. Net losses account for just 0.04% of total outstanding loans. No cause was found to revise collectively assessed impairment write-downs.
Net interest income came to NOK 351m compared with NOK 356m in the same period last year. The change is due to higher funding costs in the money market, but the interest margin strengthened during the quarter.
High activity levels at the Bank and its subsidiaries Eiendomsmegler 1 Midt-Norge and SpareBank 1 SMN Regnskap have brought higher costs compared with last year's first quarter.
SpareBank 1 SMN's total assets come to NOK 125bn as of the first quarter 2012, including loans transferred to the part-owned SpareBank 1 Boligkreditt.
Successful stock issues
In the first quarter 2012 SpareBank 1 SMN carried through a rights issue and a private placing with employees which strengthened the Bank's equity capital by a total of NOK 761m. The issues were registered with the Register of Business Enterprises on 11 April 2012, and thus have accounting effect in the second quarter 2012.
The above stock issues, together with a planned placing of NOK 200m mainly with the foundation Sparebankstiftelsen SpareBank 1 SMN, will strengthen the Group's capital ratio by about 1.3 percentage points, bringing the tier 1 capital ratio to about 11.6%. SpareBank 1 SMN's objective is a tier 1 capital ratio of 11%, an objective that was revised in autumn 2011 in light of the forthcoming increase in regulatory capital requirements.
Sound finances regionally and nationally
"Households and firms in Trøndelag and Møre and Romsdal, and in Norway as a whole, are in a sound financial position. Internationally the situation remains demanding, but SpareBank 1 SMN has virtually no direct foreign exposure and only negligible indirect exposure through customers", says Finn Haugan.
"The Bank has initiated a wide-ranging endeavour to strengthen customer orientation and enhance productivity. The Bank's directors and management have great expectations that this will promote profit growth for SpareBank 1 SMN", says SpareBank 1 SMN's CEO.
Trondheim, 26 April 2012
Contact persons at SpareBank 1 SMN:
Group 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'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.
