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SpareBank 1 SMN: Good result for SpareBank 1 SMN
The profit growth is mainly attributable to the group's continued growth in customers and income from core business. In addition, the accounts show limited cost growth and very low loan losses. Profit for the third quarter in isolation was NOK 443m.
"We are well pleased with the profit growth achieved in the first nine months of the year. With good earnings we are continuing to build up capital in keeping with the authorities' expectations and requirements. We are certain of attaining our target of a CET1 capital ratio of at least 13.5% by 30 June 2016. This target will be reached even though we now have normalised lending both to corporates and private borrowers," says CEO Finn Haugan.
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Net interest income totalled NOK 1,305m for the first nine months of 2014, a substantial increase of NOK 125m from the same period last year . The increase derives mainly from higher loan and deposit volumes. Commission income and other operating income increased by 5.0% to NOK 1,140m. Strong growth is primarily ascribable to increased commissions from SpareBank 1 Boligkreditt as a result of higher margins on home mortgage loans. The bank's subsidiaries show continued good earnings.
As targeted in the bank's capital plan, growth in lending to large corporate customers has been reduced for a period, but is again on the increase. Total lending to business and industry rose by 2.0% in in the 12 months to end-September. Lending to retail customers rose by 7.6% in the 12 months to end-September and the bank reinforced its market leader position, according to figures from Statistics Norway.
The bank has very low losses and low defaults. Net losses measure only 0.06% of total lending in the first nine months of 2014.
"The low loss figures mirror the situation in our region, where households and the business sector alike are characterised by secure and sound finances. The figures are also confirmation of our banking skills," says Finn Haugan.
The board of directors has adopted new targets for the bank's cost trend. They entail zero growth in the bank's nominal costs in 2015 and 2016.
" A shift in customer behaviour towards more self-service solutions and growing automation of internal work processes require changes in how we distribute our products and services. Through project SMN 2020 we are developing a new service concept with an adjusted cost level to make the bank the best for customer experience and give it renewed competitive power.
At end-September 2014, SpareBank 1 SMN's total assets amount to NOK 147bn, including loans transferred to the co-owned SpareBank 1 Boligkreditt and SpareBank 1 Næringskreditt .
In collaboration with Menon Business Economics, SpareBank 1 SMN has carried out a comprehensive and thorough analysis of regional economic development trends. This analysis was published in the bank's economic barometer earlier this week. In the barometer the bank presents economic forecasts for each of the three counties in our region.
The conclusion for the next two years is fairly clear: the economy of all three counties will continue on a good trend, but at a somewhat slower pace than the preceding year. The oil price and lower pace of investment in the oil and gas sector will have consequences, especially in Møre and Romsdal. North Trøndelag county will also see slightly lower output growth. For both counties, however, the change is limited to a reduction from 2 to 1 per cent growth . South Trøndelag, which has a large cyclically independent services sector, will maintain growth of 2 per cent .
"The findings in the bank's economic barometer support the bank's soberly optimistic view for the rest of 2014 and next year," says Finn Haugan.
Trondheim, 31 October 2014.
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
Copyright GlobeNewswire
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