SpareBank 1 SMN : High growth and solid operations brought increased profit.

High growth and solid operations brought increased profit
SpareBank 1 SMN recorded a profit of NOK 1,250m in the first nine months of the current year compared with NOK 1,185m in the same period last year. High growth and a large influx of new customers again made their mark on the quarter.

The year's first nine months at SpareBank 1 SMN feature strengthened operating profit, reduced loan losses, good sales in all product areas, a strong financial position along with high growth and many new customers.

"We are well pleased with the fact that as many as 8,250 personal customers and 450 firms have opted for us as their new main bank so far this year. We view this as an expression of confidence and confirmation of our strong position as a digital bank with a local and personal signature", says Finn Haugan, Group CEO at SpareBank 1 SMN.

Market position strengthened
The bank increased its lending to personal customers by 10.3 per cent to NOK 96.4bn in the twelve months to end-September. Lending to corporate customers rose by 7.9 per cent to NOK 50.8bn, the growth stemming mainly from small businesses. This is in keeping with the bank's plan for differentiated growth with a focus on small and medium-sized businesses.

"SpareBank 1 SMN is reinforcing its position in Trøndelag and in Møre and Romsdal through solid growth among retail customers and firms alike. The lending growth is evidence that our region is faring well and that we are competitive throughout the Group," says Finn Haugan.

Reduced CET1 capital adequacy
As of the third quarter the bank has a CET1 capital ratio of 14.7%. This a reduction of 0.25 percentage points in the quarter, and is due to regulatory factors along with relatively high growth on the corporate customer front. The targeted CET1 ratio of 15.0% stands firm.

Net interest income rose by NOK 212m to NOK 1,603m compared with the same period last year. The increase is due mainly to lending growth and increased lending margins.

Group costs increased by NOK 230m, largely due to the subsidiary SpareBank 1 SMN Regnskapshuset's acquisition of Økonomisenteret in Molde in January this year. Parent bank costs have risen by NOK 16m. Staff costs are reduced, but the overall increase is attributable to the introduction of a new tax on financial sector employers and to a changed pension scheme. The target of zero growth in parent bank costs in 2017 is retained.

Lower losses
Losses are considerably reduced compared with the same period last year with a decline of NOK 154m to NOK 263m. The losses relate mainly to the offshore segment.

"We are keeping a close eye on economic developments in Trøndelag and Møre and Romsdal, and a considerable improvement is in evidence, also in those parts of the region that have faced challenges. Our economic barometer, which takes the pulse of the region's business and industry, shows that businesses are more optimistic and prospects are brighter. This is also reflected in lower losses for the bank," says CEO Finn Haugan.

Growing optimism in the region
This year's edition of SpareBank 1 SMN's economic barometer for Trøndelag and Møre and Romsdal was presented earlier this week. The main points in this year's barometer are:

• The oil slump appears to be over this time round, and optimism is again growing across all three counties in our region
• The bank has analysed the financial statements of some 40,000 businesses in our region. The conclusion is clear: the region has a robust industry structure which holds its own both in good and more challenging times
• The 2016 accounts show sound growth and increased profitability in Trøndelag. In Møre and Romsdal overall turnover is receding, but profitability remains stable
• The sea gives and the sea takes away: seafarming and fisheries are blooming as never before, while maritime industry and offshore are finding the going tough.

Read more at smn.no/konjunkturbarometeret

Accounts for first nine months of 2017 - key figures:

• Pre-tax profit: NOK 1,568m (1,430m same period 2016)
• Post-tax profit: NOK 1,250m (1,185m)
• Return on equity: 10.8% (11.0%)
• Growth in lending: 9.4% (6.6%)
• Growth in deposits: 10.3% (4.2%)
• Loan losses: NOK 263m (417m)
• CET1 capital ratio: 14.7% (14.3%)
• Earnings per EC: NOK 6.06 (5.70)
   
   

Link to the quarterly report: http://quarterlyreport.smn.no/2017/

Trondheim, 26 October 2017

Contact persons at SpareBank 1 SMN:
Executive Vice President, Finance, Kjell Fordal on +47 905 41 672
Vice President, Corporate Communications, Hans Tronstad on +47 941 78 322