SpareBank 1 SMN recorded a profit of NOK 321m in the first quarter of 2013, an increase of NOK 49m over the same period last year. SMN's financial position also strengthened.
The quarterly accounts reflect a strong income trend on ordinary operations, increased lending margins, low loan losses, good return on financial assets, positive profit growth for SpareBank 1 Gruppen and dampened growth in lending to business and industry.
"We are well satisfied with the quarter's profit performance. It contributes to strengthening the bank's capital adequacy in keeping with forthcoming government requirements," says Group CEO Finn Haugan at SpareBank 1 SMN.
Revised capital plan
The common equity tier 1 ratio has risen from 8.8% as of the first quarter 2012 to 10.4%. The Board of Directors adopted in December 2012 a new capital plan targeting a new minimum common equity tier 1 ratio of 12.5% by the end of 2015. The Board of Directors has now revised the capital plan.
"We are planning to increase the common equity tier 1 ratio to 14.5% by 1 July 2016. The level of ambition is new, whereas the measures proposed are unchanged," says Finn Haugan.
Accounts first quarter 2013 - highlights:
· Profit before tax: NOK 390m (333m in first quarter 2012)
· Profit after tax: NOK 321m (272m)
· Return on equity: 12.7% (13.0%)
· Growth in lending: 9.7% (9.9%)
· Growth in deposits: 7.4% (14.2%)
· Loan losses: NOK 17m (8m)
· Common equity tier 1 ratio: 10.4% (8.8%)
· Earnings per equity certificate (EC): NOK 1.55 (1.41)
Dampened growth
In the first quarter 2013 overall growth in lending was 2.1% to the retail segment and 1.4% to the corporate segment. Twelve-month growth to the same segments was 12.5% and 5.8% respectively, and the bank has strengthened its market position.
The bank has low losses and a low default rate, which reflect both the region's economy and the bank's portfolio quality. Net losses measure only 0.06% of total lending. Cost growth is reduced to 4%, with no growth recorded at the parent bank. The growth is due to a planned activity increase at the subsidiaries Eiendomsmegler 1 Midt-Norge and SpareBank 1 SMN Regnskap.
Commission income and other operating income rose by 35% to NOK 317m compared with the first quarter 2012. The strong growth is ascribed in all essentials to increased commissions from SpareBank 1 Boligkreditt resulting from higher margins on home mortgage loans. The bank's subsidiaries show continued solid progress.
At the end of the first quarter 2013 SpareBank 1 SMN's total assets came to NOK 141bn, including loans transferred to the co-owned SpareBank 1 Boligkreditt and SpareBank 1 Næringskreditt.
Healthy regional and national economy
"Continued turbulence in international financial markets is increasing the uncertainty in the national and the regional economy. Even so there are few signs Trøndelag and Møre and Romsdal to suggest major changes in the risk picture in the current year. We see continued good growth in home mortgage lending, whereas in the business market we will devote our growth capital chiefly to meeting our own group customers' needs in addition to a planned focus on small and mid-sized businesses. This is in keeping with the bank's capital plan," says Finn Haugan.
Trondheim, 25 April 2013.
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 51 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 1,200 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.
