SpareBank 1 SMN's ordinary pre-loss banking operations were on a satisfactory trend in 2008 compared with the previous year, with a profit improvement of NOK 74 million to NOK 767 million. The increase is essentially due to growth in business volume and stable margins. Net interest income rose by NOK 220 million to NOK 1,345 million.
Pre-tax profit was NOK 778 million compared with NOK 1,045 million in 2007. Return on equity was 11.9% (18.9%). Total assets rose by 18.4% to NOK 84.7 billion.
Number 1 position strengthened
SpareBank 1 SMN strengthened its number 1 position throughout the region with a net increase in customers and lending growth in excess of the general growth in credit in the period.
Total outstanding loans increased by 15.2% in 2008 to reach NOK 71.3 billion, including loans transferred to SpareBank 1 Boligkreditt. The growth breaks down to 9.8% in the retail market and 24.3% in the corporate market. The bank is pleased to see more than 3,000 new retail customers and a solid influx of good corporate clients.
Aggregate deposits rose by 8.8% to NOK 35.3 billion. Growth in retail deposits was 9.3% and in corporate deposits 8.3%. A switch was seen in customers' savings pattern from savings products to bank deposits. Sales of fixed-rate deposits showed a marked increase.
Low losses
Net losses on loans and guarantees came to NOK 202 million compared with a net recovery of NOK 6 million in 2007. NOK 60 million relates to a single, sizeable, corporate sector exposure. A corresponding amount has been allocated to collective impairment write-downs.
The loss level is viewed as moderate to low. The bank expects an increase in defaults and losses in 2009.
Return on financial investments
In the fourth quarter the SpareBank 1 banks acquired BNbank ASA (formerly Glitnir Bank). SpareBank 1 SMN's 25% stake makes it the largest shareholder. Recognition of badwill upon the acquisition of BNbank and of the profit share amounted to NOK 528 million for SpareBank 1 SMN.
Weaker financial market conditions resulted in lower return on financial investments (down NOK 295 million) and a lower profit contribution from SpareBank 1 Gruppen (down NOK 383 million).
The drop in financial return is largely due to unrealised losses on shares and bonds. The profit contribution from SpareBank 1 Gruppen was weakened by a substantial deficit at SpareBank 1 Livsforsikring (life insurer) due to impaired financial return and loss recognition of an IT project.
Dividend of NOK 2.00
The Board of Directors recommends the Supervisory Board to approve a cash dividend of NOK 2.00 per PCC, altogether totalling NOK 116 million. The Directors also recommend a one-for-five bonus issue.
NOK 92 million is allocated to charitable purposes. This makes up 25% of the net profit after provision for dividends. The Directors' intention is that the bulk of the allocation should not be distributed, but should be added to the bank's tier 1 capital.
Humble and responsibly minded
"SpareBank 1 SMN has tackled the challenges brought by the global financial crisis in a creditable manner. The bank is in a satisfactory liquidity and equity capital position, and has not been exposed to the US subprime market or to international banks hit by bankruptcy. This has made it possible to focus on the bank's role of provider of capital to commerce and industry and other customers in the bank's market area," comments Finn Haugan, CEO at SpareBank 1 SMN.
"We are making full allowance for the fact that we are entering a recession with the challenges this entails for businesses and households. Much emphasis is being given to sound assessments and decisions that strike the best possible balance between the customer's funding concerns and the bank's capacity for growth and risk," says Finn Haugan.
Key figures
|
|
At 31.12.08
NOKm |
At 31.12.07
NOKm |
|
Total income
Pre-loss profit
Post-loss profit |
2169
980
616 |
2142
1040
844 |
Contact persons at SpareBank 1 SMN:
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
Trondheim, 4 February 2009
About SpareBank 1 SMN
SpareBank 1 SMN is mid-Norway's leading financial services group. It leads the region's retail and corporate market, and is positioned in 68 localities across the region.
We aim to be the recommended bank for customers in mid-Norway, and as 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 has about 1,100 employees and the following subsidiaries: SpareBank 1 SMN Finans, EiendomsMegler 1 Midt-Norge, Allegro Finans and Midt-Norge Regnskap.
SpareBank 1 SMN is one of six owners of SpareBank 1 Gruppen. For further information, visit our website at http://www.smn.no
Downloadable photo here.
