SpareBank 1 Østlandet’s consolidated profit after tax for the fourth quarter of 2023 was NOK 574 (622) million. The quarterly results show good growth in net interest income, while reductions in contributions from financial assets and liabilities pull in the other direction.
“The Bank’s results for 2023 reflect the troubled year that has just ended, in which some customers in vulnerable industries had a tougher year,” says Group CEO Richard Heiberg. “We have worked hard to find long-term solutions with customers, which means that impairment charges in the fourth quarter were significantly lower than in the preceding quarters,” he says.
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Consolidated profit
SpareBank 1 Østlandet’s consolidated profit after tax for 2023 was NOK 2 222 (1 948) million. The Bank saw good growth in lending and deposits throughout the year and this contributed to the increase in the Bank’s net interest income in 2023. It was largely interest income that contributed to higher profits for the Group, while increased loan losses, higher operating expenses and reduced commission income from the covered bond companies pulled in the opposite direction.
Customers still need loans for their various projects, and the Group’s overall lending growth for the past 12 months was 5.3 per cent. Saving by customers remained good despite somewhat tighter finances for both households and businesses, and deposit growth was 7.8 per cent over the past 12 months.
Dividend and customer dividends
SpareBank 1 Østlandet’s Board of Directors is proposing to distribute 60 per cent of the Group’s profit to owners and customers. The decision on profit sharing will be made by the Bank’s Supervisory Board on 21 March 2024.
The Board of Directors is proposing a dividend of NOK 903 million for the owners, meaning a cash dividend of NOK 7.80 per equity capital certificate. The Bank’s largest owner, Sparebankstiftelsen Hedmark, which is the largest contributor to good causes in the former county of Hedmark, will receive the largest dividend from the Bank, of NOK 471 million.
Furthermore, the Board of Directors is proposing to the Supervisory Board that customer dividends of NOK 381 (306) million be paid out, the highest amount since customer dividends were launched in 2017. In the years since then, the Bank has paid out more than NOK 1.8 billion in customer dividends.
“I am pleased and proud of our innovative bank customer dividends. It is especially satisfying for me in my last year at the Bank to announce what we are distributing to customers,” says Group CEO Richard Heiberg. This will be the last set of annual results that he presents. He will retire on 01 April 2024 after almost 30 years as a board member, Chair of the Board and Group CEO. On that day he will hand over the helm to the Bank’s new Group CEO, Klara Lise Aasen.
Stronger presence in Oppland and Øvre Romerike
On 15 January 2024, the boards of SpareBank 1 Østlandet and Totens Sparebank decided to merge the two banks so they could focus more strongly together on the best interests of customers, employees, owners, and local communities in the Inland region. Final decisions will be made in the banks’ General Meeting and Supervisory Board on 22 February 2024. Approvals from supervisory authorities must also be given before the legal merger can be completed. SpareBank 1 Østlandet also refers to the merger plan’s regulation of dividends, which implies that dividends in Sparebank 1 Østlandet shall guide the distribution of the profit that can be approved by Totens Sparebank.
Establishing a branch office in Drammen
SpareBank 1 Østlandet has decided to establish a branch office in Drammen. The branch will have a central location and the plan is to open it in the autumn of 2024. Drammen is an attractive and growing region and opening a branch here will strengthen the bank’s presence in the region southwest of Oslo.
Key figures for Q4 and the full year 2023
Q4 2023 (Consolidated figures. Figures in brackets concern the corresponding period in 2022)
• Profit after tax: NOK 574 (622) million
• Return on equity: 11.3 (12.9) per cent
• Earnings per equity capital certificate: NOK 3.32 (3.61)
• Net interest income: NOK 1 005 (789) million
• Net commissions and other operating income: NOK 319 (370) million
• Net income from financial assets and liabilities was NOK 77 (172) million.
• Total operating expenses: NOK 594 (517) million
• Net loan loss provisions were NOK 39 (63) million.
• Lending growth in the last quarter, including mortgages transferred to the covered bond companies: 0.9 (1.1) per cent
• Deposit growth in the last quarter: 2.6 (-0.1) per cent
• Common Equity Tier 1 capital ratio: 17.0 (17.7) per cent
• The Bank’s green loans (incl. loans transferred to the covered bond companies) amounted to NOK 39 (33) billion at the end of the fourth quarter
Provisional annual results for 2023 (Consolidated figures. Figures in brackets concern the corresponding period in 2022)
• Profit after tax: NOK 2 222 (1 948) million
• Return on equity: 11.3 (10.5) per cent
• Earnings per equity capital certificate: NOK 12.99 (11.37)
• Net interest income: NOK 3 655 (2 693) million.
• Net commissions and other operating income: NOK 1 455 (1 588) million
• Net income from financial assets and liabilities: NOK 233 (162) million
• Total operating expenses: NOK 2 191 (2 037) million
• Net loan loss provisions were NOK 307 (27) million.
• Lending growth in the past 12 months, including mortgages transferred to the covered bond companies: 5.3 (8.7) per cent
• Deposit growth in the past 12 months: 7.8 (7.2) per cent
• The Board of Directors is proposing to the Supervisory Board of the Bank a cash dividend of NOK 7.80 (6.80) per equity capital certificate, totalling NOK 903 (788) million. Customer dividends of NOK 381 (306) million and a provision of NOK 6 (31) million for gifts are also proposed.
Contact information:
Richard Heiberg, Group CEO, Tel.: +47 902 06 018
Geir-Egil Bolstad, CFO, Tel.: +47 918 82 071
Bjørn-Erik Orskaug, Head of Investor Relations, Tel.: +47 922 39 185
Siv Stenseth, EVP Communication and Social Affairs, Tel.: +47 958 46 991
This information must be disclosed pursuant to section 5-12 of the Securities Trading Act.
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