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The post-tax profit for the first nine months of the year was NOK 1,528 compared
with NOK 2,217m in the same period last year. The change is mainly due to
increased provision for losses in the wake of the corona crisis.
The subsidiaries EiendomsMegler 1 Midt-Norge, SpareBank 1 Regnskapshuset SMN,
SpareBank 1 Finans Midt-Norge and SpareBank 1 Markets all show good results for
the third quarter, and account for a increasing share of the group’s earnings.
“Despite turbulent market conditions caused by the corona pandemic, SpareBank 1
SMN presents good interim results with increased incomes and lower cost growth.
Growth in both lending and deposits is high among personal customers and
businesses alike. Incomes from other financial products are also rising. Market
shares are growing and we are reinforcing our position as the leading finance
house in Central Norway. Higher losses and lower financial return nonetheless
entail reduced profit”, says Group CEO Jan-Frode Janson at SpareBank 1 SMN.
Lending growth of NOK 14bn
With lending growth of NOK 14bn, corresponding to 8.5 per cent, SpareBank 1 SMN
has strengthened its market position. General growth in the market in the same
period was just over 4 per cent.
Lending to personal customers has grown by 8.7 per cent in the 12 months to end-
September, to which the agreement with the LO (Norwegian Confederation of Trade
Unions) has made an important contribution. Lending to corporate clients rose in
the same period by 8.5 per cent thanks to increased demand from small and
medium-sized business in the region.
6,000 personal customers and 1,000 companies opted for SpareBank 1 SMN as their
new main bank in the first nine months. Satisfied customers were also reflected
in the recent EPSI annual rating of customer satisfaction in which SpareBank 1
SMN markedly improved its score from the previous year and came out right at the
top among the banks rated.
Strengthened financial soundness
SpareBank 1 SMN is well capitalised with a CET1 ratio of 17.6 per cent as at 30
September 2020. This is well above the target level of 15.4 per cent.
“Increased financial soundness gives us more muscle to assist people and
businesses through the pandemic and out of the economic consequences it is
having for the region. In addition, strong results enable us to pass dividend on
to the regional community, which is our largest owner. This year alone we have
earmarked more than NOK 100m of our social dividend to assisting the cultural,
sports and voluntary sectors through a demanding period”, says Jan-Frode Janson.
Loan losses totalled NOK 231m compared with NOK 170m in the previous quarter.
90 per cent of losses as per this year’s third quarter are losses on loans to
corporates. Defaults remain low.
«Great uncertainty persists as regards the pandemic and how its economic
consequences will pan out for business and industry and for jobs in our region.
We continue to see individual segments that face major challenges, and we expect
a long time to pass before the situation normalises and growth fully recovers",
says Mr Janson.
The enhancement programme ‘One SMN’ will realise synergies between the group’s
business lines in addition to increased digitalisation, more efficient work
processes and ambitious cost reductions. Group costs were reduced by NOK 22m
from the previous quarter to NOK 685m. The ambition is to reduce annual costs by
a minimum of NOK 200m.
See the enclosed quarterly report and presentation.
Key figures
- Pre-tax profit: NOK 1,823m (2,612m as per first nine months of 2019)
- Post-tax profit: NOK 1,528m (2,217m)
- Return on equity: 10.4% (16.0%)
- Growth in lending: 8.5% (4.8%)
- Growth in deposits: 14.0% (7.9%)
- Loan losses: NOK 709m (198m)
- CET1 ratio: 17.6% (15.1%)
Trondheim, 30 October 2020
Contact persons at SpareBank 1 SMN:
Executive Director, Finance, Kjell Fordal on +47 905 41 672
Head of Corporate Communications, Hans Tronstad on +47 941 78 322
https://quarterlyreport.smn.no/2020/
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