In the third quarter of 2022 Sparebanken Vest recorded a pre-tax profit of NOK 1,095 (811) million and a return on equity of 17,3 (13,8) per cent. The quarter is characterised by increased net interest income, strong growth from financial instruments and commission income, and reversals of loan and guarantee loss provisions. In the quarter operating expenses as a percentage of net operating income are at 27,7 (33,1) per cent.
The bank’s net interest income in the quarter is NOK 1,041 (849) million. Net commission income increases compared to last year to NOK 153 (122) million, and the net contribution from financial instruments is NOK 173 (56) million. Operating expenses are NOK 410 (383) million in the quarter.
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At the end of the quarter, the bank’s CET1 ratio was 18.3 (17.7) per cent, which gives significant margin to the requirement of 14.5 per cent.
- We are delivering a strong third quarter with growth in revenue and a strong return on equity. The bank’s cost percentage has been reduced from both the corresponding quarter last year and previous quarters. The CET1 ratio is solid, and we are well prepared for more demanding times in the Norwegian and international economy, says Jan Erik Kjerpeseth, CEO of Sparebanken Vest.
Solid growth in lending and deposits
Gross lending increases by NOK 20.6 billion to 218.7 billion from third quarter of 2021, corresponding to a growth of 10.4 per cent last twelve months. Growth in lending to the retail market is 9.2 per cent last twelve months, whilst growth in the corporate market is 13.9 per cent for the period. Deposits have had a growth of 18.2 per cent last twelve months.
In the quarter, the bank was ranked highest among Norwegian banks in the annual EPSI survey in customer satisfaction for the corporate market. In the survey, which was carried out from July to September, the bank receives a satisfaction score of 73.6, which is 0.5 points ahead of the next bank on the list and 6.6 points above the industry average.
- The bank’s value proposition is strong, and we are experiencing growth in both the retail market and the corporate market. We have worked well and targeted over time to strengthen our position in the corporate market, which the latest EPSI survey confirms that we have been successful at, says Kjerpeseth.
Provisions that were built through Covid-19 have been maintained
Reversals of impairment provisions mean that the loss costs on loans and guarantees were net negative NOK 10 million in the quarter.
- 71 percent of the loss costs since the first quarter of 2020 is model-based provisions. These were increased throughout the pandemic and have been upheld afterwards. We are conscious of being proactive, and the combination of good credit work and a robust provisions level ensures that the bank is well prepared for what lies ahead, says Kjerpeseth.
A more uncertain macro picture ahead
Although Sparebanken Vest observes few signs of increased loss risk in its credit engagements the bank is preparing for more uncertain times in the Norwegian economy. The bank is taking several measures, including closer dialogue and follow-up of customers, strengthening the follow-up of the default portfolio, and increased portfolio monitoring.
- The bank’s results in the quarter reflect the strong growth the Norwegian and West Norwegian economy has had in the wake of the pandemic. At the same time, we know that going forward Norwegian and international economy is facing significantly more unpredictable times. Increased international unrest, increased costs, inflation and increased interest rates affect the economy and prospects for both retail customers and companies. In the face of more demanding times, it is important to have a solid and robust bank that is close to its customers, and we are taking several measures that help ensure we are well prepared, says Kjerpeseth.
Key figures third quarter 2022 (Q3 2021 in brackets)
• Strong return on equity: 17.3% (13.8%)
• Pre-tax profit: NOK 1,095 (811) million
• Sound growth in net interest income: NOK 1,041 (849) million
• Positive development in commission income: NOK 153 (122) million
• Good development in associated companies, but weaker financial result for Frende reduces contribution: NOK 68 (79) million
• Strategic initiatives increase costs: NOK 410 (383) million
• Net reversal of loss provisions: NOK -10 (-22) million
• Sound CET1 ratio: 18.3% (17.7%)
• Profit per equity certificate: NOK 3.11 (2.31)
Sparebanken Vest’s presentation of the third quarter results will be presented at 10.00 on 27 October 2022. The presentation can be followed here: Webcast | Sparebanken Vest. Questions about the quarterly presentation can be sent to: investorrelations@spv.no
For further information, please contact:
Jan Erik Kjerpeseth, CEO, tel.: (+47) 951 98 430
Frank Johannesen, EVP CFO, tel.: (+47) 952 65 971
Brede Borgen Kristiansen, Director Finance and Investor Relations, tel.: (+47) 479 06 402
Hanne Dankertsen, Communications Director, tel.: (+47) 994 49 173
Sparebanken Vest is the second largest savings bank in Norway, with more than 700 committed and highly skilled employees. Since the start in 1823, we have gained a position of trust among customers in Western Norway that has resulted in a solid market position and 34 branch offices in the counties of Vestland, Rogaland and Møre og Romsdal. Through our associated companies and subsidiaries, we are able to provide a complete range of financial services to all our retail and corporate customers. We are proud to be an independent financial services group with our head office in Bergen, allowing us to play a key role in much of the value creation that takes place in Western Norway.
This information is subject to a duty of disclosure pursuant to the Securities Trading Act Section 5-12.
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