As of end-September 2005 Sparebanken Midt-Norge recorded a post-tax profit of NOK 482 million (290 million) corresponding to a return on equity of 22.8% (17.2%). The Group cost-income ratio (exc. gains on securities) was 53% (54%). The improvement on last year's third quarter is mainly due to a strong increase in sales of savings and insurance products, Romsdals Fellesbank's profit contribution, a substantial reduction in losses, an excellent performance by SpareBank 1 Gruppen AS and a write-back after the compromise reached with KPMG in the Finance Credit affair. Accounts for the third quarter of 2005 are presented under IFRS.
The bank's equity capital was increased by NOK 473 million after a public rights issue and a staff placing. This increase is included in the basis for calculation of the bank's return on equity.
Abstract of the accounts:
- The bank's net interest ratio is 2.06%, about the same as at end-June (2.09%), but 2.34% down on the same period of 2004. The profit effect of this fall is a mere NOK 13 million since lower interest rates have generated expected volume growth, especially in the home mortgage loan area.
- Net commission earnings and other operating income rose 21% due to good growth in sales of payment, savings and insurance products. In addition, NOK 10 million was taken to income after disposal of interests in Trøndelag Eiendom 2 AS.
- Total loans have risen by NOK 4.4 billion or 11.0% to NOK 44.3 billion in the last 12 months. The growth is in part due to a more assertive competitive strategy in the retail market. Lending to the retail market rose 12.2%, lending to the corporate market 9.2%.
- Total deposits have risen by NOK 2.0 billion or 8.2% to NOK 25.9 billion in the last 12 months. Corporate market deposits rose 15.5%.
- The value of equity and fixed income funds sold to the bank's customers as of end-September was NOK 1,606 million, NOK 411 million higher than at year-end.
- The bank's insurance portfolio shows satisfactory growth. Overall premium volume for life and non-life insurance was up 12.0% at quarter-end.
- The subsidiaries' aggregate post-tax profit came to NOK 23 million (20 million).
- SpareBank 1 Midt-Norge's share of SpareBank 1 Gruppen's profit was NOK 64 million (23 million).
- Group operating expenses measured 1.83% (1.93%) of average total assets. The Group cost-income ratio (exc. gains on securities) was 53%.
- The growth in costs is ascribable to general wage and price growth, IT development costs, higher pension costs and costs related to the integration of Romsdals Fellesbank. In addition, EiendomsMegler 1 has opened new offices in Kristiansund, Molde and Ålesund.
- NOK 16 million was written back on loan losses (loss of NOK 72 million). Losses on corporate market customers (exc. write-back from Finance Credit) came to NOK 28 million, net, while retail market customers yielded a net income of NOK 7 million.
- Write-back of earlier losses on Finance Credit came to NOK 37 million after a compromise worth NOK 52 million was reached with KPMG.
- Aggregate problem loans were substantially reduced by NOK 290 million to NOK 707 million in the last 12 months. Defaults in excess of 90 days totalled NOK 348 million (493 million), equivalent to 0.8% of total outstanding loans. Other doubtful exposures totalled NOK 359 million (504 million), also equivalent to 0.8% of total outstanding loans.
SpareBank 1 Midt-Norge's assets totalled NOK 50 billion at end-September, NOK 11 billion more than at the end of 2004. RF accounted for NOK 7.5 billion of the increase.
In his comment on the accounts, President and CEO Finn Haugan says the bank is doing very well indeed. The highly satisfactory trend seen in the first half-year is continuing. The fine profit is due to a good sales performance spurred by a more assertive growth strategy in the retail market as well as to improvements in sales and portfolio quality in the corporate market. Developments at SpareBank 1 RomsdalsFellesbank are satisfactory and the integration process has thus far been virtually free of problems. All staff at RomsdalsFellesbank have responded with enthusiasm and enterprise to the challenges posed by integration with SpareBank 1 Midt-Norge. Indeed we are already seeing good growth in incomes from sales of savings and insurance products in Møre and Romsdal. Also highly gratifying is the sound growth in lending to the county's retail market and corporate market as well as the net inflow of new customers.
Mr Haugan also highlights the solid results posted both by SpareBank 1 Gruppen AS and the bank's subsidiaries, and concludes by praising all Group staff for a solid effort.
Trondheim, 26 October 2005
Contact persons:
Any inquiries should be directed to: CEO Finn Haugan on +47 90 04 10 02
or: Executive Director Kjell Fordal on +47 90 54 16 72
3rd Quarter Report 2005:
Presentation of 3rd Quarter 2005: