30.04.08 << back
MING-Good operations, but financial turbulence affects SMN too
SpareBank 1 SMN strengthened earnings on its core business in the first quarter 2008, but the turbulence seen in international financial markets has affected its overall profit performance. Profit after tax came to NOK 94 million compared with NOK 176 million in the same period last year.
SpareBank 1 SMN's ordinary banking operations were on a positive trend in the first three months of the year compared with the start of 2007. Ordinary banking operations show a profit improvement of NOK 42 million, which in all essentials is due to sound growth and hence higher market share in the retail market and the corporate market alike in most product areas.
Number 1 position strengthened
SpareBank 1 SMN has strengthened its number 1 position throughout the region with a net increase in customers along with lending growth in excess of the general growth in credit in the period.
Total outstanding loans rose by 17.5 per cent to NOK 64.3 billion. The growth breaks down to 14 per cent on the retail market and all of 23 per cent on the corporate market. The bank is witnessing a particularly high influx of good corporate customers. Aggregate deposits rose by 7.5 per cent to NOK 33.4 billion. Growth in retail deposits was 10 per cent and in corporate deposits 5 per cent.
Low losses
Losses on loans and guarantees came to NOK 1 million compared with a net recovery of NOK 9 million in the same period last year.
In the retail market the savings pattern has switched from the stock market to banks. Sales of three-month fixed-rate deposits almost quintupled in this year's first quarter compared with the same period last year. Other savings products show a stable and in some cases lower sales, but with fine growth in purchases of contracts for long term investment in equity funds.
City of Trondheim switches to SMN
Activity in the corporate market is good, and losses are still very low. A number of new customer relationships were initiated in the first quarter, among them the City of Trondheim for whom SpareBank 1 SMN becomes the main bank as from 1 May. Moreover, an increased focus on non-life insurance is beginning to produce appreciable results.
SpareBank 1 SMN has expanded heavily in the field of corporate finance, and in recent months has become part owner of PAB Consulting in Ålesund and acquired Mercantor in Trondheim. This makes SpareBank 1 SMN the region's leading brokerage house.
Weaker financial result
A weaker financial market has reduced return on financial investments by NOK 82 million and the profit contribution from SpareBank 1 Gruppen by NOK 28 million. The fall in financial return is largely due to unrealised losses on shares in the Adresseavisen newspaper and Det Norske Oljeselskap as well as on the bank's bond holding.
Return on equity was 7.8 per cent (18.2 per cent). Total assets rose by 9.6 per cent to NOK 70.4 billion, including transfers to SpareBank 1 Boligkreditt.
Prepared for the turbulence
"We were well prepared for the likelihood that we too would be affected by the financial market turbulence. It has burdened our investments in companies in the region in the first quarter 2008. These are fine companies with substantial potentials in the longer term. We have also invested parts of our liquidity reserve in the bond market and will consequently see losses on a par with other Norwegian regional banks. We maintain a long term perspective and are now keenly focused on ensuring continual improvement in the bank's ordinary operations. In fact banking operations are on a very satisfactory trend," says CEO Finn Haugan at SpareBank 1 SMN.
Key figures
At 31.03.08
At 31.03.07
Total income
Pre-loss profit
Post-loss profit
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, 30 April 2008
About SpareBank 1 SMN
SpareBank 1 SMN is mid-Norway's largest financial services group. We lead the region's retail and corporate market, and are located at 68 offices 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
1 Q 2008 report (pdf)
1 Q 2008 presentation (pdf)
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