Solid first quarter with lending growth, higher income and low losses
SpareBank 1 SR-Bank ASA's profit before tax for the first quarter of 2024 wasNOK 1,498 million. The group took market share with good lending growth,higherincome and low losses.
The quarterly result was NOK 367 million higher than in the same quarter in2023. The return on equity after tax for the quarter amounted to 14.6%.
The growth in Norwegian households' and businesses' debt has slowed in linewiththe interest rate hikes over the past year. Despite this, SpareBank 1 SR-Banksaw good growth in its lending volume in both the retail and corporatemarkets.For the first quarter of 2024, lending growth amounted to 5.8% in RetailMarket,9.9% in Large Corporates and 15.5% in SME & Agriculture. Overall, grosslendingto customers has risen by NOK 20 billion in the past 12 months.
"We have seen solid growth over time and are taking a greater share of ahighlycompetitive market. At the same time, we are committed to ensuring good riskmanagement as we grow and correct pricing for customers," says CEO BenedicteSchilbred Fasmer, continuing:
"In the past year, we have also seen a sharp increase in the number of advicemeetings, with customers more frequently wanting our help with financialplanning. This gives customers the confidence to realise their projects whilebuilding stronger relationships with customers and giving our business morebreadth.
The group's net impairment provisions on loans and financial liabilitiesamounted to NOK 35 million as at the end of the first quarter of 2024. This ison a par with the corresponding quarter in 2023, and slightly higher than intheprevious quarter. The impairment provisions corresponded to 0.05% of grosslending in the first quarter. The quality of our retail and corporate marketportfolios is good.
SpareBank 1 SR-Bank saw better net interest income and net commissions andotheroperating income in the first quarter than in the same period in 2023. Netinterest income increased with 23,3%, to NOK 1,729 million, mainly due tolending growth, increased margins and higher interest on equity.
Net commission and other income increased by 5.6% from the first quarter of2023, to NOK 480 million in the first quarter of 2024. The main reasons fortheincrease were increased arrangement and customer fees in Large Corporates,growth in income from savings and investments, as well as income from moneytransfer services. EiendomsMegler 1 SR-Eiendom and SpareBank 1 SR-BankForretningspartner also saw improved results for the first quarter of 2024compared with the first quarter of 2023.
Net income from financial investments was NOK 149 million in the quarter, withincome from associated companies amounting to 143 million kroner.
The group's cost/income ratio was 35% for the first quarter, down from 39.5%forthe first quarter of 2023. The groups operating costs increased in the firstquarter of 2024 to NOK 826 million, up from NOK 761 million for the firstquarter of 2023. Personnel costs were higher, mainly due to more FTEs.
The majority of the companies and households in the group's portfolio havebeenable to adapt to the higher costs and the higher level of interest rates overthe past few years. The companies in The Central Bank of Norway's regionalnetwork said that they are somewhat more optimistic than before aboutdevelopments in the coming year.
"We know that many companies are experiencing pressure on profitability andlower investment levels, with the building and construction sectorexperiencinga challenging period. However, the high activity in Southwest Norway meansthatthese companies are also faring better in this region. We expect the regionaldifferences in both the business sector and housing market to last for sometimeto come. SpareBank 1 SR-Bank is well diversified and positioned for furthergrowth in Southern Norway," says Benedicte Schilbred Fasmer.
On April 17th, the group received approval from the Norwegian CompetitionAuthority to merge with SpareBank 1 Sørøst-Norge. The merger process withSpareBank 1 Sør-Norge on October 1st is proceeding as planned.
Q1 2024
o Profit before tax: NOK 1,498 million (NOK 1,131 million)o Net profit: NOK 1,191 million (NOK 881 million)o Return on equity after tax: 14.6% (12.5%)o Earnings per share: NOK 4.26 (NOK 3.31)o Net interest income: NOK 1,729 million (NOK 1,402 million)o Net commissions and other operating income: NOK 480 million (NOK 455million)o Net income from financial investments: NOK 149 million (NOK 71 million)o Operating costs: NOK 826 million (NOK 761 million)o Impairment provisions on loans and financial liabilities: NOK 35 million(NOK35 million)o Total lending growth over past 12 months: 7.7% (10.5%) o Growth in deposits over past 12 months: -0.9% (7.1%)o Deposit growth in the past 12 months, excl. public sector: 6.1% (10.9%) o Common Equity Tier 1 capital: 17.62% (17.42%)o Capital ratio: 22.05% (21.05%)(Q1 2023 in brackets)
The full interim report is available for download from www.sr-bank.no.
Stavanger, 25.4.2024
Contact people:Benedicte Schilbred Fasmer, CEO, Tel. +47 950 60 034Inge Reinertsen, CFO, Tel. +47 909 95 033Morten Forgaard, Finance Director, Tel. +47 916 21 425Øyvind Knoph Askeland, Chief Communications Officer, Tel. +47 922 32 639
This information is disclosed in compliance with section 5-1 of the SecuritiesTrading Act.
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