Solid banking operations in the fourth quarter concludes strong year for Sparebanken Vest

02 Feb 2023 07:00 CET

Sparebanken Vest recorded a pre-tax profit of NOK 3,504 (3,055) million in 2022,
and a return on equity of 14.6 (14.0) per cent. The board proposes a dividend
totalling NOK 603 million, corresponding to NOK 5.50 (4.50) per equity
certificate.

Net interest income amounted to NOK 3,994 (3,299) million in 2022. The bank’s
costs for 2022 amounted to NOK 1,687 (1,538) million. Operating expenses as a
percentage of net operating income were reduced to 32.5 (34.2) per cent.

Growth in net interest income contributed to a pre-tax profit of NOK 840 (883)
million in the fourth quarter of 2022 and a return on equity of 12.5 (15.5) per
cent. Corrected for the financial result and other one-off items the underlying
return on equity was 15.0 (13.6) per cent in the quarter. The bank’s net
commission income amounted increased to NOK 226 (188) million kroner in the
quarter.

At the end of the quarter the CET1 ratio was sound at 18.1 (17.4) per cent.

“The fourth quarter concludes a strong year for Sparebanken Vest. The last three
months of the year saw growth in interest income and commission income. In
total, 2022 was a strong year with good growth in customers, lending and income,
which gave a return on equity for the year of a strong 14.6 per cent. As with
2022, 2023 will be characterized by economic unpredictability, and Sparebanken
Vest is well prepared for a more demanding macroeconomic picture”, says Jan Erik
Kjerpeseth, CEO of Sparebanken Vest.

Record high levels of customer satisfaction
Gross lending increased by NOK 21.5 (21.1) billion to NOK 225.4 (203.8) billion
from the fourth quarter of 2021, corresponding to year-on-year growth of 10.6
per cent. Total deposits from customers amounted to NOK 112.3 (90.8) billion,
corresponding to year-on-year growth of 23.6 per cent. The merger with Etne
Sparebank, completed in the fourth quarter, accounted for NOK 2.3 billion of
growth in lending and NOK 1.5 billion of growth in deposits.

“The bank's value proposition is strong amongst both retail and corporate
customers in the region. In 2022, we were at record high levels of customer
satisfaction in both segments, and in EPSI's customer satisfaction survey among
Norwegian business customers, Sparebanken Vest was ranked at the top. The strong
position is a result of targeted and dedicated work over time and in the
anniversary year 2023, when the bank turns 200 years old, we have the ambition
to strengthen this further”, says Kjerpeseth.

The Bulder concept has now passed NOK 25 billion in lending. By year end 2023
the goal is that the concept has a lending volume of approximately NOK 36
billion.

“Since we introduced Bulder towards the end of 2019 the concept has been
continuously developed with new and improved products and functionality. By
expanding the customer funnel and products the ambition is to continue the
growth through 2023”, says Kjerpeseth.

Low risk in lending portfolio with main share to retail market
Total write-downs on loans and guarantees amounted to NOK 38 (reversal 3)
million for the quarter. In 2022 total write-downs totalled at NOK 52 (reversal
31) million kroner.

Commitments in default and potential bad debt in the retail market amounted to a
total of NOK 272 (274) million. This corresponds to 0.16 (0.18) per cent of
gross lending to the retail market. In the corporate market the equivalent
amounted to a total of NOK 978 (1,125) million, corresponding to 1.76 (2.30) per
cent of gross lending.

“76 per cent of the banks write-downs on loans and guarantees are model based.
These increased through the pandemic and have to a lesser extent been reduced.
Commitments in default and potential bad debt for both retail and corporate
markets have been reduced. The bank enters 2023 with a robust provision level
and a lending portfolio which in total has low risk”, says Kjerpeseth.

Board proposal of record-high customer dividend
The board of directors proposes a customer dividend of NOK 580 million for the
financial year 2022. For donations for the public benefit the board proposes NOK
301 million kroner.

“With the board’s proposal for this year’s customer dividend we will have paid
out a total of close to NOK 1.7 billion in customer dividends to the bank’s
customers since the introduction from the financial year 2019. The knowledge of
the customer dividend increases year by year, both with customers and
non-customers”, says Kjerpeseth.

“The last ten years the bank has contributed NOK 2.1 billion to teams,
associations, volunteer organisations and projects for restructuring the region.
This shows the strength of the savings bank model, and how we, as Western
Norway’s own bank, have a unique social position in the region. We will take
this with us into 2023, when the bank celebrates its 200 years anniversary”,
Kjerpeseth concludes.

Highlights of fourth quarter 2022 results (fourth quarter 2023 in brackets)
• Good return on equity: 12.5 (15.5) per cent. Strong development in underlying*
return on equity: 15.0 (13.6) per cent
• Higher net interest: 1.67 (1.46) per cent as a result of good growth and
repricing
• Increased commission income: NOK 226 (188) million with increased
profitability commission from Frende Forsikring
• Low cost-to-income ratio excl. financial instruments: 30.4 (32.1) per cent
• Good contribution to profits from and underlying development in associates:
NOK 95 (174*) million
• Sound CET1 ratio: 18.1 (17.4) per cent

* In Q4 2021, the bank recognised a value adjustment effect of NOK 86 million on
its holding in Vipps. Corrected for this effect, ROE in Q4 2021 would have been
13.6 per cent. In Q4 2022, the bank recorded a loss of NOK 178 million as a
result of evaluation effects on hedging derivatives linked to own debt.
Corrected for this effect, ROE was 15.0 per cent.

Highlights of 2022 results (2023 in brackets)
• Very good pre-tax profit: NOK 3,504 (3,055) million
• Excellent return on equity: 14.6 (14.0) per cent
• Sound improvement in net interest over the year: 1.56 (1.44) per cent
• Lower cost-to-income ratio: 32.5 (34.2) per cent
• Moderate write-downs on loans and guarantees: NOK 52 (reversal 31) million
• Profit per equity certificate: NOK 10.29 (9.16)
• Proposed dividend: NOK 5.50 (4.50) per equity certificate, NOK 580 million in
customer dividend and NOK 301 million in donations


Sparebanken Vest's presentation of the fourth quarter results will be presented
at CET 08.15 on 2 February at Hotel Continental in Oslo. To attend the
presentation, please notice anne.urdal@spv.no. The presentation of results can
be followed here: https://www.spv.no/om-oss/investor-relations/webcast.
Questions to 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 35 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.

More information:
Access the news on Oslo Bors NewsWeb site

581185_Sparebanken Vest Interim Report Q4 2022.pdf
581185_Sparebanken Vest_SVEG_Quarterly presentation_Q4 2022 ENG.pdf