Good results driven by solid operations, high loan growth, and one-time effects

31 Oct 2024 07:00 CET

SpareBank 1 SR-Bank ASA's results for the third quarter of 2024 were NOK 1.450
million after tax, NOK 388 million higher than the same quarter last year. The
return on equity was 17.5 percent.

On October 1, 2024, SpareBank 1 SR-Bank and SpareBank 1 Sørøst-Norge merged to
form SpareBank 1 Sør-Norge ASA. Today, the results for the third quarter and pro
forma figures for the new group are presented.

SpareBank 1 SR-Bank's results were driven by strong underlying operations, with
growth, increased interest income, and contributions from associated companies.

Gross loan growth over the past twelve months was 7.3 percent, equivalent to NOK
19.7 billion. Retail Market accounted for NOK 12.4 billion, resulting in a loan
growth in the division of 7.9 percent. This is significantly above the
twelve-month debt growth in Norwegian households, which was 3.5 percent
nationwide in August. Large Corporate’s loan growth was 5.7 percent, while it
was 11.9 percent in the Corporate and Agriculture segments.

Systematic efforts are paying off, and the group reports growth in a challenging
market.

– We have worked diligently on the merger with SpareBank 1 Sørøst-Norge over the
past year, while also focusing on operating well and efficiently. The fact that
we have gained more customers during this period shows that we are competitive
and attractive to customers. The growth also resulted in increased net interest
income, contributing to solid results in the third quarter. This gives us a good
starting point for the new group, says Inge Reinertsen, Group CEO of SpareBank 1
Sør-Norge.

Net interest income increased by NOK 173 million in the quarter compared to the
third quarter last year. The increase was due to higher loan volumes, improved
lending margins, and higher interest rates on equity.

Net income from financial investments was NOK 514 million. In connection with
the merger of Eika and Fremtind Forsikring, NOK 452 million was recognized as a
one-time effect in the quarter. The ordinary contribution from associated
companies, including SpareBank 1 Gruppen AS, amounted to NOK 203 million this
quarter.

Operating expenses in SpareBank 1 SR-Bank were NOK 891 million in the quarter,
up NOK 105 million from last year. Of this, merger costs accounted for NOK 65
million of the increase. The cost-to-income ratio for the group was 32.3
percent, compared to 37.4 percent in the same period last year.

SpareBank 1 SR-Bank also experienced an increase in impairments on loans and
financial commitments, as well as a decline in other income in the third
quarter. The decline in other income was due to seasonal variations from
subsidiaries in accounting, advisory, and real estate brokerage.

Impairments on loans and financial commitments were NOK 160 million in the third
quarter. In the same quarter of 2023, the group recognized NOK 78 million in
income.

– In the third quarter, we saw an increase in the level of impairments in the
group. The quality of our portfolio is good, and over the next twelve months,
most businesses in our region expect to be profitable, increase turnover, and
hire more employees. It appears that most people and businesses are
well-prepared for the coming year, says Inge Reinertsen.

The pro forma result for SpareBank 1 Sør-Norge ASA for the third quarter, after
the merger of SpareBank 1 SR-Bank and SpareBank 1 Sørøst-Norge, was NOK 1.959
million after tax. The pro forma result for the year to date was NOK 5.049
million.

Key figures SpareBank 1 SR-Bank Q3 2024

• Profit before tax: NOK 1.704 million (NOK 1.396 million)
• Profit after tax: NOK 1.450 million (NOK 1.062 million)
• Return on equity after tax: 17.5 percent (14.5 percent)
• Earnings per share: NOK 5.19 (NOK 3.94)
• Net interest income: NOK 1.768 million (NOK 1,596 million)
• Net commission and other income: NOK 473 million (NOK 496 million)
• Net income from financial investments: NOK 514 million (NOK 11 million)
• Operating costs: NOK 891 million (NOK 786 million)
• Impairments provisions on loans and financial liabilities: NOK 160 million
(NOK -78 million)
• Lending growth last 12 months: 7.3 percent (8.6 percent)
• Deposit growth last 12 months: -2.7 percent (3.5 percent)
• Common Equity Tier 1 ratio: 17.8 percent (17.9 percent)
• Capital ratio: 23.9 percent (22.0 percent)
(Third quarter 2023 in parentheses)

Key Figures (Pro Forma) SpareBank 1 Sør-Norge Q3 2024

• Profit before tax: NOK 2.312 million
• Profit after tax: NOK 1.959 million
• Return on equity after tax: 16.2 percent
• Earnings per share: NOK 4.99
• Net interest income: NOK 2.308 million
• Net commission and other income: NOK 694 million
• Net income from financial investments: NOK 743 million
• Operating costs: NOK 1.268 million
• Impairments provisions on loans and financial liabilities: NOK 166 million
• Lending growth last 12 months: 6.1 percent
• Deposit growth last 12 months: -1.4 percent
• Common Equity Tier 1 ratio: 18.3 percent
• Capital ratio: 23.3 percent

The quarterly report can be downloaded in its entirety from www.sr-bank.no/ir.

Stavanger, October 31, 2024.

Contacts:

Inge Reinertsen, CEO, phone +47 909 95 033
Roar Snippen, CFO, phone +47 976 10 360
Morten Forgaard, Director of Finance, phone +47 916 21 425
Øyvind Knoph Askeland, Director of Communications, phone +47 922 32 639

This information is disclosed in compliance with section 5-12 of the Norwegian
Securities
Trading Act.

More information:
Access the news on Oslo Bors NewsWeb site

630799_SpareBank 1 Sørøst-Norge Quarterly Report Q3 2024.pdf
630799_Quarterly report Q3 2024 SpareBank 1 SR-Bank.pdf
630799_Presentation Q3 2024 SpareBank 1 SR-Bank.pdf