SpareBank 1 SMN: Excellent profit performance and solid growth

SpareBank 1 SMN delivered a pre-tax profit of NOK 768m in the first quarter of 2021, compared with NOK 290m the previous year. The quarter reflects solid incomes in all business lines, efficient operations and strong growth in the corporate market and the retail market. Losses are now back to a moderate level.

The strong performance results from high efficiency, strong growth and a robust business model which makes the group less dependent on interest margins. All business lines are now assembled under the same roof with a view to enhancing efficiency and providing customers with added value. Strong customer growth was seen in the period.

"We have kept a cool head and stood by people and businesses through the crisis of the past year. More and more members of the Central Norway community are now opting for SpareBank 1 SMN, and the corporate market alone has seen record-level lending growth in excess of 11 per cent the past year. This is a sign of a business sector on the upgrade which recognises the benefits of choosing a regional bank with short decision paths”, says group CEO Jan-Frode Janson.

Increased optimism in business and industry

In the first three months of the year 442 firms in Central Norway opted for SpareBank 1 SMN. Lending growth in this period was 2.6 per cent, and the bank now has NOK 46bn in loans to corporate customers. The growth derives mainly from small and medium-sized businesses, along with a small number of companies in the real estate and aquaculture segments.

The period’s losses were substantially reduced to NOK 59m in the first quarter, compared with NOK 308m in the first quarter of 2020. This is mainly down to increased optimism for business and industry, although uncertainty persists with regard to the economic consequences of the pandemic.

SpareBank 1 Markets delivered its best quarterly results ever, with a pre-tax profit of NOK 124m compared with a negative profit of NOK 15m in the same quarter last year. It now tops the list of introduction on the Oslo Stock Exchange.

High activity in the housing market and growth in the personal market

The housing market in Central Norway remains strong. This reflects the growth in the retail market, which in the last 12 months shows growth of NOK 9bn, bringing outstanding loans to a total of NOK 130bn. A large portion of the growth derives from the agreement with the Norwegian Configuration of Trade Unions (LO) whose members benefit from one of the market’s most attractive banking agreements. The retail banking division’s pre-tax profit in the first quarter was NOK 280m compared with NOK 260m in the same quarter of last year.

EiendomsMegler 1 Midt-Norge, the leading real estate agent in the region, sold 1,830 dwellings and commercial buildings in the first quarter. This represents a substantial increase from 1,459 sales in the first quarter of 2020. The company posted a pre-tax profit of NOK 21m in the first quarter compared with a break-even result in the same period last year.

First report on sustainability

SpareBank 1 SMN is now reporting for the first time on sustainability, in conjunction with the group’s financial reporting for the quarter.

"Sustainability is now given far more emphasis by customers and investors alike. We have therefore acknowledged this to be a competitive advantage and have set ourselves ambitious goals on which we intend to issue status reports to the market on the progress made, in the same way as with our financial results. This will impact on our awareness and ensure that our sustainability effort is given high priority”, says Group CEO Jan-Frode Janson.

In April SpareBank 1 SMN launched a new mobile and internet bank function that enables customers to measure their personal climate footprint. The solution, developed by a local company, also enables local authorities and other public bodies to retrieve data with a view to curbing greenhouse gas emissions in Central Norway.

Strong growth and a solid profit performance also form the basis for a substantial community dividend. In 2020 NOK 100m was allocated to the voluntary sector in Central Norway to fund collective responses to the Covid pandemic, and in 2021 a further NOK 200m is assigned to community dividend. People, businesses, clubs and organisation are now invited to submit their ideas on how these funds should be used. So far more than 7,000 submissions have been received.

Key figures:

• Pre-tax profit: NOK 768m (290m)
• Return on equity: 14.8% (5.7%)
• Growth in lending: 8.5% (6.0%)
• Growth in deposits: 16.2% (8.7%)
• Losses on loans: NOK 59m (308m)
• CET1 ratio: 18.0% (16.3%)

Trondheim, 7 May 2021

Contacts at SpareBank 1 SMN:
Executive Director, Finance, Kjell Fordal on +47 905 41 672
Executive Director Rolf Jarle Brøske on +47 911 12 475

This information is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act

?https://quarterlyreport.smn.no/2021/

Attachments

• Q1 report
• Q1 presentation
• Supplementary information