Strengthening the market leader position

"We have a clear goal of growth in prioritized market areas. It is therefore gratifying to note that a clear strategy, targeted investment and impressive efforts from the organisation have helped to further consolidate an already solid market leadership role," says Trond Lars Nydal, CEO of Sparebanken Møre.

The bank also has solid deposit growth of 6.2 per cent, as well as a high and stable deposit/loan ratio.

Strengthened net interest income

Profit after tax for Q2 ended at NOK 143 million, compared with NOK 150 million in the same period last year. Net interest income increased by NOK 41 million, while other operating income was NOK 58 million lower than in Q2 last year, mainly due to changes in the value of financial instruments. Apart from this, other income increased by NOK 3 million in the quarter compared with the same period last year.

"In a market with low interest rates and strong competition, I am pleased that we are increasing interest income through lending and deposit growth. We also have good income from active management and real estate brokerage, where we have strengthened our investment in recent months. We have a clear ambition for further revenue growth from these areas in the future," says Nydal.

Operating expenses in the quarter increased by NOK 3 million from the same quarter last year, ending at NOK 160 million. Expenses as a percentage of revenues were 42.9 per cent.

Good activity level

The quarterly result was charged with NOK 28 million in losses on loans and guarantees, a decrease of NOK 14 million compared with the same period last year. The losses are mainly related to offshore/supply and changes in model-calculated expected losses (ECL). The share of impaired exposures is otherwise at a low level.

"Proximity to customers and knowledge of local conditions are key management tools that ensure that we can be both close to and early with any measures. Our customer portfolio is solid and well diversified, and we also see that the level of activity in the county has remained well up this spring, despite periodic closures in parts of the service sector," says Nydal.

According to the Norwegian Labour and Welfare Administration (NAV), unemployment in Møre og Romsdal was 2.4 per cent at the end of June, compared with 2.9 per cent nationwide.

At a meeting of the Bank's Annual General Meeting on 23 March 2021, the Board of Directors was authorised to decide on further distribution of dividends based on the Bank's annual accounts for 2020 within a limit of up to NOK 9.00 per equity certificate. Such a distribution will be considered and communicated in connection with the presentation of the bank's financial statements for Q3 this year.

High recruitment activity

Sparebanken Møre is the largest financial house in Northwest Norway, and at the end of Q2 had 343 full-time equivalents distributed between offices in different parts of the county. Although the number of full-time equivalents has been reduced compared with the same period last year, the Group has gained many new employees in the first half of the year.

"We have several employees who are leaving the bank as a result of natural attrition. We are preparing ourselves for growth and further development by replenishing our expertise, and so far this year our recruitment activity has been all-time high. We have advertised 17 positions externally, and the response confirms that there are many talented people who want to work at Sparebanken Møre," says Nydal.

In June, the bank announced that John Arne Winsnes has been appointed head of the Economic and Financial Affairs (CFO) section. He comes from the position of CFO of Olympic Subsea ASA and will take up the position on 1 November.

 
First in the world with sustainability measurement

Sparebanken Møre also continues to intensify its commitment to sustainability, both inside and outside the bank. Recently, green car and mortgage loans were launched to give customers an incentive to make sustainable choices. The bank has previously established a green framework for issuing bonds, and in May received an ESG rating of 20.6 from the research company Sustainalytics. The rating provides the bank's debt capital investors with a better information basis for their investment decisions, and may contribute to Sparebanken Møre's inclusion in new investment mandates.

The bank also has a stated goal of being a driving force for sustainable development of Northwest Norway. Recently, Møre og Romsdal County Council published a report that shows how the county is doing in relation to the UN's Sustainable Development Goals. Møre og Romsdal is the first region in the world to have measured sustainability under the auspices of the UN, and Sparebanken Møre has played an important role in the pioneering work.

"We were never in doubt about contributing both funds and commitment to this project. All the county's municipalities have been mapped, and the project has contributed to concrete information about what the county scores well on, and what should be improved. Sustainability is an area that embraces a wide range, and we need facts to work systematically with sustainable social development. The report is an important contribution to the further work," says Trond Lars Nydal, CEO of Sparebanken Møre.

Key figures – Q2 2021

• Net interest income: NOK 307 million/1.53 per cent (NOK 266 million/1.35 per cent)
• Profit before loss: NOK 213 million (NOK 233 million)
• Profit after tax: NOK 143 million (NOK 150 million)
• Return on equity: 8.5 per cent (9.2 per cent)
• Cost-to-income ratio: 42.9 per cent (40.3 per cent)
• Profit per equity certificate (group): NOK 6.85 (NOK 7.16)

Comparable figures for the second quarter of 2020 in brackets.

Key figures – H1 2021

• Net interest income: NOK 612 million/1.53 per cent (NOK 608 million/1.57 per cent)
• Profit before loss: NOK 445 million (NOK 420 million)
• Profit after tax: NOK 313 million (NOK 267 million)
• Return on equity: 9.4 per cent (8.2 per cent)
• Cost-to-income ratio: 41.7 per cent (43.5 per cent)
• Profit per equity certificate (group): NOK 15.11 (NOK 12.62)
• Common Equity Tier 1 capital: 16.9 per cent (17.3 per cent)
• Growth in lending over the past 12 months: 6.2 per cent (4.1 per cent)
• Growth in deposits over the past 12 months: 6.2 per cent (4.6 per cent)

Comparable figures for the 1st half of 2020 in brackets.

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