Sparebanken Møre's preliminary results for 2013 show that strategic measures taken in the Bank during the year have had a positive effect. The Bank produced a profit for the year of NOK 450 million, a result that is partly attributable to strong costs control and improved efficiency. At the same time, the Bank enjoyed very good growth in lending to retail customers in 2013.
The profit after tax for Q4 2013 amounted to NOK 131 million, compared to NOK 222 million for the same quarter in 2012. The primary reason for the reduction was the recognition in 2012 of a result improving, non-recurring effect of NOK 166 million due to pension plan changes. Net interest income developed positively during 2013 and amounted to 2.10 % for Q4 2013, compared to 1.90 % for the corresponding quarter in 2012. Losses remain low and in the last quarter amounted to NOK 26 million, or 0.19 % of average total assets. Lending to retail customers grew by 10.1 % in the last 12 months.
"I am pleased that growth in the retail market has been good. It shows that we are an attractive bank for retail customers in Møre og Romsdal and that we provide good services in tough competition with other banks in the region. The retail market accounts for almost 66 % of our lending portfolio. At the same time, we experienced no losses in this segment of the portfolio in 2013. This helps to underscore that the county is enjoying good economic times and that our customers are willing and able to service their debt. Retail customer defaults also remain low and stable," says CEO Olav Arne Fiskerstrand.
Focus on costs and efficiency
Net interest income amounted to NOK 1.04 billion for 2013 as a whole, an increase of NOK 106 million. Costs were reduced by NOK 36 million last year compared to 2012, when the effects of the pension plan changes are excluded. This is a result of the internal efficiency improvement measures that were implemented at the start of 2013. Losses on loans and guarantees amounted to NOK 54 million in 2013, which in percentage terms is on a par with last year. The quality of the lending portfolio also improved and we have seen a decrease in impaired commitments from 0.96 % of gross lending at year-end 2012 to 0.80 % at year-end 2013.
"At the start of the year we implemented a number of major efficiency measures in the Bank. The objectives were to optimise the organisation with a focus on good customer follow-up and simultaneously benefit from this on the costs side. We have succeeded. These measures were important with regard to adapting to the new requirements concerning good earnings and good financial strength to which banks now are subject. We could not have achieved this without the efforts of our staff. The fact that we can present a very good result for the year is largely due to the contributions of our staff," says Fiskerstrand.
Financial strength continues to grow
The Bank`s issues in Q3 2013 significantly improved its financial strength. The authorities' regulatory requirements for the banking sector were high on the agenda last year and Sparebanken Møre adapted to these throughout 2013.
"After allocating the profit for 2013, our equity and related capital will be NOK 5.7 billion, which amounts to 17.05 %. Our core tier 1 capital, which is what the authorities have focused heavily on, is 12.55 %. It has increased by 2.00 percentage points during the year and is now at a good level compared with the regulatory requirements and is suitable for our level of risk. We will remain heavily focused on this area and the Board of Directors has recommended to the Board of Trustees that 63 % of the Group's profit for the year should be retained in order to further build up our financial strength," says Fiskerstrand.
The Board will recommend that a cash dividend of NOK 8.00 per equity certificate be paid for the 2013 financial year. At the same time, they will recommend that NOK 87 million should be set aside for the benefit of local communities in Møre og Romsdal.
"More than half of this year's distribution of dividends will return to local communities in our county. Sparebanken Møre has allocated well over NOK 500 million to such purposes in the last few years. Our vision is that our bank should help to improve opportunities for people and enterprises to live, work, develop and have a good life in Møre og Romsdal. The funds we set aside for good purposes within culture, talent development, education, sports and the development of regional infrastructure is one of the ways in which our corporate responsibility is expressed in the region. This year's allocation of NOK 87 million will go to publicly beneficial and important projects within these main areas of focus, and at the same time bring us a step closer to our vision for the Bank's contribution to the county's attractiveness and development," concludes Olav Arne Fiskerstrand.
Key figures for Q4 2013
- Net interest income amounted to NOK 281 million/2.10 % (NOK 238 million/1.90 %)
- Profit before write-downs and tax amounted to NOK 210 million (NOK 325 million)
- Profit after tax amounted to NOK 131 million (NOK 222 million)
- Return on equity was 12.7 % (27.0 %)
- Cost income ratio was 37.7 % (-2.2 %/49.7 % excl. pension changes)
Comparable figures for Q4 2012 in brackets.
Key figures for preliminary financial statements for 2013
- Net interest income amounted to NOK 1 042 million/2.00 % (NOK 936 million/1.93 %)
- Profit before write-downs and tax amounted to NOK 675 million (NOK 787 million)
- Profit after tax amounted to NOK 450 million (NOK 530 million)
- Return on equity was 11.6 % (16.3 %
- Cost income ratio was 45.7 % (35.4 %/48.8 % excl. pension changes)
- Earnings per equity certificate (parent bank) were NOK 18.45 (NOK 27.75)
Comparable figures for 2012 in brackets.
Olav Arne Fiskerstrand, CEO, Mobile: (+47) 900 18 299
Kjetil Hauge, Chief Information Officer, Mobile: (+47) 900 25 011
Runar Sandanger, EVP, Head of Treasury and Markets, Mobile: (+47) 950 43 660Interim report 4. quarter 2013 - Sparebanken Møre