Sparebanken Møre has been characterized by very efficient banking operations in the first nine months of 2014, with low costs and low losses. Combined with good net interest income and a booked profit from the sale of Nets AS of NOK 94 million, this has produced a profit after tax of NOK 496 million as at 30 September 2014. This is NOK 176 million higher than in the corresponding period in 2013.
Low costs and low losses
"We continue to benefit from the rationalisation process we started in 2013. Costs have been reduced in relation to last year and at the same time we have enjoyed good growth in the retail market and increasing growth in the corporate market. The competition for bank customers is intense and I am very pleased that we continuously win new customers, while maintaining a good, stable net interest income," says CEO Olav Arne Fiskerstrand.
The net interest income as at 30 September 2014 amounted to NOK 811 million, which is NOK 50 million higher than for the same period last year. A positive market development of the bank's liquidity portfolio has contributed, together with the profit from the sale of Nets AS, to total income being NOK 178 million higher than for the corresponding period in 2013. Costs have been reduced by a total of NOK 14 million, which represents a reduction of 3.2 %. The cost/income ratio at the end of the third quarter was 39.4 %. Losses remain stable and low, with a reduction of NOK 13 million compared to the same period last year. Recognised losses as at 30 September 2014 amounted to NOK 15 million, which represents 0.04 % of total assets. Losses recognised in the third quarter amounted to NOK 1 million.
Well positioned for further growth
Sparebanken Møre has seen 4.6 % lending growth in the last 12 months. Retail market growth amounted to 6.2 %, while growth in the corporate market was 1.7 %. In the same period, deposits grew by 3.1 %. Our primary capital at the end of September amounted to NOK 5 296 million, or 15.85 %. Our core tier 1 capital amounted to 12.35 % of the risk weighted assets, and exceeds the regulatory requirement for 2015 of 11 % by a good margin.
"I am pleased to note that both lending and deposit growth has improved after somewhat weak start at the beginning of the year. It is particularly pleasing to see the increasing growth in the corporate segment. Sparebanken Møre is financially very strong and has a capital base that far exceeds the regulatory requirements. This provides us with space to grow further in Møre og Romsdal, both in the retail market and the corporate market," continues Fiskerstrand.
Situation still positive for Møre og Romsdal
He believes the bank's low losses and very low commitments in default are signs that business is still doing very well in the county. In September, registered unemployment in the county was at 2.1 %, and it appears that interest rates will remain low for a good while yet.
"We therefore think that the general macroeconomic conditions in our county are good. There are no indications that these will materially change before the end of the year, although the economic outlook for the county for the next 1-2 years marginally worsened during the third quarter," says Fiskerstrand.
Focusing on expertise
Sparebanken Møre has the strongest financial centre between Trondheim and Bergen, and has focused heavily on ensuring that young people learn about finance for many years.
Today, the bank has its own programme for six trainees, one apprentice and one pupil, and is an important supporter of the economics research course at Fagerlia Upper Secondary School. 40 of the bank's advisers also teach lower secondary pupils through the Young Entrepreneurship's Economics and Career Choices programme. Last year around 2 000 ninth graders from 86 classes in Møre og Romsdal were trained in personal finances by staff from Sparebanken Møre.
"We view this as an important part of our corporate social responsibility and are sure that our projects within teaching about finances and skills enhancement are very important investments for the future. The overall goal is to increase the county's attractiveness and ensure that we have also the expertise necessary to develop further in the years ahead," concludes Olav Arne Fiskerstrand.
Key figures for Q3 2014
- Net interest income amounted to NOK 274 million/2.02 % (NOK 267 million/2.04 %)
- Profit before losses and tax amounted to NOK 285 million (NOK 176 million)
- Profit after tax was NOK 233 million (NOK 119 million)
- Return on equity was 20.8 % (11.8 %)
- Cost/income ratio was 33.0 % (44.5 %)
- Earnings per equity certificate in year-to-date: NOK 25.10 (NOK 14.50)
- Lending growth in last 12 months: 4.6 % (7.0 %)
- Deposits growth in last 12 months: 3.1 % (3.8 %)
- Core tier 1 capital amounted to 12.35 % as at 30 September 2014 (12.30 %)
Comparable figures for Q3 2013 in brackets.
Olav Arne Fiskerstrand, CEO, Mobile: (+47) 900 18 299
Runar Sandanger, CFO, Mobile: (+47) 950 43 660