The board of directors of SpareBank 1 SMN recommend revising the dividend payout
from last year's profit from 53.5 per cent to 41.2 per cent. New dividend is
recommended at NOK 5.00 per equity certificate.
SpareBank 1 SMN's board of directors is following the crisis in the Norwegian
economy closely, and is taking the consequences for our region seriously. The
board considers the recommended change in the payout ratio to reflect a good
balance between the need for stability and predictability for the bank's owners
and investors on the one hand, and the group's social responsibility towards its
customers and local communities in Central Norway on the other. This
recommendation further bolsters an already strong financial position, enabling
SpareBank 1 SMN once again to keep its cool and to accompany personal customers
and firms alike safely through the crisis.
The economic ripple effects of the crisis could be far-reaching. SpareBank 1 SMN
has capital and liquidity that puts the group in a solid position, well-prepared
to meet these challenges. The bank's equity capital is well in excess of
government requirements, and provides scope to absorb future losses. This
robustness enables the bank to initiate immediate measures for customers
experiencing problems as a result of the crisis. For example, the bank is
opening the way for mortgage payment holidays and for advances of unemployment
benefit. The group's solid position enables it to maintain normal lending
activity in a demanding market.
Finanstilsynet (Norway's FSA) has asked all Norwegian banks to reappraise their
distribution of net profit in light of the economic crisis that has arisen. The
board has accordingly revised its original recommendation for distribution of
last year's net profit.
The original assessment was made on 5 February, before the consequences of the
crisis for the Norwegian economy had arisen. At that point a dividend payout of
NOK 6.50 per equity certificate was recommended, corresponding to a payout ratio
of 53.5 per cent of the group's net profit. NOK 474 million was allocated to
social dividend, comprising NOK 200 million to dividend payout and NOK 274
million to the foundation Sparebankstiftelsen SMN.
In their reappraisal of the payout ratio, the board of directors emphasise that
SpareBank 1 SMN should be even better prepared to safely negotiate a long
lasting crisis. At the same time, the board takes heed of the government's
expectations of reduced dividend, and upholds the bank's most important social
mission which is to ensure an ample supply of capital to people and businesses
in the region.
SpareBank 1 SMN also aims to be a sound investment for its owners and investors
by delivering the best possible results and pursuing an attractive and prudent
dividend policy. The board accordingly considers it appropriate to reduce the
dividend payout to NOK 5.00 per equity certificate. This provides a payout ratio
of 41.2 per cent, which is equivalent to a 23 per cent reduction on the original
recommendation.
The social dividend is reduced from NOK 474 million to NOK 364 million, in
keeping with the bank's dividend policy. The reduction in the payout ratio of
about NOK 300 million strengthens the bank's financial position by about 0.3
percentage points.
Contact:
CFO Kjell Fordal, phone +47 905 41 672
Head of Communications Hans Tronstad, phone +47 941 78 322
This information is subject to the disclosure requirements pursuant to Section
5-12 the Norwegian Securities Trading Act