Sparebanken Møre leaves behind another year of
efficient operations, growth and low level of losses.
The preliminary accounting figures for 2016 show a
profit for the year after tax of NOK 574 million, an
increase of NOK 71 million on the year before.
The Group's profit after tax was NOK 116 million for
the fourth quarter and thus the Group experienced a
good end to a year that was characterized by positive
development and growth from the beginning. Total
income in the quarter ended on a par with last year,
while costs were NOK 19 million higher. This was
mainly due to costs in the same quarter in 2015 being
reduced by NOK 24 million due to a non-recurring
effect from changes to the Bank's pensions scheme.
"In a strongly competitive market with tight margins,
we are pleased to declare that we ended the year with
strong figures in the fourth quarter as well. The Bank
is very sound and we satisfy the regulatory
requirements by a good margin. This provides us with a
good basis for providing good advice, smart solutions
and reliability for our customers also in the future,"
says the chief executive of Sparebanken Møre, Olav
Arne Fiskerstrand.
Strong deposit growth
Deposits from customers increased by NOK 3.2 billion
last year and totalled NOK 32.6 billion at the end of
the year. The strongest growth was seen in the public
sector and the corporate segment.
"The growth reflects good liquidity, but also the
level-headed attitude of our customers. A high deposit-
to-loan ratio and total assets of NOK 61.6 billion
make us a strong source of capital in the county. This
provides security for our customers, owners and
region," says Fiskerstrand. The Core Tier 1 capital
ratio was 14.7 % at the end of the year.
Efficient operations
In 2016, the Bank also gained many new loan customers
and at year-end the lending volume totalled NOK 52.7
billion. This reflects growth of 6.6 % in the retail
market, while lending to corporate customers dropped
by 4.8 %.
"We grew steadily in the retail market throughout the
year, which shows that we are both attractive and
competitive. The decline in the corporate segment was,
among other things, due to the repayment of debt in
the maritime sector and the Bank's ambition to
increase its core capital adequacy."
Even though the competition is strong and net interest
income is slightly falling, total income rose by NOK
60 million compared with the year before. One of the
reasons for this was capital gains of NOK 24 million
in the bond portfolio, compared with capital losses of
NOK 51 million in 2015. A heavy focus on costs has
also resulted in low costs over time for the Bank.
Low level of losses and risk
While several industries can look back on a very
active year and good results, the low oil price has
presented challenges for oil-related industries.
"We take the challenges in the offshore sector
extremely seriously, even though our debt to asset
ratio is low and we have a good quality portfolio in
this segment. As a regional savings bank we have a
social responsibility and goal to be a committed
supporter of business and industry in our region,
Nordvestlandet. It is in situations like this we see
the great benefits of geographical proximity and local
knowledge. Being close to the situation means we can
do good, preventive work and be there for our
customers," says Fiskerstrand.
In the fourth quarter, the Bank increased collective
impairments by NOK 14 million and at year-end total
impairments for losses amounted to NOK 360 million.
Booked losses on loans and guarantees amount to NOK 22
million in the income statement for 2016.
Supporting the local community
Good results for the Bank benefit the county's
inhabitants, and the Board recommends allocating NOK
141 million to various projects within culture,
sports, local communities, infrastructure, skills and
business development.
"Half of the Bank's profit is returned to the region
through social dividends and in the last 3 years
Sparebanken Møre has supported almost 2 000 clubs and
organisations. We are proud to be an active and
significant contributor to prosperity, good childhood
environments and development in Møre og Romsdal," says
Fiskerstrand.
A cash dividend of NOK 14.00 per equity certificate is
also being recommended.
Future prospects
Møre og Romsdal's economic outlook have stabilised
during the autumn and winter. Most businesses and
industries are seeing increased activity due to the
weak Norwegian krone, low interest rates and an
expansive fiscal policy, and the rise in oil prices
has helped to reduce uncertainty for oil-related
industries. The situation will nonetheless be
challenging in 2017 and unemployment might continue to
rise slightly.
In Sparebanken Møre it is anticipated that the growth
in lending within the retail market will decrease
somewhat during the year, while the growth in the
corporate market will increase. Overall, a good result
is expected for 2017.
"With a good result for the year, professional
expertise and local knowledge, we have the very best
starting point for being a good local bank for people
and businesses with links to the county also in 2017,"
concludes Fiskerstrand.
Key figures - Q4 2016
(Comparable figures for Q4 2015 in brackets)
* Net interest income: NOK 279 million/1.83 %
(NOK 285 million/1.91 %)
* Profit before losses: NOK 181 million
(NOK 201 million)
* Profit after tax: NOK 116 million (NOK 128 million)
* Return on equity: 9.2 % (10.7 %)
* Cost in relation to income: 44.2 % (38.1 %)
Key figures - 2016 accounts
(Comparable figures for 2015 in brackets)
* Net interest income: NOK 1 082 million/1.79 %
(NOK 1 098 million/1.89 %)
* Profit before losses: NOK 777 million
(NOK 742 million)
* Profit after tax: NOK 574 million
(NOK 503 million)
* Return on equity: 11.6 % (10.7 %)
* Cost in relation to income: 43.0 % (43.0 %)
* Core Tier 1 capital ratio: 14.7 % (14.1 %)
* Lending growth in the last 12 months: 2.7 % (4.9 %)
* Deposit growth in the last 12 months: 10.8 % (3.5 %)
* Earnings per equity certificate (Group): NOK 28.80
(NOK 25.25)
Contact
Olav Arne Fiskerstrand, CEO, Mobile: +47 900 18 299
Runar Sandanger, EVP, Head of Treasury & Markets,
Mobile: +47 950 43 660
Tone S. Gjerdsbakk, Chief Information Officer, Mobile:
+47 990 44 346