After the first six months of the year, Sparebanken Møre can
report good growth and low level of losses. Retail lending
increased by 8 % compared with the same period last year,
while the bank has grown by 13.3 % in the corporate market.
"We have had a goal of growth and we are pleased with the
development, which confirms we are an attractive,
competitive bank for both retail customers and the corporate
sector in our region," says the chief executive of
Sparebanken Møre, Trond Lars Nydal. The county's largest
bank has also experienced good growth in deposits with a
growth rate of 6.1 % in the last 12 months.
Pre-tax profit for the first half of 2017 amounted to NOK
349 million, compared with NOK 410 million for the same
period last year. The largest deviation was the NOK 33
million reduction in other operating income. This was due to
the extraordinary proceeds of NOK 38 million that were
recognised in the second quarter of last year in connection
with the sales contract between Visa Europe Ltd. and Visa
Inc.
Net interest income under pressure
Profit after tax for the second quarter amounted to NOK 130
million, compared with NOK 181 million for the same period
last year. Net interest income in NOK was at the same level
as last year, while other operating income was NOK 43
million lower (NOK 5 million lower when adjusted for the
Visa transaction).
"Net interest income is under pressure due to strong
competition for both loans and deposits. It has also been
influenced by reduced risk in parts of our portfolio in the
last year. At the same time we are experiencing good,
managed growth and we now have a robust customer portfolio,"
says Nydal.
The bank has increased lending to customers by NOK 4.8
billion in the last 12 months, and at the end of the second
quarter its total lending amounted to NOK 56 billion. The
bank expects lending growth to slow in the remainder of the
year.
Stable cost level
Sparebanken Møre can refer to a stable level of costs and
solid operations. Operating costs increased by NOK 4 million
compared with the same period last year, NOK 3 million of
which was due to higher employers' National Insurance
contributions due to the recently introduced financial
industry tax. The Bank is also focusing on the development
of future-oriented IT solutions.
"We have a continuous focus on improving and simplifying
banking for our customers. Among other things, we recently
launched a new and improved mobile bank, which ensures easy
access to banking services at all times. We strongly believe
that investing in smart solutions and capable advisers will
benefit both customers and the bank," says Nydal.
He underscores the bank's commitment of a maximum cost
income ratio of 45 %.
Low level of losses and positive prospects
Sparebanken Møre can still present a low level of losses. In
the second quarter, NOK 6 million was recognised in losses
on loans and guarantees. Collective impairments were reduced
by NOK 40 million. Reversal of losses amounted to NOK 2
million in the retail segment, while individual losses
amounting to NOK 48 million were recognised in the corporate
segment.
Nydal reports that the economic outlook for Møre og Romsdal
has improved during the spring and summer, and that
unemployment fell by around 500 people in the first half of
the year. He expects a low level of losses in the rest of
2017 as well.
"Production is rising in industries such as fishing,
traditional exports, building and construction, and tourism.
The downturn in oil-related industries has become more
subdued and there is also a high level of activity in the
public sector. The main reasons for the improvement are the
adaptability in the corporate sector, low level of interest
rates, a weak NOK exchange rate, and an expansionary fiscal
policy", says Nydal.
Our customers have never been more satisfied
Sparebanken Møre has recently conducted a survey showing
that the satisfaction of its retail customers has never been
higher. The customers are particularly satisfied with the
expertise of the advisors and their ability to understand
the customers' needs.
"I am pleased to see that our focus areas are giving
tangible results, both in terms of good and increasing
scores in satisfaction surveys - and not least in an
increasing number of customers. We focus strongly on
expertise, aiming to be the best in class in giving good and
personal financial advices. Our strong local presence
provides us with a closeness, knowledge and accessibility
which increase the quality of our services", says Trond Lars
Nydal.
Key figures for Q2 2017
* Net interest income: NOK 268 million/1.71 %
(NOK 268 million/1.79 %)
* Profit before losses: NOK 180 million (NOK 227 million)
* Profit after tax: NOK 130 million (NOK 181 million)
* Return on equity: 10.0 % (14.7 %)
* Cost income ratio: 45.6 % (39.2 %)
* Earnings per equity certificate (Group): NOK 6.50
(NOK 9.10)
Comparable figures for Q2 2016 in brackets.
Key figures for H1 2017
* Net interest income: NOK 529 million/1.69 %
(NOK 538 million/1.80 %)
* Profit before losses: NOK 357 million (NOK 405 million)
* Profit after tax: NOK 261 million (NOK 315 million)
* Return on equity: 10.0 % (12.9 %)
* Cost income ratio: 45.7 % (42.1 %)
* Earnings per equity certificate (Group): NOK 13.10
(NOK 15.80)
* Core Tier 1 capital ratio: 14.3 % (14.5 %)
* Lending growth in the last 12 months: 9.5 % (1.5 %)
* Deposit growth in the last 12 months: 6.1 % (5.5 %)
Comparable figures for H1 2016 in brackets.