SpareBank 1 SMN: Strong customer growth and better-than-expected profit performance
SpareBank 1 SMN recorded a post-tax profit of NOK 719m in the second quarter of 2020 compared with NOK 290m in the previous quarter. The second quarter brought higher growth, good financial earnings and lower losses. The group is gearing up to face sharp competition, lower economic growth and continued uncertainty about the corona pandemic.
The post-tax profit for the first six months of the year was NOK 1,008m compared with NOK 1,729m in the same period of 2019. The subsidiaries EiendomsMegler 1 Midt-Norge, SpareBank 1 Regnskapshuset SMN, SpareBank 1 Finans Midt-Norge and SpareBank 1 Markets all show strong figures and account for an increasing share of the group's earnings.
"Central Norway recovered more rapidly than we could have expected in late winter. This is particularly evident in the housing market. It is also reflected in SpareBank 1 SMN's accounts which show higher growth and lower losses than in the previous quarter. All credit to our customers and our staff for the way they have tackled the corona challenges. Being in a position to support the voluntary sector and the cultural sector through our social dividend is also gratifying", says Group CEO Jan-Frode Janson at SpareBank 1 SMN.
Lending to personal customers rose 7.9 per cent in the last twelve months, and SpareBank 1 SMN has thus strengthened its market position as the leading bank in Central Norway. The growth is largely due to the bank's agreement with the Norwegian Confederation of Trade Unions (LO) and to high activity in the housing market. Lending to corporates rose by 5.2 per cent thanks to increased demand from small and medium-sized businesses in the region. 4,200 personal customers and 650 businesses chose SpareBank 1 SMN as their new main bank in the first half-year.
Reduced losses in the second quarter
Losses on loans totalled NOK 478m compared with 308m in the first quarter, measuring 0.56 per cent of total outstanding loans. 89 per cent of losses in the first half of the current year refer to corporate clients.
"The corona crisis continues to leave its mark on the accounts, although the bank made substantially lower write-downs in the second quarter than the first. We have an active summer behind us, both in the housing market and among firms. Even so, major uncertainties remain. Covid infections are on the increase, and the government is again imposing tighter restrictions nationwide. SpareBank 1 SMN continues to keep a cool head and is helping people and viable companies through the crisis", says Jan-Frode Janson.
Transition from management by the bank to management by the group
The enhancement programme 'One SMN' will realise synergies between the group's business lines in addition to increased digitalisation, more efficient work processes and ambitious cost reductions.
Changes are made to the composition of the group management team in a move to increase the business focus of the entire group. Managing director Arne Nypan (49) at SpareBank 1 Regnskapshuset SMN and managing director Kjetil Reinsberg (59) at EiendomsMegler 1 Midt-Norge join the group management team from 11 August onwards.
"The changes signal a switch from management anchored in the bank to management anchored in the group. The changes will enable the group management team to keep closer to the business and to become even more customer-oriented", says Jan-Frode Janson.
Group costs rose 1.3 per cent to NOK 1,422m in the first half-year. In order to meet sharper competition and lower economic growth, the group intends to enhance its operational efficiency. Its ambition is to reduce annual costs by a minimum of NOK 200m.
See the enclosed quarterly interim report and presentation.
Key figures
Pre-tax profit: NOK 1,202m (2,003m as per first half 2019)Post-tax profit: NOK 1,008m (1,729m)Return on equity: 10.3% (19.0%)Growth in lending: 7.0% (5.7%)Growth in deposits: 8.9% (7.7%)Loan losses: NOK 478m (126m)CET1 ratio: 17.2% (15.0%)
There will be a Global Investor webinar in English 11th on August at 3:30 PM CET. You can find the link to the webinar here
Trondheim, 11 August 2020
Contact persons at SpareBank 1 SMN:
Executive Director, Finance, Kjell Fordal on +47 905 41 672
Head of Corporate Communications, Hans Tronstad on +47 941 78 322
This information is subject of the disclosure requirements acc. to §5-12 vphl (Norwegian Securities Trading Act)
https://quarterlyreport.smn.no/2020
Attachments
Report Q2 2020 Supplementary information Q2 2020 Presentation Q2 2020
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