SpareBank 1 SMN: Good profit performance makes for green strength

SpareBank 1 SMN recorded a post-tax profit of NOK 2,217m for the first nine months of the current year, an increase of NOK 528m over the same period of last year. The bank is now lifting sustainability to the top of its agenda – because it is a corporate social responsibility and because it creates financial value.

"We are well placed to reach our economic goals in 2019, and we have laid a solid basis that enables us to disburse even higher social dividend next year. The region is thriving, and this, combined with good work across the entire group, has yielded record-high profit,” says Group CEO at SpareBank 1 SMN, Jan-Frode Janson, who is now setting higher ambitions on behalf of the group.

"If we are to reap equal success in the years ahead, sustainability must be a hallmark of our business. What was previously a matter of communication and words has now made its mark on the financial markets. Sustainable firms are preferred by customers and investors, they are valued more highly and have cheaper access to capital. That is why we at SpareBank 1 SMN have lifted sustainability to the top of our agenda,” says Group CEO Jan-Frode Janson at SpareBank 1 SMN.

In this year’s edition of Economic Barometer for Central Norway which was presented last week, the bank, together with Sentio Research Norway, has interviewed 700 businesses in the region about sustainability. The survey shows that business and industry have a positive but wait-and-see attitude to the theme.

"Central Norwegian businesses have yet to fully realise the tie-in between sustainability and financial value creation. However, we believe this will change rapidly. We intend to contribute to that change,” says Jan-Frode Janson.

"We have made some progress at the bank, and earlier this autumn Sustainalytics, respected for their ESG rating and accompanying research, awarded us a markedly higher ESG rating than they did in 2018. And last month we signed, as one of five Norwegian banks, the UN’s principles for responsible banking. The principles are designed to guide the financial sector’s alignment with the UN’s sustainability goals and the Paris Agreement. This imposes an obligation. Further, we recently issued the first Norwegian green senior bond in Europe, earmarking about NOK 5 billion for loans to sustainable commercial property, fisheries and aquaculture,” says Mr Janson.

High growth and stable loss level

In the course of the year’s first nine months, 4,700 personal customers and 850 corporate customers have opted for SpareBank 1 SMN as their new bank. Growth in lending to households now stands at 5.8 per cent, which is higher than the general rate of growth in the market. The bank has thus strengthened its leading position in Central Norway. Lending to corporate clients increased by 2.8 per cent.

Loan losses totalled NOK 198 million, on a par with last year’s level. Losses stem mainly from oil-related activity.

Business and industry in Central Norway continue to prosper. In this year’s edition of Economic Barometer for Central Norway, SpareBank 1 SMN nonetheless revises its forecast for the coming year from positive to neutral, but the bank still anticipates high activity levels.

"2018 and 2019 have been two fantastic years for Central Norwegian business and industry with high turnover growth and good profit performances. 2020 will also be a very good year, but possibly not quite as good as the two preceding years. This is suggested by weaker macroeconomic prospects in Norway and elsewhere, higher interest rates and an increasing shortage of qualified labour,” says Jan-Frode Janson.

Key figures

• Pre-tax profit: NOK 2,612m (1,937m first nine months of 2018)
• Post-tax profit: NOK 2,217m (1,689m)
• Return on equity: 16.0% (13.3%)
• Loan losses: NOK 198m (196m)
• CET1 ratio: 15.1% (14.9%)
• Growth in lending: 4.8% (7.3%)
• Growth in deposits: 7.9% (6.1%)

?Trondheim, 30 October 2019

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

?https://quarterlyreport.smn.no/2019/

Attachments

• Quarterly report Q319
• Presentation Q319
• Supplementary information Q319