Quarterly Report as of 30 June 2001

Transcription

1 Quarterly Report as of 30 June 2001 SpareBank 1 SR-Bank focus on investment pays off Group profit of NOK 244 million before tax Substantial growth in net new sales of Odin funds 44,000 customers save in Odin funds Good growth in deposits, twelve-month growth rate of 13 % High contribution and increased market shares from EiendomsMegler 1 Rogaland AS High cost-effectiveness, cost percentage of 1.70 Cost reduction and organizational development program implemented Reduced growth in lending, twelve-month growth rate of 16 % Low losses and stable default rate License to carry out active investment management in subsidiary SR-Forvaltning ASA Good growth in other operating income and continued high cost-effectiveness The SpareBank 1 SR-Bank group achieved a pre-tax profit of NOK 244 million after the first six months. This is NOK 129 million less than in 2000, which was influenced by high capital gains on sales of shares in Fellesdata ASA (NOK 177 million) and cost allocations (NOK 35 million). The underlying bank operations show an improvement of NOK 35 million as compared with the first six months of The group's regular operations exhibit good growth in other operating income, particularly in the areas of insurance, securities and real estate business. Operating costs are rising, in part due to the integration of former Vår/Varde employees, but the cost percentage remains low and stable at 1.70 % of the average total assets. Losses are also low and default is stable. The income/cost ratio is 1.74:1 so far this year, and the return on equity capital after tax is 13.3 %. The group's growth in lending has softened, with a growth of 7 % so far this year and 16 % for the last 12 months. Deposit trends are good and customer deposits have increased by 13 % over the past 12 months. Net interest income and interest margin Net interest income at the end of the second quarter amounted to NOK 454 million, up from NOK 442 million in the same period last year. Compared with the average total assets, the interest income constituted 2.03 %, compared with 2.33 % for the first half of The reduction is mainly due to changed framework conditions related to hedge fund fees as well as technical accounting factors related to posting investments in interest funds and zero-coupon bonds. The lending margin has improved somewhat compared with the first half of 2000, while the deposit margin is reduced.

2 Other operating income After the 2nd quarter, the group has achieved operating income totaling NOK 232 million, which is NOK 74 million higher than for the same period last year. Net commission income from the sale of money transfer services shows a 12-month growth of approximately 9 % to NOK 61 million. Commission income from securities and insurance increased by 63 % and 219% respectively, totaling NOK 28 million and NOK 22 million. The increase in securities income reflects the bank's increased focus on investment. The acquisition of Vår Bank og Forsikring provides high growth in insurance income. The total capital gains of NOK 56 million are divided among NOK 15 million from foreign currency, NOK 1 million on certificates and bonds and NOK 6 million on shares, primary capital certificates and securities. In addition comes the yield of NOK 34 million from investments in Odin money market funds and zero-coupon bonds. The yield on shares and securities is about 6.5 percentage points higher than the stock index on the Oslo Stock Exchange so far this year. The deficit in Sparebank 1 Gruppen AS gives a negative owner interest share of NOK 17 million. This is mainly due to weak development in the securities market as well as substantial valueadded and goodwill write-offs in connection with the acquisition of Vår Bank og Forsikring. Other operating income increased by 47 %, or NOK 17 million, which is mainly due to significant growth in the subsidiary EiendomsMegler 1 Rogaland AS. Operating costs Group operating costs for the first half of 2001 amounted to NOK 381 million. In relation to the total assets, this constituted 1.70 % compared with 1.83 % in the first six months of 2000 (1.65 % excl. reorganization costs). In relation to operating income (excl. capital gains) the costs constitute 57.3 %. In nominal terms, total costs have climbed by NOK 68 million compared with the same period last year (excl. reorganization costs). Of this amount, personnel costs account for NOK 36 million. The average number of man-years rose from 687 in the first half of 2000 to 789 in the first half of The increase is largely due to the integration of former Vår/Varde employees as from 1 January 2001, as well as expansion in EiendomsMegler 1 Rogaland AS. The group has implemented reorganization measures which will lead to the departure of 35 persons from the group during the course of 2001 and A cost reduction and organizational development program has been implemented to ensure continued high cost-effectiveness. Deposits, investments and lending Customer deposits from the private market are rising, with a growth rate of 12% compared with 14 % last year. Deposits from the business market are affected by changes in significant individual commitments. The annual growth rate from the business market is 14 %, compared with 17 % at the beginning of the year. The total growth in deposits on a 12-month basis shows a weak reduction from 15% at the beginning of the year to 13 % at the end of June The bank's sales of ODIN mutual and interest funds show a very good trend. Net new sales of Odin funds increased from NOK 107 million in the first six months of 2000 to NOK 378 million in the first six months of SpareBank 1 SR-Bank's share of the SpareBank 1 banks' total assets in Odin mutual funds has increased from approximately 29 % to about 32 % in the last 12 months. In addition come the sale of guaranteed products which yielded a volume of NOK 248

3 million in the first half year. Net new subscriptions of Odin funds so far this year and guaranteed products amount to an annual growth in customer deposits of 4.6 %. So far this year, lending has increased by 7 % to NOK 42.0 billion, while the 12-month growth is 16 %. The growth is in line with the adopted plans, reduced from 20 % at the beginning of the year. The growth in lending is divided between 18 % in the private market and 14 % in the business market, and the volume distribution between the private and business markets is 65/35%. Default Gross default over 90 days amounted to NOK 307 million at the end of June, NOK 13 million lower than at the end of last year. Gross and net default at the end of the quarter constituted 0.7 % and 0.5 % of gross lending respectively. The specified loss allocation on the default portfolio is NOK 101 million, which is equivalent to an allocation rate of 33 %. In addition, the specified loss allocation on commitments not in default is NOK 158 million, which is equivalent to an allocation rate of 38 %. So far this year, the group has had net losses of NOK 50 million. Unspecified loss allocations have increased by NOK 15 million in the second quarter and now total NOK 323 million. This is equivalent to 0.8 % of the lending portfolio. Capital adequacy ratio At the end of June, the capital adequacy ratio for the group was %, excluding the profit for the year and % for the parent bank. The core capital adequacy for the group and the parent bank were 7.97 % and 7.74 % respectively. The amended capital adequacy rules that entered into force on 1 April 2000, improved the capital adequacy ratio for the parent bank as of 30 June 2001 by 0.62 percentage points. Subsidiaries EiendomsMegler 1 Rogaland AS has experienced very high turnover so far this year and revenues from the real estate business have increased by 51 % compared with last year. This is a result both of expansion and generally good market activity. Westbroker Finans AS is delivering good results, with a stable interest margin compared with last year. The bank's subsidiary, SR-Forvaltning ASA, has recently received a license to carry out active investment management. As of 30 June 2001, the company manages approximately NOK 1.1 billion. The formation of the subsidiary will be reflected in the accounts in the next quarterly report. Market development SpareBank 1 SR-Bank's market share in the private market in Rogaland is increasing steadily and has now reached 44 %. This is an increase of about 4.5 percentage points over the past five years. The acquisition of Vår Bank yielded an increase of nearly one full percentage point. The bank's goal in the Agder counties is controlled growth with primary focus on the private market. We have new bank offices in Kristiansand and Mandal, and we plan to set up offices in Arendal and Lyngdal.

4 SpareBank 1 SR-Bank is also expanding in Rogaland, recently opening a new office in Klepp. Another new branch will be opened in Sauda this autumn. A new office concept will be implemented for the new offices, as well as for the existing offices to some extent. The concept reinforces the office's public profile and role as an active marketplace. The personal and advisory bank is emphasized, and the new concept also provides improved synergy with EiendomsMegler 1. The growth in the number of Internet bank customers continues to be significant, with an increase over the past 12 months of approximately 54 % (to just over 46,000 customers). The growth so far this year is at about 21 %. Approximately 23% of our full-service customers now have signed on to the Internet bank product, compared with 16% one year ago. The bank has recently launched a new and improved version of the Internet bank. The activity level within the business and commercial market is good, with rising activity in oilrelated business. This provides positive ripple effects for the region. The bank's commercial portfolio shows few loses and stable default. The bank's primary capital certificates The bank's primary capital certificates were quoted at NOK 233 at the end of June. The number of primary capital certificate owners declined by 80 in the second quarter to At the end of the quarter, the percentage held by foreigners was 11.0 %, while Rogaland-based owners accounted for 46.9 %. The 20 largest owners accounted for 32.5 % of the primary capital certificates. 1. Swedbank Markets % 2. National Insurance Fund % 3. Tveteraas Finans AS % 4. Gjensidige NOR Sparebank % 5. SpareBank 1 Midt-Norge % 6. Arne B. Corneliussen Invest % 7. Clipper Shipping AS % 8. Stiftelsen UNI % 9. Frank Mohn AS % 10. Pareto AS % 11. Otto B. Morcken % 12. Solvang Shipping AS % 13. Audley AS % 14. Ringerikes Sparebank % 15. Westco AS % 16. Brown Brothers Harriman % 17. Helland AS % 18. Erik Steen % 19. Sentralinvest AS % 20. Verdipapirfondet Avanse Finans % Total - 20 largest %

5 Outlook for the future The Board expects satisfactory profit performance for the remainder of the year. Stavanger, 9 August 2001 The Board of Sparebanken Rogaland

6 Highlights SpareBank 1 SR-Bank focus on investment pays off Group profit of NOK 244 million before tax Substantial growth in net new sales of Odin funds 44,000 customers save in Odin funds Good growth in deposits, twelve-month growth rate of 13 % High contribution from EiendomsMegler 1 Rogaland AS High cost-effectiveness, cost percentage of 1.70 License to carry out active investment management in subsidiary SR-Forvaltning ASA Highlights Year-end MAIN FIGURES NOK mill % NOK mill % NOK mill % Net interest income 454 2, , ,33 Net other operating income 232 1, , ,83 Total operating income 686 3, , ,16 Reorganization 0 0, , ,12 Operating costs 381 1, , ,64 Total operating costs 381 1, , ,76 Result before losses and write-downs 305 1, , ,40 Losses and write-downs 61 0, , ,18 Result of ordinary activities 244 1, , ,58 Taxes 69 0, , ,42 Profit 175 0, , ,16 Key figures Year-end 2000 Average total assets Total assets Net loans to customers Deposits from customers Growth in loans 16 % 19 % 20 % Growth in deposits 13 % 13 % 15 % Capital adequacy ratio 13,70 10,94 11,65 Core capital ratio 7,97 7,79 8,15 Net equity and subordinated loan capital Return on equity * 13,3 23,4 19,5 Income per cost krone ** 1,74 1,68 1,72 Number of man-years Number of offices Market price at the close of the quarter Profit per primary capital certificate *** 14,7 24,0 40,4 * Profit as a percentage og average equity ** Profit income (excluding net exchange and capital gain/loss that are not related to money market fund and zero interest coupon), divided by total operating costs. *** Profit for the year multiplied by the primary capital certificate percentage and divided by the number of primary capital sertifikates. KHT/ Kvartal22001A.xls

7 Main Figures from the Profit and Loss Account and balance sheet SpareBank 1 SR-Bank PROFIT AND LOSS ACCOUNT Year-end Year-end (Amount in NOK million) Interest income Interest costs Net interest income Dividends Income from ownership interests Commission income Commission costs Net exchange and capital gains Other operating income Net other operating income Total operating income Wages and general administration costs Reorganization Other operating costs Total operating costs Profit before losses and write-downs Loss/gain finansiel fixed assets Loss on loans and guarantees Result og ordinary activities Taxes Profit ,4 24,0 14,7 Profit per primary capital certificate 14,7 24,0 40,4 SpareBank 1 SR-Bank BALANSE (Amount in NOK million) Assets Cash and claims on central banks Claims on credit institutions Gross loans to customers Specified loss provisions Unspecified loss provisions Net loans to customers Acquired assets Securities Fixed assets Other assets Total assets Liabilities and equity Debt to credit institutions Deposits from customers Debt established on issue of securities Other debt Subordinated loan capital Equity Profit Total liabilities and equity Off-balance-sheet: Contingent liabilities (guarantees) KHT/ Kvartal22001B.xls

8 Loans for which loss provisions have been made SpareBank 1 SR-Bank (Amounts in NOK million) Non-performing loans for which loss provisions have been made Gross non-performing loans Specified loss provisions Net non-performing loans % 39 % 35 % Loan loss provision ratio 33 % 36 % 41 % Of which gross non-aaccrual loans Performing loans for which loss provisions have been made Performing loans with loss provision Specified loss provisions Net performing loans % 38 % 38 % Loan loss provision ratio 38 % 35 % 33 % Total loans for a customer are regarded as non-performing and included in the bank's overviews of non-performing loans when due instalments or interest payments have not been paid within 90 days after the due date or a line of credit is overdrawn for 90 days or more. Loss assessments are made of loans that are non-performing for more than 60 days. Loss provisions SpareBank 1 SR-Bank (Amounts in NOK million) Specified loss provisions: Specified loss provision pr Actual loan losses during the period for which specified loss provisions have been made previously /- The period's specified loss provisions Specified loss provisions Unspecified loss provisions: Unspecified loss provisions pr /-The period's change in unspecified loss provision Unspecified loss provisions Loans and losses in 2001 Loans and Gross Recoveries Net Loss (Amounts in NOK million) guarantees loans of losses loss ratio Corporate ,27 % Private customers ,03 % Transferred to unspesified Sum ,12 % KHT/ Kvartal22001C.xls

9 RESULTS FROM THE QUARTERLY ACCOUNTS Net interest income Net other operating income Total operating income Total operating costs Result before losses and write-downs Losses and write-downs Result of ordinary activities Taxes Profit BALANCE SHEET FIGURES FROM THE QUARTERLY ACCOUNTS Deposits from customers Gross loans to customers Loan loss provisions Net loans to customers Total assets Average total assets NON-PERFORMING LOANS AND NON-ACCRUAL LOAN Gross non-performing loans Specified loan loss provisions Net non-permorming loans Gross non-accrual loans Net non-accrual loans CAPITAL ADEQUACY The bank's reserves Primary capital certificate Other reserves Core capital Additional capital Deductions Net equity and subord.loan capital Total basis for calculation Capital adequacy ratio 13,70 % 11,44 % 11,65 % 10,96 % 10,94 % 11,42 % 12,12 % 11,27 % 10,11 % KEY FIGURES FOR PRIMARY CAPITAL CERTIFICATES Marked price at the close of the quarter Book equity per primary capital certificate Primary capital certificate ratio 63, ,3 64,8 64,8 64,8 66,6 66,6 KHT/ Kvartal22001D.xls