SpareBank 1 SMN

Earnings Release • Aug 12, 2021

SpareBank 1 SMN : Increased optimism in the economy, solid growth and a strong profit performance

SpareBank 1 SMN : Increased optimism in the economy, solid growth and a strong profit performance

SpareBank 1 SMN gained more customers, improved profitability and lower losses

in the second quarter. Net profit in the second quarter amounted to NOK 942m,

and to NOK 1,836 in the first half-year on an accumulated basis. The bank is

more solid than ever, and NOK 100m is now allocated to community dividend for

the reopening of Mid-Norway.

After an excellent performance in the first quarter, the trend continued in the

second quarter, well assisted by growing optimism among the people and

businesses of Mid-Norway. Losses were reduced to NOK 39m, from NOK 170m in the

same quarter last year. SpareBank 1 SMN is now achieving solid growth across all

business lines.

"We have kept a cool head and maintained our faith in the people and businesses

of the region throughout the pandemic and are now reaping the benefits in the

shape of even stronger customer loyalty and the fact that we are increasingly

the bank of choice. Substantial growth in both lending and deposits are the best

possible endorsement from our customers", says Group CEO Jan-Frode Janson.

Well set for further growth

Lending and deposits have shown good growth. Gross lending rose by NOK 7.9 per

cent and deposits by 16.8 per cent in the 12 months to end-June. Operating

expenses were reduced to NOK 735m for the quarter, and the bank achieved a

return on equity of 14.3 per cent. With a CET1 ratio of 18.3 per cent, the bank

is very robust.

A large proportion of the population have now received their first vaccination

dose, and uncertainty in the economy is gradually abating in step with the wind-

down of the restrictions imposed by the authorities. The Confederation of

Norwegian Enterprise (NHO) anticipates lower unemployment and growth in the

economy in forthcoming quarters, and expects the economy to be back to its pre-

pandemic level as early as in the third quarter.

"Although there is still some risk in the economy, we expect strong economic

growth ahead. SpareBank 1 SMN is achieving strong results and is more solid than

ever, so we are well placed to play our part in the growth, and to contribute a

little extra. We aspire to grow more than our competitors in Mid Norway and to

further consolidate our position as finance centre number one," says Mr Janson.

NOK 100m for the reopening of Mid-Norway

Good results at SpareBank 1 SMN also benefit the bank's stakeholders. The

largest single stakeholder is the community, which owns 40 per cent of the bank.

All inhabitants of Mid-Norway can thus share in the distribution of the bank's

net profit in the form of dividend to the community.

NOK 100m of the community dividend is now earmarked for the reopening of Mid-

Norway.

"When society went into lockdown we stepped up as a matter of course. We set

aside NOK 100m to our post-pandemic project to support the voluntary sector

through a demanding year of lockdown. In our mind it is entirely appropriate to

also be a driver for the reopening which is at last approaching. After a long

period of little activity, restrictions on attendances at sporting venues and

other gatherings, falling memberships and challenges in recruiting participants

and coaches alike, we wish to contribute to getting the wheels of sports and

cultural activities turning again. At long last we are returning to sports

grounds and other arenas to cheer on good performances," says Group CEO Jan-

Frode Janson.

Key figures, second quarter 2021:

(Consolidated figures. Figures in parenthesis refer to the same period of 2020

unless otherwise stated)

* Pre-tax profit: NOK 942m (840m)

* Post-tax profit: NOK 755m (719m)

* Return on equity: 14.3% (15.1%)

* CET1 ratio: 18.3% (17.2%)

* Growth in lending: 2.0% (2.5%)

* Growth in deposits: 7.6% (7.0%)

* Lending to personal customers: 2.2% (2.4%)

* Lending to corporate clients: 1.5% (2.7%)

* Deposits from personal customers: 6.9% (10.2%)

* Deposits from corporate customers: 8.0% (4.6%)

* Net result of ownership interests: NOK 212m (177m)

* Net result of financial instruments: NOK 59m (271m)

* Losses on loans and guarantees: NOK 39m (170m)

* Earnings per equity certificate: NOK 3.51 (3.27)

* Book value per equity certificate: NOK 100.18 (90.37)

Contacts:

Chief Financial Officer, Kjell Fordal on +47 905 41 672

Executive Vice President, Rolf Jarle Brøske on +47 911 12 475

This information is subject to the disclosure requirements pursuant to Section

5-12 the Norwegian Securities Trading Act

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