SpareBank 1 SMN

Earnings Release • Feb 10, 2022

Preliminary 2021 net profit for SpareBank 1 SMN: Historically strong profit performance, solid operations and low losses provide growth opportunities and high dividend

Preliminary 2021 net profit for SpareBank 1 SMN: Historically strong profit performance, solid operations and low losses provide growth opportunities and high dividend

SpareBank 1 SMN delivers a profit of NOK 703m for after tax the fourth quarter

and ends the year with a preliminary annual profit of NOK 2,902m after tax.

Losses on loans are reduced to NOK 32m in the fourth quarter. The board of

directors recommends paying a dividend of NOK 7.50 per equity certificate, and

NOK 547m as community dividend.

The fourth quarter showed continued growth, resulting in an overall increase in

lending of 6.9 per cent and deposit growth of 14.1 per cent in 2021. Growth in

lending was 6.8 per cent to personal customers and 7.1 per cent to corporate

customers. Deposit growth was 9.8 per cent from personal customers and 17.2 per

cent from corporate customers.

"People and businesses appear to have navigated safely through the pandemic,

despite new restrictions imposed towards the end of the year. Strong deposit

growth, considerably lower losses and few bankruptcies are a clear sign that

things are going well in Mid-Norway now", says Group CEO at SpareBank 1 SMN,

Jan-Frode Janson.

The results bring a return on equity of 13.5 per cent for the year as a whole.

Losses are now considerably reduced after remaining at a high level for several

years, and amounted to NOK 161m in 2021. The CET1 ratio is now 18.0 per cent.

The strategy project 'One SMN' has reduced costs and increased synergy effects

across the business lines as central objectives. Adjusted for reorganisation

costs, there was zero growth in costs at the bank in 2021. Cost growth among the

subsidiaries is in all essentials related to growth initiatives.

Ready for further growth

Strong growth across all business lines has enabled SpareBank 1 SMN to

strengthen its market position in recent years. The growth is primarily seen in

the bank's primary geographical catchment area Mid-Norway, spurred in part by

increased synergy effects across the group's various business lines.

"We will continue to grow and gain market shares in the years ahead. We will

above all create even greater growth and profitability by offering customers a

product range among the most competitive in the country. No-one in our region

has a comparable breadth of competence and products assembled under one roof",

says Group CEO Jan-Frode Janson.

In addition, a deliberate focus on the LO agreement and synergy effects with the

subsidiary SpareBank 1 Markets has contributed to solid growth in the Oslo area

in the past year. The bank has for several years built up a client base in Oslo

with a total of NOK 6.5bn in loans. SpareBank 1 SMN is now ready to continue its

growth, in part through a stronger presence in Oslo.

"We see a large business potential of establishing a presence in Oslo, but will

primarily use our solid position and growth capacity to secure even more

customers in Mid-Norway in upcoming years", says Mr Janson.

Record dividend enables a quarter billion kroner payout to the regional

community

SpareBank 1 SMN achieved its best results ever in 2021, based on good

performances in all business areas. This provides a good basis for a

historically high dividend payout of NOK 7.50 per equity certificate to

investors, altogether totalling NOK 970m. In addition, it is recommended

allocating as much as NOK 547m to community dividend. Of this, NOK 297m will be

transferred to the foundation Sparebankstiftelsen SMN, and NOK 250m will be for

distribution.

"With our unique ownership model in which the community owns about 40 per cent

of the bank, a large share of the net profit goes back to the community in the

form of community dividend. This year we recommend distributing a quarter

million kroner to non-profit causes in Mid-Norway. This is a historically high

sum which will be to the benefit of the voluntary sector, sports, culture and

local community development throughout the region", says Group CEO Jan-Frode

Janson.

SpareBank 1 SMN will earmark NOK 80m of the community dividend to support green

transition for business and industry in Mid-Norway. The bank has for example in

collaboration with SINTEF developed a competence raising programme for

businesses in the region, in addition to a seedcorn fund to help new sustainable

firms get under way. Moreover, a course in innovation entitled "Hvordan skape

business av bærekraft" ('How to make a business out of sustainability') is to be

established in conjunction with Æra Strategic Innovation.

Key figures 2021:

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

unless otherwise stated)

* Post-tax profit: NOK 2,902m (1,978m)

* Return on equity: 13.5% (10.0%)

* CET1 ratio: 18.0% (18.3%)

* Growth in lending: 6.9% (9.0%)

* Growth in deposits: 14.1% (13.5%)

* Losses on loans and guarantees: NOK 161m (951m)

* Earnings per equity certificate: NOK 13.31 (8.87)

* Recommended dividend: NOK 7.50 per equity certificate (NOK 4.40)

* Recommended community dividend: NOK 547m (NOK 321m)

Contacts:

CFO Kjell Fordal on +47 905 41 672

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

https://quarterlyreport.smn.no/

This information is subject to the disclosure requirements pursuant to Section

5-12 the Norwegian Securities Trading Act