Sparebanken Møre

Earnings Release • Oct 19, 2017

Solid performance for Sparebanken Møre

Solid performance for Sparebanken Møre

Sparebanken Møre reports growth, lower costs and higher net

interest income for the third quarter.

Profit after tax amounted to NOK 139 million in the third

quarter, compared with NOK 146 million for the same quarter

last year. Return on equity was 10.5 % and the Group's total

assets stands at NOK 66.2 billion by quarter end.

"We have performed well and record positive effects of the

measures we have implemented. To be solid, we have to

operate profitable and efficient. This has been our best

quarter in 2017", says Trond Lars Nydal, CEO of Sparebanken

Møre.

Continuing growth

At the end of the third quarter of 2017, lending to

customers totalled NOK 56.5 billion. The Group has increased

lending by 9.1 % in the last 12 months, although growth has

gradually slowed during the quarter, as anticipated. Lending

to corporate customers fell by 1.6 % in the third quarter of

2017, while lending to retail customers rose by 1.6 %.

Deposits from customers increased by 2.3 % the last 12

months.

"We are very pleased that so many people want to be

customers of Sparebanken Møre and we see this as a

confirmation that customers find us competitive and

appreciate our way of doing business. We are seeing more and

more people appreciate our combination of high-quality

personal advice, short decision-making chains, and smart

digital solutions."

Nydal adds that the rate of growth is according to the

Bank's plans and that lending growth is expected to slow

further over the rest of the year.

Lower costs

Nydal underlines that the persistent low level of interest

rates, strong competition and changing customer behaviour

set high standards regarding good, efficient banking

operations.

Net interest income in the third quarter amounted to NOK 281

million, which represents an increase of NOK 10 million

compared with the same quarter last year. Other operating

income fell by NOK 19 million, in part due to the change in

market value of the bond portfolio.

Operating costs were NOK 3 million lower than in the same

quarter last year, despite the introduction of the financial

industry tax with effect from January this year. This

amounted to approximately NOK 3 million for the quarter.

"Cost effectiveness has been a high priority in Sparebanken

Møre for many years. We have also worked thoroughly and

systematically to keep losses and defaults at a low level.

In third quarter we recognised NOK 6 million in losses on

lending and guarantees and can thus still report a very low

level of losses."

Adjusting the dividend policy

Sparebanken Møre has the recent years specified a dividend

ratio in the range of 40 to 50 per cent. The Board now

states that about 50 per cent of the profit can be

distributed as dividends in the form of cash dividend to the

equity certificate owners and dividend to the local

community.

"Sparebanken Møre's aim is to achieve financial results

which provide a good and stable return on the Bank's equity.

The share of the profit which is set aside as dividend must

be adapted to the Bank's solidity, and we wish that the

Banks' good results over time will benefit both the equity

certificate owners and the community", Nydal says.

Future-oriented organisation

Sparebanken Møre has recently changed the organisation with

the aim of ensuring the Bank having a future-oriented,

outwardly directed and efficient organisation. This will

enable the Bank in meeting and taking advantage of the

digital shift in a positive manner.

One example of this is the Bank's new Customer Experience

Division, which is tasked with ensuring that both services

and solutions meet the customers' requirements and

expectations.

"Customer needs will be the focus for all development and

work processes in the Bank. Our customer satisfaction is

high and rising, and we are now dedicating even more

resources in ensuring that customers have a good experience.

This includes everything from the quality of advice and user

friendliness of digital channels, to the relevance of

products and services", says CEO, Trond Lars Nydal.

The new organisation was effective from 1 October 2017.

Key figures for Q3 2017

* Profit before losses: NOK 191 million (NOK 197 million)

* Profit after tax: NOK 139 million (NOK 146 million)

* Return on equity: 10.5 % (11.7 %)

* Net interest income: NOK 281 million/1.72 % (NOK 271

million/1.77 %)

* Cost income ratio: 44.2 % (43.1 %)

* Earnings per equity certificate (Group): NOK 6.95 (NOK

7.35)

Comparable figures for Q3 2016 in brackets.

Key figures for 30.09.2017

* Profit before losses: NOK 548 million (NOK 602 million)

* Profit after tax: NOK 400 million (NOK 461 million)

* Return on equity: 10.2 % (12.5 %)

* Net interest income: NOK 810 million/1.70 % (NOK 809

million/1.79 %)

* Cost income ratio: 44.9 % (42.4 %)

* Core Tier 1 capital ratio: 14.5 % (14.9 %)

* Earnings per equity certificate (Group): NOK 20.10 (NOK

23.10)

* Lending growth in the last 12 months: 9.1 % (0.6 %)

* Deposit growth in the last 12 months: 2.3 % (10.5 %)

Comparable figures for 30.09.2016 in brackets.

Contact

* Trond Lars Nydal, CEO, Mobile: +47 951 79 977

* Runar Sandanger, EVP, Mobile. +47 950 43 660

* Tone S. Gjerdsbakk, Chief Information Officer, Mobile: +47

990 44 346