SpareBank 1 Sørøst-Norges profit in the first quarter of 2024 wasNOK 388 million . This isNOK 87 million higher than the last quarter. The result for the quarter is driven by stable net interest income, increased earnings from financial assets, and lower costs compared to the previous quarter. Loan growth remains modest but has picked up towards the end of the quarter. The quality of the loan portfolio is considered good with low losses so far in 2024. Taking into account one-time costs ofNOK 3 million in the quarter andNOK 25 million in the previous quarter, the return on equity was 11.9 percent in the quarter compared to 9.8 percent in the previous quarter. Net interest income is at the same level as the previous quarter. Total operating expenses have decreased compared to the previous quarter, mainly due to costs related to bonuses and one-time/merger expenses in the fourth quarter of last year. Excluding these items, costs are unchanged from the previous quarter Net interest income including commission income from credit institutions has decreased by 1 percent in the quarter (NOK 4 million ), entirely due to the day effect of 1 day less in the current quarter. The effect of the change in the policy rate inDecember 2023 took effect for retail customers onMarch 10, 2024 , and will have full effect from the second quarter. Other commission income has decreased byNOK 10 million in the quarter, primarily due to a reduction in payment processing. Other income has increased byNOK 5 million , driven by increased revenues in the accounting house during the quarter. Revenue from real estate brokerage is at the same level as the previous quarter. Net financial result has improved byNOK 110 million from the previous quarter. Dividends from SpareBank 1 Boligkreditt and SpareBank 1 Næringskreditt have been recognized in the quarter, totalingNOK 57 million . Additionally,SpareBank 1 Gruppen and SamSpar contribute positively withNOK 14 million , andBN Bank ASA withNOK 18 million . Other financial investments have a positive result ofNOK 28 million . Operating expenses amount toNOK 335 million kroner in the quarter, which is a reduction ofNOK 51 million from the previous quarter. Measured as a percentage of revenue, the cost level has decreased to 40 percent compared to 52 percent in the previous quarter. This reduction is attributed to one-time costs and bonus provisions in the fourth quarter. Excluding these elements, costs remain unchanged. The group has a financial goal for the cost-to-income ratio to be below 40 percent. The cost-to-income ratio excluding one-time costs for the first quarter is 40 percent for the group and 36 percent for the parent bank. Total loan growth has been weak in the quarter and over the past 12 months. Over the past 12 months, loan growth has been 1.0 percent. In the first quarter, loan growth was 0.3 percent compared to 0.2 percent in the previous quarter. The loan portfolio is considered to have good quality, reflected in low loan losses. 99 percent of the loan portfolio is classified in stages 1 and 2. Loss provisions for the quarter amount toNOK 24 million , of which net realized losses amount toNOK 4 million in the quarter. The common equity Tier 1 capital ratio for the group is calculated to be 18.9 percent (this calculation does not include the share of the year-to-date profit in 2024), which is a decrease from 19.4 percent at the end of the year. The decrease is primarily explained by the repurchase of mortgage loans from SpareBank 1 Boligkreditt, where the risk weight differs from that of the parent bank. OnOctober 26, 2023 , the companies announced a plan for the merger ofSpareBank 1 SR-Bank ASA and SpareBank 1 Sør-Norge, with the aim of implementation1st October 2024 . OnApril 17th , the group received approval from the Competition Authority to merge with SpareBank 1 Sørøst-Norge. The work on merging withSpareBank 1 Sør-Norge onOctober 1st is proceeding as planned. Highlights of the 1th quarter of 2024 (figures in brackets concern the 1th quarter of 2023) o Ordinary profit after tax ofNOK 388 million (NOK 320 million ) o EPS groupNOK 1.65 (1.36) o Return on equity 11.9% (10.4%) o Net interest income, inclusive of mortgage credit institutions, ofNOK 558 million (NOK 523 million ) o Net other commission and other incomeNOK 163 million (NOK 190 million ) o Net income from financial assetsNOK 116 million (NOK 171 million ) Profit contributions from SpareBank 1Gruppen/SamSpar andBN Bank ASA ofNOK -14 million (NOK 13 million ) andNOK 18 million (NOK 13 million ), respectively o Losses on loansNOK 24 million (incomeNOK 1 million ) o Lending and deposit growth in the past quarter was 0.3% (-0.7%) and -0.1% (0.1%), respectively. o Common Equity Tier 1 capital ratio 18.9% (19.1%) The full quarterly report can be downloaded from the Bank's website sparebank1sorost.no Sandefjord,24.04.2024 For further information: Per Halvorsen, CEO, Tel. +47 934 07 441Roar Snippen , CFO/IR, Tel. +47 976 10 360 This information must be disclosed pursuant to section 5-12 of the Securities Trading Act.
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