Sparebanken Vest recorded a pre-tax profit ofNOK 811 (551) million and a return on equity of 13.8 (10.5) per cent in the third quarter 2021. The performance was driven by greater optimism among retail and corporate customers inWestern Norway . The bank has reversed previous loss provisions for the second quarter in a row. The bank has seen strong volume growth in all business areas in the third quarter. Cost development was also good in the quarter with total costs ofNOK 383 (347) million. This includes almostNOK 17 million for the operation and further development of the Bulder concept. The positive trend continued in associated companies and subsidiaries, which contributed a total ofNOK 84 million during the quarter. The bank's CET1 ratio was 17.7 (17.8) per cent at the end of the quarter. The applicable requirement is 14.2 per cent. 'We are continuing to see an improvement in the economy inWestern Norway , andSparebanken Vest can look back at yet another strong quarter. For the fourth quarter in a row, we have delivered a return on equity of over 13 per cent, which is well above the bank's long-term target of 12 per cent. The good profit performance is continuing in all business areas,' said Jan Erik Kjerpeseth, CEO ofSparebanken Vest . Continuing trend of reduced losses Individual and model-based write-downs ofNOK 22 million were reversed during the quarter. 'The positive trend of reduced losses continued, with individual loss provisions being reversed for the third quarter in a row. The retail market has seen a positive decline in defaults and overdue payments in the last six quarters, and the corporate market is seeing positive development in risk, increased debt servicing ability and redemptions of high-risk exposures in shipping and commercial property,' said Kjerpeseth. Sound growth in lending Gross lending has increased byNOK 17.5 billion since the third quarter 2020, corresponding to year-on-year growth of 9.7 per cent. Lending to the retail market increased by 3.4 per cent during the quarter and has seen growth of 10.4 per cent over the past 12 months. The corresponding figures for the corporate market are 2.1 per cent and 7.4 per cent, respectively. Growth in the mobile-only banking concept Bulder continued towards theNOK 20 billion target for lending by the end of 2021, and it had just underNOK 15 billion in mortgages at the end of the third quarter. 'Bulder Bank continues to grow and win market shares. One in four Norwegians stated inKantar's nationwide survey that they were aware of Bulder, and it came in sixth in Amedia's bank switching survey. This shows that the concept has established a firm footing in the market, and that many people consider Bulder when they switch banks,' says Kjerpeseth. Credit assessment upgrade On 28 September, the credit rating agency Moody's announced that it was upgradingSparebanken Vest's rating for long-term deposits, senior unsecured loans and counterparty risk to Aa3. This places the bank among the highest rated Norwegian savings banks. 'This is a reflection of sound banking craftsmanship over time. The upgrade is a result of improved risk in the lending portfolio, reduced exposure to volatile industries and a lower proportion of defaults and other potential bad debt. The bank's investment in the Bulder concept is also something that increases our geographical presence,' said Kjerpeseth. Further contributions to clubs, associations and non-profit organisationsThe Ministry of Finance announced in September that the uncertainty in the Norwegian economy had decreased, and that Norwegian banks could apply ordinary dividend limits after 30 September. Based on the Ministry's assessment and the bank's financial situation at the end of the second quarter, the Board decided on 1 October, in accordance with the authorisation granted by the General Meeting, to pay a dividend ofNOK 193 million (NOK 1.80 per equity certificate) and to awardNOK 290 million in donations for the public benefit. 'We areWestern Norway's own bank and aim to be a banking frontrunner for both the people and business sector along the entire coast ofWestern Norway . The savings bank model also means that we can give a big share of the bank's profits back to support and assist local communities inWestern Norway . The latest donation will provideNOK 290 million to clubs, associations, non-profit organisations and projects inWestern Norway ,' said Kjerpeseth. Profit performance expectations The Board expects the bank to emerge stronger from the downturn in the Norwegian economy during the past 18 to 20 months. The bank's return on equity is good, customer satisfaction has improved, and the bank enjoys a strong position in the capital markets. The Board expectsSparebanken Vest to achieve its target of a long-term ROE of 12 per cent and a dividend ratio of up to 50 per cent for the 2021 financial year. Key figures third quarter 2021 (Q3 2020 in brackets) o Very strong ROE: 13.8% (10.5%) o Good pre-tax profit:NOK 811 (551) million o Stronger net interest income:NOK 849 (750) million o Positive development in commission income:NOK 122 (103) million o Good contributions from associated companies:NOK 79 (89) million o Good cost development:NOK 383 (347) million o Reversals on loans and guarantees:NOK -22 (76) million o Sound CET1 ratio: 17.7% (17.8%) o Profit per equity certificate:NOK 2.31 (1.59)Sparebanken Vest will present the accounts for the third quarter at 10.00 on 28 October. The presentation will be available here: https://www.spv.no/om-oss/investor-relations/webcast Questions concerning the presentation will be addressed after the presentation. Questions may be sent to: investorrelations@spv.no. For a complete Q3 report, please visit https://www.spv.no/om-oss/investor-relations. For further information, please contact: Jan Erik Kjerpeseth, CEO, tel.: (+47) 951 98 430Frank Johannesen , EVP CFO, tel.: (+47) 952 65 971Hans Olav Ingdal , Director Finance and IR, tel.: (+47) 948 09 328Hanne Dankertsen , Communications Director, tel.: (+47) 994 49 173Sparebanken Vest is the third largest savings bank inNorway , with more than 600 committed and highly skilled employees. Since the start in 1823, we have gained a position of trust among customers inWestern Norway that has resulted in a solid market position and 34 branch offices in the counties of Vestland, Rogaland and Møre og Romsdal. Through our associated companies and subsidiaries, we are able to provide a complete range of financial services to all our retail and corporate customers. We are proud to be an independent financial services group with our head office in Bergen, allowing us to play a key role in much of the value creation that takes place inWestern Norway . This information is subject to a duty of disclosure pursuant to the Securities Trading Act Section 5-12.
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