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Strong profit performance and growth

10/27/2021 | 11:02am

Sparebanken Vest recorded a pre-tax profit of NOK 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 in Western
. 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

Cost development was also good in the quarter with total costs of NOK 383 (347)
million. This includes almost NOK 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 of NOK 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 in Western Norway, and
Sparebanken 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
of Sparebanken Vest.

Continuing trend of reduced losses
Individual and model-based write-downs of NOK 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 by NOK 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 the NOK 20
target for lending by the end of 2021, and it had just under NOK 15
in mortgages at the end of the third quarter.

'Bulder Bank continues to grow and win market shares. One in four Norwegians
stated in Kantar'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
upgrading Sparebanken 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 organisations
The 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 of NOK 193 million (NOK 1.80 per equity certificate)
and to award NOK 290 million in donations for the public benefit.

'We are Western Norway's own bank and aim to be a banking frontrunner for both
the people and business sector along the entire coast of Western 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 in Western Norway. The latest
donation will provide NOK 290 million to clubs, associations, non-profit
organisations and projects in Western 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 expects Sparebanken 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: Questions concerning the
presentation will be addressed after the presentation. Questions may be sent to:

For a complete Q3 report, please visit

For further information, please contact:
Jan Erik Kjerpeseth, CEO, tel.: (+47) 951 98 430
Frank Johannesen, EVP CFO, tel.: (+47) 952 65 971
Hans Olav Ingdal, Director Finance and IR, tel.: (+47) 948 09 328
Hanne Dankertsen, Communications Director, tel.: (+47) 994 49 173

Sparebanken Vest is the third largest savings bank in Norway, with more than 600
committed and highly skilled employees. Since the start in 1823, we have gained
a position of trust among customers in Western 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 in Western Norway.

This information is subject to a duty of disclosure pursuant to the Securities
Trading Act Section 5-12.

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