Sparebanken Vest recorded a pre-tax profit ofNOK 849 (613) million in the first quarter 2022, and a return on equity of 16,5 (13,1) per cent. In the quarter both retail and corporate customers reported record high customer satisfaction. The result is positively impacted by solid operations, a good financial result and low loan losses. Increased costs on financing somewhat reduces the positive developments in operations. Net commission income amounted toNOK 137 (112) million in the first quarter, and the increase is due to increased income from payment transfers, and savings and investments. The net contribution from financial instruments amounted toNOK 146 (-9) million for the quarter. The strong financial result is due to sale of shares inFrende Holding AS to the Lokalbank alliance, and net positive effects of value adjustments as a consequence of increased basis swap spreads and credit spreads. The profit contribution from associated companies amounted toNOK 28 (46) million. The bank's operating expenses in the first quarter amounted toNOK 405 (354) million, which gives a ratio of operating cost-to-income of 32.4 (36.5) per cent. The nominal cost increase from 2021 is partially due to costs in the first quarter of 2021 being abnormally low due to lower activity following Covid-19. The increase in costs must further be seen in connection with the upscaling of Eiendomsmegler Vest, increased investments in the Bulder concept, opening of the office in Ålesund and costs related to the merger withEtne Sparebank . At quarter end the bank's CET1 ratio was 17.5 (18.5) per cent. The reduction from the corresponding quarter of 2021 is partially due to increased average risk weight in the retail market in line with theFinancial Supervisory Authority's IRB guideline. In line with the amended Pillar 2 decision from theFinancial Supervisory Authority , the requirement for CET1 ratio has been reduced from 14.2 to 14.0 per cent from 30 April. "Through growth, record-high customer satisfaction and strong results, we continue to strengthen our position asWestern Norway's leading bank. The bank's value proposition with a personal signature, simple digital services and a burning commitment toWestern Norway's society proves strong in the market. In line with the good economic development in the region, we deliver a first quarter with a strong return on equity driven by increased income, low losses and an increase in net commission and financial income. Despite nominal cost increases as a result of strategic investments, the cost-to-income ratio has decreased compared with the first quarter of 2021, and is among the lowest in the industry", says Jan Erik Kjerpeseth, CEO ofSparebanken Vest . Record high customer satisfaction Last twelve months gross lending increased byNOK 23.4 (9.6) billion, corresponding to a growth of 12.7 per cent. The growth in the retail market isNOK 18.8 billion , whereofNOK 11.7 billion was in theBulder Bank concept. Corporate lending grew byNOK 4.2 billion in the period. Total deposits from customers increased byNOK 12.9 billion last twelve months, corresponding to a growth of 15.2 per cent. "We have had good growth in both lending and deposits, and in the first quarter both retail and corporate customers give us record high scores in customer satisfaction. Retail customers give us a total score of 77 and corporate customers 73, and this is the highest satisfaction we have had in both segments since the surveys began in 1997. Customer dividends, which were announced and approved in the quarter, and paid in April, have received a very good response from customers and is an increasingly important part of our value proposition", says Kjerpeseth. "Every third Norwegian now state that they know of theBulder Bank concept, an increase from every fourth in the previous survey. We are constantly working to expand the product range in Bulder. We have a zero vision for manual work in loan cases, and in the first quarter we more than doubled the proportion of loans that were processed completely automatically", says Kjerpeseth. Low losses, and reduction in commitments in default and potential bad debt In the first quarter total losses on loans and guarantees amounted toNOK 6 (17) million. 73 per cent of the bank's provisions are model based and have only to a small extent been reversed as Covid-19 has subsided. Commitments in default and potential bad debt in the retail market amounted to a total ofNOK 283 (435) million, which corresponds to 0.18% (0.31%) of gross lending in the retail market. In the corporate market it amounted toNOK 1,133 (1,333) million, corresponding to 2.27% (2.95%) of gross lending in the corporate market. "The development with stable low losses is also continued in the first quarter with total loss costs ofNOK 6 million . Commitments in default and potential bad debt have been reduced compared with the corresponding quarter last year and have been stable in recent quarters. Moderate credit risk with a high proportion of retail market exposure with a low loan-to-value ratio, good credit work and a diversified corporate market portfolio, results in low losses", says Kjerpeseth. Well positioned for growth In February,Sparebanken Vest announced that the bank would merge withEtne Sparebank .Sparebanken Vest is the acquiring bank, and the merged bank will be namedSparebanken Vest . "Last autumn, we opened an office in Ålesund where we see that our value proposition is attractive in both the retail and corporate markets. According to plan, from autumn this year we will be merged withEtne Sparebank .Etne Sparebank andSparebanken Vest are today two strong and locally based savings banks with many similarities in profile, and a merger will provide better services to both retail and corporate customers, and not least support the local community in Etne with socially beneficial funds. We see an exciting retail and corporate market in Etne and Vindafjord with significant potential to grow.Sparebanken Vest is well positioned for further growth and consolidation", says Kjerpeseth. Key figures first quarter 2022 (Q1 2022 in brackets) o Excellent return on equity: 16.5% (13.1%) o Significantly improved pre-tax profit:NOK 849 (613) million o Higher net interest income:NOK 887 (779) million o Higher contribution from finance:NOK 146 (-9) million o Positive development in commission income:NOK 137 (112) million o Weaker financial result for Frende reduces contribution from associates:NOK 28 (46) million o Strategic initiatives increase costs:NOK 405 (354) million o Low write-downs on loans and guarantees:NOK 6 (17) million o Sound CET1 ratio: 17.5% (18.5%) o Profit per equity certificate:NOK 2.77 (2.05)Sparebanken Vest will present the accounts for the first quarter at 10.00 on 5 May. 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 further information, please contact: Jan Erik Kjerpeseth, CEO, tel.: (+47) 951 98 430Frank Johannesen , EVP CFO, tel.: (+47) 952 65 971 BredeBorgen Kristiansen , Director Finance and Investor Relations, tel.: (+47) 479 06 402Hanne Dankertsen , Communications Director, tel.: (+47) 994 49 173Sparebanken Vest is the second largest savings bank inNorway , with more than 700 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 35 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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