Sparebank 1 Østlandet
Sparebank 1 Østlandet
08/11/2022 | Press release | Distributed by Public on 08/11/2022 01:34
SpareBank 1 Østlandet (SPOL): Strong volume growth and record customer satisfaction
Tid11.08.2022, 07:30:00
MeldingsID568255
UtstederIDSPOL
InstrumentSPOL
MarkedOslo Børs, Nordic ABM
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SpareBank 1 Østlandet (SPOL): Strong volume growth and record customer satisfaction
SpareBank 1 Østlandet's results for the second quarter saw falls in the value of its financial assets, but also all-time high surveys for customer satisfaction, strong lending growth and solid net interest income. "Good feedback from our customers is important when it comes to our ambition of becoming Norway's best relationship bank," says CEO Richard Heiberg.
The CEO is satisfied with the Bank's second quarter profit after tax of NOK 350 (516) million. The decrease compared with the same period last year was mainly due to a negative return on net financial assets and liabilities. The return on equity for the quarter was NOK 7.7 per cent (12.2 per cent for the same period last year).
"Core banking operations have for their part provided very good results, with strong growth in income from customer-driven activities and reversals of loan losses," says Heiberg.
Strong lending growth and record high customer satisfaction:
The 11.1 per cent increase in net interest income compared with the same period last year relates to the growth in lending and deposit volumes. The Group's lending has grown by 9.6 (5.9) per cent in the past 12 months. The growth in deposits was also good in the same period at 8.1 (8.3) per cent. The Bank saw very good lending growth of 7.6 (6.6) per cent in the retail market, and in the corporate market the growth in lending was particularly strong at 15.3 (3.9) per cent.
This means that the Bank's market share in the corporate market has increased quarter-on-quarter for almost 3 years, at the same time as the Bank now has its highest ever measured corporate customer satisfaction.
"It is pleasing to see that the long-term work on strengthening customer relationships is producing results. Satisfied customers provide good opportunities for growth," says Heiberg.
The growth in lending corresponds well with the Bank's latest expectations survey. The survey shows that despite the turmoil and volatile business conditions, the corporate sector appears optimistic.
The Bank considers the overall opportunities for growth to be good:
The Bank expects continued good demand for credit in the corporate market going forward, while growth in household demand for mortgages is expected to slow somewhat in line with slowing house price inflation.
"A well-established market position, high customer satisfaction, a solid capital situation and capable financial advisers underpin our growth opportunities," says Heiberg.
Intensified work on emissions in the mortgage portfolio and good feedback on ESG:
Work on reducing emissions from the Bank's mortgage portfolio has been intensified. SpareBank 1 Østlandet was one of the first banks in Norway to offer a green energy efficiency loan. Corporate customers are also now being offered a new green loan to increase the energy efficiency of commercial buildings.
The Bank's commitment to sustainable solutions is reflected in its good ESG ratings, most recently from Sustainalytics where SpareBank 1 Østlandet was the only Norwegian bank to be placed in the lowest risk category 'negligible risk', for environmental, social and corporate governance matters.
In May, SpareBank 1 Østlandet launched a dedicated NOK 10 million sustainability fund, which will be added to other funds for worthy sustainability purposes every year. The fund will also award an annual sustainability prize to companies that develop good solutions for the green transition.
Second quarter of 2022 (Consolidated figures. Figures in brackets concern the corresponding period in 2021)
Profit after tax: NOK 350 (516) million
Return on equity: 7.7 (12.1) per cent
Earnings per equity capital certificate: NOK 2.02 (3.05)
Net interest income inclusive of commissions from the covered bond companies: NOK 728 (655) million
Net commissions and other operating income, (excl. from the covered bond companies): NOK 332 (302) million
Net result from financial assets and liabilities: NOK -120 (181) million
Total operating expenses: NOK 520 (492) million
Impairment losses on loans and guarantees: net reversal of NOK 59 million (loss of NOK 11 million)
Lending growth in the last quarter, including mortgages transferred to the covered bond companies: 3.1 (2.9) per cent
Growth in deposits in the last quarter: 6.5 (5.8) per cent
Lending growth, including mortgages transferred to covered bond companies in the past 12 months: 9.6 (5.9) per cent
Deposit growth in the past 12 months: 8.1 (8.3) per cent
Common Equity Tier 1 capital ratio: 18.0 (17.8) per cent
Contact information:
Richard Heiberg, Group CEO, Tel.: +47 902 06 018
Geir-Egil Bolstad, CFO, Tel.: +47 918 82 071
Bjørn-Erik Orskaug, Head of Investor Relations, Tel.: +47 922 39 185
Siv Stenseth, EVP Communication and Social Affairs, Tel.: +47 958 46 991
This information must be disclosed pursuant to section 5-12 of the Securities Trading Act.
The CEO is satisfied with the Bank's second quarter profit after tax of NOK 350 (516) million. The decrease compared with the same period last year was mainly due to a negative return on net financial assets and liabilities. The return on equity for the quarter was NOK 7.7 per cent (12.2 per cent for the same period last year).
"Core banking operations have for their part provided very good results, with strong growth in income from customer-driven activities and reversals of loan losses," says Heiberg.
Strong lending growth and record high customer satisfaction:
The 11.1 per cent increase in net interest income compared with the same period last year relates to the growth in lending and deposit volumes. The Group's lending has grown by 9.6 (5.9) per cent in the past 12 months. The growth in deposits was also good in the same period at 8.1 (8.3) per cent. The Bank saw very good lending growth of 7.6 (6.6) per cent in the retail market, and in the corporate market the growth in lending was particularly strong at 15.3 (3.9) per cent.
This means that the Bank's market share in the corporate market has increased quarter-on-quarter for almost 3 years, at the same time as the Bank now has its highest ever measured corporate customer satisfaction.
"It is pleasing to see that the long-term work on strengthening customer relationships is producing results. Satisfied customers provide good opportunities for growth," says Heiberg.
The growth in lending corresponds well with the Bank's latest expectations survey. The survey shows that despite the turmoil and volatile business conditions, the corporate sector appears optimistic.
The Bank considers the overall opportunities for growth to be good:
The Bank expects continued good demand for credit in the corporate market going forward, while growth in household demand for mortgages is expected to slow somewhat in line with slowing house price inflation.
"A well-established market position, high customer satisfaction, a solid capital situation and capable financial advisers underpin our growth opportunities," says Heiberg.
Intensified work on emissions in the mortgage portfolio and good feedback on ESG:
Work on reducing emissions from the Bank's mortgage portfolio has been intensified. SpareBank 1 Østlandet was one of the first banks in Norway to offer a green energy efficiency loan. Corporate customers are also now being offered a new green loan to increase the energy efficiency of commercial buildings.
The Bank's commitment to sustainable solutions is reflected in its good ESG ratings, most recently from Sustainalytics where SpareBank 1 Østlandet was the only Norwegian bank to be placed in the lowest risk category 'negligible risk', for environmental, social and corporate governance matters.
In May, SpareBank 1 Østlandet launched a dedicated NOK 10 million sustainability fund, which will be added to other funds for worthy sustainability purposes every year. The fund will also award an annual sustainability prize to companies that develop good solutions for the green transition.
Second quarter of 2022 (Consolidated figures. Figures in brackets concern the corresponding period in 2021)
Profit after tax: NOK 350 (516) million
Return on equity: 7.7 (12.1) per cent
Earnings per equity capital certificate: NOK 2.02 (3.05)
Net interest income inclusive of commissions from the covered bond companies: NOK 728 (655) million
Net commissions and other operating income, (excl. from the covered bond companies): NOK 332 (302) million
Net result from financial assets and liabilities: NOK -120 (181) million
Total operating expenses: NOK 520 (492) million
Impairment losses on loans and guarantees: net reversal of NOK 59 million (loss of NOK 11 million)
Lending growth in the last quarter, including mortgages transferred to the covered bond companies: 3.1 (2.9) per cent
Growth in deposits in the last quarter: 6.5 (5.8) per cent
Lending growth, including mortgages transferred to covered bond companies in the past 12 months: 9.6 (5.9) per cent
Deposit growth in the past 12 months: 8.1 (8.3) per cent
Common Equity Tier 1 capital ratio: 18.0 (17.8) per cent
Contact information:
Richard Heiberg, Group CEO, Tel.: +47 902 06 018
Geir-Egil Bolstad, CFO, Tel.: +47 918 82 071
Bjørn-Erik Orskaug, Head of Investor Relations, Tel.: +47 922 39 185
Siv Stenseth, EVP Communication and Social Affairs, Tel.: +47 958 46 991
This information must be disclosed pursuant to section 5-12 of the Securities Trading Act.