Sbanken ASA: Record growth in savings and reduced losses
Bergen, 11 February 2021. The Sbanken group generated a profit before tax of NOK 282.7 million in the fourth quarter of 2020, compared to NOK 214.1 million in the fourth quarter of 2019. Net interest income decreased by NOK 21.7 million, while net fee and commission decreased by NOK 4.0 million. Non-recurring items, relating to the part sale of Visa shares owned by VN Norge and severance pay, had a net positive effect of NOK 13.0 million. Return on equity was 12.5 per cent in the quarter.
At quarter-end, customer lending totalled NOK 83.4 billion, corresponding to an annual lending growth rate of 2.4 per cent. Mortgage lending was flat from the previous quarter as healthy inflow of new customers was countered by elevated churn in lower yielding mortgages. Funds under management (FuM) increased to NOK 23.2 billion, supported by record high net inflow from customers.
· EPS growth 10.4 per cent in 2020
· FuM record growth to NOK 23.2 billion – market share 8.1 per cent
· Reduced loss levels – loss ratio 0.02 per cent
· 2019 dividend: distribution of NOK 3.15 per share
· 2020 dividend: proposed authorisation of up to NOK 4.40 per share
· Significant overcapitalisation – NOK 1.0 billion above CET1 target post proposed dividends
"With the release of the fourth quarter figures, we can close the chapter on 2020, a year which impacted both the bank and society in many unexpected ways, but also a year where Sbanken delivered bottom-line growth above 10 per cent. This quarter, the bank has delivered resilient profitability, underpinned by cost control and low losses. Within savings, we are breaking historic records for volume growth. Our key financial target of delivering 14 percent return on equity remains unchanged, but we are sharpening our efficiency ambitions by lowering the cost-to-income target to 30 per cent," says Øyvind Thomassen, CEO of Sbanken.
Net interest income decreased to NOK 407.3 (429.1) million. The net interest margin for the quarter was 1.60 per cent, down 6 basis points from the previous quarter.
Operating expenses amounted to NOK 189.8 (219.8) million, of which NOK 14.9 million in severance pay related to the bank’s ongoing cost and efficiency programme. The net cost of losses amounted to NOK 4.6 million, equivalent to a loss ratio of 0.02 per cent.
The Board of Directors have decided to utilise the current dividend authorisation for 2019 by distributing NOK 3.15 per share. The dividend represents 26.6 per cent of cumulative net profit for Sbanken ASA in 2019 and 2020, and is hence within the 30 per cent expectation conveyed by the Ministry of Finance. Taking the dividend for 2019 and the proposed dividend authorisation for 2020 into account, Sbanken had a CET1 capital ratio of 15.5 per cent at the end. This was 3.0 percentage points above the bank’s regulatory capital requirement of 12.5 per cent.
"The short term outlook for the Norwegian economy remains uncertain, but there is optimism of a recovery towards the end of the year. We are continuing our efforts to deliver the market’s most automated and scalable banking services, which in combination with continued growth within savings, provides a strong foundation for delivering attractive returns going forward," Thomassen concludes.
Jesper M. Hatletveit, Head of IR, Sbanken ASA, +47 959 40 045
Henning Nordgulen, CFO, Sbanken ASA, +47 952 65 990
Kristian K. Fredheim, Head of Communications, Sbanken ASA, +47 924 47 407
This information is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act
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