Oslo Bors VPS : Børs VPS Holding - 1st quarter 2017

http://www.osloborsvps.no

Oslo Børs VPS Holding reports a profit of NOK 87 million for the first quarter of 2017 (NOK 48 million).

A more detailed presentation by business areas is provided in the quarterly report (enclosed).

The first quarter was characterised by a high level of activity in the primary market for both equities and fixed income instruments. The level of activity in the secondary market for equities was also higher than in the first quarter of 2016.

Reported revenue for the first quarter of 2017 was NOK 252 million, which is NOK 25 million higher than in the same period in 2016. Revenue related to listing and registration was in total NOK 22 million higher than in the first quarter of 2016. Revenue related to the trading and settlement of equities and fixed income issues was NOK 6 million higher, while revenue relating to trading in derivatives was NOK 3 million lower. Revenue related to market data was NOK 2 million higher, while revenue from the mutual funds area was NOK 2 million lower.

Operating expenses before capitalisation of internal costs, depreciation and amortisation of excess value amounted to NOK 128 million in the first quarter, which represents an increase of NOK 8 million from the same period in 2016. The increase relates to the modernisation program at VPS, trading system projects at Oslo Børs and the financial sector tax.

Central securities depositaries are facing major changes over the next few years both in terms of the services they provide and the technology they use. The Board of Directors of VPS is keen to ensure continuity in relation to the strategic changes that need to be decided upon and implemented at VPS over the next few years, and it will accordingly start its work on finding a new CEO for VPS this year. John-Arne Haugerud will remain as CEO until the new CEO is in place, and he will continue to assist the group and VPS in both 2017 and 2018, including with following up numerous major projects and processes that are underway at VPS and by serving as the Chairman of the Board of Directors of Centevo.

The Board of Directors has been approached by some shareholders who would like the Board to initiate a process to identify alternative strategic scenarios for the group. The agreement of the vast majority of the shareholders would be needed for any such changes to take place. The Board has therefore surveyed its largest shareholders and notes that they hold a range of different views on the strategic development of the group. The Board of Directors addresses strategic considerations on a continual basis and will pursue alternatives considered to be value-creating for the group's shareholders for which the conditions for success are in place.

In March Oslo Børs successfully implemented Millennium Exchange Release 9.1, providing customers with a lot of new functionality, including dark to lit sweep orders in the North Sea Dark Pool. At the same time VPS successfully implemented a significant version update for its systems, which has made available a new subscription client integrated with BankID and Norwegian banks' joint register of accounts and addresses (KAR), and functionality for opening and managing share savings accounts and transferring securities to them.

Operating expenses for 2017 before capitalisation of internal costs, depreciation and amortisation are expected to be in the order of NOK 480 million to NOK 490 million. This includes expenses in 2017 in relation to a MiFID II version of Millennium Exchange, adapting VPS' systems to the EU's CSD Regulation (CSDR) and the financial sector tax that was approved by Parliament in December 2016. The financial sector tax will represent an extra 5% tax on the salaries and other remuneration received by financial sector employees in addition to corporation tax remaining at 25% for financial sector companies.

The group's operating revenue varies in line with the level of activity in the securities market. Oslo Børs VPS is committed to offering a range of products and a pricing structure that are competitive and that encourage active use of the group's services. Oslo Børs VPS anticipates that its marketplace activities will continue to face intense competition, and it also expects increasing competition for the group's post-trade activities. Oslo Børs VPS will also in the future consider adjusting certain of its fees and prices, as well as further measures to improve the efficiency of its organisation and services for the benefit of its customers.

For further information, please contact:
CFO Geir Heggem, tel. [phone]
EVP Corporate Communications Per Eikrem, tel. [phone]

Vedlegg