SpareBank 1 SR-Bank achieved a pre-tax profit of NOK 513 million in the first half of 2020, compared with NOK 2,432 million in the same period last year. The result is marked by good operations and a good influx of customer, but weakened by increased impairments.

The return on equity after tax was 3.7%, compared with 18.8% for the same period in 2019.

Impairments on loans and guarantees totalled NOK 1,391 million, compared with NOK 30 million in the same period last year. The increased impairments are the result of continued challenging market conditions for offshore related companies.

"With the significant impairments we have recognized in the first half of the year, I expect that we will see lower impairments in the future. Nevertheless, there is still uncertainty about the market conditions for offshore related companies," says Arne Austreid, CEO of SpareBank 1 SR-Bank.

The Group's operating costs amounted to NOK 1,162 million, a decrease of NOK 23 million compared with the same period last year. The cost/income ratio was 37.9%.

Net income from financial investments amounted to NOK 269 million, compared with NOK 1,016 million in the same period last year.

"The Group's operating profit before impairments is good, both for the first half of the year and for the quarter seen in isolation. We are experiencing a good influx of new customers and increased demand for our products and services from existing customers. Efficiency is high, which is due to the fact that a number of our labour-intensive processes have been robotised. I would also like to commend the Group's employees who have helped to serve our customers well under difficult Covid-19 conditions," says Arne Austreid, CEO of SpareBank 1 SR-Bank.

The pre-tax profit for the quarter in isolation was NOK 266 million, compared with NOK 1,109 million last year. This corresponds to a return on equity after tax of 4.0%, compared with 16.2% for the second quarter of 2019.

First half-year 2020

· Pre-tax profit: NOK 513 million (NOK 2,432 million)
· Net profit for the quarter: NOK 477 million (NOK 2,046 million)
· Return on equity after tax: 3.7% (18.8%)
· Earnings per share: NOK 1.87 (NOK 8.00)
· Net interest income: NOK 2,107 million (NOK 1,906 million)
· Net commissions and other operating income: NOK 690 million (NOK 725 million)
· Net income from financial investments: NOK 269 million (NOK 1,016 million)
· Operating costs: NOK 1,162 million (NOK 1,185 million)
· Impairments on loans and financial liabilities: NOK 1,391 million (NOK 30 million)
· Total lending growth over last 12 months: 5.4% (7.3%)
· Growth in deposits over last 12 months: 8.3% (-3.0%)
· Common Equity Tier 1 capital ratio: 18.3% (14.4%)
· Tier 1 capital ratio: 19.9% (15.8%) 
(H1 2019 figures in brackets)

The bank's financial strength is very good. At the end of the second quarter, Common Equity Tier 1 capital ratio was 18.3% compared with the target of 16.7% and the regulatory authorities' requirement, which is 15.2% at the end of the year. The increased Common Equity Tier 1 capital ratio is due to retained earnings from a good result in 2019, combined with new capital requirements that were implemented on 31 December 2019. 

The full half-yearly report is available for download from www.sr-bank.no.

Stavanger, 6 August 2020

Contact persons:
Arne Austreid, CEO, Tel. +47 900 77 334
Inge Reinertsen, CFO, Tel. +47 909 95 033
Stian Helgøy, Vice President Investor Relations, Tel. +47 906 52 173
Thor-Christian Haugland, Executive Vice President Communications, Tel. +47 480 31 633

This information is disclosed in compliance with section 5-12 of the Securities Trading Act.

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