SpareBank 1 SMN: Historic profit performance makes for high dividend payouts

SpareBank 1 SMN posted a record high post-tax profit of NOK 2,563m in 2019, an increase of NOK 473m over the previous year. The bank’s board of directors recommend a dividend payout of NOK 6.50 per equity certificate (EC).

The directors’ recommendation to the supervisory board includes an allocation of NOK 473m to social dividend. Of this figure, it is recommended that NOK 200m be distributed to non-profit causes this year and NOK 273m allocated to the bank’s owner foundation. The social dividend stems from an ownership model in which the Central Norwegian community, directly and via the foundation, owns 39.1 per cent of SpareBank 1 SMN.

“When the region prospers, so does the region’s leading bank. SpareBank 1 SMN has never before delivered such a good performance. Our customers clearly appreciate simple, efficient self-service solutions combined with skilled advisers with local knowledge across the entire region,” says Group CEO Jan-Frode Janson at SpareBank 1 SMN.

Historic increase of social dividend

The amount for distribution to non-profit causes represents a threefold increase compared with previous years. This is the largest-ever distribution by SpareBank 1 SMN.

“Through solid banking operations we are building muscle to contribute to financing people and firms. As a society-owned bank we also pay dividends to local communities. Our ownership model is unique. The greater the number of bank customers who opt for SpareBank 1 SMN, the larger the dividend to the community. We see that the people of Central Norway have taken this on board. Through social dividend we collaborate to make things happen, including things that necessarily cannot be measured in monetary terms,” says Mr Janson.

“Banking operations and social dividend both rest on a sustainable foundation. If we are to succeed in the years ahead, a green thread must run through everything we do. Sustainability is changing the financial markets. Customers will notice this in the shape of new products and new terms and conditions, but also through clearer expectations on the part of the bank. We recently launched a number of new, green loans for personal customers. This is just the start,” says the Group CEO.

Market position strengthened

The 2019 accounts feature good sales across all product areas, stable losses, gains on major equity stakes along with high growth and a large influx of new customers. 7,000 personal customers and 1,000 businesses chose SpareBank 1 SMN as their new main bank in 2019.

The bank expanded its lending to personal customers by 6.4 per cent in 2019, and at a faster rate towards year-end. The bank has succeeded well in recruiting new customers through the agreement with the Norwegian Confederation of Trade Unions (LO). Lending to corporates increased by 1.1 per cent.

Net interest income increased by NOK 284m to NOK 2,687m compared with the same period of the previous year. The increase is mainly attributable to growth in lending and deposits along with higher deposit margins. Losses on loans totalled NOK 299m compared with NOK 263m the previous year. The losses continue to stem mainly from oil-related activities, but are on a par with the previous year. Losses on loans to personal customers have risen slightly but remain at a low level.

Focus on reducing costs

Group costs increased by 6.6 per cent to NOK 2,797m. The board of directors has set a new target of limiting annual growth in costs to 2 per cent. This target applies across the entire group.

An improvement programme, called ‘One SMN’, has been established to exploit the power inherent in the group. It will look into possible synergies between the business lines in the group that can provide increased incomes and more efficient operations.

Key figures

• Pre-tax profit: NOK 3,081m (2,450m as at fourth quarter 2018)
• Post-tax profit: NOK 2,563m (2,090m)
• Return on equity: 13.7% (12.2%)
• Growth in lending: 4.7% (7.8%)
• Growth in deposits: 6.6% (5.4%)
• Loan losses: NOK 299m (263m)
• CET1 ratio: 17.2% (14.9%)
• Recommended dividend: NOK 6.50 (5.10)

Trondheim, 5 February 2020

Contact persons at SpareBank 1 SMN:

Executive Director, Finance, Kjell Fordal on

Head of Corporate Communications, Hans Tronstad on  322

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