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OFFON

SPAREBANK 1 SØRØST-NORGE

(SOON)
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SpareBank 1 Sørøst Norge : Solid half-year profits and record-high optimism

08/10/2021 | 04:01am EST
SpareBank 1 Østlandet's net profit for the first half of 2021 was NOK 955
million after tax. 

"The good performance reflects that the bank has weathered the coronavirus
period with stable operations and low losses.  Currently, there is high optimism
in the population and among businesses in the region, which bodes well for
developments going forward," says Richard Heiberg, Group CEO of SpareBank 1
Østlandet.

The profit after tax for the first half of 2021 is NOK 251 million better than
in the same period of 2020. Reversals of losses, increased other income and
solid contributions from wholly and partly owned subsidiaries have contributed
to the improvement.

The downturn after the onset of the coronavirus more than a year ago has turned
to record-breaking optimism among businesses and private individuals in Eastern
Norway (SpareBank 1 Østlandet's survey of expectations June 2021). This is
reflected in high customer activity and increased lending in the bank. Overall
lending growth over the past 12 months was 5.9 (9.4) per cent. Deposit growth
was 8.3 (10.5) per cent. 

Another strong quarter - particularly in the corporate market 

The Group also reported good numbers for the quarter itself. Lending growth in
the second quarter was 2.9 per cent and the bank gained around 4,300 new
customers. The return on equity was 12.1 (11.3) per cent. Net interest income in
the second quarter was NOK 542 (498) million. 

"Lending growth in the corporate division has been strong in the last quarter
following a period of lower activity. This proves that businesses now have a
more optimistic view of the future. The Bank's business confidence survey
confirms this: Fear of bankruptcy is low, and several businesses are planning
changes in their business models and sources of income in the time ahead. We
find that our corporate customers have shown a great ability to restructure.
They have adjusted their operations to the market conditions and have become
better equipped for the future," says Group CEO Richard Heiberg. 

Low losses and limited exposure to vulnerable sectors during the pandemic

"Loan losses have proven to be significantly lower than assumed at the beginning
of the crisis. Broad support schemes from the authorities, low interest rates, a
healthy loan portfolio and adaptable credit customers have contributed to the
bank reversing loss provisions in the first six months. The Bank's lending book
has limited exposure to the most vulnerable sectors and although a heightened
uncertainty is still present partly due to the Delta variant, we expect further
normalisation of bank operations in the next quarter," Heiberg says.

A milestone has been reached 

In the second quarter the bank exceeded NOK 200 billion in adjusted total
assets. This means that the bank has increased in size by around 50 per cent
since the merger with Bank 1 Oslo Akershus and the subsequent IPO in 2017. 
"With annual growth in excess of 10 per cent in these four years, we are
delivering on the ambition to gain market shares and attract new customers in
Eastern Norway. We are proud and pleased of becoming an increasingly stronger
savings bank to the benefit of customers, businesses and local communities in
the region, Heiberg says.

On customer dividends and dividends to owners

The Group's financial strength with a CET1 capital ratio of 17.8 per cent at the
end of the first six months and a return on equity of 11.3 per cent, indicates
that there is a good possibility for the distribution of customer dividends and
remaining dividends to owners in the autumn.  For regulatory reasons, this
decision will be made by the Board of Directors after 30 September, and is
dependent on prudential assessments at the time. The decision on dividends will
be communicated on 29 October in connection with publication of the accounts for
the third quarter of 2021. 

Financial key figures for the Group in the first six months of 2021 (figures for
corresponding period in 2020): 
  - Profit after tax: NOK 955 (704) million
  - Return on equity: 11.3 (9.1) per cent
  - Net interest income: NOK 1,077 (1,093) million
  - Total operating expenses: NOK 976 (933) million  
  - Impairment losses on loans and guarantees: Net reversals on losses of NOK 7
(net cost of   282) million
  - Common Equity Tier 1 ratio 17.8% (17.1) 

For more details on the result: See the attached half-yearly report and
presentation. 

For further information: 
Richard Heiberg | Group CEO, Tel.: +47 902 06 018 
Geir-Egil Bolstad | CFO, Tel.: +47 918 82 071

This information must be disclosed pursuant to section 5-12 of the Securities
Trading Act.

Click here for more information

© Oslo Bors ASA, source Oslo Stock Exchange

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Financials
Sales 2021 2 275 M 256 M 256 M
Net income 2021 967 M 109 M 109 M
Net Debt 2021 - - -
P/E ratio 2021 12,7x
Yield 2021 3,69%
Capitalization 7 394 M 832 M 833 M
Capi. / Sales 2021 3,25x
Capi. / Sales 2022 3,03x
Nbr of Employees 539
Free-Float 37,8%
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SpareBank 1 Sørøst-Norge Technical Analysis Chart | SOON | NO0006000207 | MarketScreener
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Mean consensus OUTPERFORM
Number of Analysts 2
Last Close Price 62,40 NOK
Average target price 67,50 NOK
Spread / Average Target 8,17%
EPS Revisions
Managers and Directors
Per Halvorsen Chief Executive Officer
Lars Ole Bjørnsrud Chairman-Supervisory Board
Finn Haugan Chairman
Marianne Sommerro Evensen EVP-Risk Management & Compliance
Kristin Søia Barkost Independent Director
Sector and Competitors