Solid results and customer dividend
– Sparebanken Sør had a strong first quarter, with solid results and very good return on equity. It is especially pleasing to announce that we have distributed NOK 226 million in customer dividends.
Says CEO Geir Bergskaug, who this week presented the results for the first quarter of 2023. A result pre-tax of NOK 529 million, is an increase from NOK 355 million in the same period in 2022.
– The results are characterized by positive contributions from associated companies, low loan losses, and good loan growth, in addition, the interest rate changes we have seen in the past year have had a positive impact
Customer dividend of NOK 226 million
In the spring of 2022, the board of trustees of Sparebanken Sør decided to introduce customer dividends from the 2022 fiscal year. Since the size of the dividend depends on the bank's profit, there was great anticipation for the annual result.
– When the bank performs well, it's great that it also benefits the customers and the region. With a solid profit in 2022, we were able to transfer NOK 226 million to the bank's customers in April 2023. In addition, the profit enabled a record high allocation to the bank's gift fund. NOK 149 million will be used in 2023 for sustainable growth and development in the region, according to Bergskaug, who on behalf of the bank, recently donated NOK 30 million to the offshore wind power initiative on the southern coast of Norway.
Solid loan portfolio
Despite a turbulent macro environment and rising interest rates, there were no major losses recorded in the quarter, and there was a low proportion of non-performing loans. The bank had a net entry on losses of NOK 5 million in the first quarter, compared to NOK 2 million in the same period in 2022.
– Sparebanken Sør has a high proportion of retail customers and a low risk profile in the loan portfolio. Property management accounts for 50 percent of lending to the corporate market, and we have solid collateral in the commercial property portfolio," explains Bergskaug.
Good momentum going into 2023
Net interest income was NOK 712 million in the first quarter of 2023, compared to NOK 521 million in the first quarter of 2022. Bergskaug reports increased net interest margins for both the retail and corporate markets.
– We are closely following the next interest rate meetings of the Norwegian Central Bank. With a significant equity, the predicted increases in the key policy rate would imply that the net interest income for banks will increase further in 2023. Together with good deposit and loan growth over the past 12 months, this naturally leads to positive results for Sparebanken Sør as well.
Highlights from Q1 2023 (Q1 2022 in parenthesis)
Profit before tax: NOK 529 mill. (NOK 355 mill.)
Return on equity: 12.5 percent (7.8 percent)
Net interest income: NOK 712 mill. (NOK 521 mill.)
Net profits financial instruments: NOK -4 mill. (NOK -26 mill.)
Income from associated companies and subsidiaries: MOK 34 mill. (NOK 27 mill.)
Opertating expenses: NOK 304 mill. (NOK 259 mill.)
Net loss on loans: NOK -5 mill. (NOK -2 mill.)