Strong results and new digital solutions

– The 2021 results demonstrate that we came out strong from another year of the pandemic. They demonstrate that we are a sound bank, well equipped for demanding times. This is important to us, and it’s important to our customers!

Geir Bergskaug er administrerende direktør i Sparebanken Sør

Says CEO Geir Bergskaug, who can present a Q4 result of 412 mill. NOK pretax. This contributes to financial results from 2021 pretax of 1,549 NOK, a solid increase from 1,403 mill. NOK in 2020.

– We are very pleased with a strong 2021. This has also been a year characterised by a focus on green and sustainable banking, and by putting an effort into digitalisation and new technology. I believe our customers notice this.

Focusing on new digital solutions

In 2021, our corporate customers have received a new Sør Dashboard, to make it easier to get an overview of their financial information. In addition, their corporate Internet bank has been improved and simplified. Our retail customers can now increase their mortgage loan in our online bank, and they can also scan their invoices in our mobile banking app.

– It’s important that the effort we put into new digital solutions will benefit our customers. I’m particularly proud of the fact that we, together with Vipps, were the first Norwegian bank to launch the possibility of proving one’s identity at home, using BankID, says Bergskaug, who describes this effort as important to future banking services and adaption to a changing customer behaviour.

– We spent our resources in a way that creates value to both the bank and the customers. We’ve done this through a strategic shift of competence towards analysis, technology and digitalisation, among other things. Also, we have invested in new technology and proven that we have the strength within our organization to deliver good and relevant banking services on a modern digital platform.

Improvement in net interest income

Net interest income increased in Q4 2021 and provided an increase in the interest margin for both the retail and corporate market. Net interest income amounted to 1,939 mill. NOK in 2021, which is an increase from 1,914 mill. NOK the previous year.

– Low interest rates had a negative influence on Sparebanken Sør’s interest margins in 2020, but decent growth, lower deposits costs and a gradually increased interest rate lead to a stronger net interest income in the last three quarters of 2021. It contributed positively to the strong result.

The positive lending and deposits growth from 2020 continued in 2021, with a growth of 4.5 and 5.5 per cent respectively. The bank has a deposit-to-loan ratio of 54.1 per cent, something which has increased during the past 12 months.

Decent growth in other revenues

The bank aspires to grow extensively in other revenues, from insurance, securities funds and leasing, among other things. Bergskaug reports on a strong 2021 for subsidiaries and associates.

– Profits from for instance Frende and Brage shows that things are looking promising. Sørmegleren experienced a strong growth, from pretax profits of 25 mill. NOK in 2020, to 35 mill. NOK in 2021.

Losses and non-performing loans

Net entry on losses on loans totalled 18 mill. NOK in 2021. The corresponding figure in 2020 was a net loss on loans of 83 mill. NOK.

– There’s been a very positive development regarding non-performing loans, and we didn’t have any major losses in 2021. This is good, viewed in the light of the demanding period that the Norwegian economy has been through, but it is also a consequence of a low risk profile in the bank’s loan portfolio, says Bergskaug.

Total assets and profits

The group’s total assets amounted to 144.2 bn NOK at the end of the year, which was an increase from 142.1 bn NOK the previous year. The group’s equity amounted to 14.9 bn NOK; an increase from 13.8 bn NOK the previous year.

The board will propose to distribute a dividend of 8 NOK per equity certificate.

Principal figures from preliminary annual accounts 2021 (annual accounts 2020 in parenthesis):

  • Pre-tax profits: 1,549 mill. NOK (1 403 mill. NOK)
  • Return on equity: 9.0 per cent (8,4 per cent)
  • Net interest income: 1,939 mill. NOK (1 914 mill. NOK)
  • Net profits financial instruments: 0 mill. NOK (40 mill. NOK)
  • Profits from subsidiaries and associates: 174 mill. NOK (136 mill. NOK)
  • Operating expenses: 1,018 mill. NOK (958 mill. NOK)
  • Net loss on loans: -18 mill. NOK (83 mill. NOK)

Principal figures from Q4 2021 (Q4 2020 in parenthesis):

  • Pre-tax profits: 412 mill. NOK (430 mill. NOK)
  • Return on equity: 9,4 per cent (10,4 per cent)
  • Net interest income: 506 mill. NOK (467 mill. NOK)
  • Net profits financial instruments: -26 mill. NOK (37 mill. NOK)
  • Profits from subsidiaries and associates: 66 mill. NOK (57 mill. NOK)
  • Operating expenses: 268 mill. NOK (260 mill. NOK)
  • Net loss on loans: 2 mill. NOK (-30 mill. NOK)

The quarterly report can be found her.