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Results for the second quarter 2021: High activity, increased operating revenues and good results

Sparebanken Sør achieved a very satisfactory result in the second quarter 2021, with positive developments in net interest income, solid contributions from the Group’s subsidiaries and associates and reversal of losses.

Foto av adm. direktør Geir Bergskaug

The bank is well capitalised and has a solid equity situation. At the end of the quarter, the Group’s leverage ratio totalled 9.2 percent, while its common equity tier 1 (CET1) capital ratio was 16.0 percent, which is well above the regulatory authorities’ requirements.


The Group made a profit before tax of NOK 386 million in the second quarter 2021, up from NOK 367 million in the same period in 2020. The Group achieved a return on equity of 9.0 percent in the second quarter 2021.

Strengthened net interest income

Net interest income totalled NOK 488 million in the second quarter 2021. An increase of NOK 39 million compared with the corresponding period last year. The low interest rate has significantly affected the bank’s interest margin over the past quarters, but lower market interest rates have contributed positively in the second quarter.

Financial income

Net income from financial instruments totalled minus NOK 11 million in the second quarter 2021, compared with NOK 59 million in the second quarter 2020. The financial markets have remained relatively stable through the quarter, but increased credit spreads have resulted in accounting losses on the liquidity portfolio.

Very positive development from subsidiaries and associates

The associates Frende and Brage made positive contributions in the second quarter 2021. Associates contributed a total of NOK 45 million in the quarter.

There has been high activity in the housing market in the last quarter. The bank’s subsidiary Sørmegleren has also seen a strong increase in profits, and contributed NOK 14.2 million in the second quarter 2021.

Cost-income ratio among the best thanks to good cost control

In the second quarter 2021, operating expenses totalled NOK 260 million, compared with NOK 240 million in the second quarter 2020. The NOK 20 million increase is attributable primarily to Sørmegleren’s higher levels of activity.

With a cost-income ratio of 37.5 percent in its banking operations, Sparebanken Sør retains its position as one of the most costeffective banks in the business.

Net entry on losses on loans and low level of non-performing loans

Net entry on losses on loans totalled NOK 11 million in the second quarter 2021. The corresponding figure in 2020 was a loss expenses NOK 46 million. There has been an improvement in the macro-picture, which has resulted in lower model-based losses on loans.

Non-performing loans totalled NOK 912 million at the close of the second quarter 2021, down from NOK 1 083 million at the corresponding period last year.

The level of losses and non-performing loans is considered low given the challenging period the Norwegian economy has been through, and demonstrates the high quality and low risk profile of the bank’s lending portfolio.

Strong lending and deposit growth

In the past 12 months, gross lending increased by 5.6 percent, while deposits grew by 10.0 percent.
Gross lending growth in the second quarter 2021 was 8.2 percent, while deposit growth was as high as 34.3 percent. There was a very high activity in retail- and corporate market last quarter.
Net lending at the close of the period stood at NOK 115.1 billion, while deposits totalled NOK 66.0 billion. The loan-to-deposit ratio was 57.4 percent at the end of the quarter.

Total bank assets and equity

The Group had total bank assets of NOK 140.4 billion at the end of the quarter, down from NOK 141.6 billion last year. The Group’s equity totalled NOK 14.1 billion, up from NOK 13.5 billion last year.

“Sparebanken Sør has confirmed its position as one of the region’s foremost banks. The bank has a strong market position, a high level of customer satisfaction, and effective, forward-looking digital solution. This puts the bank in a good position for further growth and development in line with our business strategy,” says CEO Geir Bergskaug.