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Sbanken Q1 results characterised by low losses and overcapitalisation

Bergen, 11 May 2021. The Sbanken group generated a profit before tax of NOK 242.9 million in the first quarter of 2021, compared to NOK 239.0 million in the first quarter of 2020. Net interest income decreased by 45.9 million, while net fee and commission income increased by 0.2 million. Return on equity (ROE) in the first quarter was 10.7 per cent. Adjusting for excess CET1 capital above the 13.0 per cent target, ROE for the quarter equalled 14.3 pent.

At quarter-end, customer lending totalled NOK 83.2 billion, corresponding to an annual lending growth rate of 0.2 per cent. Mortgage lending was flat from the previous quarter. Funds under management (FuM) increased to NOK 25.9 billion, corresponding to 86 per cent growth year-on-year, supported by continued high inflow from customers.

· DNB launches recommended voluntary offer to acquire all share of Sbanken at NOK 103.85 per share
· Strong asset quality – loss ratio 0.06 per cent
· FuM growth to NOK 25.9 billion – annual increase 86 per cent
· Awarded best mobile banking app in Norway
· Remains significantly overcapitalised - NOK 1.2 billion above target post dividends

“In this quarter, losses have remained at low levels, evidence that the bank’s lending portfolio is among the most profitable and robust in the market. Savings show continued strong and profitable growth, with increasing inflow from savings agreements and high activity in equity share trading. Last but not least, our position as a leader in digital innovation was reconfirmed in March, when Cicero Consulting’s mobile banking report ranked Sbanken as Norway’s most popular mobile banking app,” says Øyvind Thomassen, CEO of Sbanken.

Net interest income decreased to NOK 384.7 (430.6) million. The net interest margin for the quarter was 1.55 per cent, down 5 basis points from the previous quarter, partly ascribed to the elevated money market rates in the first quarter.

Operating expenses were reduced to NOK 174.7 (183.8) million, with the cost-to-income ratio at 40.6 per cent in the quarter. The net cost of losses amounted to NOK 12.7 (51.0) million, equivalent to a loan loss ratio of 0.06 per cent. The implementation of EBA’s new definition of default had a NOK 23.1 million negative impact on losses in the quarter.

Dividend of NOK 3.15 per share for 2019 was distributed in the quarter, and the share traded ex-dividend from 1 March. On 22 April, the ordinary general meeting approved an authorisation to the Board to decide on the distribution of 2020 dividends, limited up to NOK 4.40 per share. Taking distributed and pending dividends into account, Sbanken had CET1 capital ratio of 15.9 per cent at quarter-end. This was 3.4 percentage points above the bank’s regulatory capital requirement of 12.5 per cent.

“These are exciting times and we are awaiting the conclusion on whether DNB becomes our new owner. Regardless of the outcome, we remain focused on delivering leading digital solutions to Norway’s most satisfied banking customers. Drive for innovation, strong customer focus and a highly skilled workforce represent core elements of the Sbanken concept, and I am confident that a potential new owner will further develop these values in the future,” Thomassen added.

The full interim report can also be found on www.sbanken.no/ir/ir-english.

Contact details,

Investor Relations
Jesper M. Hatletveit, Head of IR, Sbanken ASA, +47 959 40 045
Henning Nordgulen, CFO, Sbanken ASA, +47 952 65 990

Media Contact
Kristian K. Fredheim, Head of Communications, Sbanken ASA, +47 924 47 407

This information is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act