Interim Report September 30, 2000

Transcription

1 3rd Interim Report

2 The Fokus Bank Group made a pre -tax profit on ordinary operations of NOK mill. for the nine months ended on September 30, The profit for the same period of 1999 was NOK mill. The operating profit before provisions for bad and doubtful debts was NOK mill. against NOK mill. for the same period last year. Group total assets were 11.6 per cent up on the figure at the turn of the year. During the past 12 months total assets have risen 12.3 per cent. Gross lending has risen 9.0 per cent since the turn of the year. Gross lending has risen NOK 4.8bn, or 12.9 per cent, during the past 12 months. General observations Fokus Bank is going through a phase of integration with Danske Bank. Integration of the IT systems is an important part of the total integration. The results of this work will strengthen Fokus Bank s competitive power. Fokus Bank changed its design profile in September, and since then has been more evidently part of the Danske Bank Group. The change of profile was followed up by a major marketing campaign to create awareness of the new profile in the minds of the public. In the realm of fund management, Fokus Bank has launched a collection of unit trusts under the name Firstnordic. Firstnordic is a securities fund incorporating sub-funds from Sweden, Norway and Luxembourg that are marketed by Fokus Bank and others. Firstnordic can be accessed on our web site. Customers are given full insight into fund management, which is designed to create good, solid returns. Fokus Bank devotes considerable resources to fund management. In addition, Fokus Bank has developed new products and launched them on both the retail and corporate markets. These products include first-mortgage home and corporate loans, and international concepts tailored to companies trading on international markets. The trend of Fokus Bank s profits is still very much dependent on net interest income. To reduce this dependence and improve the results, several activities have been initiated to both raise income and reduce costs. Managing Director Svein Sivertsen has informed the Board that he wishes to resign. Thomas Borgen is appointed as the new Managing Director. The change of Managing Director takes place on January 1, On November 9, 2000 the Committee of shareholder s representatives appointed Søren Møller Nilsen as the new Chairman of the Board. Peter Straarup will continue as vice-chairman of the Board. Profit and loss account Net interest income amounted to NOK mill., which was NOK 25.2 mill. down on the same period last year. NOK 7.3 mill. in interest from previous periods was booked as income as at September 30, The corresponding figure last year was NOK 6.9 mill. Measured against average total assets, net interest was 2.30 per cent against 2.56 per cent for the year Other income amounted to NOK mill. This is NOK 20.3 mill. more than for the same period last year. The increase in net commission income partly results from the acquisition of Danske Securities AS at the turn of the year. Net gains on securities amounted to NOK 46.1 mill., which is NOK 47.9 mill. down on the same period last year. Fokus Bank s trading portfolio of equities and bonds is booked at market value. NOK 63.5 mill. of net booked gains was apportioned to shares and a negative figure of NOK17.4 mill. to certificates or bonds. Operating expenses amounted to NOK mill., which was NOK mill. up on the same period last year. A major part of this increase is the result of the consolidation of Danske Securities AS. Measured as a percentage of average total assets, operating expenses amounted to 2.33 per cent against 2.26 per cent for the whole of At the end of the quarter, the Fokus Bank Group had 1,045 full-time employees. During the past 12 months, the number of full-time employees has increased by 71, of which Danske Securities accounts for 35. The ratio of costs to income was 68.4 per cent compared with 61.3 per cent at the end of the third quarter of The change in Fokus Bank s deferred tax position is estimated at NOK 65.5 mill. for the first three quarters (see our comments on the bank s tax position). Fokus Bank, 3rd Interim Report

3 Losses on loans and guarantees After the third quarter, net losses on loans amounted to NOK171 mill. as compared with net losses of NOK132.4 mill. for the same period in Gross losses amounted to NOK 240.1mill.; 87.4 per cent was attributable to business and industry and 12.6 per cent to retail customers. Estimated losses amounted to 98 per cent of gross losses as at September 30, Gross non-performing loans rose to NOK1,191mill., which is an increase of 3.6 per cent since the turn of the year. Gross non-performing loans account for 2.8 per cent of gross lending. Specific loan loss provisions amounted to 59.9 per cent of gross non-performing loans. Net non-performing loans amounted to NOK478mill. Balance sheet Fokus Bank s total assets amounted to NOK49.4bn. This is an increase of NOK5.1bn since the turn of the year and corresponds to a growth rate of 11.6 per cent. Growth for the same period last year was 12.3 per cent. The increase is mainly due to an increase of 12.9 per cent in the volume of lending. Customer deposits reached NOK26.7bn as at September 30, 2000, an increase of NOK3.5bn since the turn of the year. The bank s own funding, measured as ordinary deposits against net loans, amounted to 64.0 per cent. Fokus Bank s tax position The bank s tax position remains undecided. The Norwegian tax authorities question the bank s right to deduct write-downs on preference capital of NOK 2.15bn. In September 1998, the bank issued a writ against the government represented by the Sør-Trøndelag tax office. The case has been held in abeyance for 18 months, and was started again October 10, The city court has again postponed the case until September 1, The bank s accounts have been drawn up on the assumption that the bank will win the case. Equity capital The capital ratio at September 30, 2000, was per cent for the group and per cent for the parent bank, of which the tier 1 ratios were 7.20 per cent and 7.04 per cent respectively. At the turn of the year the group had a solvency ratio of per cent and the parent bank a solvency ratio of per cent. If 50 per cent of the profit at September 30, 2000, is included, the solvency ratios are 7.39 per cent and 7.19 per cent respectively. Booked equity per share, including 50 per cent of the profit for the period, amounted to NOK at the end of the quarter. Trondheim, November 16, 2000 Board of Directors, Fokus Bank Fokus Bank, 3rd Interim Report

4 Parent Bank Profit and Loss Account Group NOK mill , , ,862.5 Interest income and related income 2, , , , , ,077.1 Interest expenses and related expenses 2, , , , , Net interest and credit commissions , Dividend and other income from securities Commissions and income from banking services Commission expenses and expenses from banking services Net profit/loss securities Net profit/loss foreign exchange Other operating income Total other operating income Personell expenses General administration expenses Ordinary depreciatons and write-downs fixed assets Other operating expenses Total other operating expenses Operating result before losses and profit/loss Losses on loans and guarantees Write-down and profit/loss long-term investments in securities Result from ordinary operations before tax Tax from ordinary operations Extraordinary income Extraordinary expenses Tax from extraordinary result Result Fokus Bank, 3rd Interim Report

5 Parent Bank Balance Sheet Group NOK mill Cash and receivables from Central Banks ,478.5 Lending to and receivables from credit institutions 1, , , ,132.8 Total loans 42, , , Specific loan loss provisions General loan loss provisions , , ,045.5 Net loans 41, , , Repossessed assets , , ,288.9 Certificates and bonds 2, , , Shares Ownership in associated companies ,082.0 Ownership in consolidated companies Intangible assets Fixed assets Other fixed assets , ,168.4 Prepaid expenses and accrued income 1, , , , ,719.5 Total assets 49, , , , , ,722.4 Due to credit institutions 4, , , , , ,372.8 Deposits from and liabilities to customers 26, , , , , ,415.7 Debt securities in issue 10, , , Other liabilities Accrues expenses and prepaid income Other liabilities and provisions , , ,053.0 Subordinated loan capital 2, , , , , ,084.0 Total liabilities 45, , , , , ,109.0 Share capital 1, , , , , ,401.9 Funds 2, , , Profit this period , , ,635.5 Total equity 3, , , , , ,719.5 Total liabilities and equity 49, , ,314.1 Accounting principles General The interim accounts have been prepared in accordance with generally accepted accounting practies, and the Banking, Insurance and Securities Commissions` regulations concerning year-end and interim reporting. As a consequence of the new accounting law, associated companies and subsidiaries have been included in the Parent Bank`s accounts according to the equity method. Furthermore, deferred tax benefits have been included in the Balance Sheet as Intangible assets. The change has been booked directly against the equity. The marked based current financial assets that are included in the trading portefolio have been booked at market value. Income received on an annual basis is periodised. For a complete account of the Accounting Principles, see the 1999 Annual Report. The Bank`s tax situation The Bank`s tax situation remains undecided. In 1995, the tax authorities raised the question of the bank`s rights to deduct the write-downs made on the preference capital issued during the banking crisis. To Fokus Bank, this preference capital amounted to NOK 2,15 billion. The Tax committee in Trondheim supported the Bank`s view, but the County Tax committee overruled the decision in April In September 1998, the Bank chose to take legal action against the Government represented by the Sør-Trøndelag County Tax Office. The case have been stopped in 18 months and was started again 10. oktober The Court has once again stopped the case, now to the 1.september The tax-loss carried forward is included in the basis for calculating the deferred tax benefit with NOK 422 million at 1st January The tax expense in the accounts is entirely attributable to the change in deferred tax benefit. Fokus Bank, 3rd Interim Report

6 Changes in Specific and General Provisions for Group Losses NOK mill Specific provisions Confirmed losses on loans, guarantees etc. in the period previously provided for by specific provisions Increased specific loan loss provisions in the period New specific loan loss provisions in the period Reversals on specific loan loss provisions in the period Specific provisions NOK mill General provisions /- The period`s general loan loss provisions General provisions Of wich general provision for loan losses at Losses on Loans and Guarantees in the Group NOK mill Changes in specific loan loss provisions in the period Changes in general loan loss provisions in the period Confirmed losses in the period previously provided for by specific loan loss provisions Confirmed losses in the period not previously provided for by specific loan loss provisions Reversals on previous periods confirmed losses in the period Debt remission subsidiaries Net loan losses in the period Parent Bank Capital Adequacy Ratio Group ,614 2,686 Core capital 2,698 2,629 1,412 1,310 Additional capital 1,310 1,412 4,026 3,995 Equity and subordinated debt 4,007 4, Deduction ,006 3,986 Net equity and subordinated debt 3,998 4,021 34,836 38,177 Risk-weighted assets 37,489 34, Capital adequacy ratio Core capital ratio Key Figures Group Cost/income ratio 1) General provisions for loan losses in per cent of gross loans 2) Loans in per cent of total assets 3) Losses in per cent 4) Deposit coverage ratio 5) Return on equity 6) Earnings per share in NOK 7) ) Ordinary operating expenses in per cent of the total net interest income and other operating income 2) General loan loss provisions in per cent of gross loans after deducting specific loan loss provisions 3) Gross loans after deducting specific loan loss gross provisons in per cent of total assets 4) Net loan losses, excluding guarantees, in per cent of gross loans at the end of the period ( p.a. ) 5) Customer deposits in per cent of gross ordinary loans 6) Result in per cent of average equity capital ( p.a. ) 7) Result divided by average number of shares ( p.a. ) Fokus Bank, 3rd Interim Report

7 Key Figures Interim Reports Profit and loss Account NOK mill. 3rd Q 00 2nd Q 00 1st Q 00 4th Q. 99 3rd Q 99 2nd Q 99 1st Q 99 4th Q 98 3rd Q 98 2nd Q 98 1st Q 98 Net interest income Other operating income (69.7) Net operating income Operating expenses Operating res. before losses/ net res long-term securities (34.4) Net loan losses (1.7) Profit/loss/write-down long-term sec. (1.0) (0.1) Pre-tax result from ordinary operations (59.9) Balance Sheet Gross loans to customers 42, , , , , , , , , , ,880.1 Customer deposits 26, , , , , , , , , , ,776.6 Total assets 49, , , , , , , , , , ,117.9 Quartely average total assets 48, , , , , , , , , , ,621.1 Average total assets 47, , , , , , , , , , ,621.1 Loan loss provisions Specific loan loss provisions General loan loss provisions Total loan loss provisions 1, , Loan loss provisions in % of gross loans Non-performing loans Total non-performing loans 1, ,170 1,150 1,225 1,226 1,174 1,150 1,188 1,131 1,088 Specific loan loss provisions Net non-performing loans Loan loss provis. in % of total non-perf Net non-perform. in % of gross loans Doubtful loans Total doubtful loans Specific loan loss provisions Net doubtful loans Loan loss provisions in % of total doubtful loans Development softloans Softloans Accounts with overdrawn/overdue amounts are classified as non-performing unless the situation is considered passing. If the loan has been overdrawn for more than 90 days, it is always classified as non-performing. Doubtful loans are exposures where an evalution of the customer`s economic situation have led the Bank to make a specific loan loss provision, although the loan is still performing. Fokus Bank, 3rd Interim Report