Fourth quarter report 2006 As at 12 December

Transcription

1 Fourth quarter report 2006 As at 12 December Main features The main features of the Bank s operations in 2006 are as follows: - Improved operating result - Increased net interest income - Increased other (non-interest) operating income - A very low overall cost ratio - Net recoveries from loans previously written off as losses - Good lending - and deposit growth Framework conditions In 2006, Norges Bank raised its benchmark rate five times, each time by 0.25 percentage point; it was 3.50 per cent at the end of the fourth quarter. The rate of increase in Norges Bank s credit indicator, K2, was 14.8 per cent at the end of November. Growth in private households borrowings remains high. The rate of growth in credit extended to commerce and industry has been increasing and has now settled down at a markedly higher level than a year ago. The upward trend in share prices on the Oslo Stock Exchange was discontinued during the second quarter of Following falling share prices during the second and third quarters, prices rose again towards the end of the year. Overall, the Oslo Stock Exchange main index increased by some 32 per cent in In the last few months, unemployment has fallen, the registered level amounting to 2.1 per cent of the total labour force at the end of December. On a seasonally adjusted basis, the number of people without a job or participating in labour market measures totalled 61,148 persons. Operating result The Bank s 2006 pre-tax operating result ended up at NOK million, as opposed to NOK million in The result is equivalent to 1.44 per cent of average assets, as against 1.35 per cent 12 months ago. Net interest income increased by NOK 30.0 million compared to last year, totalling NOK million at the end of In relation to average assets, this amounted to 1.71 per cent. Other (non-interest) operating income totalled to NOK million, up by NOK 27.6 million on Net commission income improved by NOK 13.6 million in 2006, whereas gains from the sale of shares and bonds amounted to NOK 13.3 million. The Bank s exposure in the stock market remains low. Costs were up by NOK 7.2 million compared to In relation to average assets, however, there was a very positive development, costs having been reduced to 0.91 per cent at the end of the year, from 1.03 per cent 12 months ago. Costs as a percentage of income have remained at a very low level. The ratio at the end of 2006 was 39.3 per cent, as against 43.3 per cent a year earlier. Total assets At the end of 2006, total assets amounted to NOK 21,542 million. This involved an increase of NOK 3,489 million or 19.3 per cent during the last 12 months. Deposits At the end of the fourth quarter, deposits from customers totalled NOK 11,409 million, up by NOK million or 18.3 per cent during the last 12 months. The corporate banking market accounted for the largest share of the overall increase in deposits. At the end of 2006, 60.7 per cent of the Bank s loans were funded by deposits received from customers. In addition to maintaining a stable deposit base, Sparebanken Pluss makes every effort to fund the growth in assets by long-term borrowings in the domestic and international money- and capital markets. The Bank s good results and excellent capital adequacy ratio have helped ensure that new capital is raised at very competitive terms and conditions. Loans Gross lending to customers was up by NOK 2,791 million or 17.3 per cent, standing at NOK 18,901 million at the end of the fourth quarter. Retail banking- and corporate loans increased by 18.4 and 15.1 per cent respectively, the two sectors accounting for 64.3 and 35.7 per cent respectively of the Bank s total loan portfolio. The level of net loans in default is still very low. The credit risk contained in the Bank s lending portfolio is regarded as low. Losses on loans and guarantees Assessment of loans, credit losses and write-downs of loans is made in accordance with the new lending rules and regulations from In comparison with previous years, the information contained in the notes to the accounts has been somewhat adjusted in this connection. Write-downs of groups of loans have been reduced by NOK 5.7 million, totalling NOK 79.8 million as at Individual write-downs of loans have been reduced by NOK 6.5 million in relation to the level at the end of last year, amounting to NOK 13.8 million. At the end of the fourth quarter, there were net recoveries from previously written off losses of NOK 7.4 million overall. In the opinion of the Board of Directors, the level of writedowns is sufficient to cover the credit risk contained in the Bank s loan portfolio. Equity capital and capital adequacy At the end of the fourth quarter of 2006, Sparebanken Pluss s equity capital totalled NOK 1,623 million. This produced a high capital adequacy ratio, amounting to13.9 per cent. Despite the combination of low domestic interest rates and a high level of core capital, the Bank achieved a good rate of return on its equity capital. At the end of 2006, the ratio was 13.1 per cent, up from 11.4 per cent 12 months earlier. Primary Capital Certificates (PCCs) In 2006, 378,975 PCCs were traded; there were 1,290 transactions in all. As at , the Bank had 1,687 PCCholders. A list of the 20 largest PCC-holders at the end of 2006 is shown in one of the attached notes to the accounts. In 2006, based on preliminary accounting figures, earnings per PCC amounted to NOK 18.81, as against NOK at the same time last year. The Board of Directors will be proposing to the Bank s Board of Trustees that a dividend of NOK per PCC is paid for Future prospects The Board of Directors expects Sparebanken Pluss s operating result to be satisfactory in 2007 too. Kristiansand, 25 January 2007 Jens Freuchen Thore Westermoen Kristin Wallevik Norunn Tveiten Benestad Peder Syrdalen Unni Kruse Stein A. Hannevik Chairman Managing Director

2 PROFIPROFIT AND LOSS ACCOUNT (NOK 1.000) PER CENT OF AVERAGE ASSETS Interest receivable and similar income 4,02 3,44 3, Interest payable and similar costs 2,31 1,61 1, Net interest- and credit commission income 1,71 1,83 2, Dividends and other income from securities with var. yield 0,02 0,02 0, Commissions and income from banking services 0,50 0,50 0, Commissions payable and costs of banking services 0,07 0,08 0, Net gains from foreign exchange and securities 0,10 0,04 0, Other operating income 0,05 0,06 0, Sum other operating income 0,61 0,55 0, Wages, salaries and general administration costs 0,77 0,85 1, Depreciation etc. of fixed - and intangible assets 0,05 0,07 0, Other operating costs 0,09 0,11 0, Sum operating costs 0,91 1,03 1, Result from ordinary operations before losses on loans 1,40 1,35 1, Losses on loans, guarantees etc. -0,04 0,00 0, Operating result 1,44 1,35 1, Taxes 0,40 0,39 0, Result after taxes 1,04 0,96 0,95 BALANCE SHEET (NOK 1.000) ASSETS As at As at As at Cash-in-hand and claims on central banks Net loans to and claims on credit institutions Gross loans Specific write-downs Write-downs of groups of loans Net loans to and claims on customers Repossessed assets Certificates, bonds and other interest-bearing securities Shares Fixed assets Other assets Prepaid costs and accrued income,not yet received TOTAL ASSETS LIABILITIES AND EQUITY CAPITAL As at As at As at Liabilities to credit institutions Deposits from and liabilities to customers Liabilities incurred through issuance of securities Other liabilities Incurred costs and prepaid income Provisions against liabilities and costs Capital bond TOTAL LIABILITIES Primary Capital Certificates Premium Fund The Savings Bank's Fund Dividend Equalisation Fund TOTAL EQUITY CAPITAL TOTAL LIABILITIES AND EQUITY CAPITAL Total off-balance sheet items

3 QUARTERLY PROFIT AND LOSS FIGURES (NOK 1.000) 4th quarter 3rd quarter 2nd quarter 1st quarter 4th quarter Interest receivable and similar income Interest payable and similar costs Net interest- and credit commission income Dividends and other income from securities with var. yield Commissions and income from banking services Commissions payable and costs of banking services Net gains from foreign exchange and securities Other operating income Sum other operating income Wages, salaries and general administration costs Depreciation etc. of fixed - and intangible assets Other operating costs Sum operating costs Result from ordinary operations before losses on loans Losses on loans, guarantees etc Operating result Taxes Result after taxes QUARTERLY PROFIT AND LOSS FIGURES IN PER CENT OF AVERAGE ASSETS 4th quarter 3rd quarter 2nd quarter 1st quarter 4th quarter Net interest- and credit commission income 1,68 1,75 1,70 1,70 1,79 Sum other operating income 0,54 0,53 0,82 0,56 0,50 Sum operating costs 0,90 0,86 0,92 0,95 0,98 Result from ordinary operations before losses on loans 1,32 1,42 1,60 1,31 1,31 Losses on loans, guarantees etc. -0,03-0,03-0,08 0,00 0,00 Operating result 1,35 1,45 1,68 1,31 1,31 KEY FIGURES AS AT Growth in gross loans (% p.a.) 17,3 16,9 15,7 16,8 17,3 - Retail banking 18,4 17,4 18,1 19,0 20,3 - Corporate banking 15,1 16,1 11,3 13,2 12,3 Growth in deposits (% p.a.) 18,3 16,7 14,3 18,0 15,8 Growth in total assets (% p.a.) 19,3 16,7 15,9 22,0 19,9 Average assets (NOK mill.) Loan loss ratio (%) -0,04-0,03-0,02 0,00 0,00 Overall deposit coverage (%) 1 60,7 60,4 61,6 61,4 60,4 After-tax return on equity capital (%) 2 13,1 13,3 13,9 11,6 11,4 Total other operating coasts in relation to net income(%) 3 39,3 38,7 39,2 42,0 43,3 Earnings per PCC (NOK) 4 18,8 14,2 9,6 3,9 16,1 Earnings per PCC (NOK) per quarter 4,6 4,6 5,7 3,9 4,2 Primary Capital Certificates (PCCs) price (NOK) Number of branches Number of man years Definitions: 1 Deposits from and liabilities to customers, divided by loans to and claims on customers. 2 After-tax result, divided by average equity capital. 3 Total other operating costs, divided by net interest- and credit commission income plus total other (non-interest) operating income. 4 PCC-holders share of operating result after tax,divided by average number of outstanding certificates.

4 NOTES TO THE ACCOUNTS The accounts have been completed in accordance with the Banking, Insurance and Securities Commission's rules and regulations. In view of the fact that the Bank does not have any subsidiaries it does not have to report according to the new IFRS rules and regulations from All figures included in the attached Notes to the Accounts are in NOK thousand. Losses on loans in the period As at As at As at Write-downs of loans Losses on guarantees Write-down on loans and losses on guarantees Losses on loans Changes in specific write-downs of loans in the period Changes in write-down on groups of loans in the period Confirmed losses in the period for which specific write-downs have previously been made Confirmed losses in the period for which no specific write-downs have previously been made Recoveries from previous confirmed losses = Write-down on loans in the period Changes in specific write-downs Specific write-downs of loans as at Confirmed losses on loans in the period for which specific write-downs have previously been made Increased specific write-downs in the period New specific write-downs in the period Recoveries from specific write-downs in the period = Specific write-downs Changes in write-downs on groups of loans Write-downs of groups of loans as at Changes in write-downs of groups of loans in in the period = Write-downs of groups of loans Defaulted loans/credits Gross defaulted loans/credits>90 days Specific write-downs = Net defaulted loans/credits Gross defaulted loans as a percentage of gross loans 0,08 % 0,10 % 0,12 % Other bad and doubtful loans/credits Other bad and doubtful loans/credits, against which write-downs have been made Specific write-downs = Net other bad and doubtful loans/credits Gross defaulted loans and bad and doubtful commitments Gross defaulted loans and bad and doubtful commitments Specific write-downs Net defaulted loans and bad and doubtful commitments

5 Equity capital movements AS at AS at AS at Primary Capital Certificates Premium Fund The Savings Bank's Fund Dividend Equalisation Fund Total Equity Capital Capital adequacy Net equity and related capital Risk-weighted asset total Capital adequacy as a percentage 13,88 14,81 13,00 The 20 largest PCC holders as at NAME Number of % part of total NAME Number of % part of total PCCs held PCC capital PCCs held PCC capital 1. Sparebankstiftelsen DnB NOR , Flekkefjord Sparebank ,26 2. Terra Utbytte VPF , Hol Sparebank ,20 3. Glastad Farsund AS , Bratland Bjørn ,02 4. Sparebanken Rogaland Finan , Allumgården ,99 5. Sparebanken Sør , MP Pensjon ,96 6. Varodd AS , Strømme Leif ,96 7. Brøvig Holding AS , Pareto AS C/O Pareto Forv ,81 8. Spareskillingsbanken , Lillesand Sparebank ,80 9. Gumpens Auto AS , HJELM AS , Birkenes Sparebank , TET InvestAS ,80 Total - 10 largest PCC holders ,44 Total - 20 largest PCC holders ,05 As at , Sparebanken Pluss owned none of the Bank s Primary Capital Certificates (PCCs). The Bank s PCC capital totalled NOK 125 million, made up 1,250,000 PCCs, each of a nominal value of NOK 100.