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Profit growth at SpareBank 1 SMN


October 27, 2011 - London

SpareBank 1 SMN recorded a pre-tax profit of NOK 946m in the first nine months of 2011, an advance of NOK 42m over the same period last year.

The quarterly accounts reflect strengthened earnings on core business, reduced loan losses, a strong financial position and sound growth in deposits and home mortgage lending with a net influx of 2,000 retail customers and 400 corporate customers in the first nine months of the year.

Ordinary banking operations have developed well with a profit of NOK 581m compared with NOK 495m in the same period last year. The Bank's financial investments have yielded an overall return of NOK 365m compared with NOK 292m in the same period of last year. The increase is due to capital gains at SpareBank 1 SMN Invest and sound return on the Bank's bond portfolio.

The Group shows a real increase of NOK 124m in operating expenses compared with last year's third quarter. This is mainly due to strong growth in estate agency and business services, both of which are business areas with a high cost share, and the Bank's focus on Sunnmøre as well as increased costs related to the new Head Office.

Strong financial and liquidity position
SpareBank 1 SMN is well capitalised and has robust funding. Core capital adequacy as of the 3 quarter is 10.4% compared with 10.6% at the same point last year. The Bank's target is a figure of at least 9.0%.

With liquidity reserves of NOK 17bn, the Bank is well prepared for a period of limited access to new money market funding. The Bank is in a position to maintain ordinary operations for 18 months without further access to external funding. The Bank has negligible international exposure in its ordinary business, with limited direct exposure to the securities markets and a conservative investment strategy for its liquidity holding.

Low rate of defaults and no loan losses
At the end of the first nine months net loan losses totalled NOK 1m compared with NOK 96m at the same point last year. New individually assessed impairment write-downs are at a low level. Defaults are at very low level, at 0.36% of overall lending.

SpareBank 1 SMN continues to strengthen its market-leader position in Trøndelag and in Møre and Romsdal. In the retail market the Bank has achieved 10.2% growth in lending to households, while general credit growth in the 12 months to end-August 2011 according to Statistics Norway was 7.2%. Overall growth in lending to corporates was 4.4% over the last 12 months compared with a general credit growth of 4.1%.

SpareBank 1 SMN notes a large influx of deposits, with growth as high as 10.1% achieved over the last 12 months.

The Bank's subsidiaries are also showing good growth and good profitability, with EiendomsMegler 1 Midt-Norge meriting special mention.

SpareBank 1 SMN's total assets come to NOK 121.1bn after the first nine months, including loans transferred to co-owned SpareBank 1 Boligkreditt.

Comments from the Group CEO
"We are well satisfied with the Bank's performance, noting satisfactory growth in all business area, and very low losses and defaults. This, along with growth in market shares, reflects the Bank's solid position in its catchment area," says Group CEO at SpareBank 1 SMN.

"It is particularly satisfying in these times to note the Bank's satisfactory funding situation, strong deposit growth, solid gains on securities and absence of international exposure. Nor, thus far, have we seen any consequences of note of the international financial turbulence for the region's business and industry," says Mr Haugan.

First nine months of 2011 - key figures:
·    Pre-tax profit: NOK 946m (904m first nine months of 2010)
·    Post-tax profit: NOK 745m (704m)
·    Return on equity: 12.6% (13.9%)
·    Growth in lending: 7.7% (12.4%)
·    Loan losses: NOK 1m (108m)
·    Growth in deposits: 19.1% (2.8%)
·    Core capital adequacy: 10.4% (10.6%)
·    Earnings per equity capital certificate: NOK 4.81 (4.13)

http://kvartalsrapport.smn.no/content/14/3.-kvartal-2011 
Trondheim, 26 October 2011.

Contact persons at SpareBank 1 SMN:
Group CEO Finn Haugan on +47 900 41 002
Executive Vice President, Finance, Kjell Fordal on +47 905 41 672
Executive Vice President, Corporate Communications, Hans Tronstad on +47 941 78 322

About SpareBank 1 SMN
SpareBank 1 SMN is the region's leading financial services group. It leads the retail and corporate market, and is positioned in 43 localities across the region's municipalities with a total of 54 offices.

We aim to be the recommended bank for customers in Trøndelag and in Møre and Romsdal. Being a local, independent savings bank we feel a special responsibility for stimulating growth and prosperity in the region. We base our business on closeness to our customers, good accessibility, a full product range and comprehensive financial advisory services.

Our head office is in Trondheim. The Group employs about 1,100 staff and includes the following subsidiaries: SpareBank 1 SMN Finans, EiendomsMegler 1 Midt-Norge, Allegro Finans and SpareBank 1 SMN Regnskap. It is the largest shareholder in BN Bank with a 33% stake.

SpareBank 1 SMN is one of six owners of SpareBank 1 Gruppen. For further information, visit our website at www.smn.no.

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Source: SpareBank 1 SMN via Thomson Reuters ONE

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