Sparebanken Vest recorded a pre-tax profit of NOK 246 million in the fourth quarter 2013, compared with NOK 547 million in the same period the year before. The main reason for the reduction is that the profit in 2012 was positively affected by a plan change of NOK 313 million in the bank's defined benefit pension scheme, while the profit for the fourth quarter 2013 was negatively affected by increased write-downs in the corporate market. The bank recorded a pre-tax profit of NOK 1.221 million for the year as a whole, compared with NOK 1.283 million in 2012. This corresponds to a return on equity of 11.7% (14.1%). The Board of Directors' dividend proposal to the Supervisory Board for 2013 is NOK 3.00 per equity certificate, up from NOK 2.50 per certificate in 2012. The key elements of the profit performance in the fourth quarter are that it was positively affected by an increase in nominal net interest and reduced operating expenses, while lower income from financial investments and increased write-downs on loans and guarantees in the corporate market segment have a negative effect on the result. 'The fourth quarter and 2013 as a whole were good for Sparebanken Vest . The income and cost measures implemented by the bank in 2013 have produced positive results. That is very pleasing,' says Jan Erik Kjerpeseth, Managing Director of Sparebanken Vest . 'We are very satisfied with the increase in total net operating revenues of more than 10% in 2013 and the continued positive cost trend,' Kjerpeseth continues. He adds that the bank has made determined efforts to reduce costs and that it is well on track in relation to reaching its target of a 2% average annual cost growth in the parent bank in the period up to 2015. To take account of the more stringent capital requirements and increased risk weights on housing loans for Norwegian banks, Sparebanken Vest implemented repricing in both the retail and corporate markets in the first quarter 2013. The increase in nominal net interest income in 2013 is a consequence of this repricing and of reduced borrowing costs as a result of falling money market interest rates. Net interest and credit commission income amounted to NOK 2.161 million in 2013, compared with NOK 1.797 million in 2012. Net interest as a percentage of average assets under management was 1.67% in 2013, compared with 1.45% in 2012. The bank's associated companies continued to improve their profit performance in 2013. The contribution to profits from these companies increased by NOK 16 million in 2013 from the year before, and it is expected to increase further in 2014. Strong financial position Sparebanken Vest's financial position is good, and the bank meets all the current regulatory capital requirements by a good margin. A set of more stringent equity requirements was introduced for Norwegian banks in 2013. Sparebanken Vest aims to meet future capital requirements by accumulating capital through operations. The measures the bank implemented in 2013 have produced positive results in relation to this goal. 'The bank's capital accumulation is according to plan, but Sparebanken Vest still believes that the new regulations do not contribute to Nordic harmonisation, and we will therefore continue to work actively to ensure harmonisation and thereby equal competitive conditions for banks that operate in Norway ,' says Kjerpeseth. Growth slowing down in the Norwegian economy The growth in the Norwegian economy slowed down in 2013. Although there is still great optimism and the economy in Western Norway is largely geared towards the petroleum sector, a more uncertain macroeconomic situation in the region can lead to the bank experiencing poor volume development in the corporate market, while weaker development in house prices could contribute to lower growth in the retail market. The profit per equity certificate was NOK 6.13 in 2013, compared with NOK 6.57 in 2012. The Board of Directors proposes that the Supervisory Board adopts a cash dividend of NOK 3.00 (2.50) per equity certificate. This corresponds to a distribution percentage of 51.6% (50%) of the equity certificate holders' share of profits. The proposed divided is within the bounds of Sparebanken Vest's dividend policy. It is also proposed that NOK 40 million (35) be donated for the public benefit in order to contribute to the social and economic development of Western Norway . In total, this means that Sparebanken Vest will have an earnings retention ratio of 83.9% (87%) of the profit for 2013. Key figures, fourth quarter 2013 (2012 in brackets): Pre-tax profit: NOK 246 (547) million Return on equity (ROE) annualised: 9.8% (21.9) Profit/diluted profit per equity certificate: NOK 1.33 (2.72) Net interest: 1.71% (1.51) Cost ratio: 43.9% (60.4) Core Tier 1 (Basel I - floor): 11.2% (10.6) Core Tier 1 (IRB): 14.2% (14.0) Key figures 2013 (2012 in brackets): Pre-tax profit: NOK 1.221 (1.283) million Return on equity (ROE) annualised: 11.7% (14.1) Profit/diluted profit per equity certificate: NOK 6.13 (6.57) Net interest: 1.67% (1.45) Cost ratio: 48.8% (58.0) Core Tier 1 (Basel I - floor): 11.2% (10.6) Core Tier 1 (IRB): 14.2% (14.0) Further information: See the enclosed interim report and presentation. A full report for 2013 is also available at www.spv.no . Contact persons: Jan Erik Kjerpeseth, Managing Director, tel.: (+47) 951 98 430 Frank Johannesen , Director - Finance and Risk Management, tel.: (+47) 95 26 59 71 Jens Olav Aksdal , CFO, tel.: (+47) 97 16 30 39 Lars Ove Breivik , Head of Communication, tel.: (+47) 41 50 69 99, email: firstname.lastname@example.org Presentations: Bergen: BØlgen & Moi, VÅgsallmenningen 16. Thursday 6 February at 8.30. Presentation by Hallgeir Isdahl , Director - Retail Market. Breakfast will be served from 8.15. Oslo : BjØrvika Konferansesenter, Oslo Atrium , Dronning Eufemias gate 6. Thursday 6 February at 8.30. Presentation by Managing Director Jan Erik Kjerpeseth. Breakfast will be served from 8.15. Click here for more information: http://www.newsweb.no/index.jsp?messageId=345165
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