In 2023,Sparebanken Vest achieved a pre-tax profit ofNOK 4,418 (3,504) million and a return on equity of 16.5 (14.6) per cent. The board proposes a dividend to equity certificate owners ofNOK 7.50 (5.50) per equity certificate,NOK 1,050 million in customer dividends andNOK 150 million in donations. Net interest income ended atNOK 5,242 (3,994) million in 2023. The bank's operating expenses for the year wereNOK 1,772 (1,687) million, corresponding to a growth of 5.0 per cent. Operating expenses as a percentage of net operating income were reduced to 28.7 (32.5) percent for the year. Equity return after tax in the fourth quarter is 17.8 (12.5) %. Net interest income in the quarter isNOK 1,442 (1,136) million. Net commission income isNOK 188 (226) million, where the reduction is primarily explained by lower profitability commission from Frende due to a more demanding non-life insurance year in 2023. Operating costs areNOK 439 (452) million, corresponding to a cost percentage of 25.7 (34.5) %. Improved net interest in the quarter and for the year as a whole is driven by good growth in the customer segments and increased return on equity as a result of higher interest rates. In 2023,Norges Bank raised the key interest rate six times by a total of 1.75 percentage points. At the end of the quarter, the CET1 ratio was a solid 16.8 (18.1) per cent. - The fourth quarter ends a good year forSparebanken Vest . 2023 was also a year of good growth in customers, lending and income, which gave a return on equity for the year of 16.5 per cent. Like 2023, 2024 will be marked by economic unpredictability, andSparebanken Vest is well equipped for a more demanding macroeconomic picture, says Jan Erik Kjerpeseth, CEO ofSparebanken Vest . Good lending and deposit growth Total growth in gross lending over the past 12 months is 13.9%, while deposit growth over the past 12 months is 10.1%. The Bulder concept reached almostNOK 47 billion in loans at the end of 2023, far above the target and expectations at the start of the year, which was a lending volume ofNOK 36 billion . Since year-end 2023, the volume has increased to more thanNOK 48 billion . - Since introducing Bulder at the end of 2019, we have continuously developed the concept with new and improved products and functionality. The ambition is to continue growth in 2024 and achieve 60 billion in lending volume by the end of 2024, says Kjerpeseth. Growth in gross lending to corporate customers in the last 12 months is 10.1 % and last quarter at 5.2 %. - These are strong figures in the corporate market in a troubled time where we see larger differences between the industries when it comes to future expectations. According to 'Vestlandsindeksen' for the fourth quarter, companies within the construction industry have by far the lowest expectations going forward, while the oil and gas industry and other export-oriented companies have much higher expectations for the time to come, says Kjerpeseth. Lowest cost-to-income ratio in the industry Operating expenses in the fourth quarter areNOK 439 (452) million. Operating expenses as a percentage of net operating income was 25.7 (34.5) percent. In 2023, total operating expenses wereNOK 1,772 (1,687) million, corresponding to growth of 5.0 per cent. Operating costs as a percentage of net operating income was 28.7 (32.5) per cent for the year. - Looking at comparable banks,Sparebanken Vest has the lowest cost-to-income ratio in the Norwegian market. We have a clear ambition to retain this position. The ambition for total cost growth in 2024 is around 5 per cent, disregarding strategic investments, says Jan Erik Kjerpeseth. Low risk in the lending portfolio with the majority of lending to the retail market Write-downs on loans and guarantees areNOK 13 (38) million in the quarter and reflect low risk in the bank's lending portfolio. The loss costs in the quarter consist ofNOK 20 million in net confirmed losses and changes in individual write-downs andNOK 7 million in reversal of model provisions. Write-downs on loans and losses on guarantees amounted toNOK 95 (52) million in 2023. Of the loss costs in 2023, increased model provisions amount toNOK 82 million and the remainingNOK 13 million is due to net confirmed losses and changes in individual write-downs. Defaults and potential bad debt for the retail market totalNOK 322 (272) million. As a percentage of gross lending to personal customers, this corresponds to 0.16 (0.16) per cent. The development underpins the continued low risk in the portfolio. Defaults and potential bad debt for the corporate market totalNOK 1,139 (978) million. As a percentage of gross lending to business customers, this amounts to 1.87 (1.77) per cent. The risk profile is assessed as moderate. Good portfolio management, close follow-up and moderate exposure in cyclical industries help to reduce the risk of loss. Defaults and other potential bad debt amounted to 0.57 (0.55) per cent for retail and corporate customers combined. The Board proposes a record high customer dividend The bank's Board proposes a customer dividend ofNOK 1,050 million , andNOK 150 million in donations. In Q4 2023, the bank made an additional distribution for the accounting year 2022 of aboutNOK 811 million , where the society's share of the distribution of about 482 million in its entirety was set aside for donations for the public benefit. The total provision for donations over the last few months is therefore approximatelyNOK 632 million . - With the proposal for this year's customer dividend, we will have paid close toNOK 2.7 billion in customer dividends to the bank's customers since this was introduced from the financial year 2019. Awareness of customer dividends increases year by year among both the bank's customers and those who are not customers. Over the past ten years, the bank has also contributed close toNOK 2.5 billion in donations to teams, associations, volunteering and restructuring projects. This shows the strength of the savings bank model, and how we have a unique social position in the region, concludes Kjerpeseth. Main points - Q4 2023 o Strong return on equity: 17.8% (12.5%) o Growth and higher interest rates increased nominal net interest income:NOK 1,442 (1,136) million o A conservative loan book gave low losses:NOK 13 (38) million o Good cost management gave a low cost-to-income ratio: 25.7% (34.5%) o Good growth in lending and deposits in the last 12 months: 13.9% and 10.1%, respectively o Strong growth in the Bulder concept:NOK 46.8 billion in lending volume at the end of the quarter o Sound CET1 ratio: 16.8% (18.1%) Main points - full-year 2023 o Strong pre-tax profit:NOK 4,418 (3,504) million o Excellent return on equity: 16.5% (14.6%) o Higher net interest as a percentage of average assets under management: 1.79% (1.56%) o Lower cost-to-income ratio: 28.7% (32.5%) o Low write-downs on loans and guarantees:NOK 95 (52) million, corresponding to 0.04% (0.02%) of gross lending o Profit per equity certificate:NOK 12.76 (10.29) o Proposed dividend:NOK 7.50 (5.50) per equity certificate,NOK 1,050 million in customer dividend andNOK 150 million in donations Sparebanken Vests will present its financial figures for the fourth quarter of 2023 at 09.00 CET on1 February 2024 . The presentation will be available here: https://www.spv.no/om-oss/investor-relations/webcast Questions for the quarterly presentation may be sent to: investorrelations@spv.no A recording of the presentation will be made available on the same website later in the day on1 February 2024 . For more information, please contact: Jan Erik Kjerpeseth, CEO: +47 951 98 430Frank Johannesen , CFO: +47 952 65 971 BredeBorgen Kristiansen , Director of Finance and Investor Relations: +47 479 06 402Hanne Dankertsen , Director of Communications: +47 994 49 173Sparebanken Vest isNorway's second largest savings bank with approximately 800 dedicated and skilled employees. Since 1823, we have built up the trust of Western Norwegians, which means that we have a solid market position. We are present in 36 locations in Vestland, Rogaland and Møre og Romsdal. Through our affiliated product companies, we are a complete financial house for all our personal and corporate customers. We are proud to be an independent financial group headquartered in Bergen with a central role in much of the value creation that takes place inWestern Norway . This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
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