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2016-02-03

SpareBank 1 SMN: Good performance and strengthened financial position

The
board of directors recommend a dividend of NOK 2.25 per equity certificate
(EC) after a good performance in 2015.
The CET1 capital ratio has now risen to 13.6 per cent.
SpareBank 1 SMN achieved a profit of NOK 1,406m in 2015 compared with NOK
1,782m in 2014. The change is due to lower financial return last year. The
year was characterised by sound profits on the bank's core business featuring
increased net interest income and limited cost growth, low losses on loans
and low defaults, a substantially strengthened CET1 capital position and
sound growth in lending and deposits.

"2015 proved to be another good year, and the entire Group performed well.
Cost growth is under good control and bank customers in our market area are
increasingly opting for SpareBank 1 SMN. The region's business sector thus
far shows that the economic challenges are being handled well," says CEO Finn
Haugan at SpareBank 1 SMN.

The bank's capital plan targets a CET1 capital ratio of at least 14.5 per cent
by 1 January 2017.

"We are pleased that our previous target of a CET1 capital ratio of 13.5 per
cent by 30 June 2016 has already been reached. Issuing stock is not a part of
the capital plan," says Mr Haugan.

Application of profit

In keeping with the capital plan the board of directors recommends a cash
dividend of NOK 2.25 per EC. This involves a payout ratio of 32 per cent. The
bank's capital plan indicates an annual dividend of 25-35 per cent in the
period to 2016. Thereafter the bank will return to a normal level of
dividend, entailing a payout of up to 50 per cent of the EC holders' share of
the profit.

An allocation of NOK 40m in donations to non-profit causes is recommended in
2016.

Accounts 2015 - key figures
:

* Pre-tax profit: NOK 1,776m (2,143m in 2014)
* Post-tax profit: NOK 1,406m (1,782m)
* Return on equity: 10.7% (15.1%)
* Growth in lending: 7.3%
* Growth in deposits: 5.6% (8.5%)
* Loan losses: NOK 169m (89m)
* CET1 capital ratio: 13.6% (11.2%)
* Earnings per EC: NOK 7.02 (8.82)
* Recommended dividend: NOK 2.25 per EC (2.25)

Increased net interest income

Net interest income totalled NOK 1,872m in 2015, an increase of NOK 82m from
the previous year. The increase is largely due to good lending growth,
increased deposit margins. Commission income and other operating income rose
by 11.7 per cent to NOK 1,211m compared with 2014, exc. commissions from
SpareBank 1 Boligkreditt and SpareBank 1 Næringskreditt. The growth is
ascribable to a positive income trend for sales of estate agency, insurance
and savings and investment products and services plus the effect of the
consolidation of SpareBank 1 Markets.

6,300 new retail customers

SpareBank 1 SMN increased its lending to retail customers by 9.0 per cent to
NOK 80.7bn. This growth is higher than the general level of credit growth and
the bank strengthened its market position in 2015. The bank acquired 6,300
new retail customers over the course of the year.

Lending to corporates increased by 0.7 per cent to NOK 46.7bn. Dampened growth
in lending to this segment is as planned due to higher capital requirements
imposed by the authorities. The reduction applies to larger exposures,
whereas the bank shows good growth among small and medium-sized businesses.
1,400 new corporate customers joined the bank last year.

Low losses

The bank has low losses and low defaults. Net losses measure 0.14 per cent of
total outstanding loans. The low loss and default figures reflect both the
macroeconomy of Trøndelag and Møre and Romsdal and the quality of the bank's
lending process and customer follow up.

The bank has only limited credit exposure to oil-related activities, in total
about 5 per cent of its aggregate lending. In the third and fourth quarters
of 2015 the bank found cause to increase collectively assessed write-downs by
a total of NOK 80m. The rationale is greater likelihood of future loss in
oil-related activities due to a more challenging market situation.

"At the start of 2016 greater uncertainty attends developments for the bank's
clients in oil-related business. This essentially involves a limited number
of shipping companies in Sunnmøre. The increase in the bank's collectively
assessed write-downs reflects this uncertainty," says Finn Haugan.

Limited cost growth

The board of directors adopted in autumn 2014 new targets for parent bank
costs, entailing zero growth in the bank's nominal costs in 2015 and 2016.
The background is the bank's customers' growing preference for digital
solutions and the fact that a number of internal production processes are
also about to undergo comprehensive automation. The parent bank showed an
increase of 0.8 per cent, taking into account the effect of consolidation of
SpareBank 1 Markets along with one-time costs.

Trondheim, 3 February 2015

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 is the
market leader in the retail and corporate segments, with a total of 49
offices located at 42 sites across the region's municipalities.

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 located in Trondheim. The Group employs about 1,200
full-time equivalents and includes the following subsidiaries: SpareBank 1
Markets, SpareBank 1 SMN Finans Midt-Norge, EiendomsMegler 1 Midt-Norge,
Allegro Finans and SpareBank 1 Regnskapshuset SMN. SpareBank 1 SMN is the
largest shareholder in BN Bank with a 33% stake.
SpareBank 1 SMN is one of six owners of SpareBank 1 Gruppen.

http://quarterlyreport.smn.no/2015/

Report
http://hugin.info/144/R/1983244/726782.pdf
Supplementary information
http://hugin.info/144/R/1983244/726775.pdf
Presentation
http://hugin.info/144/R/1983244/726774.pdf

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This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: SpareBank 1 SMN via Globenewswire

HUG#1983244

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