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2014-05-09

SpareBank 1 SMN: A good quarter for SpareBank 1 SMN

SpareBank 1 SMN recorded a post-tax profit of NOK 500m in the
first quarter
2014, an increase of NOK 179m compared with the same period last year.

The quarter's accounts reflect considerably strengthened core business, low
loan losses, a financial position in keeping with the bank's capital plan,
reduced lending to corporate customers and an unrealised gain on the sale of
the sale of the bank's stake of NOK 148m in Nets Holding.

"We are well satisfied with the profit achieved, also when the effect of the
gain on the disposal of our stake in Nets is taken into account. The measures
set out in the capital plan are having a visible impact, we are maintaining
high net interest income, and losses and defaults are at a stable low level",
says CEO Finn Haugan at SpareBank 1 SMN.

First quarter accounts 2014 - highlights
:

* Pre-tax profit: NOK 597m (390m as of 1st quarter 2013)
* Post-tax profit: NOK 500m (321m)
* Return on equity: 17.7% (12.7%)
* Growth in lending: 4.4% (9.7%)
* Growth in deposits: 4.1% (7.4%)
* Loan losses: NOK 17m (17m)
* Common equity tier 1 (CET1) ratio: 11.1% (10.4%)
* Earnings per equity certificate: NOK 2.48 (1.55)

Strengthened net interest income
Net interest income came to NOK 412m in the first quarter 2014, an increase of
NOK 69m over the same period last year. Lending margins have risen due to
tighter capital requirements for Norwegian banks. Commission income and other
operating income increased by 21 per cent to NOK 385m. Strong growth is in
all essentials to increased commissions from SpareBank 1 Boligkreditt
resulting from higher margins on home mortgage loans. The bank's subsidiaries
show continued healthy earnings.

Lower growth in lending
As targeted in the bank's capital plan, growth in lending to large corporates
is considerably reduced. Overall lending to large customers and to small and
medium businesses is 2.8 per cent lower than at the same point last year.

Loans to retail borrowers increased by 8.8 per cent in the 12 months to
end-March and the bank strengthened its leading market position. In
comparison, credit growth among households in the same period was 6.9 per
cent according to Statistics Norway. Growth has been particularly high in
Trondheim along with Levanger and Frosta. The bank acquired 3,700 new retail
customers in the first quarter 2014.

"The quarterly accounts show that SpareBank 1 SMN is handling a demanding
competitive situation well. A systematic approach is being applied to change
processes and competence development of the bank's customer advisers to
ensure continued competitive power and progress", says Finn Haugan.

The bank has low losses and a low default rate, reflecting both the region's
economy and the bank's portfolio quality. Net losses measure a mere 0.06 per
cent of aggregate lending as of the first quarter 2014.

More efficient
Cost growth in the parent bank comes to 3.3 per cent in the 12 months to
end-March, which is in keeping with the bank's efficiency enhancement plan. A
project launched with the aim of ensuring continual improvement will also
contribute to enhancing the bank's efficiency. Increased digitalisation will
enable further cost reductions, and new initiatives will be assessed and put
in place.

At the end of the first quarter 2014 SpareBank 1 SMN's assets totalled NOK
144bn, including loans transferred to the co-owned SpareBank 1 Boligkreditt
and SpareBank 1 Næringskreditt.

Stable outlook
"We still see few indications that the business sector in Trøndelag and in
Møre and Romsdal faces a change in the economic climate. The region's most
important industries are showing growing activity levels and good
profitability, and prospects for 2014 appear to be good. Nevertheless a
certain macroeconomic weakening is in evidence which is reflected in reduced
growth in lending", says Finn Haugan.

http://quarterlyreport.smn.no/2014/

Trondheim, 9 May 2014.

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
market in the retail and corporate segments, with a total of 49 offices
located 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 in Trondheim. The Group employs about 1,200 full-time
equivalents and includes the following subsidiaries: SpareBank 1 SMN Finans,
EiendomsMegler 1 Midt-Norge, Allegro Finans and SpareBank 1 SMN
Regnskapshuset. The bank 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 atwww.smn.no.

Report
http://hugin.info/144/R/1784072/611185.pdf
Supplementary information
http://hugin.info/144/R/1784072/611187.pdf
Presentation
http://hugin.info/144/R/1784072/611186.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#1784072

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