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SpareBank 1 SMN (OSL:MING) MING- Sound Operations At SMN, But Financial Result Pulls Down Overall Performance

SpareBank 1 SMN (OSL:MING) SpareBank 1 SMN strengthened earnings on its core business in the first nine months of 2008, but its overall performance was substantially impaired by losses on securities and a lower profit contribution from SpareBank 1 Gruppen. Net profit after tax was NOK 284 million compared with NOK 690 million in the same period last year.

SpareBank 1 SMN's ordinary pre-loss banking operations were on satisfactory trend in the year's first nine months compared with the same period 2007. Ordinary banking operations show a profit increase of NOK 48 million, due in all essentials to growth in business volume and stable margins. Net interest income rose by NOK 145 million to NOK 968 million.

Number 1 position strengthened SpareBank 1 SMN strengthened its number 1 position throughout the region with a net increase in customers and lending growth in excess of the general growth in credit in the period.

Between end-September 2007 and the same point this year, total outstanding loans increased by 16% to reach NOK 69.6 billion, including loans transferred to SpareBank 1 Boligkreditt. The growth breaks down to 10.5 per cent in the retail market and 26.4 per cent in the corporate market. The bank notes a solid influx of good corporate customers, particularly in Trondheim.

Aggregate deposits rose by 12 per cent to NOK 35.7 billion. Growth in retail deposits was 9.3 per cent and in corporate deposits 14.7 per cent. A switch has been seen in the savings pattern from the stock market to banks. Sales of fixed-rate deposits have shown a marked increase.

Low losses Net losses on loans and guarantees came to NOK 69 million compared with a net recovery of NOK 15 million in the same period last year. NOK 60 million relates to a single, sizeable, corporate sector exposure. The company concerned is in bankruptcy proceedings.

After a long period of improvement, the risk profile of the bank's loan portfolio is expected to normalise in the period ahead. This will bring an increase in defaults and losses.

Weaker financial result Weaker financial market conditions resulted in lower return on financial investments (down NOK 286 million) and a lower profit contribution from SpareBank 1 Gruppen (down NOK 120 million). The drop in financial return is largely due to unrealised losses on shares and wider margins on bonds.

Return on equity was 7.5 per cent (21.1 per cent). Total assets rose by 10.5 per cent to NOK 76.9 billion.

Hit by the financial turbulence "At a time of turmoil in the financial market SpareBank 1 SMN is performing well with robust earnings on ordinary operations. Interest income is on the rise and we are maintaining a high level of sales and commission income despite the significant reduction in the market for savings products and despite our introduction of charge-free payment services. The bank shows strong sound growth, and we are taking market shares from our competitors. This is particularly true in Trondheim. Apart from one single corporate exposure, losses and defaults remain at a very low level," says CEO Finn Haugan at SpareBank 1 SMN.

Key figures

+----------------------------------------------+ | | At 30.09.08 | At 30.09.07 | | | NOKm | NOKm | |------------------+-------------+-------------| | Total income | 1395 | 1652 | | Pre-loss profit | 488 | 838 | | Post-loss profit | 284 | 690 | +----------------------------------------------+

Contact persons at SpareBank 1 SMN: 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

This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.

LINK: http://hugin.info/144/R/1264749/278072.pdf

LINK: http://hugin.info/144/R/1264749/278073.pdf

SpareBank 1 SMN

www.smn.no

ISIN: NO0006390301

Stock Identifier: XOSL.MING

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SpareBank 1 SMN

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