Download Press release

Press Release
First half results
THE FINANCIAL RESULTS RELATE TO
August 7, 2008
Decline in profit due to integration expenses
THE BANKING ACTIVITIES OF SAMPO
BANK, WHICH SERVES BOTH RETAIL
AND CORPORATE CUSTOMERS.
DANSKE BANK GROUP’S BANKING
ACTIVITIES IN FINLAND HAS SIX
REGIONS WITH 123 BRANCHES AND 7
The profit of Banking Activities in Finland declined mainly as a
result of integration expenses. Banking activities continued
stable development, as total lending grew 8 % and net interest
income showed a positive trend.
SERVICE POINTS. THIS RESULT DOES
NOT INCLUDE THE RESULTS OF DANSKE
MARKETS AND DANSKE CAPITAL IN
FINLAND.
SAMPO BANK HAS 1.2 MILLION
CUSTOMERS AND ABOUT 2,400
EMPLOYEES RELATED TO BANKING
ƒ
Profit before tax of EUR 6m
ƒ
Quality of loan portfolio remains good, non-existent credit losses
ƒ
Lending up 8%, net interest income rose steadily
ƒ
Market share of mutual funds continued to rise
ƒ
Period following the migration difficult due to system errors
ACTIVITIES.
THIS PRESS RELEASE COMMENTS ON
THE RESULTS OF DANSKE BANK
GROUP’S BANKING ACTIVITIES IN
FINLAND. SAMPO BANK BECAME PART
OF DANSKE BANK GROUP ON FEBRUARY
1, 2007.
THE DANSKE BANK GROUP IS AMONG
THE LEADING BANKS IN NORTHERN
EUROPE WITH FIVE MILLION
CUSTOMERS AND BANKING ACTIVITIES
COVERING 15 COUNTRIES.
BANKING ACTIVITIES FINLAND
(€ m)
First half First half
2008
2007
Net interest income
Net fee income
Net trading income
Other income
213
68
2
18
173
75
1
11
Total income
Amortisation of intangible assets
Integration expenses
Other operating expenses
301
32
55
209
260
35
13
154
Operating expenses
296
202
Profit before credit loss expenses
Credit loss expenses
5
-1
58
1
Profit before tax
6
57
22,349
11,914
1,023
20,770
11,953
979
1.0
1.2
98.3
69.4
14.2
14.0
77.7
59.2
Loans and advances, end of period
Deposits, end of period
Allocated capital (avg.)
Profit before credit loss expenses as % p.a. of allocated capital
Pre-tax profit as % p.a. of allocated capital (ROE)
Cost/income ratio, %
Cost/income ratio, excl. total integration expenses, %
2007 figures include Banking Activities as of February
S
Turbulence in the global financial markets continued in the second
quarter of 2008, cooling down the world economy. Regardless of it,
the economic climate in Finland remained favourable during the first
six months of the year.
Net interest income rose steadily in the first and second quarter of
2008. Growth in lending and higher interest rates compensated
again for the pressure on lending margins and this contributed to
the positive trend. Overall net interest income amounted to EUR
213m.
The international financial crisis has had no effect on Sampo Bank’s
loan portfolio, which has a good credit quality. Credit loss expenses
amounted a net positive entry of EUR 1m.
“The result of Sampo Bank for first half year was at an expected level
due to high integration expenses”, calculates Ilkka Hallavo, CEO of
Sampo Bank.
At the end of the period the market share of lending and deposits of
Banking Activities Finland was 14.1% and 12.7%.
Unexpected technical adversities
During Easter Sampo Bank migrated to Danske Bank Group’s IT platform, one of the largest it-projects ever implemented in Northern
Europe.
Unexpected system errors and challenges resulted in regrettable
inconveniences for customers. The Group has carried out and implemented several improvements, but is not yet fully satisfied with
level of customer service at Sampo Bank and continues to improve
system stability and service level.
Because of these problems, Sampo Bank has lost 27,320 of its retail customers, a decrease of 2 % of the total number of customers.
At the end of July Sampo Bank had 1 154 282 customers (1 181
602 customers at March 31, 2008)
“The last couple of months have been difficult for us because of technical adversities. The Group has worked extremely hard to restore
the high level of customer service we used to have,” says Hallavo.
“I’m convinced that as a part of Danske Bank Group the customers of
our bank will experience improved and wider choice of products at
competitive prices. One good example is new customer packages,
which are incredibly well received. We have already made about
18,000 new packages.”
SAMPO BANK IS DIVIDED INTO SIX REGIONAL AREAS AND FINANCE CENTRES.
SIX AREAS ARE:: HELSINKI, UUSIMAA, WESTERN FINLAND, CENTRAL FINLAND,
EASTERN FINLAND AND NORTHERN FINLAND.
IN THE NEW ORGANISATION SAMPO BANK PRIVATE BANK OPERATES AS A PART OF
SAMPO BANK UNDER THE FINANCE CENTRES.
Sampo Bank on mutual fund markets
During the first half of 2008 the global markets suffered from high
volatility and declining valuations, and consequently assets were
redeemed more than usually from both bond and equity funds. However, Sampo Fund Management performed better than its larger
competitors, strengthening its market position in mutual funds.
The market share of Sampo Fund Management grew during first half
of 2008 with 0.5 percentage points to 18.7 %.
Despite the strengthening of the market position, the mutual fund
assets administered by Sampo Fund Management declined with
around EUR 1.6 bn. during the first half of 2008. The assets administered by Sampo Fund Management amounted to EUR 10.5 bn. (EUR
11.9 bn.) at the end of June.
Outlook 2008
Assuming that economic conditions remain favourable, Banking Activities Finland is likely to see continued growth in 2008, albeit more
moderate than in 2007.
Banking Activities Finland expects to realise synergies with full accounting effect from 2010.
The full Danske Bank Group report can be viewed at
www.danskebank.com/reports
For further information:
Pekka Kainulainen
CFO, Sampo Bank
Tel.: +358 10 546 7807
E-mail:
[email protected]
Hannu Vuola
Head of Communications
Tel: +358 10 546 8001
E-mail: [email protected]