Sbanken loses lending as a result of dissatisfaction with DNB being able to take over the bank.
The online newspaper has mentioned several times the customer uprising in Sbanken after it became known in mid-April that DNB would buy Sbanken for NOK 11.1 billion. The bank’s results for the second quarter are characterized by customer dissatisfaction and flight to other banks.
The bank states in a stock exchange release on Friday morning that the bank’s lending fell by 2.9 per cent in the quarter – converted on an annual basis – to NOK 82.0 billion.
According to the stock exchange announcement, the departure level for lending for housing purposes was increased in May, while mortgage growth in June was moderately positive.
In the second quarter, Sbanken achieved a profit before tax of NOK 253.2 million, up from NOK 210.9 million in the corresponding quarter last year. Net interest income in the previous quarter amounted to NOK 392.3 million, compared with NOK 384 million in the second quarter of 2020.
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Marginal
In the first quarter, Sbanken had a marginal lending growth of NOK 83.2 billion, and the twelve-month growth was a modest 0.2 per cent. This is clear during the general market growth.
Despite the decline in lending, bank manager Øyvind Thomassen still believes that the quarter is unique.
– This quarter has been unique in the bank’s history. Our savings robot has become the world’s first authorized robot advisor, and we have once again been named the bank with the most satisfied and loyal bank customers, he says in the stock exchange announcement.
– Even though lending for housing purposes was down in the quarter, we are satisfied with turning to positive growth towards the end of the quarter, a result of our initiatives associated with the interest rate guarantee and a new framework loan product.
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Self-critical
The bank has – DNB acquisition or not – in recent years not had the success the bank had to begin with, something a self-critical Thomassen admitted in February 2020. Thomassen was Sbanken’s first manager at the establishment in 2000 as a pure online bank, and he was brought back in the autumn of 2019 to gear up the growth.
– We have not delivered, we must improve, Thomassen admitted during the presentation of the 2019 figures.
– We must be more present in the transaction market and not just in the refinancing market for customers. We have not been there, and we must become more sophisticated in our pricing, the bank manager acknowledged a year and a half ago.
Thomassen now says that these are exciting times for Sbanken. If DNB becomes the new owner of Sbanken, they will together make strategic plans for a journey together. He describes the accounting figures as a good underlying result.
Stable
After DNB had increased its bid for Sbanken to NOK 108.85 per share at the beginning of June and received the necessary acceptance, the share price has stabilized at around NOK 107 (see graph below). There is thus a slight uncertainty as to whether DNB will be allowed by the competition authorities to take over Sbanken.
Considering stopping
In mid-June, the Norwegian Competition Authority announced that it was considering halting the acquisition, because they were particularly concerned about the market shares on the fund side. The bank itself is impressed with what they achieve in the sale of funds.
Fund savings in the second quarter increased to NOK 25.9 billion, which Sbanken believes is a result of positive market sentiment and persistently high fund subscriptions among customers.
An opportunity to appease the Norwegian Competition Authority may be to separate the fund distribution to the bank. The supervisory authorities, on the other hand, are not concerned about competition in the mortgage market in the event of a merger.
The Norwegian Competition Authority has until 26 August to either allow the acquisition or send a new notification to DNB and Sbanken that it may be stopped. The final deadline in the case is October 7, 2021.
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