Behind the Figures. Contents
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Annual Report 2005 Behind the figures. Contents Page The story of SpareBank 1 Midt-Norge . 4 Important events in . 8 The recommended bank . 8 Main figures Group . 9 Business description . 12 Statement by the CEO . 26 Report of the Boards of Directors . 30 Presentation of the Boards of Directors . 46 GROUP IFRS Behind the figures there is a story that counts Income statement . 50 Balance sheet . 51 Pro forma profit and loss account . 52 Pro forma balance sheet . 53 Annual Report 2005 Every figure in the annual accounts has at least one story to tell. Change in equity . 54 Some stories are particularly absorbing since they say something about Balance sheet – impacts of IFRS . 55 the character of the bank, its ethos, which is exactly what enables us to Income statement – impacts of IFRS . 57 Notes . 58 deliver such good figures. 3 Cash flow statement . 81 PARENT BANK NGAAP Pro forma profit and loss account . 84 Pro forma balance sheet . 85 Profit and loss account . 86 Balance sheet . 87 Profit and loss account specifications . 88 Balance sheet specifications . 90 Contents Accounting principles . 92 Notes . 94 Cash flow statement . 113 Auditor’s Report . 116 Report of the Control Committee . 117 Financial summary . 118 Primary capital certificates . 120 Here when you need us . 123 Group managament . 124 Coverning bodies . 125 Marketing . 126 BENNETT AS Photo: Geir Mogen Front page photo: Romsdalen, E136 og Rauma The story of SpareBank 1 Midt-Norge In an announcement in the Adresseavisen newspaper, building. A building committee was appointed and the Age of mergers Digital age five of Trondhjem’s (as the city was then known) most new bank building, costing 421,090 kroner was comple- Developments in the 1960s and 1970s forced a number The 1990s were also marked by the digital revolution. prominent men urged their fellow citizens to contribute ted in 1882. No truly hard times were encountered by of mergers. In 1975 Trondhjems Sparebank merged with Online banking became commonplace and new techno- towards the establishment of a savings bank, for the the bank until the banking crisis at the start of the 1920s. Strindens Sparebank. Trøndelag had now acquired its logy opened up new ways of doing one’s banking. Today “beneficent promotion of enterprise, thrift and public In 1921, Norges Bank (the central bank) described first major regional savings bank. The new bank featu- the Internet Bank and Customer Centre comprise a morality”. Thirty-nine men replied to the announcement. Norwegian banks’ credit needs as “insatiable”, and red a decentralised power structure with substantial complete approach to banking. All types of business can The year was 1823, and Trondhjem’s Sparebank was many banks were in dire straits despite government sup- decision-making at branch level. The philosophy was be transacted digitally. Customers make other demands duly established with an initial capital of 1,596 port. Early in April 1925 there were rumours that the cri- that the local community was best taken care of by the of an automated bank – it is important for the market to Specidaler. The first chapter of the story of SpareBank 1 sis had taken hold of Trondhjems Sparebank. When it local community itself. have access to the bank whatever the time of day and Midt-Norge had now been written. was heard that Orkedalens Sparebank had asked to be wherever one happens to be. At the same time the Merger discussions continued in the 1980s . In 1982 31 placed into administration, panic spread and people resourceful, automated customer has greater require- savings banks were invited to participate in the At the outset Norwegian savings bank managers took a started to withdraw their savings. In the space of just ments in terms of personal counselling and tailored establishment of Sparebanken Midt-Norge. Trondhjems personal responsibility for the common people’s assets. over a week, nervous savers withdrew a total of 6 million products. Annual Report 2005 Annual Report 2005 Sparebank and Strindens Sparebank had the new name In addition to creating secure institutions in which to kroner. The peak was reached on Thursday 23 April approved by the authorities the following year, but post- deposit savings, savings banks were also keen to promote when more than 1 million kroner were taken out of the poned the name change until the merger negotiations Romsdals Fellesbank diligence and public morality. bank in just one day. The story has it that this prompted were completed. In 1984 it was clear that 23 banks In 2004 SpareBank 1 Midt-Norge cast its eyes upon a flippant play on words by Bank Manager Kristian Bryn. 4 would be forming a new regional bank. Sparebanken Romsdals Fellesbank – a well run bank with conside- 5 He denied this, although he did later admit that he Social actor Inn-Trøndelag and Sparebanken Namdal were absorbed rable potential for improvement. An offer was made, thought his comment a witty one. By 30 April tempers The desire to be a social actor, and not “just a bank”, is in 1988. Spareskillingsbanken, which only joined Spare- and after a hard tug of war Mr. Haugan could say: “The were soothed, and the bank once again recorded a cash probably a legacy of the moral aspirations of that period. banken Midt-Norge in 1989, entered the negotiations at acquisition of Romsdals Fellesbank is probably the surplus at the end of the day. In 1840 it was decided that part of the bank’s profits an early stage but was sceptical of the new regional second most important event in the bank’s 183-year should be allotted “to public and charitable causes”. In bank. history. That is, next after the establishment of the bank the beginning the money often went to schools, nursing Society and technology in change itself”. homes, voluntary organisations or to the community’s In the 1960s the authorities looked with concern at the SpareBank 1 Alliance Whether the President’s words are to be taken literally, paupers. To this day the bank’s shared destiny with the banking structure in Norway; the banking system was In Sparebanken Midt-Norge’s annual report published or as a symbol of an important milestone in the bank’s region is a driver behind the support given to non-profit lagging behind general social developments. The trend in 1995, Managing Director Finn Haugan wrote that history, is difficult to tell. What is certain is that this level The story causes. Each year about a thousand causes benefit from elsewhere in society was one of centralisation: fewer, but The story 1996 would bring “a taste of the future”. Mr. Haugan of aspiration was intentional – promising that SpareBank 1 financial support from the savings bank’s reserves. larger entities. Banks still comprised a large number of was speaking of the SpareBank 1 Alliance between RomsdalsFellesbank would be an “even better bank for small entities. The challenge was to create a banking Upon the establishment of the bank a point was that Sparebanken Rogaland, Sparebanken Vest, Sparebanken people in Møre and Romsdal” was certainly a tall order. structure featuring financially solid banks that did not “small sums would be received from persons of either Nord-Norge and Sparebanken Midt-Norge. The object And what better benchmark of success than a 183-year draw all loanable capital away from the rural communi- sex”. Trondhjems Sparebank was not for men alone. of the alliance was to meet the competition from the history: ties. Indeed the first mortgage loan granted by the bank went major financial groups in the capital and to strengthen A savings bank, known as Trondhjem’s Sparebank, is hereby to a woman. That was in 1865, and the mortgaged items Concurrently new technology provided new opportunities the bank’s position at the local level. The four regions established, under adequate guarantees, in the city of included Sakshaug Church and some land properties in to extend the range of banking services and we begin to had already collaborated at an earlier stage. The new Trondhjem for the promotion of public morality, diligence, Sparbu. see the outlines of the self-service customer. Norway’s alliance put this collaboration on a formal, professional order and thrift. Under this arrangement, duly established first cash dispensers saw the light of day in the 1970s. footing. in the best interests of working people and servants, small Computer technology also erased many of the differen- Growth and crisis sums will be received from persons of either sex, and will ces between commercial banks and savings banks, and In the 1800s Trondhjems Sparebank grew in step with bear fruit for their owners by the calculation of interest.” the town. In 1874 the bank purchased the two upper- with their increasingly identical products they became most properties on the west side of Søndre Street, competitors to a larger degree than previously. prompted by the management’s desire for a new bank 5,463 shareholders [ Behind the number: A story about believing in something. With both head and heart. ] “The acquisition of Romsdals Fellesbank is probably the second most important event in the bank’s 183-year history. Next after the establishment of the bank itself”. The date is 5 April, and Finn Haugan, President and And today we know that this is precisely how people in CEO, stands in the foyer of Rica Seilet Hotel in Molde. Møre and Romsdal view SpareBank 1 Midt-Norge Annual Report 2005 He is about to meet Olav Arne Fiskerstrand from RomsdalsFellesbank. If we compare position surveys Sparebanken Møre in a head-to-head debate. Was Mr. carried out in April and September, customers confirm Haugan compelled to say what he said, or did it come that the bank has become “even better”.