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On Wednesday evening, the board of Sparebank 1 Nord-Norge decided that 16 of the 31 bank branches will be closed. The reason is the change in customer behavior, stiff price competition and expected demographic development.
On Thursday morning, CEO Liv Ulriksen briefed employees.
– When we talk about business strategy, I think that employees are expectant and we see that we take the necessary steps and a boost for the organization. As for the employees who are directly affected, I think we should respect the fact that some of them are sad and upset, says Ulriksen.
When half the offices are now closed, it will affect 35 employees. At the same time, the bank will have a voluntary reduction in which a severance package will be offered to more people.
– Our ambition is for 50 employees to take the final package, says Ulriksen.
The bank currently has just under 900 employees.
You will save 40 million a year
In May, Ulriksen accepted the position of CEO of Sparebank 1 Nord-Norge. By then, she had already been acting CEO since February. Ulriksen has a long career in finance and at that time had already worked for 12 years at the savings bank.
– The most important reason we do it is because customer behavior has changed dramatically. It is the smaller offices that are closed. There we have the challenge of obtaining the appropriate competence. The most important thing is that customers want to meet us on the other channels, he says.
The changes being made now will result in annual savings of approximately NOK 40 million, according to the bank, which expects to be in line with the profitability schedule by the end of the year.
It will increase revenue
The profitability program, which started in 2019, has the ambition to increase profits by NOK 200 million annually. A significant part of this will be recovered through cost reductions.
Ulriksen says they have already cut costs in many areas.
As a result of the crown, we do not travel as much and have improved in the use of digital solutions, he says, but at the same time emphasizes that the bank is concerned about increasing revenue.
– We have to invest in new services that can make us better in both products and services, he says.
Grade Completed
In the first half of the year, Sparebank 1 Nord-Norge made a pre-tax profit of NOK 1.24 billion, compared to NOK 1.63 billion in the same period last year. Return on equity, which is one of the banks’ most important profitability targets, ended at 12.9%. By comparison, the return on equity was 22.7 percent in the first half of last year.
Of course, the drop can be largely attributed to the coronavirus and the effect it has had on the Norwegian economy. The bank had credit losses of NOK 201 million in the first half of the year. In the latest quarterly report, the bank writes that the underlying level of portfolio losses remains low and is initially expected to remain low in the near future, but that the risk of future losses has increased since the pandemic broke out.
Earlier this year, Sparebank 1 Nord-Norge asked the credit rating agency Fitch Ratings to end the bank’s rating. The bank has implemented measures to increase efficiency, simplify operations and reduce costs, and has concluded that one rating agency is sufficient.(Terms)Copyright Dagens Næringsliv AS and / or our suppliers. We would like you to share our cases via a link, which leads directly to our pages. Copying or other use of all or part of the content may only be done with written permission or as permitted by law. For more terms, see here.
