DnB Markets - Sparebanken More (MORG) Sparebanken Møre (Hold, TP: NOK97.00) - ROE target raised after strong Q4

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DnB Markets

Håkon Astrup

EUR 87.57 For Business Accounts Only

Sparebanken Møre (Hold, TP: NOK97.00) - ROE target raised after strong Q4

Boosted by solid core revenues and reduced costs YOY, Q4 ROE was ~12%, despite negative trading income. The board proposed a 2024 DPS of NOK6.25, implying a ~63% payout ratio and 6.4% dividend yield. With the report, MORG raised its ROE target to >13% (>12%), levelling with other larger regional banks’ current targets. While we have raised our target price to NOK97 (92), we still find a more attractive risk/reward elsewhere in the sector, with the stock trading at a 2026e dividend-adjusted P/E of ~10.6x. Thus, we reiterate our HOLD.

30/01/2025 1 EN

Underlying

Sparebanken More

Sparebanken More (the Bank) is a Norway-based regional bank. The Bank's primary market area are the More and Romsdal regions in Norway. Its product and service offering includes loans, cards, payment services, savings accounts, pension funds, life and non-life insurance, investment services and investment advice. As of December 31, 2011, the Bank had four wholly owned subsidiaries: More Finans AS, offering leasing services; Sparebankeiendom AS, a company responsible for the management of the Bank's commercial properties; More Boligkreditt AS, which funded loans secured by residential and commercial properties, and as More Eiendomsmegling AS, engaged in the real estate services for both private customers and trade. As of December 31, 2011, its largest shareholder was Sparebankstiftelsen Tingvoll (10.27%).

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NO0006390004 Oslo Bors Norway

Provider

DnB Markets

DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.

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Analysts

Håkon Astrup

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Sparebanken Møre (Hold, TP: NOK95.00) - Higher margin pressure and costs

With elevated margin pressure and higher costs YOY, Q1 ROE was 11.2%, despite modest loan losses. Given the composition of the lending growth, MORG increased its risk-weight assets, leading to a ~ 20bp lower CET1 ratio QOQ. That said, the bank guided for a net positive effect of ~1.5%-points from the pending implementation of Basel IV in Q2 and Q3, leaving an ample buffer to its 16.15% requirement (including P2G), boding well for solid distributions. We have lowered our 2026–2027e EPS by ~5% on lower NII and higher costs, and our target price to NOK95 (100), but reiterate our HOLD.

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Sparebanken Møre (Hold, TP: NOK97.00) - ROE target raised after strong Q4

Sparebanken Møre (Hold, TP: NOK95.00) - Higher margin pressure and costs

Outlook for continued high rates

Atea (Buy, TP: NOK170.00) - Solid performance

Nordic Semiconductor (Buy, TP: NOK160.00) - Not too bad given tail-end of 55nm

Hexagon (Buy, TP: SEK115.00) - Q1 results were a clearing event

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