Helgeland Sparebank (Hold, TP: NOK88.00) - Strong NII and DPS
The Q4 ROE was 11.6%, and PTP was 10% above consensus, driven by solid revenue lines and a beat on trading income, only partly offset by higher loan losses. The bank also proposed a 2019 DPS of NOK5.4, above consensus of NOK4.0. We have raised our 2020–2021e EPS by 0–2% as higher NII mitigates increased loan losses. We reiterate our HOLD, but have raised our target price to NOK88 (NOK84), highlighting a 6% 2019 dividend yield as the main positive to the investment case.Helgeland Sparebank (the Bank) is a Norway-based regional bank active in the Norwegian region of Helgeland. It offers its services mainly to the private market, business and the public sector. Its offering includes such products and services, as payment services, credit cards, saving accounts, placement services, loans, insurance, shares and currencies, as well as an online banking facility, the Nettbank. Additionally, the Bank carries out leasing of property through ANS Bankbygg Mo, AS Sparebankbygg, Helgeland Sparebank Eiendomsselskap AS and Helgeland Utviklingsselskap AS, all of which are wholly owned subsidiaries of the Bank. It also offers housing mortgages through Helgeland Boligkreditt AS, its whole owned subsidiary. As of December 31, 2011, the Bank also had such associated companies, as Helgeland Invest AS, Eiendomsmegleren Helgeland AS and Storgt. The Bank operates through 16 offices in 14 municipalities in Helgeland.
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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