Sandnes Sparebank (Hold, TP: NOK104.00) - Q1 ROE in line with 10% target
Helped by YOY cost reductions and low loan losses, Q1 ROE was 10.0%, in line with the 2024 target. With solid lending growth and improved retail lending margins mitigated by deposit margin pressure, NII was flat QOQ. While down ~20bp QOQ, the bank has a strong CET1 ratio of ~17.6% versus its 16.2% requirement (including a 1%-point management buffer), boding well for further generous dividend distributions. That said, with the stock trading at a 2025e P/E of ~9.3x, we continue to find more attractive risk/reward elsewhere in the sector. We reiterate our HOLD and NOK104 target price.Sandnes Sparebank is engaged in banking and financing activities in Norway. Co. has four business segments: Retail Market and Corporate Market, which are a banking business divided between two main customer groups. They also include general investment advice to Co.'s customers; The property segment, which operates as an estate agency; and Corporate Finance, which includes business activities related to consultancy in the field of capital markets and alternative investments. As of Dec 31 2008, Co. had total assets of NOK31,704,692,000 and total deposits from customers in the amount of NOK11,687,204,000.
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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