Sbanken (Buy, TP: NOK97.00) - Accelerating lending growth
Sbanken reported a Q2 ROE of 15.3%, and pre-tax profit 5% above consensus, boosted by gains related to the Vipps merger and Visa Norge. Underlying NII was weighed down by higher funding costs and mortgage margin pressure, and while we still see a risk of some cannibalisation by the new low-LTV product, it should be supportive of continued strong lending growth, which accelerated in Q2 (up 4.4% QOQ). We have lowered our 2019–2020e EPS by 2–3%, and reiterate our BUY and NOK97 target price.Sbanken ASA, formerly Skandiabanken ASA, is a Norway-based online retail bank. The Bank operates a digital platform, through which serves individual customers in Norway. Its financial products and services comprise current accounts, payment and card services, savings, investment products, as well as long- and short-term loans.
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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