Sbanken (Hold, TP: NOK83.00) - Set to become more ordinary
Sbanken reported a Q4 ROE of 11.5% and PTP 3% above consensus, fuelled by higher NII. The bank has scrapped its 10%+ annual lending growth target, while introducing a 10% growth target for EPS, indicating increased focus on profitability over growth. However, given a tightening competitive landscape, we estimate a 2019–2020 ROE of 12–13%, and consider the valuation to be fair. We have reduced our target price to NOK83 (NOK96) and downgraded the stock to HOLD.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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