SpareBank 1 Helgeland (Buy, TP: NOK136.00) - Low loan losses, but margin pressure
Aided by low loan losses, HELG reported a solid Q2 ROE of 11.7% (>11% target) and pre-tax profit of ~6% above our estimate, despite somewhat elevated cost inflation. Meanwhile, with strong lending growth offset by margin pressure, ‘real NII’ fell by 1.5% QOQ. We have cut our 2025–2026e EPS by ~4%, driven by lower NII and higher costs, and trimmed our target price to NOK136 (138). That said, with the stock trading at a 2025e P/E of ~9.1x and generous dividend prospects, we continue to find the valuation undemanding and reiterate our BUY.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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