SpareBank 1 Helgeland (Buy, TP: NOK142.00) - Generous dividends after solid Q4
Helped by solid core revenues and trading income, as well as low loan losses, HELG reported Q4 ROE of 14.6%. Expanding 9.1% QOQ, the recent NII momentum continued. After revising its dividend policy from <50% to >50%, the board proposed a 2022 DPS of NOK10.3, implying a ~80% payout ratio and an ~8.0% dividend yield. We have raised our 2023–2024e EPS by ~4–2%, driven by higher NII, and have increased our target price to NOK142 (137). Given our ~11% 2023–2024e ROEs and the still-generous dividend prospects, we continue to find the valuation attractive at a 2023e P/B of ~0.9x. Thus, we 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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