Sparebank1 Nord-Norge (Buy, TP: NOK113.00) - Minor model adjustments
We have updated our estimates following Thursday’s announcement confirming that the verdict from June – ordering Kluge Advokatfirma and others to pay NOK112.9m plus default interest to NONG’s subsidiary SpareBank 1 Finans Nord-Norge – was now final and would be recognised in the 2021 results. Hence, we have added the total amount of ~NOK163m to Q4e income, raising the unadjusted Q4e ROE to 18.4% (also includes a ~NOK150m non-recurring benefit from the HELG transaction). While the split has yet to be determined, we have included NOK120m in loan loss reversals and NOK43m in NII in our estimates. That said, we have not changed our 2022–2023e EPS. We do not consider these changes to be material, and we have not changed our BUY recommendation. We reiterate our NOK113 target price.Sparebanken Nord-Norge is engaged in the provision of financial products and services in North Norway. In addition to loans, deposits, payments transmission services, leasing and factoring, such financial products and services also include most savings products as well as life-and non-life insurance. Co. is active within the areas of real estate brokerage, trading in securities, active investment management, value assessment and other corporate services. Co. has 81 branches throughout North Norway. As of Dec 31 2008, Co.'s total assets were NOK65,507,000,000 and its total deposits were NOK34,572,000,000.
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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