SpareBank1 Nord-Norge (Buy, TP: NOK115.00) - Continued strong ROE
Supported by solid core revenues, NONG reported a Q2 ROE of ~15%, despite low trading income. ‘Real NII’ continued to expand, by 3.5% QOQ, helped by solid lending growth. After a ~20bp QOQ CET1 ratio increase, the bank had comfortable ~1%-point headroom to its 16.5% requirement (including P2G) at end-Q2, with further upside potential from an updated Pillar 2 assessment given the change in the required capital mix. With the stock trading at a 2024e P/E of ~8.4x, we still find the valuation attractive. We reiterate our BUY and NOK115 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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