SpareBank1 Nord-Norge (Buy, TP: NOK118.00) - Continued ROE tailwinds
Fuelled by strong core revenues and low loan losses (4bp), NONG reported a Q2 ROE of 18.9% (>13% target), despite somewhat soft trading income and sustained cost pressure. Helped by improved lending margins and decent lending growth, ‘real NII’ rose 1.8% QOQ, while fees and other operating income improved ~11% YOY. We have raised our 2025–2026e EPS by ~1%, driven by higher NII and fees, and our target price to NOK118 (115). With the stock trading at a 2025e P/E of ~8.8x, we continue to find the valuation attractive and reiterate our BUY.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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