Sparebank1 Nord-Norge (Buy, TP: NOK81.00) - Set for strong dividends
The Q3 ROE was 11.7%, with pre-tax profit 4% above consensus, driven by stronger NII and lower loan losses. The bank continues to take market share in the SME segment, and raised its lending ambition here. NONG’s CET1 ratio improved by ~70bp QOQ following a change in the treatment of its BN Bank stake, which should allow for a 2019e DPS above its 50% payout policy. We reiterate our BUY recommendation and have increased our target price to NOK81 (78).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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