SpareBank1 Nord-Norge (Hold, TP: NOK104.00) - Stepping off the ROE podium
NONG reported a Q1 ROE of 11.6%, while pre-tax profit of NOK564m was down 6% YOY, reflecting higher opex and volatile markets. Although rising interest rates continued to lift NII, momentum was slower than we expected due to mix effects and higher funding costs in early Q1. We have lowered our 2023–2024e EPS by 4–5% given the weaker NII momentum and softer margins. We reiterate our HOLD but have cut our target price to NOK104 (115) and find the stock fairly valued at a 2023e P/E of c11x and P/B of 1.22x.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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