SpareBank1 Nord-Norge (Hold, TP: NOK123.00) - Strong Q3, but reduced DPS potential
NONG reported a Q3 ROE of 32.1%, boosted by sustained core revenue tailwinds, moderate loan losses and a NOK452m gain from the Fremtind/Eika merger (still-strong 21.2% adjusted for the latter). Meanwhile, the CET1 ratio fell by ~70bp QOQ, lowering the requirement buffer to ~80bp. Thus, while we have raised our 2025–2026e EPS by ~1%, we have cut our 2024–2026e DPS by ~5–6%. Following the recent share price uptick, we find the valuation fair (2025e P/E of ~9.7x) and have downgraded to HOLD (BUY). That said, we have increased our target price to NOK123 (121).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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