Sparebank1 Nord-Norge (Hold, TP: NOK90.00) - Asset-quality tailwind
Except for the soft NII, we consider the Q1 report strong – characterised by robust fee income trends, enhanced cost control and net loan-loss reversals. With a solid capital position, which is set to improve further following the Helgeland transaction, we see ample room for continued growth and generous dividend distributions. We have trimmed our 2022–2023e EPS by c0–1% on the lower NII and reiterate our NOK90 target price. The stock is trading at a 2021e P/B of 1.2x, which we consider fair given its ROE prospects, and we have downgraded to HOLD (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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