SpareBank 1 Østlandet (Buy, TP: NOK140.00) - Sustained NII uptick, but cost pressure
Supported by continued NII expansion (+5.7% QOQ), SPOL reported a Q4 ROE of 11.3%, despite elevated cost inflation and a YOY downtick in fee income. The board proposed a 2023 DPS of NOK7.8, implying a ~60% payout ratio (50% policy) and a 6.3% dividend yield. Trading at a dividend-adjusted 2025e P/E of ~7.8x, we find the valuation undemanding following the recent share price depreciation. Thus, while we reiterate our NOK140 target price, we have upgraded to BUY (HOLD).Sparebank 1 Ostlandet operates as a bank and holding company. Co.'s main focus is on responsible lending, financial crime, requirements for providers of financial services, ethics and corruption, and ethical marketing of products and services. Co. is primarily a regional actor that operates in central Eastern Norway. Because of this, Co. concentrates on sustainability, growth and development in the local communities of which it. is a part. The Co.'s 38 branches have authorised financial advisers with local knowledge about their communities to better serve its clients.
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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