SpareBank 1 Østlandet (Buy, TP: NOK142.00) - Further repricing benefits
Boosted by a NOK76m tax benefit from customer dividends and maintained NII momentum, SPOL reported a Q1 ROE of 13.9%, well above its recently raised >12% target, despite elevated cost pressure. As margins continued to improve, NII increased by 11% QOQ. We have raised our 2024–2025e EPS by ~3%, as higher NII was only partly offset by higher costs and lower fee income, and edged up our target price to NOK142 (140). We continue to find the valuation undemanding at a 2023e P/B of ~1.0x, given our ~11–12% 2024–2025e ROEs, and reiterate our BUY.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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