Sparebank 1 Østlandet (Buy, TP: NOK90.00) - Well-equipped for a downturn
SPOL’s Q1 ROE of 6.9% and PTP of NOK251m were well below our forecasts, following model-driven loan-loss provisions and weak net financial items. In our view, SPOL should be fairly resilient in the oncoming economic slowdown due to its low-risk balance sheet and solid capital position. Furthermore, the recent plummet in the NIBOR is set to neutralise the downward NII pressure from the announced rate adjustments from H2 2020. We reiterate our BUY and NOK90 target price, and have edged up our 2021–2021e EPS by 0–1% on higher NII.
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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