SpareBank 1 Østlandet (Hold, TP: NOK146.00) - Profitability in focus
Boosted by solid lending growth, strong non-interest income and modest loan losses, SPOL reported a Q2 ROE of 14.2%, despite cost pressure. Emphasising a strategic focus on good cost control and capital discipline, the bank raised its ROE target to >13% (>12%) and revised its dividend policy to >50% (~50%). While we have edged up our target price to NOK146 (143), we continue to find a more attractive risk/reward elsewhere in the sector (the stock is trading at a 2025e P/E of ~9.6x). Thus, we reiterate our 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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