Sparebank 1 Østlandet (Hold, TP: NOK86.00) - Cost creeping higher
SPOL reported a Q1 PTP 5% above our estimates, mainly driven by loan-loss reversals. We find the underlying cost inflation somewhat disturbing, and see risk of continued margin pressure through 2019 given the combination of strong mortgage competition and its intention to put its excess capital to work. We have reduced our 2020–2021e EPS by 3–4% due to higher costs. We reiterate our HOLD and NOK86 target price.
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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