Improving ROE and NII
MING’s Q3 ROE was 12.5%, with EPS 18% above our expectation. Its strong NII trend continued with an 8% uptick QOQ. The capital position was slightly soft due to higher corporate lending growth and model changes, but MING expects to reach its 15.0% target at end-2017 through a reduction in corporate lending volumes with a dividend payout ratio of ~50%. We have increased our 2018–2019e EPS by 3% and raised our target price to NOK99 (NOK96). We reiterate our BUY recommendation.SpareBank 1 SMN is an independent, regional finance house. Through the SpareBank 1 Alliance and its own subsidiaries (the Bank), Co. has access to products in the fields of financing, savings and investment, insurance and money transfer services. At its Offices business area, the bank provides advice to retail customers, farm sector customers, pools/associations, one-person businesses and small and medium businesses. The Corporate business area focuses on financial counselling in investment and operations financing, domestic and foreign money transfers, fixed income and currency hedging, investment of surplus liquidity and insurance of individuals and buildings/operating equipment.
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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