Sparebank 1 SMN (Buy, TP: NOK161.00) - Repricing efforts taking effect
Boosted by strong NII momentum (+10% QOQ) and offshore reversals, MING reported a Q1 ROE in line with its 13% target, despite low trading income and one-off costs from the embezzlement case and the merger with SpareBank 1 Søre Sunnmøre. While the CET1 ratio came down ~70bp QOQ, the bank still has ~1%-point headroom to its 17.2% fully phased-in requirement. With the stock trading at a 2024e P/E of ~8.2x, we continue to find the valuation attractive. We have increased our 2024–2025e EPS by 1%, and reiterate our BUY and NOK161 target price.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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