Sparebank 1 SMN (Buy, TP: NOK175.00) - NII momentum
Solid NII from strong loan growth helped offset higher opex and loan losses in Q3, while the NOK452m gain from the merger of Fremtind and Eika Forsikring on 1 July helped drive Q3 ROE above 21%. Asset quality remains strong, and we expect moderate loan losses going forward. We have raised our 2025–2026e EPS by ~2% on continued NII momentum and increased our target price to NOK175 (172). We reiterate our BUY.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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