ROE back above 12%
SR-Bank reported a Q3 ROE of 12.9%, its most profitable quarter since the oil price started falling in Q3 2014. Pre-tax profit was 11% ahead of consensus, driven by higher NII and trading income, in addition to lower loan losses. Loan losses are trending lower and the underlying CET1 ratio was above its year-end target of 15.0%, supporting 2017e DPS. We have raised our 2018–2019e EPS by 3–2%. We reiterate our BUY recommendation and NOK102 target price.Sparebank 1 SR Bank is a savings bank. Co.'s core activities are sales and brokering of financial products and services, as well as leasing and real estate brokering. Co. is organized in three divisions: The Retail Market Division; The Corporate Market Division; and The Capital Market Division Co. provides products and services in the fields of financing, investments, money transfers, pensions and life and non-life insurance.
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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