SpareBank1 SR-Bank (Buy, TP: NOK141.00) - Profitability maintained
Despite margin headwinds, SRBNK reported a Q3 ROE of 12.5% (above its 12% target), supported by positive basis swap effects, modest cost inflation and low loan losses. Moreover, driven by strong corporate growth, lending volumes were up 2.2% QOQ. Primarily explained by lower NII, we have reduced our 2023–2024e EPS by ~1–2%, and in turn trimmed our target price to NOK141 (143). That said, we continue to find the valuation attractive, at a 2023e P/E of ~8.2x, and reiterate our BUY.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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