SpareBank1 SR-Bank (Buy, TP: NOK148.00) - Joining forces to secure growth
SpareBank 1 SR-Bank reported a Q2 ROE of 12%, as a strong NII trend and improved credit quality supported earnings. In addition to the ongoing interest repricing, the high lending growth in and around Oslo lifted NII by 9% QOQ. Along with an improved outlook for the offshore industry, SRBNK reported significant loan loss reversals, which also supported earnings. We have raised our 2023–2024e EPS by 2–4%, as we expect the positive NII trend to continue. We reiterate our BUY and have raised our target price to NOK148 (146). We continue to find the shares attractively priced at a 2023e P/E below 9x.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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