SpareBank1 SR-Bank (Buy, TP: NOK160.00) - Solid growth but slight margin squeeze
Supported by still-high NII and solid fee income, SRBNK reported a strong Q2 ROE of 14.6%, despite somewhat soft trading income. With margin pressure mitigated by high activity (2.3% QOQ lending growth), NII was fairly flat QOQ, while fee income rose 4.4% YOY, even with the recent transfer of its capital markets operations to SpareBank 1 Markets. With the stock trading at a 2025e P/E of ~8.8x, we continue to find the valuation attractive. We reiterate our BUY and NOK160 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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