Sparebank1 SR-Bank (Buy, TP: NOK90.00) - Positive margin surprise
We consider the NII resilience the main positive in the Q2 report. While we expect loan-loss provisions to remain elevated in H2, the bank expects significantly lower loan-loss impairments going forward. Thus, combining this with robust earnings generation from core operations, we expect profitability to pick up meaningfully during H2. We have lifted our 2021–2022e EPS by ~3% and consequently raised our target price to NOK90 (82). We 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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