Sparebanken Sør (Hold, TP: NOK165.00) - Capital relief on the horizon
Supported by strong non-interest income and low loan losses, SOR reported a solid Q2 ROE of 12.5%. With some margin headwinds, but robust lending growth, NII was largely stable QOQ. Having made only minor changes to our 2025–2026e EPS, we reiterate our NOK165 target price. That said, after the recent share-price appreciation, we find a more attractive risk/reward elsewhere in the sector (SOR is trading at a 2025e P/E of ~9.4x), and have downgraded to HOLD (BUY).Sparebanken Sor. Sparebanken Sor (the Bank), formerly Sparebanken Pluss, is a Norway-based regional bank. In December 2013, the Company merged with Sparebanken Sor. It is engaged in the provision of both financial and banking products and services to individual and corporate customers. The Bank's offering includes such products and services as credit cards, loans, foreign exchange, different types of insurance, savings accounts, payment services and pension funds, as well as the NettBank online banking facility. The Bank is active through around 30 branches in the West-Agder area, the East-Agder area and Telemark. The Company's subsidiaries are Sormegleren and Sor Boligkreditt AS.
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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