Sparebanken Vest (Buy, TP: NOK115.00) - Further core revenue momentum
Despite negative trading income, SVEG reported a Q4 ROE of 12.5%, above its >12% target, supported by strong core revenues. The board proposed a 2022 DPS of NOK5.5, implying a ~54% payout ratio (compared to its dividend policy of <50%) and a ~5.7% dividend yield. We have raised our 2023–2024e EPS by ~7–8%, driven by higher NII and fees, and in turn increased our target price to NOK115 (110). At a 2024e P/E of ~8.6x, we continue to find the valuation attractive and reiterate our BUY.Sparebanken Vest is engaged as an independent banking and financial services group based in Bergen and with branches in the counties of Hordaland and Sogn & Fjordane. Co. also is engaged in estate agency activities and real estate management activities. As of Dec 31, 2002, Co. had total assets of NOK35 billion and total deposits of NOK22 billion. The banks market area comprises the regions Nordfjord, Sogn, Nordhordland, Hardanger/Midthorland, West, Sunnhordland, Bergern North and Bergen South.
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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