Sparebanken Vest (Buy, TP: NOK132.00) - Continued ROE outperformance
Boosted by further growth-driven NII expansion, firm cost efficiency and low loan losses, Q4 ROE was ~17.8%, despite somewhat low trading income. A 2023 DPS of NOK7.5 was proposed (~59% payout ratio, 6.5% dividend yield), while the CET1 ratio fell ~80bp QOQ to 16.8% (16.1% supervisory expectation). Trading at a dividend-adjusted 2025e P/E of ~7.9x, we continue to find the valuation attractive. We reiterate our BUY and have raised our target price to NOK132 (126).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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