Sparebanken Sor: Update following outlook change to positive

Our credit view of this issuer reflects its resilient asset quality, with two-thirds, against some single borrower and its asset risk.

Cost reductions incoming

Insurance trip: 14 insurers in three days

High price increases in non-life = margin expansion; Attractive dividend levels to come from life units; BUY stability from Sampo/Tryg; earnings growth STB/GJF

SpareBank 1 Sørøst-Norge (No_rec, TP: NOK) - Discontinuing coverage

Given SOON’s pending merger with SRBNK and its expected subsequent delisting, we have discontinued coverage. Our last published recommendation, target price, and estimates should no longer be relied upon.

Nordic banks – statistical update – Swedish bankruptcies August 2024

Sparebanken Sor: 1 director

A director at Sparebanken Sor bought 2,000 shares at 184.000NOK and the significance rating of the trade was 53/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years clear...

Nordic banks – Statistical update - Finnish lending July 2024

Sparebanken Sør (Buy, TP: NOK213.00) - Set to merge with SVEG

This morning, SOR announced its intention to merge with SVEG (acquirer), creating Norway’s largest savings bank (cNOK429m combined lending). The 1.437 ECC exchange ratio values SOR at 1.23x our 2024e BV and represents a 23% premium to yesterday’s closing price. In addition to the estimated NOK2.1bn benefit from the implementation of the new standard method, the banks guide for NOK2.0bn of capital synergies related to IRB models and NOK350m–400m of annual operating synergies. We have upgraded to ...

Sparebanken Vest (Buy, TP: NOK148.00) - Expanding in the south

This morning, SVEG announced its intention to merge with SOR, creating Norway’s largest savings bank (cNOK429m combined lending). While seeing the greatest benefit for SOR’s shareholders, we expect an accretive effect on BV, and the capital and operating synergy guidance leave potential for a ~6% positive EPS effect (on 2025e EPS). We continue to find the valuation undemanding at a 2025e P/E of ~9.3x, and reiterate our BUY and NOK148 target price.

Looks like a win-win transaction

2024 Norwegian bank survey - Sector trends remain promising

While the respondents unsurprisingly forecast margins to decline from current highs, our 11th annual survey of the 50 largest banks in Norway presents an upbeat outlook, in our view. In addition to robust asset quality, the banks expect a slight uptick in lending growth. Supported by a market-disciplining profitability focus and solid dividend potential, we still find the sector valuation undemanding at an average 2025e P/E of ~9.3x. Noting a slightly more nuanced perspective with some HOLD reco...

Nordic banks – Statistical update – Danish lending July 2024

Total lending in July was up 4.4% y-o-y (corporate +6.0%; retail +3.4%) and increased by 0.4% m-o-m.

Nordic banks – Statistical update – Swedish lending July 2024

Total lending decreased slightly (-0.4%) y-o-y (corporate lending -2.5% and retail lending 0.9%) and was flat (0.0%) m-o-m.

Nordic banks – Statistical update - Norwegian lending July 2024

SpareBank 1 Helgeland: 1 director

A director at SpareBank 1 Helgeland sold 80,000 shares at 127.000NOK and the significance rating of the trade was 76/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years ...

SpareBank 1 Helgeland (Buy, TP: NOK136.00) - Low loan losses, but marg...

Aided by low loan losses, HELG reported a solid Q2 ROE of 11.7% (>11% target) and pre-tax profit of ~6% above our estimate, despite somewhat elevated cost inflation. Meanwhile, with strong lending growth offset by margin pressure, ‘real NII’ fell by 1.5% QOQ. We have cut our 2025–2026e EPS by ~4%, driven by lower NII and higher costs, and trimmed our target price to NOK136 (138). That said, with the stock trading at a 2025e P/E of ~9.1x and generous dividend prospects, we continue to find the va...

Rogaland Sparebank (Buy, TP: NOK109.00) - Closing in on capital relief...

Fuelled by the tax advantage of customer dividends, dividends from Eika Gruppen and solid core revenues, ROGS reported a strong Q2 ROE of 15.0%, despite an uptick in loan losses. We have edged up our 2025–2026e EPS by ~1%, driven by higher revenues, and raised our target price to NOK109 (107). With the stock trading at a 2025e P/E of ~9.4x and prospects for generous excess capital distributions, we continue to find the valuation undemanding and reiterate our BUY.

Sparebanken Møre (Hold, TP: NOK90.00) - Strong quarter despite cost pr...

Fuelled by loan-loss reversals and further NII expansion, MORG reported a strong Q2 ROE of ~14% (>12% target), despite cost inflation remaining elevated. Moreover, the CET1 ratio rose ~60bp QOQ to 19.1%, leaving an ample ~3.0%-points headroom to its 16.15% regulatory requirement (including P2G). That said, with the stock trading at a 2025e P/E of ~9.6x, we continue to find the valuation fair. Thus, we reiterate our HOLD and NOK90 target price.

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 Vest (Buy, TP: NOK148.00) - Still-strong earnings momentum

Fuelled by strong core revenues, sound cost efficiency and robust asset quality, SVEG reported a standout Q2 ROE of 20.1%. Aided by continued lending growth momentum and improved retail lending margins, NII rose by 5.1% QOQ. We have raised our 2025–2026e EPS by ~3–4%, driven by higher NII, and edged up our target price to NOK148 (141). We still like the bank’s strong earnings generation capabilities, and at a 2025e P/E of ~9.3x, continue to find the valuation undemanding. Thus, we reiterate our ...