Norwegian banks: Q2'25 outcome vs. expectations

Buybacks enter the toolkit for capital efficiency

Soft share on NII miss despite adj. PBLL beat

Norwegian banks Q2e: It's time for a breather

Trading above fair P/NAV and hist. P/E

Norwegian banks: Q1'25 outcome vs. expectations

SpareBank 1 Sør-Norge (Hold, TP: NOK180.00) - Strong core revenues

Helped by strong core revenues and limited loan losses, the Q1 ROE was 13.5%, despite some underlying cost inflation and merger-related costs. Backed by solid earnings generation, the CET1 ratio rose ~30bp QOQ to 18.3%, with an ample buffer to the ~17.6% requirement, boding well for meaningful distributions over our forecast horizon. We have raised our 2026–2027e EPS by 2–3% on higher NII and fee income, and our target price to NOK180 (170), but continue to find the valuation fair and reiterate ...

Strong numbers, but pricing is fair

Strong adj. PBLL beat +8% vs. cons

Adj. PBLL +3% vs ABGSCe, and +8% vs. cons; Stronger lending growth and unchanged synergies guidance; Expect cons. adj. EPS up by 2-4% and stock to go 2-5% today

Norwegian banks Q1: priced for higher rates

Need further details on bullish ROE guidance

Heder Bank to offer mortgages at 4.99%

Outlook for continued high rates

Although we continue to expect some margin headwind, the outlook for postponed rate cuts – leaving interest rates at continued high levels – should bode well for sector earnings, further supported by a strong profitability focus and modest loan losses. With the sector trading at an average 2026e P/E of c11.0x, and solid dividend potential, we find the valuation undemanding. We reiterate our positive sector view but highlight a larger share of HOLD recommendations than 12 months ago.

Norwegian banks: Q4'24 outcome vs. expectations

ROE >14% in 2027 seems unlikely

SpareBank 1 Sør-Norge (Buy, TP: NOK167.00) - Raised ROE and synergy am...

Helped by strong fees and moderate loan losses, the Q4 ROE was 10.9% in the first post-merger quarter, despite soft trading income and NOK89m of merger-related costs. With the report, the bank raised its ROE target to >14% (>13%). We have increased our 2026e EPS by ~2% and our target price to NOK167 (160). Trading at a 2026e P/E of ~9.8x adjusted for the proposed 2024 DPS (NOK8.5, implying a 5.4% yield), we continue to find the valuation undemanding and reiterate our BUY.

Weaker Q4 numbers, but solid ROE guiding

Adj. PTP in-line with ABGSCe, but -1% vs. cons; Stronger lending growth, but weak deposit growth; Cons. EPS 0-2% down, but depending on long term ROE details

Norw. banks Q4e: Lower yields from RW floor

Likely to give more details on cost synergies

On course for ample distributions

While we forecast some margin moderation from current highs, we believe still-high interest rates, robust asset quality and a firm profitability focus bode well for continued strong earnings. With the sector trading at an average dividend-adjusted 2025e P/E of ~9.3x and several banks having additional excess capital, we still find the valuation undemanding. Noting some HOLD recommendations, we keep our positive sector view.