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.

Sparebanken Vest: 3 directors

Three Directors at Sparebanken Vest sold 86,280 shares at between 147.633NOK and 148.500NOK. The significance rating of the trade was 63/100. 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...

Bank Brunch/Deutsche Bank makes a decision on its AT1 calls, Sparebank...

Deutsche Bank makes a decision on its AT1 calls. Sparebanken Vest covered bond

Bank Brunch/Deutsche Bank makes a decision on its AT1 calls, Sparebank...

Deutsche Bank takes a dynamic approach for its AT1 calls. Another day, another Norwegian covered bond.

Synergies vs. EPS headwinds

Norwegian banks: Q4'24 outcome vs. expectations

We make net positive revisions for Borea

Q4: Adj. PTP +2% and +4% vs. ABGSCe and consensus; Adj. EPS -0.4% and +0.7% for '25e and '26e ; At current 1.66x P/NAV in '24, the valuation is fair: HOLD

Sparebanken Vest (Buy, TP: NOK156.00) - Further core revenue tailwinds

Helped by continued core revenue tailwinds and low loan losses, SVEG reported a Q4 ROE of 17.6%, despite a cost uptick after consolidating Frende Kapitalforvaltning. The board proposed a 2024 DPS of NOK8.5, implying a ~51% payout ratio and 6.1% dividend yield. With the stock trading at a dividend-adjusted 2026e P/E of 9.9x and the longer-term synergy potential from the pending merger, we continue to find the valuation undemanding. Thus, we reiterate our BUY and NOK156 target price.

Higher costs to drive revisions

Adj. PTP +2% vs. cons and +0% vs ABGSC; Cost up 24% y-o-y driven by Borea and higher Q4 wealth tax; Cons. est. rev. likely down 0-2% (costs ), stock to follow

Norw. banks Q4e: Lower yields from RW floor

DPS estimates cut by increased mortgage RW

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.

Norwegian banks: Increased RW floors for IRB banks

N-MoF increase RW to 25% for mortgages, keep CRE at 35%; Implementation 30 June 2025, banks time to adopt; Stocks likely down 1-3%. SVEG, MING more than DNB, NONG.

Norwegian savings banks: 4 proposals in a white paper

The ECC capital loss absorbing rank must be solved. Four independent suggestions, interconnect we think. SB1NO could be a relative winner, but still early days.

Sparebanken Vest (Buy, TP: NOK158.00) - Long-term synergy potential

In this note, we have included the merger with Sparebanken Sør in our estimates (scheduled for 1 May 2025 pending regulatory approval). The banks have guided for annual operating synergies of NOK350m–400m from 2027–2028, as well as combined capital benefits of NOK4.1bn (NOK2.1bn from the new standard method and NOK2bn from SVEG’s IRB models). While we have cut our 2025–2026e EPS by ~5% due to the synergy time lag, we expect the merger to be accretive longer-term. Also seeing generous dividend pr...

Norwegian banks: Q3'24 outcome vs. expectations

Sparebanken Vest (Buy, TP: NOK158.00) - Strong revenues and firm cost ...

Fuelled by continued core revenue expansion, good cost efficiency and low loan losses, SVEG reported a strong Q3 ROE of 21.4%. While NII rose 2.5% QOQ and fee income 10.3% YOY, the bank saw marginal YOY cost reductions. We have raised our 2025–2026e EPS by ~3%, and our target price to NOK158 (148). With the stock trading at a 2025e P/E of ~9.1x, we continue to find the valuation attractive and reiterate our BUY.

Impressive fundamentals priced in

Q3: Adj. PTP +8% and +7% vs. ABGSCe and cons; Adj. EPS up 6.3%, 3.5% and 3.4% for '24e-'26e; At 1.57x P/NAV in '24e the valuation is fair: HOLD

Strong cost combined with higher lending

Adj. PTP +7% vs.cons and +8% vs ABG from income & costs; Merger synergies of ~25-30% of the smallest unit looks low; Cons. est. rev. likely up 1-2% (costs ); Stock up 1-2%

The stronger 2025e is reflected in valuation