Norw. Savingsbanks - could be just soft today

Norwegian banks - Q4 sector preview

Sector trading at '24e-'25e P/Es of 8.5x and 9.1x, with abating NIM, and at '23e P/BV 1.2x with normalised ROE of ~14%, still attractive. Adj. EPS up for '24e, down for '25e; we prefer SVEG & MING.

New lending growth assumptions for 24e-25e

Q4e: PTP NOK 355m, short-term headwinds from increased costs. Lending growth refocus towards growth as part of a new bank. Shareholder value created in the merger with SRBNK - HOLD.

Norwegian savings banks: Christmas gifts from the NFSA

Sp1 banks are allowed to establish "new" Sp1 Markets. Gains will be moved from Q1'24e to Q4'23e and add to dividend capacity. Prefer MING and SVEG in Norway on more attractive valuation.

Santa came early this year – down to HOLD

The merger news with SRBNK overshadowed a weaker Q3. We trim our estimates on lower lending growth and margins. ~70% of value creation & 38% of new bank is fair at 1.1x BV. Lower to HOLD, unchg TP.

Dividends could come earlier

Q3e: its CET1 looks very attractive for EO DPS. Estimates trimmed on changed interest rate path. BUY into its IRB transition at a discount - 20% upside.

Expect dividends to flow with IRB

Q2: adj. PBLL -7% vs. ABGSCe on softer costs & other income. Estimates down -4% and -3% on same topic for '24e-'25e.Reiterate BUY, as excess capital will convert to dividends.

Miss on adj. PBLL, saved by write-backs

Adj. PTP beat of 8% vs. ABGSCe, 4% vs cons, driven by write-backs, muted by weaker costs & other income. Cons. EPS chg. likely up for '23e, down 1-2% '24e-'25e

Norwegian banks: Further NII uplift

Sector trading at P/E'23e-'24e of 8.3x and 8.1x at a P/BV of 1.1x with ROE of ~14%. Adj. EPS up (higher interest rates) – expect further cons. uplift.

Still strong long-term case, given IRB approval

Trading at a P/E in '23e-'24e of 8.8x and 8x at a P/BV of 0.9x, with ROE of ~11%. Adj. EPS up (higher interest rates, muted by lower growth). BUY.

Expect improving C/I

Q1: adj. net profit beat driven by lower loan losses. Adj. EPS estimates up on improved margins. Reiterate BUY – 27% upside.

Better adj. PTP on lower loan losses

Adj. PTP beat of 10% vs. ABGSCe, 5% vs cons, driven by lower loan losses, muted by weaker costs. Cons. EPS chg. likely +1-2% for '23e, limited for '24e-'25e

Norwegian banks: another strong quarter

Q1e: expect solid reports, but with a neutral risk/reward. Adj. EPS up (higher interest rates) — expect further cons. uplift. Trading in line with historical average — but record earnings

Expect stronger NII and cost synergies

Q1e: NII up 2% q-o-q. Adj. EPS estimates up on higher interest rates. Reiterate BUY - 23% upside.

SOON to receive IRB benefits

Expect synergies and scale to drive C/I down to ~40%. We initiate coverage with a BUY recommendation, TP of NOK 63, 13% upside.