Revisions hit by NII and capital synergies

Sparebanken Vest (Buy, TP: NOK157.00) - Strong pre-merger quarter

Continued solid loan growth, high fees, and a strong trading result helped offset merger-related costs and seasonally soft NII, as SVEG reported Q1 PTP of NOK1,415m, 13% higher YOY, and a Q1 ROE of 21.3%. As capital synergies are expected to offset increased IRB risk weights in the 2 May merger, we continue to find the capital situation supportive for further distributions. We have cut our 2026–2027e EPS by ~2%, while reiterating our NOK157 target price and our BUY.

Q1: Small beat standalone, inline proforma

Adj. net profit +2% (standalone) due to asset quality; inline (proforma). Softer NII, while better fees (Borea), weaker costs (Borea). Cons. est. rev. minor negative, stock to perform in line to just soft

Norwegian banks Q1: priced for higher rates

Our favourite among the savings banks

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.

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.