Flekkefjord Sparebank (FFSB) Q2 2024 earnings summary

Executive summary

• Net profit after tax reached NOK 26.5 million in Q2 2024, up from NOK 21.9 million in Q2 2023, and H1 2024 net profit was NOK 53.4 million, up from NOK 42.8 million year-over-year.

• Annualized return on equity after tax was 9.0% in Q2 2024, compared to 8.1% a year earlier.

• One-off costs from the equity certificate issuance increased the cost ratio and temporarily reduced ROE, with normalization expected by year-end.

• Ongoing reduction in exposure to impaired and non-performing loans, with a focus on credit risk management.

• 12-month loan growth reached 18.4%, and deposit growth was 8.0% year-over-year.

Financial highlights

• Net interest income for Q2 2024 was NOK 55.2 million, up from NOK 49.1 million in Q2 2023; H1 2024 net interest income was NOK 109.9 million, up from NOK 96.4 million year-over-year.

• Total operating income for Q2 2024 was NOK 63.6 million, up from NOK 56.0 million year-over-year.

• Net commission income rose to NOK 15.0 million and net financial income to NOK 14.0 million in H1 2024.

• Cost/income ratio (excluding gains/losses) was 50.7% in Q2 2024 and H1 2024, up from 49.3% year-over-year.

• Loan losses and guarantees amounted to NOK 3.3 million in Q2 2024 and NOK 6.6 million in H1 2024, mainly from two corporate exposures.

Outlook and guidance

• Bank is well capitalized following NOK 150 million equity certificate issuance, supporting further profitable growth.

• Temporary increase in cost ratio and lower ROE expected to normalize by year-end as emission effects subside.

• Credit growth in the market is declining, increasing competition for customers; the bank continues to gain market share in its core area.

• Board remains focused on credit risk, ESG, anti-money laundering, and fraud prevention.