Grong Sparebank (GRONG) Q2 2024 earnings summary

Executive summary

• Net profit after tax was NOK 53.5 million, down from NOK 67.1 million last year; return on equity after tax was 8.8% versus 12.3% last year; adjusted ROE at 10.6%.

• Strong lending growth of 10.04% year-over-year and 4.78% in Q2; customer deposits grew 4.74% year-over-year.

• Opened new branches in Verdal and Nærøysund, expanding regional footprint.

• Underlying banking operations remain solid, with low losses and delinquencies; increased focus on anti-money laundering and fraud management.

• Continued investment in sustainability advisory and energy consulting for commercial buildings.

Financial highlights

• Net interest income for H1 2024 was NOK 116.4 million (2.28% margin), up from NOK 105.8 million (2.25%) in H1 2023.

• Net commission income was NOK 41.6 million, slightly up from NOK 40.3 million last year.

• Dividend income decreased by NOK 6.7 million; net income from financial assets was NOK -5.2 million, mainly due to value changes in Eika Boligkreditt and Eika Gruppen.

• Operating expenses increased to NOK 75.5 million, mainly due to higher personnel costs; cost-to-income ratio (excl. securities) improved to 47.75% from 48.54%.

• Loan losses and provisions were NOK 4.3 million (0.10% of gross loans), up from NOK 2.8 million (0.07%) last year.

Outlook and guidance

• Positioned for further growth, with strengthened presence in the corporate market and clear ambitions for expansion.

• Basel 4 regulatory changes are expected to improve competitive conditions for smaller banks.

• Some turbulence in construction, retail, and capital goods sectors, but direct exposure is limited.