Grong Sparebank (GRONG) Q3 2024 earnings summary

Executive summary

• Achieved profit after tax of NOK 82.1 million, down from NOK 92.4 million last year; return on equity at 8.95%–9% versus 11.1%–11.13% last year.

• Lending grew by NOK 1.3 billion (11.3%) over 12 months; customer deposits increased by 4% year-over-year.

• Core operations improved with higher net interest income and lower operating costs, despite a rise in non-performing loans.

• Expansion in Mo i Rana progressing, with new leadership and strategic partnerships established.

• Strong customer and lending growth supported by increased business management capacity.

Financial highlights

• Net interest income increased by NOK 13.4 million year-over-year; Q3 2024 net interest income was NOK 178.2 million (2.28%–2.30% margin).

• Net commission income reached NOK 63.2 million, up from NOK 58.7 million last year.

• Operating expenses decreased to NOK 116.7 million; cost-to-income ratio (excl. securities) improved to 48.3%–48.34% from 53.6%–53.56% last year.

• Loan losses increased to NOK 5.4 million (0.08% of gross loans), up from NOK 2.6 million (0.04%) last year.

• Net income from financial assets was NOK -7.4 million, down from NOK 16.5 million last year.

Outlook and guidance

• New risk-sensitive standard method expected to ease capital requirements and improve competitive conditions.

• CET1 ratio would reach 17.46% if year-to-date results included; currently below internal target but above regulatory requirements.

• Norges Bank expected to keep policy rate unchanged through year-end, with gradual reductions in 2025, potentially lowering net interest income.

• Continued focus on market expansion, strategic partnerships, and organizational growth.

• Slight increase in non-performing loans, but exposures are closely monitored and losses remain low.