Grong Sparebank (GRONG) Q4 2024 earnings summary

Executive summary

• Net profit after tax was NOK 111.1 million, down from NOK 155.2 million last year, with strong lending and deposit growth but increased defaults and losses, mainly tied to a single business exposure.

• Core operations improved, with higher net interest and commission income, despite a significant reduction in financial investment results.

• Expansion into Mo i Rana progressing as planned, with a new branch to open in Q2 2025.

• New Pillar 2 capital requirement introduced, effective from 31.12.2024.

• Staff increased to 83 employees (79.3 FTEs), up from 72 (68.6 FTEs) last year.

Financial highlights

• Net profit after tax of NOK 111.1 million, down from NOK 155.2 million year-over-year.

• Net interest income increased to NOK 240.8 million (margin 2.31%), up NOK 14.4 million year-over-year.

• Net commission income rose to NOK 89.5 million, driven by Eika Boligkreditt and insurance commissions.

• Cost-to-income ratio (ex. securities) improved to 49.73% from 54%.

• Earnings per equity certificate for 2024 was NOK 11.96, down from NOK 18.04 in 2023.

Outlook and guidance

• More risk-sensitive standard method expected soon, easing capital requirements and supporting growth for smaller banks.

• New Pillar 2 requirement of 1.9% (1.07% core capital) from 31.12.2024, lower than previous 2% requirement.

• Fewer interest rate cuts expected than previously signaled by Norges Bank, with first cut anticipated in March 2025.

• Continued organizational capacity for above-market growth, with new Mo i Rana branch to open in Q2 2025.