HØLAND OG SETSKOG SPAREBANK (HSPG) Q3 2024 earnings summary

Executive summary

• Net profit after tax for Q3 2024 was NOK 38.6 million, down from NOK 41.4 million year-over-year, with solid underlying banking operations and profitability maintained.

• Total business capital, including EBK financing, reached NOK 9.3 billion, up 4.1% over the past 12 months.

• The bank remains primarily exposed to private mortgages and residential construction, with a strong used housing market but weak new housing starts.

Financial highlights

• Net interest income for the period was NOK 99.4 million, down from NOK 104.4 million year-over-year, reflecting lower net interest margins.

• Net commission income (excluding EBK) increased to NOK 26.5 million from NOK 24.8 million.

• Operating expenses decreased to NOK 69.5 million from NOK 71.4 million, despite an 11% increase in personnel costs due to more employees.

• Loan losses and provisions rose to NOK 27.1 million from NOK 22.3 million, mainly due to restructuring after the Boligpartner bankruptcy.

• Customer deposits totaled NOK 4,771 million, down 3.7% year-over-year; gross loans increased 4.3% to NOK 7,491 million.

Outlook and guidance

• Norges Bank signals that the interest rate peak has been reached, with possible rate cuts in early 2025; the new housing market remains very weak, impacting customers in this segment.

• The bank focuses on customer service, competence development, and efficiency to ensure long-term profitability.