HØLAND OG SETSKOG SPAREBANK (HSPG) Q4 2023 earnings summary

Executive summary

• FY2023 profit before tax was NOK 65.8m, up from NOK 58.0m; profit after tax was NOK 50.8m versus NOK 46.8m.

• Underlying banking operations remained solid and profitable; profit before loan losses rose to NOK 98.3m from NOK 92.4m.

• Business capital reached NOK 9.123bn, up 7.2% YoY, including loans funded through Eika Boligkreditt (EBK).

Financial highlights

• Net interest income was NOK 138.4m versus NOK 130.1m; including net interest income from EBK funding, it was NOK 143.1m versus NOK 135.0m.

• Net commission income excluding EBK rose 6% to NOK 37.7m from NOK 35.6m.

• Operating expenses increased 6.7% to NOK 95.5m from NOK 89.5m; loan impairments and losses were NOK 32.5m versus NOK 34.4m.

• Customer deposits were NOK 4.835bn, up 2.2% YoY; gross loans including EBK were NOK 7.146bn, up 3.1%.

Outlook and guidance

• Lower operating costs are expected in 2024 as elevated core-system conversion costs ease.

• Norges Bank signaled that the rate peak had been reached after 13 increases, taking the policy rate from 0.00% to 4.50% by December 2023.

• Used-home activity had remained solid, while new-home activity had slowed sharply; expected pressure on customers in the new-build segment remains a concern.