HØLAND OG SETSKOG SPAREBANK (HSPG) Q4 2024 earnings summary

Executive summary

• Net profit after tax reached NOK 55 million for Q4 2024, up from NOK 51 million year-over-year, with solid underlying banking operations and stable cost control.

• Gross lending including EBK financing increased by 7.7% to NOK 7.7 billion over the last 12 months, while customer deposits remained flat at NOK 4.8 billion.

• The bank maintains strong capital adequacy, with a consolidated CET1 ratio of 17.46% and total capital ratio of 23.58%.

• The business is primarily exposed to residential mortgages and housing construction, with a robust used housing market but weak new housing starts.

Financial highlights

• Net interest income for the year was NOK 132.7 million, slightly down from NOK 138.4 million year-over-year, reflecting lower net interest margins.

• Operating profit before losses was NOK 102.3 million (NOK 98.3 million last year); cost/income ratio adjusted for VP was 51.8%.

• Credit losses and provisions totaled NOK 32.5 million, with NOK 25.9 million related to the Boligpartner bankruptcy.

• Return on equity (ROE) was 5.95% for Q4 2024, down from 9.27% last year.

• Total assets under management, including EBK, reached NOK 9.6 billion, up 5.1% year-over-year.

Outlook and guidance

• Norges Bank is expected to cut rates in March 2025, with two further cuts anticipated during the year.

• The bank expects continued strong performance in the used housing market, but new housing construction remains subdued, impacting corporate clients.

• Focus remains on customer service, competence development, and efficiency to ensure long-term profitability.