Rogaland Sparebank (ROGS) Q1 2025 earnings summary

Executive summary

• Q1 2025 profit after tax reached NOK 139.3 million, up NOK 48.2 million year-over-year, driven by higher net interest income, increased other operating income, and lower tax expense, partially offset by higher operating and credit loss costs.

• Return on equity after tax improved to 13.8% from 10.3% year-over-year (including hybrid capital, up from 10.0%).

• Lending growth was 6.4% YoY, with total lending up 14.9% including merger effects.

• The bank completed a merger in August 2024, significantly increasing balance sheet size and market presence.

• Net interest margin remained strong at 1.99% (1.94% YoY).

Financial highlights

• Earnings per equity capital certificate (EPS) was NOK 3.7, up from NOK 2.8 YoY.

• Net interest income: NOK 198.1 million (Q1 2024: NOK 167.8 million).

• Costs increased to NOK 100.7 million (Q1 2024: NOK 82.2 million), mainly due to merger-related effects.

• Net loss on loans was NOK 6.5 million, compared to NOK 0.1 million YoY.

• Total assets: NOK 41.0 billion (Q1 2024: NOK 35.1 billion), up 16.8% year-over-year, mainly due to the merger and loan growth.

Outlook and guidance

• Internal CET1 target set at 16.8% from August 2024, with a 1.5% management buffer above regulatory requirements.

• Bank expects a new pillar 2 requirement in 2025, increasing to 2.3% post-merger.

• Preliminary estimates for new standard method (CRR3) from April 2025 indicate a +3.0% CET1 impact.

• Expectation of stable net interest margin in coming quarters, assuming stable interest rate environment.

• Regional economic outlook remains positive, with high activity in energy-related industries and a strong housing market, though some uncertainty persists due to international trade and labor shortages.