Spar Nord Bank (SPNO) Q1 2025 earnings summary

Executive summary

• Q1 2025 profit after tax was DKK 491 million, with ROE at 14.0%, reflecting strong credit quality and satisfactory business activity despite lower interest rates impacting net interest income.

• Lending and deposits grew year-over-year by 10% and 6%, respectively, with total business volume up 4% compared to Q1 2024.

• Net interest income declined 14% year-over-year due to lower interest rates and reduced returns on surplus liquidity.

• Net fee income increased 6% year-over-year, driven by higher activity in the housing market and asset management inflows.

• Nykredit's all-cash voluntary takeover offer remains pending, with two out of three conditions met and the offer period extended to 20 May 2025.

Financial highlights

• Net interest income: DKK 783 million (down 14% year-over-year).

• Net fee income: DKK 430 million (up 6% year-over-year).

• Market value adjustments and dividends: DKK 139 million (down from DKK 155 million in Q1 2024), with positive bond portfolio revaluations offset by March market turmoil.

• Operating expenses: DKK 742 million (up 8% year-over-year), including DKK 21 million in one-off advisory costs related to Nykredit's offer.

• Profit before tax: DKK 644 million (down 27% year-over-year).

Outlook and guidance

• 2025 profit after tax expected in the DKK 1.6–1.9 billion range, with ROE after tax in the 11–13% range.

• Core earnings before impairment expected at DKK 2.2–2.6 billion.

• Net interest income anticipated to decline due to margin pressure and lower rates; net fee income expected to rise on higher volumes.

• Payroll costs to increase, but average headcount expected to fall slightly.

• Guidance subject to heightened uncertainty due to geopolitical risks and market volatility.