SPAREBANK 1 NORD-NORGE (NONG) Q2 2025 earnings summary

Executive summary

• Pre-tax profit for H1 2025 reached NOK 2,178 million, with ROE at 18.9% and cost/income ratio at 31.7%.

• Achieved record profit after tax of NOK 951 million in 2Q25, up 26% year-over-year, with ROE at 20.3%.

• Loan losses remained low at NOK 27 million for H1 2025, with net loan loss reversals of NOK 30 million in 2Q25.

• One-off costs of NOK 46 million in 2Q25 impacted results, but underlying operations remain solid.

• The bank maintains a leading market position in Northern Norway, gaining market share and strong customer loyalty.

Financial highlights

• Net interest income for 2Q25 was NOK 1,003 million, slightly down from NOK 1,007 million in 1Q25 and NOK 995 million in 2Q24.

• Net fee and other operating income reached NOK 370 million, up from NOK 351 million in 2Q24.

• Net income from financial investments surged to NOK 298 million, up from NOK 102 million in 2Q24.

• Total income in 2Q25 reached NOK 1,671 million, with result after tax at NOK 951 million, up from NOK 811 million in 1Q25.

• Net losses on loans and guarantees in 2Q25 were -NOK 30 million, reflecting continued low credit risk.

Outlook and guidance

• Net interest margin is expected to remain under pressure due to competition and policy rate cuts, but above pre-pandemic levels.

• Further interest rate cuts in 2025 and 2026 are expected to stimulate lending and economic activity.

• The bank targets lending growth of 4-7% in retail and 3-6% in corporate for 2025.

• Cost measures are expected to reduce expenses by NOK 40-50 million annually by 2027, supporting a cost/income ratio below 40%.

• Dividend payout ratio is expected to remain above 50%, with a solid capital base supporting distributions.