SPAREBANK 1 RINGERIKE HADELAND (RING) Q2 2024 earnings summary

Executive summary

• Achieved strong profitability in H1 2024 with annualized ROE of 12.6% and CET1 ratio at 17.7%.

• Net interest income rose 20% year-over-year, driven by loan growth, repricing, and improved customer margins.

• Cost efficiency maintained with cost/income ratio at 33.7%–40.6% despite higher personnel and IT expenses.

• Credit quality remains robust, with low losses and only a temporary increase in non-performing loans.

• Deposit growth was strong at 8.8% YTD, supporting a strong liquidity position.

Financial highlights

• Net profit after tax for H1 2024 was NOK 287 million; Q2 2024 profit was NOK 141 million.

• Net interest income for H1 2024 reached NOK 432–433 million, up from NOK 359–334 million in H1 2023.

• EPS for H1 2024 was NOK 17.83.

• Profit before tax: NOK 370 million (NOK 302 million in H1 2023).

• Cost/income ratio improved to 33.7%–40.6% from 34.9%–43.3% year-over-year.

Outlook and guidance

• Expects continued low loan demand and increased competition for mortgage customers.

• Anticipates a slight rise in defaults and losses due to persistent high interest rates and inflation.

• CET1 ratio target is minimum 11% ROE and at least 50% of annual profit as dividend, subject to capital needs.

• New capital requirements in 2025 expected to improve CET1 by ~1 percentage point for the parent bank.

• The region faces subdued economic activity, especially in new housing, but long-term prospects remain positive.