SPAREBANK 1 RINGERIKE HADELAND (RING) Q3 2024 earnings summary

Executive summary

• Record results for Q3 2024 and the first nine months, driven by extraordinary gains from Eika/Fremtind transactions and SamSpar, and strong underlying banking operations.

• Underlying operations remain robust, with increased net interest income and low loan losses.

• High cost growth due to staffing, wage, and IT expenses, but efficiency maintained with a cost/income ratio of 31.0% (parent bank).

• Strong deposit growth and market-level lending growth.

• Solid capital position and robust liquidity.

Financial highlights

• Net profit after tax for Q3 2024 reached MNOK 249; profit after tax for the first nine months was NOK 536 million, up from NOK 363 million year-over-year.

• Earnings per equity certificate (EPS) for the period was 33.29, up from 22.53 year-over-year.

• Return on equity (ROE) annualized at 15.3%, compared to 11.0% last year.

• Net interest income increased by 18% year-over-year, but growth is flattening.

• Cost/income ratio at 31.0% (parent bank), 35.5% (group).

Outlook and guidance

• Expectation of continued low unemployment but a rise in bankruptcies and real estate risks.

• Anticipate increased competition for mortgage customers and persistently low loan demand.

• Loan losses and defaults expected to rise slightly due to high interest rates and inflation.

• Bank targets minimum 11% ROE and aims to distribute at least 50% of profit as dividends, with potential for extraordinary dividends.

• New capital requirements in 2025 may improve core capital ratios by about 1 percentage point.