SPAREBANK 1 RINGERIKE HADELAND (RING) Q4 2023 earnings summary

Executive summary

• FY2023 net profit was NOK 461m vs NOK 421m; stronger net interest income and low annual credit losses supported underlying banking results.

• Q4 pre-tax profit was NOK 134m; increased credit-loss provisions and a negative SpareBank 1 Gruppen investment contribution offset higher interest income.

Financial highlights

• FY2023 total income was NOK 1,081m vs NOK 949m; pre-tax profit was NOK 612m vs NOK 535m.

• Net interest income was NOK 736m vs NOK 559m; including credit-company commissions, it rose 25% to NOK 775m from NOK 618m.

• Operating expenses rose 15.2% to NOK 455m from NOK 395m; group cost ratio was 42.1% vs 41.6%, while parent-bank cost ratio improved to 31.3% from 33.0%.

• FY2023 credit losses were NOK 14m vs NOK 19m; net financial-asset returns fell to NOK 19m from NOK 55m, including a Kredinor-related impairment effect.

• Q4 net interest income including credit-company commissions was NOK 216m vs NOK 166m; pre-tax profit was NOK 134m vs NOK 162m a year earlier.

Outlook and guidance

• Lower loan demand is expected to persist; competition for residential mortgage customers may intensify, with policy rates expected to fall in H2 2024.

• Prospects point to weak Norwegian economic growth, high interest rates and uncertainty over household responses to higher prices and borrowing costs.

• The ROE target is 11%; the distribution policy aims to pay out at least 50% of annual profit, subject to capital needs.