SpareBank 1 Sør-Norge (SB1NO) Q1 2025 earnings summary

Executive summary

• Q1 2025 delivered strong results with pre-tax profit of NOK 2,186 million, up NOK 445 million sequentially and NOK 208 million year-over-year, driven by solid operations, higher income, and lower loan losses.

• Integration of SpareBank 1 Sør-Norge is progressing as planned, with technical integration set for September 2025 and operational synergies estimated at NOK 300 million annually by 2027.

• The bank maintains a well-diversified loan portfolio, low exposure to high-risk sectors, and a strong capital and liquidity position.

• Return on equity after tax was 13.5% (14.7% adjusted for merger effects); earnings per share reached NOK 4.37.

• Loan and deposit growth continued, with lending up 6.5% and deposits up 2.4% year-over-year.

Financial highlights

• Net interest income rose to NOK 2,310 million, up NOK 17 million sequentially and NOK 54 million year-over-year, mainly due to growth and lower funding costs.

• Cost to income ratio stood at 36.7%, and CET1 capital ratio reached 18.3%.

• Lending volume grew to NOK 408 billion (+6.5% YoY); deposit growth was 2.4%.

• Impairments on lending and financial commitments were low at NOK 23 million (0.03% of gross lending).

• Net income from financial investments increased to NOK 394 million, up NOK 270 million from Q4 2024 and NOK 128 million year-over-year.

Outlook and guidance

• Board expects 2025 to be a good year, with improved economic growth prospects but some uncertainty due to global trade tensions and potential inflation impacts.

• Long-term targets: return on equity above 14%, cost to income ratio below 40%, and CET1 capital ratio minimum 17.55%.

• Dividend policy aims to distribute around 50% of annual profit, considering capital needs and regulatory requirements.