SpareBank 1 Sør-Norge (SB1NO) Q2 2026 earnings summary

Executive summary

• Strong quarter and half-year performance, with new executive management and board chair appointed, and completion of the merger with EM1 Telemark forming a unified team.

• Focus sharpened on core banking by reducing stake in accounting firm and expanding real estate brokerage, including the sale of a 55% stake in Forretningspartner and acquisition of Panorama Eiendomsmegling AS.

• Significant growth in mutual fund savings and assets under management, supporting future earnings and reflecting robust market position.

• Embedded AI in customer service, saving 10,000 working hours and streamlining operations.

• Merger synergies ahead of plan, with synergy target raised from NOK 300 million to NOK 550 million.

Financial highlights

• Pre-tax profit for Q2 2026 reached NOK 2,092 million, with profit after tax at NOK 1,677 million; lending growth of 2.6% and deposit growth of 6.4% in the quarter.

• Net interest income was NOK 2,146 million, with net commission and other income at NOK 888 million, mainly from real estate and ownership interests.

• Cost to income ratio was 37.8% for Q2 2026, reflecting strong cost control.

• Low impairment losses at NOK 54 million (0.05%), well below normalized levels.

• CET1 capital ratio at 17.51% as of 30 June 2026.

Outlook and guidance

• Confident in achieving long-term return on equity target above 14%; Q2 return on equity at 12.7% (13.6% excluding merger goodwill).

• CET1 capital ratio target above 16.74%; cost to income ratio target below 35%.

• Dividend payout policy of about 50% of net profit, supplemented by a new share buyback program up to 1% of shares.

• Funding synergies expected by 2027, with increased certificate program issuance anticipated as deposit growth normalizes.

• Expectation of continued strong performance, with focus on cost efficiency and margin management amid fierce competition.