SpareBank 1 Sør-Norge (SB1NO) Q3 2025 earnings summary

Executive summary

• Achieved a return on equity of 13.0% for Q3 2025 (14.5% adjusted for one-offs), with strong lending and deposit growth and successful technical and operational merger, transferring over 335,000 customers and integrating accounting and real estate businesses.

• Maintains a well-diversified loan portfolio with low concentration risk and strong credit quality.

• Synergy estimate from the merger raised to NOK 450 million annually by 2027, with NOK 100 million from operational efficiencies, NOK 50 million from funding synergies, and capital synergies of NOK 1.7 billion.

• Enhanced dividend policy to distribute at least 50% of annual profit in cash, supplemented by a new share buyback program.

• Total merger costs to date are NOK 400–411 million.

Financial highlights

• Pre-tax profit for Q3 2025 was NOK 2,120 million, up NOK 280 million year-over-year; profit after tax was NOK 1,697 million.

• Net interest income for Q3 2025 was NOK 2,328 million, with total income of NOK 3,549 million.

• Cost-to-income ratio at 37.0%, reflecting high cost efficiency.

• Lending volume grew 4.4% year-over-year to NOK 415 billion; deposit growth was 10.9%.

• Impairments on loans and financial commitments were NOK 115 million (0.12% of gross lending), down from NOK 166 million year-over-year.

Outlook and guidance

• Well positioned for profitable organic lending growth and strong capital distribution through dividends and buybacks, with a long-term ROE ambition of 14% expected to be fully realized by 2027.

• CET1 capital ratio target is a minimum of 17.53%, expected to reduce to 17.06% due to regulatory changes; buffer of 50 basis points above capital requirements targeted.

• Ready to further reduce costs if corporate sector growth does not materialize.

• Uncertainty remains due to global trade policy and geopolitical tensions, but local business sentiment is optimistic.