SPAREBANK 1 ØSTFOLD AKERSHUS (SOAG) Q2 2025 earnings summary

Executive summary

• Strong loan growth in H1 2025: 4.7% in retail and 6.9% in corporate segments.

• Net profit after tax for H1 2025 reached NOK 357 million, up from NOK 276 million year-over-year, with strong lending and deposit growth.

• Pre-tax profit for Q2 2025 was NOK 280 million, up from NOK 171 million in Q2 2024, driven by stable interest rates, gains from share sales, and reduced loan loss provisions.

• One-off gain of NOK 50 million from sale of stakes in Samarbeidende Sparebanker entities and a NOK 8 million cost related to the Tietoevry legal case impacted results.

• Return on equity for H1 2025 was 14.7% (12.6% in H1 2024), exceeding the long-term target of 11%.

Financial highlights

• Pre-tax profit for H1 2025 reached NOK 425 million, compared to NOK 351 million in H1 2024.

• Net interest income for Q2 2025 increased sequentially from Q1 2025.

• Net commission and other income: NOK 208 million (NOK 189 million), mainly from insurance, real estate, and accounting services.

• Operating expenses: NOK 287 million (NOK 262 million), up 8.6% due to increased headcount, IT, and one-off legal costs.

• Dividend payout ratio maintained at approximately 50% of group profit.

Outlook and guidance

• Entering H2 2025 with solid profitability and capital, despite a challenging macroeconomic environment.

• Norges Bank has started rate cuts, with further reductions expected in 2025; bank adjusted lending and deposit rates accordingly.

• Margin pressure expected to persist due to competition and growth strategy.

• Continued focus on cost control and leveraging local market position for growth.

• Long-term ROE target raised to 11%, with about 50% of annual profit to be distributed as dividends and gifts, subject to capital adequacy.