SPAREBANK 1 ØSTLANDET (SPOL) Q4 2024 earnings summary

Executive summary

• Return on equity was 11.5% in Q4 2024, with profit after tax of NOK 701 million, and full-year profit after tax reached NOK 3,356 million, up 51% year-over-year.

• The merger with Totens Sparebank was completed on 1 November 2024, making the group Norway's fourth largest savings bank.

• Underlying profitability remained strong despite higher impairment charges and merger-related expenses.

• The Board proposes a dividend of NOK 10.30 per equity certificate and NOK 470 million in customer dividends.

• Solid growth in net interest income and loan growth in the retail market, with high activity continuing into Q1 2025.

Financial highlights

• Net interest income for Q4 2024 was NOK 1,179 million, up 14.5% year-over-year; full-year net interest income was NOK 4,213 million.

• Net commissions and other income reached NOK 442 million in Q4 2024, up from NOK 289 million in Q4 2023; full-year NOK 1,690 million.

• Operating expenses rose to NOK 764 million in Q4 2024, mainly due to merger and integration costs; full-year expenses were NOK 2,595 million.

• Loan loss provisions were NOK 122 million in Q4 2024, significantly higher than NOK 39 million in Q4 2023.

• Earnings per ECC for 2024 were NOK 19.07, with a proposed cash dividend of NOK 10.3 per ECC.

Outlook and guidance

• Profitability target raised to a return on equity of at least 13%, reflecting scale and market developments.

• The Board expects strong long-term growth opportunities due to the bank's market position, capital strength, and the Totens Sparebank merger.

• Loan growth in the retail market remains strong, with high mortgage application activity continuing into 2025.

• Dividend policy updated to a payout ratio of at least 50% of annual profits; 60% of group profit after tax allocated to owners and customers.

• Regulatory changes and macroeconomic uncertainty are noted as key challenges, but the bank remains confident in its resilience.