SPAREBANKEN NORGE (SBNOR) Q4 2024 earnings summary

Executive summary

• Achieved all 2024 financial targets, including ROE after tax of 20.1%, CET1 ratio of 17.7%, and cost-to-income ratio of 24.8%.

• Pre-tax profit for Q4 2024 was NOK 1,388 million, with full-year pre-tax profit at NOK 5,641 million, a 28% increase year-over-year.

• Significant profit improvement in 2024 driven by higher net interest income, commission income, and contributions from associated companies.

• Merger with Sparebanken Sør progressing, aiming to create Norway's leading savings bank with national ambitions, effective May 2025.

• Strong growth in lending (10.3%) and deposits (9.3%) over the past 12 months, with robust performance in both retail and corporate segments.

Financial highlights

• Net interest income for Q4 was NOK 1,586 million; full-year net interest income was NOK 6,159 million.

• Profit per equity certificate reached NOK 16.66 for 2024, with book value per certificate at NOK 89.1.

• Dividend per equity certificate proposed at NOK 8.50 for 2024, up from NOK 7.50 in 2023.

• Customer dividend of NOK 927 million and NOK 434 million in donations proposed for 2024.

• Write-downs and losses on loans and guarantees remained low at NOK 16 million for Q4 and NOK 97 million for the year.

Outlook and guidance

• Cost synergies from the merger estimated at NOK 350-400 million annually from 2027-2028.

• Capital synergies expected at net NOK 2 billion, with additional Basel IV effects.

• National expansion planned, with a focus on Oslo and major city centers over the next 5-10 years.

• Financial targets for 2025: ROE over 13%, payout ratio around 50%, and CET1 ratio 1-1.25 percentage points above minimum and buffer requirements.

• Lending and deposit growth targets for 2025: 4-5% in retail, 6% in corporate lending, and Bulder lending volume target of NOK 73 billion.