Sparebanken Sør (SOR) Q2 2024 earnings summary

Executive summary

• Q2 2024 profit before tax was NOK 648 million, with profit for the period at NOK 504 million, up NOK 77 million year-over-year; return on equity after tax reached 12.5% for the quarter and 13.3% for the first half.

• Net interest and commission income showed strong growth, with positive contributions from associated companies and financial assets.

• Maintained a low-risk loan book, strong capitalization, and high cost efficiency, with a cost/income ratio of 34.3% in Q2.

• Distributed NOK 417 million in customer dividends and NOK 208 million for non-profit purposes in the region.

• Loan growth over the last 12 months was 4.6%, and deposit growth was 6.6%.

Financial highlights

• Net interest income rose 12% year-over-year to NOK 823 million in Q2; YTD net interest income at NOK 1,647 million.

• Net commission income increased to NOK 116 million in Q2; YTD at NOK 201 million.

• Cost/income ratio improved to 34.3% in Q2 and 34.4% YTD.

• Profit per equity certificate was NOK 4.6 in Q2 and NOK 9.9 YTD.

• Net income from financial instruments was NOK 21 million in Q2 2024.

Outlook and guidance

• Positive future prospects with strong market position, low risk, and high cost efficiency.

• Measures in place to further increase ROE; focus on ESG leadership and customer dividends.

• ROE target set at >11% for 2024 and >12% by end of 2025; cost/income ratio target <40%.

• Key policy rate expected to remain high through 2024; inflation nearing target but economic uncertainty persists.

• Focus remains on cost control, technology investments, and profitable growth.