Sparebanken Sør (SOR) Q4 2024 earnings summary

Executive summary

• Full-year profit for 2024 was NOK 1,991 million, with profit before tax at NOK 2,457 million, both up year-over-year.

• Net interest and commission income grew solidly, with continued low loan losses and defaults.

• Return on equity reached 12.1% for 2024, with a cost-income ratio of 35.3%.

• Board proposes a dividend of NOK 12.21 per equity certificate, representing a 67% payout.

• Merger with Sparebanken Vest progressing, aiming for significant synergies and legal completion in May 2025.

Financial highlights

• Net interest income for Q4 2024 was NOK 829 million; full year at NOK 3,315 million, both up year-over-year.

• Net commission income for Q4 2024 was NOK 118 million; full year at NOK 424 million, both increased from 2023.

• Profit per equity certificate for Q4 2024 was NOK 3.8; full year NOK 18.2, both higher than last year.

• Loan growth over 12 months was 4.6%; deposit growth 7.1%.

• Non-performing loans rose to NOK 1,397 million (1.04% of gross loans), up from NOK 1,071 million (0.84%) a year earlier.

Outlook and guidance

• ROE target set at above 11% for 2024 and above 12% by end of 2025.

• Dividend policy aims for 50% payout, with capital requirements considered.

• Merger with Sparebanken Vest expected to deliver NOK 350–400 million in annual cost synergies and NOK 2 billion in capital synergies by 2027–2028.

• Basel IV (CRR3) implementation expected to release NOK 2.1 billion in capital, increasing ROE.

• Interest rates expected to fall in 2025, potentially boosting housing and construction markets.