Sunndal Sparebank (SUNSB) Q3 2024 earnings summary

Executive summary

• Net profit after tax reached 54.3 MNOK for the first nine months of 2024, up from 52.0 MNOK year-over-year.

• Return on equity was 9.0%, slightly down from 9.5% in the same period last year.

• Cost/income ratio improved to 42.9% from 44.2% year-over-year, reflecting cost efficiency.

• Loan growth over 12 months was 6.5%, outpacing market growth, while deposit growth was -0.9%.

• The bank is in merger negotiations with Romsdal Sparebank, aiming for completion in 2025.

Financial highlights

• Net interest income increased by 8.2 MNOK (7.9%) to 112.1 MNOK, driven by loan growth and higher rates.

• Other operating income rose by 4.7 MNOK (13.5%) to 39.8 MNOK, mainly from higher commissions.

• Operating expenses increased by 3.8 MNOK to 65.3 MNOK, mainly due to wage and price inflation.

• Credit losses booked at 15.9 MNOK, up from 12.7 MNOK, mainly due to increased stage 3 write-downs in the corporate portfolio.

• Earnings per equity certificate were NOK 7.81, up from NOK 6.96 year-over-year.

Outlook and guidance

• The board expects credit losses to normalize at moderate levels, with good loan portfolio quality.

• The bank targets a 10% return on equity and a cost/income ratio below 45%.

• Organic loan growth of 6% is planned for 2024, with annualized growth at 8.3% by Q3.

• Dividend policy remains at 70-100% payout, subject to capital and strategic plans.