TOTENS SPAREBANK (TOTG) Q2 2024 earnings summary

Executive summary

• Group net profit for H1 2024 was NOK 161.6m, nearly flat year-over-year; Q2 net profit was NOK 90.4m, down from NOK 102.7m in Q2 2023.

• Return on equity (excl. hybrid capital) for H1 2024 was 12.3%, compared to 13.2% in H1 2023.

• Net interest income for H1 2024 increased to NOK 268.0m from NOK 250.5m in H1 2023.

• The announced merger with Sparebank 1 Østlandet is targeted for completion on November 1, 2024, pending regulatory approval.

Financial highlights

• Q2 2024 net interest income was NOK 134.5m, up slightly from NOK 133.5m in Q1 2024 and NOK 133.6m in Q4 2023.

• Q2 2024 net commission and other income was NOK 43.0m, down from NOK 59.7m in Q2 2023, mainly due to lower dividends from Eika Gruppen.

• Q2 2024 operating expenses were NOK 57.1m, up from NOK 52.3m in Q2 2023.

• Q2 2024 loan losses were NOK 6.9m, down from NOK 9.2m in Q2 2023.

• Customer deposits grew 7.2% year-over-year; net lending to customers increased 0.8% year-over-year, or 4.1% including loans brokered to Eika Boligkreditt.

Outlook and guidance

• Underlying costs are expected to rise in coming quarters due to inflation and wage settlements.

• Net interest margin is expected to remain relatively stable, but strong competition and low credit growth may pressure margins over time.