JÆREN SPAREBANK (JAREN) Q2 2024 earnings summary

Executive summary

• Achieved strong growth in core markets, with 7.3% loan growth and 6.1% deposit growth year-over-year per 30.06.2024.

• Net interest income up 16% year-over-year, driven by higher rates and increased volumes.

• Cost-to-income ratio improved to 36.1% YTD, reflecting stable cost development and efficiency gains.

• Return on equity reached 13.0% YTD, exceeding strategic targets.

• Dividends from Eika Gruppen and tax deductions for customer dividends contributed positively in Q2.

Financial highlights

• Net interest income H1: NOK 202.6 million (H1 2023: NOK 175.4 million); net commission income: NOK 50.3 million (H1 2023: NOK 45.0 million).

• Operating expenses H1: NOK 100.2 million (H1 2023: NOK 99.1 million); cost/income ratio improved to 36.1% (H1 2023: 39.1%).

• Profit after tax H1: NOK 160.2 million (H1 2023: NOK 138.4 million); Q2 after tax: NOK 100.5 million (Q2 2023: NOK 91.6 million).

• Loan loss provisions reversed by NOK 6.0 million in H1, reflecting improved credit quality.

• Net income from financial investments H1: NOK 24.7 million (H1 2023: NOK 32.8 million), mainly due to lower dividends from Eika Gruppen.

Outlook and guidance

• Expectation of stable net interest and commission income in H2 2024.

• Norges Bank's rate path suggests unchanged policy rate through year-end, with possible decline in 2025.

• Continued ambition for loan growth above local market average.

• The bank expects continued uncertainty due to geopolitical tensions, high prices, weak NOK, and high interest rates, but anticipates a gradual reduction in rates from autumn/winter.

• Some increase in defaults is expected, but the bank remains well-positioned in terms of market, liquidity, and solidity.