Rogaland Sparebank (ROGS) Q1 2025 earnings summary

Executive summary

• Q1 2025 profit after tax reached NOK 139.3 million, up 53% year-over-year, driven by higher net interest income, increased other operating income, and lower tax expense, partially offset by higher operating and credit loss costs.

• Return on equity after tax improved to 13.8% from 10.3% year-over-year, including hybrid capital.

• The bank completed a merger in August 2024, significantly increasing balance sheet size, market presence, and total lending.

• The bank gained market share, especially in the SME segment, and remains highly relevant in its region due to local presence and decision-making.

• Positive development in both banking and real estate services, with increased customer satisfaction and high activity levels.

Financial highlights

• Net interest margin remained strong at 1.99% (1.94% YoY), with net interest income of NOK 198.1 million.

• Earnings per equity certificate was NOK 3.7, up from NOK 2.7 YoY.

• Cost-to-income ratio for banking operations at 39% in Q1 2025; group cost/income ratio at 41%.

• One-time income effect of NOK 17 million from increased value of Vipps ownership; dividend income for Q2 expected at NOK 61 million.

• Costs increased to NOK 100.7 million from NOK 82.2 million YoY, mainly due to merger-related effects.

Outlook and guidance

• Expectation of stable net interest margin in coming quarters, assuming stable interest rate environment.

• Internal CET1 target set at 16.8% from August 2024, with a 1.5% management buffer above regulatory requirements.

• Implementation of new standard method for capital (CRR3) from April 2025 expected to improve CET1 ratio by about 3 percentage points.

• Regional economic outlook remains positive, with high activity in energy-related industries and a strong housing market, though some uncertainty persists due to international trade and labor shortages.

• Anticipation of continued strong position in the region, with focus on local presence and customer relationships.