Rogaland Sparebank (ROGS) Q4 2024 earnings summary

Executive summary

• Rogaland Sparebank completed a successful merger with Hjelmeland Sparebank in 2024, resulting in strong financial performance and a new strategic direction for 2025-2028.

• The merger was accounted for under IFRS 3, with a one-time negative goodwill (badwill) of NOK 73.7 million recognized as income.

• Profit after tax reached NOK 457.6 million in 2024, with a return on equity (ROE) of 12.2%, up from 9.9% the previous year.

• Lending growth was 15.7% year-over-year, driven by both organic growth and merger effects.

• The bank aims for growth and improved profitability, targeting a leading position in Rogaland, with a market area covering Ryfylke and Nord Jæren.

Financial highlights

• Net interest margin improved to 1.95% in 2024, compared to 1.85% in 2023.

• Earnings per equity certificate (EPS) rose to NOK 12.4 from NOK 10.0 year-over-year.

• Proposed dividend payout is 75% of profits, with NOK 9.5 per equity certificate.

• Operating costs increased to NOK 415.0 million, mainly due to merger-related expenses of NOK 44.6 million.

• Net losses on loans were NOK 23.6 million, up from NOK 10.6 million in 2023, but losses remain low as a percentage of gross lending.

Outlook and guidance

• New financial targets for 2025-2028: ROE above 11%, lending growth above 5%, and dividend payout between 50%-100%.

• CET1 target set at less than 1.5% above legal requirements, currently at 16.8%.

• The bank expects continued stable net interest margins, assuming stable market rates.

• Rogaland's economy remains robust, with high activity in the energy sector and a strong housing market.

• Focus on profitable growth, customer experience, and social responsibility in the new strategy period.