SPAREBANK 1 NORD-NORGE (NONG) Q2 2024 earnings summary

Executive summary

• Pre-tax profit YTD reached NOK 1,889 million, up from NOK 1,641 million year-over-year, with ROE at 18.2% versus 16.1% last year.

• Profit after tax for 2Q24 was NOK 753 million, up from NOK 559 million in 2Q23, driven by robust banking operations and growth in both deposits and lending.

• Return on equity reached 18.9% in 2Q24, well above the Group's target, with a cost/income ratio of 33.1%.

• Lending growth of 3.8% for the quarter, with 2.9% in Corporate Market and 4.3% in Retail Market, despite a challenging macroeconomic environment.

• Net losses amounted to NOK 51 million YTD, compared to a net recovery of NOK 27 million last year.

Financial highlights

• Net interest income for 2Q24 was NOK 995 million, up from NOK 855 million in 2Q23; YTD NOK 1,981 million (NOK 1,675 million).

• Total income for 2Q24 was NOK 1,487 million, with result before tax at NOK 973 million.

• Cost/income ratio for 2Q24 was 33.1%, an improvement from 35.9% in 2Q23.

• Annualized loan losses for the group were 0.13% of gross lending.

• Operating costs for 2Q24 were NOK 489 million (NOK 430 million); YTD NOK 977 million (NOK 851 million).

Outlook and guidance

• Interest rates are expected to remain higher for longer, with the first cut now anticipated in March 2025.

• Lending growth for 2024 is expected at 2-4% in Retail Market and 4-7% in Corporate Market, though uncertainty has increased.

• Targeted ROE remains above 13%, with actual Q2 ROE at 18.9%; CET1 target is one percentage point above the 14.8% regulatory minimum.

• Cost/income ratio target remains below 40%, with current performance well within target.

• The Group is well positioned to continue taking market share and expects good future prospects.