SPAREBANK 1 NORD-NORGE (NONG) Q3 2024 earnings summary

Executive summary

• Pre-tax profit YTD reached NOK 3,441 million, up from NOK 2,345 million year-over-year, with strong profitability and capital position.

• Profit after tax for Q3 2024 was NOK 1,344 million, up from NOK 512 million in Q3 2023, driven by robust banking operations and a significant one-off gain from the Fremtind/Eika transaction.

• Return on equity (ROE) YTD was 22.9%, significantly higher than 15.6% in the same period last year.

• Cost/income ratio improved to 28.5% YTD from 34.5% last year, and to 23.0% in Q3 2024, reflecting effective cost control.

• Loan growth was strong in both retail (7.5% annualized) and corporate (7.0% annualized) markets, with the group gaining market share.

Financial highlights

• Net interest income for 3Q24 was NOK 1,020 million, up from NOK 955 million in 3Q23; YTD net interest income was NOK 3,001 million.

• Net income from financial investments YTD was NOK 910 million, including a NOK 452 million gain from the Fremtind/Eika transaction.

• Total income in 3Q24 was NOK 2,061 million, with result before tax at NOK 1,552 million.

• Result after tax YTD was NOK 2,811 million; EPS YTD was NOK 12.51.

• CET1 ratio at quarter-end was 16.6%, slightly above the targeted 15.8%.

Outlook and guidance

• Lending growth expected at 2-4% for retail and 4-7% for corporate in 2024, with a slowdown in corporate loan demand anticipated.

• Interest margin expected to remain stable, with no significant weakening in NII anticipated for 2024.

• Targeted ROE remains above 13%, with CET1 ratio targeted at 15.8% and cost/income below 40%.

• Dividend payout ratio target above 50% is maintained.

• Interest rate cuts are anticipated in Norway in 2025, which may support housing and vulnerable industries.