SpareBank 1 Sør-Norge (SB1NO) Q1 2025 earnings summary

Executive summary

• Q1 2025 delivered strong results with pre-tax profit of NOK 2,186 million, up from NOK 1,977 million in Q1 2024, driven by solid operations, higher income, and low loan losses.

• Return on equity after tax was 13.5% (14.7% excluding one-off merger effects and goodwill), with stable earnings and a cost to income ratio of 36.7%.

• Integration of SpareBank 1 Sør-Norge ASA and merger with Eurydica are progressing as planned, with technical integration and real estate broker merger scheduled for September/autumn 2025.

• The bank maintains a strong position in Southern Norway, with a well-diversified loan portfolio and growth opportunities, despite increased market uncertainty.

• Operating in a benign macro environment in southern Norway, with low unemployment and regional diversification.

Financial highlights

• Pre-tax profit reached NOK 2,186 million in Q1 2025, with profit after tax at NOK 1,737 million.

• Return on equity for Q1 2025 at 13.5% (14.7% excluding one-off merger effects and goodwill), cost income ratio at 36.7%, and CET1 capital ratio at 18.3%.

• Lending volume grew 6.5% year-over-year to NOK 408 billion, with retail segment leading at 7.3%; deposit growth was 2.4%.

• Earnings per share for Q1 2025 was NOK 4.37.

• Impairments on lending and financial commitments were low at NOK 23 million (0.03% of gross lending).

Outlook and guidance

• Long-term targets include ROE above 14%, CET1 capital ratio above 17.6%, cost to income below 40%, and a 50% dividend share.

• NOK 300 million operational synergy target remains a key focus, with realization on track by 2027.

• Risk weights for retail segment to increase by 80 basis points from July 1, but expected to be offset by CRR3 relief and IRB Advanced platform application.

• The board expects 2025 to be a good year, though trade turbulence and tariffs could impact inflation and interest rates.

• Capital position provides flexibility for growth or increased distributions to owners.