SpareBank 1 Sør-Norge (SB1NO) Q2 2024 earnings summary

Executive summary

• Achieved strong Q2 2024 results with ROE of 14.6%, cost-to-income ratio at 34.9%, and lending growth of 7.5%, with net profit at NOK 1,162 million and EPS at NOK 4.20.

• Merger with SpareBank 1 Sørøst-Norge is progressing as planned, with legal completion set for October 1, 2024, creating Norway's largest savings bank.

• All regulatory approvals for the merger are in place, with expected capital and cost synergies.

• CEO Benedicte Schilbred Fasmer announced resignation effective December 2024; search for replacement underway.

• Underlying growth supported by increased loan growth, other income, and low loan losses.

Financial highlights

• Loan book reached NOK 285 billion at Q2 end, with 7.5% year-over-year growth; gross loans to customers totaled NOK 284.6 billion.

• Return on equity was 14.6% in Q2, above the 13% target.

• Result before tax was NOK 1,472 million, up 10.2% year-over-year; profit after tax for Q2 was NOK 1,162 million.

• Earnings per share for Q2 2024 was NOK 4.20.

• Cost-to-income ratio improved to 34.9% for the group, down from 39.8% in Q2 2023.

Outlook and guidance

• Confident in completing the merger on schedule, with ambitions for further income synergies and full integration expected by mid-2025.

• Businesses in the region are more optimistic, supporting further growth; subdued housing price growth expected in autumn.

• CET1 capital ratio target is at least 16.40% as of June 2024, rising to 17.40% in Q3 and 17.57% in Q4.

• Norges Bank kept the policy rate at 4.50% and signaled stability ahead.

• Bank continues to gain market share and expects further growth in Southern Norway.