SpareBank 1 Sør-Norge (SB1NO) Q2 2025 earnings summary

Executive summary

• Achieved strong operational results in Q2 2025, with robust growth in lending and deposits, and high activity across segments.

• Integration of SpareBank 1 Sør - Norge is progressing as planned, with technical merger set for September 2025.

• Pre-tax profit for Q2 2025 was NOK 2,050 million, with profit after tax at NOK 1,668 million, reflecting strong operations despite one-off merger and legal costs.

• Return on equity after tax was 12.9% (14.9% adjusted for merger effects); earnings per share for Q2 2025 was NOK 5.0.

• Business optimism remains high in Southern Norway, with low unemployment and stable macroeconomic conditions.

Financial highlights

• Q2 2025 profit after tax reached NOK 1,668 million; pre-tax profit was NOK 2,050 million.

• Total income for Q2 2025 was NOK 3,540 million, up from NOK 2,419 million in Q2 2024.

• Cost to income ratio was 39.9% (35.9% adjusted for one-offs); CET1 capital ratio at 18.63%.

• Lending volume grew 5.5% year-over-year to NOK 413 billion; deposit growth at 8.4%.

• Earnings per share for Q2 2025 was NOK 5.0.

Outlook and guidance

• Board expects 2025 to be a strong year, targeting return on equity above 14% and cost to income below 40%.

• Expects to realize NOK 300 million in annual operational synergies by 2027.

• CET1 capital ratio target set at minimum 17.55%, expected to reduce to 17.08% following regulatory changes.

• Dividend policy aims for 50% payout of annual profit, with a share buy-back program planned.

• Economic outlook is positive, with companies in the market area expecting higher employment and revenue, though macro uncertainty remains.