SpareBank 1 Sør-Norge (SB1NO) Q3 2025 earnings summary

Executive summary

• Achieved a 13.0% return on equity for Q3 2025, or 14.5% adjusted for one-offs, with strong lending and deposit growth and successful technical and operational merger, transferring over 335,000 customers.

• Pre-tax profit reached NOK 2,120 million, up NOK 280 million year-over-year, with profit after tax at NOK 1,697 million.

• Increased operational synergy target from NOK 300 million to NOK 450 million annually by 2027, with total merger costs now fully realized at NOK 411 million.

• Enhanced dividend policy to distribute at least 50% of annual profit in cash, supplemented by a share buyback program.

• Maintains a well-diversified loan portfolio with strong credit quality and low concentration risk.

Financial highlights

• Net interest income for Q3 2025 was NOK 2,328 million, with total income of NOK 3,549 million and cost-to-income ratio at 37.0%.

• Lending volume grew 4.4% year-over-year to NOK 415 billion; deposit growth was 10.9%.

• Net commission and other income was NOK 778 million, up NOK 84 million year-over-year.

• Net income from financial investments was NOK 443 million, up NOK 171 million year-over-year.

• Impairment losses on loans and financial commitments were NOK 115 million (0.12% of gross lending), down from NOK 166 million year-over-year.

Outlook and guidance

• Well positioned for profitable organic lending growth and strong capital distribution through dividends and buybacks.

• Long-term ROE ambition of at least 14%, expected to be fully realized by 2027 as synergies are implemented.

• CET1 capital ratio target is a minimum of 17.53%, expected to reduce to 17.06% due to regulatory changes.

• Buffer of approximately 50 bps above capital requirements targeted for ongoing capital strength.

• Uncertainty remains due to global trade and geopolitical risks, but local business sentiment is optimistic.