SpareBank 1 Sør-Norge (SB1NO) Q4 2024 earnings summary

Executive summary

• Completed merger between SpareBank 1 SR-Bank and SpareBank 1 Sørøst-Norge on October 1, 2024, forming SpareBank 1 Sør-Norge ASA, with integration and operational synergies expected by 2027.

• Acquired Kaland & Partners and Ullevaal Eiendomsmegling, and opened a new branch, strengthening presence in southern Norway and real estate services.

• Launched new digital services and sharpened climate targets as part of strategic initiatives.

• Board proposes a dividend of NOK 8.50 per share for 2024, up from NOK 7.50.

• Goodwill of NOK 3.5 billion recognized post-merger, impacting ROE by 0.8%.

Financial highlights

• Full-year 2024 return on equity was 13.4% (14.0% adjusted), with Q4 at 10.9% (12.3% adjusted for merger costs and goodwill).

• Lending growth of 7.4% year-over-year, with gross loans at NOK 405 billion; SME/agriculture lending grew 13.1%.

• Net interest income for Q4 2024 was NOK 2,312 million; full-year net interest income was NOK 9,119 million.

• Cost to income ratio for 2024 was 37.4%, below the 40% target.

• Earnings per share for 2024 was NOK 16.3 (pro forma) and NOK 13.08 (reported); dividend payout ratio at 49.6%.

Outlook and guidance

• Long-term ROE target set at above 14%, with cost/income ratio below 40% and CET1 capital ratio above 17.56%.

• Operational synergies target increased to NOK 300 million annually by 2027.

• Focus on profitable growth, cost efficiency, and maintaining strong capital position.

• Guidance for lower volume growth ahead, prioritizing profitability over volume.

• Board expects improved activity in 2025, especially in Rogaland, Greater Oslo, and Vestland.