SPAREBANK 1 SMN (MING) Q2 2024 earnings summary

Executive summary

• Q2 2024 delivered strong profitability with 15.4% ROE and NOK 1,015m profit after tax, supported by robust net interest and commission income, and solid ownership results.

• Pre-tax profit for Q2 2024 was NOK 1,296m, up from NOK 1,045m year-over-year.

• All business areas showed satisfactory profitability, with increased results in real estate brokerage and accountancy subsidiaries.

• Loan losses remained moderate and cost development was stable, with comfortable capital headroom and strong liquidity.

• Growth strategy achieved across geographies and customer segments, with increased market share in banking, accounting, and estate agency.

Financial highlights

• Net interest income in Q2 2024 was NOK 1,310m, up NOK 199m year-over-year; commission income rose to NOK 698m, up NOK 138m.

• Operating income reached NOK 2,161m, with pre-loss core business result at NOK 1,190m, and net profit at NOK 1,015m.

• Return on equity was 15.4% in Q2 and 15.6% for H1 2024; CET1 ratio at 18.5%.

• Lending growth was 1.6% in both retail and corporate banking; deposit growth was 3.9% retail and 5.4% corporate.

• Loan losses totaled NOK 47m in Q2, with problem loans at 0.78% of gross lending.

Outlook and guidance

• The group is rigged for growth with good dividend capacity and strong capital position.

• Focus remains on sustainable growth, digitalization, and leveraging the ownership model.

• Financial targets include ROE above 13%, CET1 ratio above 16.3%, and payout ratio around 50%.

• Norges Bank kept the base rate at 4.50% in June, with no immediate rate cuts expected.

• The risk picture remains satisfactory, with moderate loan losses and robust capital and liquidity positions.