SPAREBANK 1 SMN (MING) Q4 2024 earnings summary

Executive summary

• Achieved return on equity of 14.4% in Q4 and 16.6% for 2024, with net profit of NOK 1,052m in Q4 and NOK 4,591m for 2024, driven by high revenues and gains from the Fremtind/Eika Insurance merger.

• Strengthened market position in Mid-Norway through new initiatives, digital solutions, and the "One SMN" financial house concept.

• Lending grew 5.5% and deposits 6.0% year-over-year; retail lending up 5.0%, corporate lending up 7.5%.

• Board proposes a record-high dividend of NOK 12.50 per equity certificate and NOK 896 million as community dividend, with a payout ratio of 61%.

• CET1 ratio at year-end was 18.3%, well above regulatory requirements.

Financial highlights

• Profit after tax reached NOK 1,052 million in Q4 and NOK 4,591 million for 2024, up from NOK 3,688 million in 2023.

• Net interest income for 2024 was NOK 5,373 million, up from NOK 4,732 million in 2023; operating income rose to NOK 7,766 million.

• Total operating expenses increased to NOK 3,300 million in 2024, with Q4 costs impacted by higher capital tax and national insurance contributions.

• Loan losses totaled NOK 176 million for 2024, with a loan loss ratio of 0.05% in Q4.

• Net return on financial investments for 2024 was NOK 1,357 million, up from NOK 699 million.

Outlook and guidance

• Expecting further reduction in cost growth in 2025 and moderate cost growth; cost-income ratio remains a key focus.

• Well-equipped to handle market volatility, with a robust loan portfolio and conservative provisions.

• Expectation of lower interest rates and increased household purchasing power in 2025.

• Risk picture in the loan portfolio is satisfactory, though uncertainty persists in construction and retail trade.

• Long-term CET1 target set at 16.3%; dividend policy of distributing about half of net profit remains.