SPAREBANKEN ØST (SPOG) Q2 2024 earnings summary

Executive summary

• Return on equity reached 11.5% in Q2 2024, surpassing the new 10% long-term target and up from 9.6% in Q2 2023.

• Net profit for Q2 2024 was NOK 134 million, up from NOK 98 million in Q2 2023.

• Net interest income increased, with a margin of 2.07% of average assets, and NOK 239.8 million in Q2 2024.

• Cost-to-income ratio improved to 30.4% in Q2 2024 from 34.6% a year earlier.

• Credit losses and non-performing loans remained low, with high capital adequacy and CET1 ratio of 18.6%.

Financial highlights

• Net profit after tax for Q2 2024 was NOK 134 million, up from NOK 98 million in Q2 2023.

• Net interest income for H1 2024 was NOK 829 million, up from NOK 686 million in H1 2023.

• Cost-to-income ratio for H1 2024 was 32.5%, down from 35.0% in H1 2023.

• Loan growth over the last 12 months was 3.0%; deposit growth was 6.6%.

• Earnings per equity certificate: NOK 1.73 in Q2 2024 (up from NOK 1.42).

Outlook and guidance

• Expects loan growth in line with national credit growth over time.

• High competition in the mortgage market is expected to pressure lending margins.

• Deposit margins remain high but are expected to decline as money market rates fall.

• Cost control remains strong, but inflation, wage growth, and IT costs will impact expenses.

• Basel 4 is expected to improve competitiveness and capital efficiency for standard method banks.