SPAREBANKEN ØST (SPOG) Q3 2024 earnings summary

Executive summary

• Net profit for Q3 2024 reached NOK 128.9 million, up NOK 9.4 million year-over-year, with ROE at 10.8%, exceeding the long-term target of 10%.

• Year-to-date profit is NOK 411 million, an increase of NOK 83.2 million from the same period in 2023, with ROE at 11.88%.

• The bank maintains high capital adequacy and low credit risk, positioning itself among Norway's most solid banks.

• Cost levels reduced, with cost-to-income ratio improving to 35.0% from 36.2% year-over-year.

• Loan losses and defaults remained low, and capital adequacy stayed robust at 22.0%.

Financial highlights

• Net interest income for Q3 2024 was NOK 239 million, up from NOK 224 million in Q3 2023; net interest margin rose to 2.06%.

• Net commission income increased to NOK 10.5 million, while other operating income was NOK 22.7 million.

• Operating expenses decreased to NOK 80 million in Q3 2024, with cost-to-income ratio at 35.0%.

• Loan losses were minimal at NOK 2.2–4.8 million, mainly due to a specific retail loan and lower reversals in AS Financiering.

• Year-to-date net interest income reached NOK 702.4 million, up NOK 89.5 million from 2023.

Outlook and guidance

• The bank targets a long-term ROE of 10% and expects Basel IV from January 2025 to improve competitiveness.

• Focus remains on profitable, sustainable lending growth, innovation, and cost control.

• Deposit margins expected to remain high but may decrease as money market rates fall.

• Loan losses are expected to stay low; the bank is well positioned for macroeconomic and regulatory uncertainty.

• The board sees the bank as well-capitalized and positioned for future lending growth and dividend capacity.