SPAREBANKEN ØST (SPOG) Q4 2024 earnings summary

Executive summary

• Achieved record annual net profit for 2024 of NOK 523.3 million, up from NOK 440.6 million in 2023, with ROE at 11.77% (vs. 9.87%).

• Proposed dividend of NOK 6.40 per equity certificate, totaling NOK 132.7 million, and NOK 331.4 million in charitable gifts, representing 94.2% of distributable profit.

• Maintained stable cost levels, low loan losses, and high capital adequacy.

• Q4 net profit stable at NOK 112.4 million, with ROE at 9.53%.

• Maintains strong capital position with CET1 ratio at 18.59% and leverage ratio at 8.73%.

Financial highlights

• Net interest income for 2024 reached NOK 932 million, up from NOK 829 million in 2023, with a margin of 2.02% of average assets.

• Net profit after tax for 2024 was NOK 523 million, up from NOK 441 million in 2023.

• Cost/income ratio for 2024 was 34.6%, below the target of 40% and improved from 37.7% in 2023.

• Loan losses remained low at NOK 14 million (0.03% of net loans), with cost of risk at 0.04%.

• Net loans to customers decreased by 2.3% YoY to NOK 37.0 billion; customer deposits increased by 6.4% to NOK 16.9 billion.

Outlook and guidance

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

• Maintains long-term ROE target of 10% and dividend policy aiming for up to 100% payout in the short term.

• High competition in mortgage lending expected to pressure margins; deposit margins to remain high but may decrease with lower market rates.

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

• Board sees limited impact from macroeconomic uncertainty and expects continued low risk in the loan book.