SpareBank 1 Sør-Norge (SB1NO) investor relations material

Executive summary

• Strong loan growth and cost control characterized the quarter, with a 2.6% quarterly loan growth and 2.5% deposit growth in the personal market and 3.3% in the corporate market.

• Return on equity after tax reached 12.7% for Q2 2026 (13.6% excluding goodwill from the merger).

• The merger with EM1 Telemark was completed in April, and organizational restructuring is now operational.

• Significant digitalization and efficiency gains, including AI-driven customer meeting logs saving 10,000 hours.

• Pre-tax profit for Q2 2026 was NOK 2,082 million, up NOK 76 million from the previous quarter and NOK 32 million year-over-year, driven by strong lending growth, increased commission income, and cost control despite margin pressure.

Financial highlights

• Net profit after tax for Q2 2026 was NOK 1,677 million, with earnings per share at NOK 4.3.

• Net interest income for the quarter was NOK 2,146 million, down 1.6% from the previous quarter and NOK 164 million year-over-year due to margin pressure.

• Net commission and other income increased by 11% sequentially to NOK 888 million.

• Cost/income ratio improved to 37.8%.

• Loan loss provisions were NOK 54 million, down from NOK 59 million in Q1 2026 and NOK 76 million in Q2 2025; net loan loss ratio was 0.05% of gross loans.

Outlook and guidance

• Long-term target for return on equity is above 14%.

• Cost/income ratio target is below 35%.

• Annual synergy effects from the merger are expected to reach NOK 550 million by 2026.

• Dividend payout policy is around 50% of annual profit, supplemented by share buybacks.

• Economic outlook is stable but cautious, with moderate growth, persistent inflation, and sector-specific challenges in construction.