SpareBank 1 Sør-Norge (SB1NO) Q3 2025 earnings summary

Executive summary

• Achieved a 13.0% return on equity for Q3 2025, or 14.5% excluding one-off effects, with strong lending and deposit growth in key segments; pre-tax profit reached NOK 2,120 million, up NOK 280 million year-over-year.

• Completed technical and operational merger, migrating over 335,000 customers and integrating accounting and real estate businesses, realizing significant operational synergies.

• Synergy estimate from the merger raised to NOK 450 million annually by 2027.

• Enhanced dividend policy to distribute at least 50% of annual profit in cash, supplemented by a share buyback program.

• Maintains a well-diversified loan portfolio with low concentration risk and strong credit quality.

Financial highlights

• Pre-tax profit for Q3 2025 was NOK 2,120 million, with net interest income of NOK 2,328 million and total income of NOK 3,549 million.

• Cost-to-income ratio at 37.0%, reflecting high cost efficiency; CET1 capital ratio at 18.5%.

• Lending volume grew 4.4% year-over-year to NOK 415 billion; deposit growth was 10.9%.

• Impairments on loans and financial commitments were NOK 115 million, or 0.12% of gross lending, down from NOK 166 million year-over-year.

• Net commission and other income was NOK 778 million, up NOK 84 million year-over-year.

Outlook and guidance

• Well positioned for profitable organic lending growth and strong capital distribution, with a long-term ROE ambition of at least 14% by 2027.

• CET1 capital ratio target is a minimum of 17.53%, expected to reduce to 17.06% due to regulatory changes.

• Buffer of approximately 50 basis points above capital requirements targeted.

• Ready to further reduce costs if corporate sector growth does not materialize.

• Uncertainty remains due to global trade and geopolitical risks, but local business sentiment is optimistic.