Report
Håkon Astrup
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Sparebanken Sør (Hold, TP: NOK105.00) - Solid quarter despite NIBOR headwind

Q2 ROE was 10.1% with pre-tax profit 9% above consensus, primarily driven by stronger than expected NII and still-resilient asset quality. We have made minor revisions to our estimates and raised 2019–2020e EPS by c0–1%. We continue to consider SOR fairly valued at 2019e P/E of 8.9x and P/B of 0.8x given a c9% ROE. We reiterate our HOLD recommendation and our NOK105 target price.
Underlying
Sparebanken Sor

Sparebanken Sor (the Bank), formerly Sparebanken Pluss, is a Norway-based regional bank. In December 2013, the Company merged with Sparebanken Sor. It is engaged in the provision of both financial and banking products and services to individual and corporate customers. The Bank's offering includes such products and services as credit cards, loans, foreign exchange, different types of insurance, savings accounts, payment services and pension funds, as well as the NettBank online banking facility. The Bank is active through around 30 branches in the West-Agder area, the East-Agder area and Telemark. The Company's subsidiaries are Sormegleren and Sor Boligkreditt AS.

Provider
DnB Markets
DnB Markets

DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.

 

Analysts
Håkon Astrup

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