Record-breaking annual results and all-time high gift fund allocation

That is what CEO Geir Bergskaug states as he presents a Q4 pre-tax profit of NOK 552 million. This contributes to a record-high annual pre-tax profit of NOK 2,457 million and a solid return on equity of 12.1 percent.

– "The board has proposed a significant increase in the gift fund allocation, amounting to NOK 348 million. By comparison, last year’s allocation was NOK 208 million. It is gratifying to share the surplus when the bank is doing well, and a solid gift fund creates great opportunities for growth and development in our region and local communities."

Solid growth in 2024

Following a period of interest rate hikes, Norges Bank kept the key policy rate unchanged throughout 2024. Higher interest rates and strong lending and deposit growth contributed to a solid increase in net interest income, which increased from NOK 3,043 million in 2023 to NOK 3,315 million in 2024.

– "We have seen a flattening in net interest income growth in Q4, while experiencing solid lending and deposit growth throughout the year. The 12-month lending growth stands at 4.6 percent, and deposit growth is at 7.1 percent. We see positive results from this, though there is also pressure on deposit margins in the retail market," says Bergskaug.

The bank’s deposit-to-loan ratio remains strong at 55.6 percent.

Low loan losses and high dividends

In 2024, the bank recorded net loan losses of NOK 75 million, compared to NOK 49 million in 2023.

– "We continue to see low losses, although certain sectors, including the building and construction industry, have faced challenges over time."

Operating costs in Q4 were affected by ongoing integration projects related to the merger with Sparebanken Vest. Despite this, the bank recorded a decrease in operating expenses compared to Q4 2023.

– "The results are strong, and the cost-income ratio is low. This allows us, once again, to distribute a solid customer dividend and allocate a record-high amount to the gift fund and charitable causes in the region."

The board proposes allocating NOK 348 million to the gift fund, up from NOK 208 million the previous year, and NOK 416 million for customer dividends. A dividend of NOK 12.21 per equity certificate will be distributed, representing 67% of the group’s earnings per equity certificate.

– "Everything is on track for us to succeed with our ambitious goals for the merger between Sparebanken Sør and Sparebanken Vest. Our integration program is progressing well, and we are strategically and operationally on course to become Norway’s leading savings bank as Sparebanken Norge from May 2," concludes Bergskaug.

A fight for the savings bank model

The Savings Bank Committee presented its proposals in November 2024. In Bergskaug’s view, the overall proposals would weaken the equity certificate as a financial instrument and threaten the savings bank model, which has served both customers and local communities for over 200 years. The committee also proposes eliminating the ability to distribute customer dividends.

– “If politicians approve the committee’s legislative proposals, it could have significant consequences for the savings bank model and Norway’s banking structure as we know it today. One possible outcome is a large-scale conversion to commercial banks,” says Bergskaug.

Key figures from the preliminary 2024 annual report (2023 figures in parentheses):

Pre-tax profit: NOK 2,457 million (NOK 2,227 million)

• Return on equity: 12.1 percent (11.3 percent)
• Net interest income: NOK 3,315 million (NOK 3,043 million)
• Net commission income: NOK 424 million (NOK 400 million)
• Net income from financial instrument: NOK 28 million (NOK 3 million)
• Income from associated companies: NOK 128 million (NOK 99 million)
• Operating costs: NOK 1 380 million (NOK 1 297 million)
• Net loan losses: NOK 75 million (NOK 49 million)
• Lending growth of 4.6 percent
• Deposit growth of 7.1 percent

Key figures from Q4 2024 (Q4 2023 figures in parentheses):

• Pre-tax profit: NOK 552 million (NOK 543 million)
• Return on equity: 9.8 percent(10.5 percent)
• Net interest income: NOK 829 million (NOK 815 million)
• Net commission income: NOK 118 million (NOK 105 million)
• Net income from financial instrument: NOK -41 million (NOK -13 million)
• Income from associated companies: NOK 36 million (NOK 33 million)
• Operating costs: 368 mill. kr (NOK 370 million)
• Net loan losses: NOK 33 million (NOK 31 million)