Bullish indicating open at $55-$60, IPO prices at $37
Introduction & Market Context
Rogaland Sparebank (ROGS) presented its second quarter 2025 results on August 13, 2025, highlighting strong financial performance one year after completing its merger with Hjelmeland Sparebank. The bank reported significant improvements in profitability metrics while maintaining a solid capital position in a market characterized by Norges Bank interest rate cuts and housing price growth.
The bank’s stock closed at NOK 144.20 on August 12, 2025, down 1.23% for the day, but remains closer to its 52-week high of NOK 156 than its low of NOK 101.02.
Quarterly Performance Highlights
Rogaland Sparebank reported profit after tax of NOK 279.7 million for the first half of 2025, compared to NOK 226.0 million in the same period last year, representing a 24% increase. Return on equity after tax improved to 13.7% from 12.8% previously, while earnings per equity certificate (EPS) rose to NOK 7.4 from NOK 6.8.
As shown in the following summary of first half results:
The bank achieved lending growth of 8.6% over the past 12 months, or 16.9% including the effect of the merger with Hjelmeland Sparebank. The net interest margin remained stable at 1.94%, while the CET1 capital ratio strengthened to 18.8% from 17.5% previously.
Merger Integration Progress
August 2025 marked one year since the merger between Sandnes Sparebank and Hjelmeland Sparebank to form Rogaland Sparebank. According to the presentation, the integration has progressed well, with technical conversion completed "in record time" and high reported customer satisfaction across the bank’s expanded market area.
The bank has invested in the Ryfylke region with more employees and upgraded offices in Hjelmeland and Jørpeland. It has also established Aktiv Rogaland, combining real estate agency and banking services in the same location. Management reported that employees are satisfied following the merger, suggesting smooth cultural integration.
Detailed Financial Analysis
Rogaland Sparebank’s return on equity has shown consistent improvement over recent years, rising from 9.7% in 2021 to 13.7% in the first half of 2025. The quarterly ROE has stabilized around 13.8% in the first two quarters of 2025, as illustrated in the following chart:
The bank’s net interest margin has remained relatively stable, hovering around 1.94-1.95% annually since 2024, though the quarterly figure for Q2 2025 dipped slightly to 1.89%:
Lending growth has been particularly strong in the retail segment, which now accounts for 75% of the bank’s total lending portfolio. Retail lending increased by NOK 2.1 billion (9.3%) over the past 12 months, while corporate lending grew by NOK 0.5 billion (6.4%). This shift toward retail lending has strategic benefits, as the bank noted that "volume growth in the private market and SMEs requires less capital."
The bank’s lending portfolio shows a conservative risk profile, with 75% exposure to retail customers and only 15% to commercial real estate. Within the real estate segment, the majority (59%) is in commercial rental properties, with limited exposure to development projects:
Operating costs increased to MNOK 208.1 in the first half of 2025 from MNOK 169.6 previously, with the bank attributing approximately 10% of the cost base increase to the merger. Despite this, the cost-to-income ratio for banking operations in the first half of 2025 was a healthy 37%.
Capital Position and Outlook
Rogaland Sparebank maintains a strong capital position with a CET1 ratio of 18.8%, well above both regulatory requirements and its internal target of 16.8%. This positions the bank well for continued growth and potential regulatory changes, including the implementation of the new standard approach (CRR3) expected from April 2025.
For the 2025-2028 strategic period, the bank has set ambitious financial targets, including return on equity above 11%, dividend payout ratio between 50-100%, profitable growth exceeding 5%, and maintaining CET1 above 16.8%. Based on first half 2025 results, the bank is currently exceeding these targets.
The bank highlighted its focus on fraud prevention as an important community initiative, noting that fraud methods are becoming more sophisticated with advanced artificial intelligence. Rogaland Sparebank has implemented AI tools to detect and stop suspicious transactions and has conducted fraud prevention courses throughout its market areas over the past six months.
With its strong capital position, improving profitability metrics, and successful merger integration, Rogaland Sparebank appears well-positioned to continue its growth trajectory while maintaining its focus on being a local, personal banking alternative in its market area.
Full presentation:
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