JFrog stock rises as Cantor Fitzgerald maintains Overweight rating after strong Q2
Introduction & Market Context
Skue Sparebank (OB:SKUE) presented its second quarter 2025 results on August 14, showing substantial year-over-year growth in profitability as the bank continues its expansion strategy. The stock traded at 316.7 NOK, up 0.73% on the day of the presentation, reflecting positive investor sentiment toward the results.
The Norwegian regional bank reported a 41.8% increase in profit before tax, reaching 220.0 million NOK compared to 155.1 million NOK in the same period last year. This performance comes as the bank advances its merger with Tinn Sparebank, which was approved at the general meeting on June 26, 2025, and is expected to close around November 3, 2025.
Executive Summary
Skue Sparebank’s Q2 2025 results demonstrated strong performance across key financial metrics, with the bank meeting or exceeding all of its economic objectives for the quarter. The bank maintained its return on equity at 10%, improved its cost percentage to 37% (below the 38% target), and significantly strengthened its consolidated Tier 1 capital ratio to 21.6%, well above the 16.7% target.
As shown in the following summary of Q2 performance and objectives:
The bank’s growth strategy is proceeding on two tracks – through organic growth in its core markets and strategic expansion via the merger with Tinn Sparebank. Management highlighted continued strong lending growth in the personal market, stable net interest income, good earnings contributions from the Eika Group, and increased solidity following the implementation of CRR3 regulatory requirements.
Quarterly Performance Highlights
Skue Sparebank’s financial results showed significant improvement across most metrics. Net interest income reached 270.2 million NOK, a 32.3% increase compared to Q2 2024, while maintaining a stable net interest margin of 2.33%. Commission income grew by 47.7% to 48.3 million NOK, and dividend income more than doubled, increasing by 145.8% to 41.6 million NOK.
The detailed financial results show substantial growth in both income and profitability:
Total assets increased by 32.1% year-over-year to 23.6 billion NOK, while equity grew by 36.0% to 3.1 billion NOK. Customer deposits rose by 38.5% to 15.3 billion NOK, and gross loans increased by 27.0% to 18.7 billion NOK. Including loans transferred to Eika Boligkreditt, the bank’s operating capital reached 29.4 billion NOK, representing a 42.9% increase from the previous year.
The bank’s balance sheet reflects both organic growth and the impact of merger activity:
The profit before tax has shown consistent growth over recent years, with Q2 2025’s 220.0 million NOK representing a significant improvement over the 155.1 million NOK recorded in Q2 2024:
Net interest income has remained stable at 2.33% compared to the same period last year, with a slight increase of 1.8% compared to the previous quarter:
Strategic Initiatives
The merger with Tinn Sparebank represents a key strategic initiative for Skue Sparebank, expanding its geographical footprint and customer base. The merger, which is still subject to approval from the Financial Supervisory Authority, will transfer all assets, rights, and obligations of Tinn Sparebank to Skue Sparebank.
The following map illustrates the expanded geographical coverage resulting from the merger:
The bank’s lending portfolio remains heavily weighted toward the personal market at 70.5%, with real estate operations representing the largest business segment at 16.1%. Lending growth including Eika Boligkreditt reached 3.6% year-to-date, slightly lower than the 4.9% recorded in the same period last year.
The business market segment has grown to represent 30% of the bank’s balance sheet, up from 27.8% in 2021, indicating a strategic shift toward increased commercial lending. However, the year-to-date lending growth shows divergence between segments, with the personal market growing by 4.7% while the business market contracted slightly by 0.1%.
Forward-Looking Statements
Skue Sparebank’s management expressed confidence in the bank’s dual-track growth strategy, highlighting that "the good lending growth in the personal market has continued through the second quarter and the bank continues to gain market share in the bank’s core area."
The merger process with Tinn Sparebank is proceeding as planned, with an expected closing date around November 3, 2025. Management characterized this merger, along with the bank’s organic lending growth, as "clear evidence that the bank continues its development through both organic and strategic growth."
The bank’s capital position has strengthened significantly, with the consolidated Tier 1 capital ratio improving to 21.62% from 18.90% a year earlier, providing a solid foundation for continued growth and potential future acquisitions. This improvement is partly attributed to the implementation of CRR3 regulatory requirements.
With deposit growth outpacing the previous year (3.2% vs 2.5%) and a well-diversified loan portfolio, Skue Sparebank appears well-positioned to continue its expansion strategy while maintaining strong financial performance.
Full presentation:
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