SpareBank 1 Helgeland Q1 2025 presentation: Profit rises 6% amid strategic repositioning

Introduction & Market Context

SpareBank 1 Helgeland (OB:HELG) presented its first quarter 2025 results on May 12, showing a 6% year-over-year increase in profit before tax to 190 million Norwegian kroner. The regional Norwegian bank maintained its return on equity at 12.3% while executing significant strategic investments to strengthen its position within the SpareBank 1 alliance.

The bank’s stock has performed well recently, with shares trading at 170.68 NOK as of May 8, representing a 5.36% increase. This positive market reaction aligns with the bank’s stable financial performance and strategic positioning for future growth.

Quarterly Performance Highlights

SpareBank 1 Helgeland reported solid financial metrics for Q1 2025, maintaining profitability while managing a strategic shift in its loan portfolio from business to personal customers.

As shown in the following key financial highlights:

The bank’s profit before tax reached 190 million NOK, up from 179 million NOK in the same period last year. Return on equity remained stable at 12.3%, aligning with the bank’s long-term target of exceeding 12%. Total (EPA:TTEF) assets under management increased to 39.0 billion NOK from 37.4 billion NOK a year earlier.

Notably, loan losses decreased significantly to 19 million NOK from 53 million NOK in Q1 2024, indicating improved credit quality. The bank maintained a strong capital position with a Core Tier 1 ratio of 17.6%, slightly down from 17.7% but still comfortably above its target of 16.5%.

Detailed Financial Analysis

The quarterly financial performance shows consistent results across key metrics, with some seasonal fluctuations:

Net interest income for Q1 2025 was 236 million NOK, representing a decrease from 254 million NOK in Q4 2024. Net commission income also declined quarter-over-quarter to 39 million NOK from 47 million NOK. However, these decreases were partially offset by strong performance in financial investments, which contributed 37 million NOK to the quarterly result, a significant increase from 7 million NOK in the previous quarter.

The bank’s earnings summary highlights that quarterly results were significantly influenced by dividends from product companies:

"Netto resultat fra finansielle eiendeler og forpliktelser på 37 mill. kr., en økning på 30 mill. kr. fra med forrige kvartal. Utbytte fra produkt- og allianseselskaper på 32 mill. kr."

Operating expenses remained stable at 106 million NOK, unchanged from the previous quarter, demonstrating effective cost control.

The bank’s profit development shows a consistent upward trend:

Strategic Initiatives

A key strategic development in Q1 2025 was SpareBank 1 Helgeland’s increased ownership in the SamSpar group of companies, representing a significant investment to strengthen future income streams:

After an investment of 361 million NOK planned for Q2 2025, the bank will increase its ownership in Samarbeidende Sparebanker AS from 4.09% to 11.47%, in SpareBank 1 Samspar from 4.51% to 11.94%, and in Samarbeidende Sparebanker Utvikling DA from 5.31% to 14.84%. This strategic move will increase the bank’s indirect ownership in SpareBank 1 Gruppen AS from 0.80% to 2.24%.

This investment aligns with the bank’s long-term financial targets:

The bank maintains ambitious but realistic financial targets, including a return on equity above 12%, Core Tier 1 capital above 16.5%, a cost-to-income ratio below 40%, and a minimum dividend payout ratio of 50%.

Forward-Looking Statements

SpareBank 1 Helgeland’s loan portfolio shows a strategic shift toward the personal market, with 12-month personal loan growth of 8.3% compared to a 1.6% decline in business loans. This rebalancing appears to be a deliberate strategy to focus on the more stable personal banking segment while being more selective in business lending.

The bank’s strong capital position, with a Core Tier 1 ratio of 17.6%, provides a solid foundation for both organic growth and strategic investments. The increased ownership in SamSpar companies positions the bank to benefit from broader alliance activities and potentially increase non-interest income in future quarters.

While the presentation did not provide specific guidance for the remainder of 2025, the consistent quarterly performance and strategic positioning suggest the bank is on track to meet its long-term financial targets in a challenging but stabilizing interest rate environment.

Full presentation:

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