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Introduction & Market Context
SpareBank 1 SMN (MING) reported strong first-quarter results for 2025, with a return on equity of 14.0%, exceeding its 13% target. The bank’s shares closed at 193.14 NOK on May 7, 2025, representing a 0.78% increase on the day before the presentation and reflecting investor confidence in the bank’s performance.
CEO Jan-Frode Janson presented the results on May 8, 2025, highlighting the bank’s solid financial performance, strategic expansion initiatives, and focus on digital transformation in an environment of global uncertainty.
Quarterly Performance Highlights
SpareBank 1 SMN delivered a profit after tax of 1,004 million NOK in Q1 2025, maintaining its position as the leading financial institution in Mid-Norway. The bank achieved a return on equity of 14.0%, well above its target of 13%, while keeping its cost-to-income ratio at 35.7%, comfortably below the 40% target.
As shown in the following chart of financial goals achievement, the bank has consistently performed well across its key metrics:
The bank reported loan losses of just 21 million NOK, indicating strong credit quality in its portfolio. Loan growth was modest in the retail segment at 0.2%, while the corporate segment saw a slight decline of 0.9%. However, deposit growth was robust, with 5.2% growth in retail banking and 3.4% in corporate banking.
The detailed financial results breakdown shows strong performance across key metrics:
The bank’s income streams showed positive development, with commission income increasing from 579 million NOK in Q1 2024 to 648 million NOK in Q1 2025. This diversification of revenue sources helps strengthen the bank’s resilience.
Cost control remained a priority, with total operating expenses of 859 million NOK. The bank provided a detailed breakdown of its cost structure:
Strategic Initiatives
SpareBank 1 SMN has been actively pursuing strategic growth opportunities. The merger with SpareBank 1 Søre Sunnmøre is expected to benefit customers, owners, and the community by strengthening service offerings and increasing lending capacity. The merger is projected to increase return on equity from approximately 9% in SpareBank 1 Søre Sunnmøre to about 13% as part of SMN.
The following slide illustrates the benefits of this strategic merger:
The bank also announced the acquisition of Norion Næringsmegling, a commercial real estate brokerage, further expanding its service offerings and market presence. Additionally, SpareBank 1 Market and Swedbank are establishing a new Nordic brokerage house, strengthening the bank’s position in capital markets.
Capital Position & Risk Management
SpareBank 1 SMN maintains a strong capital position with a Common Equity Tier 1 (CET1) ratio of 18.1%, well above its target of 16.3%. This solid capital base provides the bank with flexibility for future growth and the ability to navigate potential economic uncertainties.
The bank’s capital adequacy metrics demonstrate its strong position:
Loan losses remained low at 21 million NOK, reflecting the high quality of the bank’s loan portfolio and effective risk management practices. The following chart illustrates the evolution of loan losses over time:
Operational Focus
SpareBank 1 SMN is emphasizing what it calls a "Fygital relation" approach, combining personal advice with modern and user-friendly digital solutions. This strategy aims to provide customers with comprehensive financial services through both physical presence and digital channels.
The bank has also established a new division focused on economic crime and business support, headed by Johan-Petter Winsnes. This division aims to create better customer experiences with simpler processes, improve efficiency through digitalization and artificial intelligence, and reduce risk and losses from economic crime.
Forward-Looking Statements
Looking ahead, SpareBank 1 SMN is positioning itself to handle global uncertainties while maintaining its growth trajectory. The bank highlighted its historical value creation, with market capitalization growing from 10 billion NOK in 2015 to 39 billion NOK in Q1 2025.
The bank emphasized its attractiveness as an investment based on its profitability, solid capital position, market leadership in Mid-Norway, high proportion of commission income, valuable ownership stakes in and outside the SpareBank 1 Alliance, and strong positioning for structural changes in the industry.
With its strong financial performance, strategic expansion initiatives, and focus on digital transformation, SpareBank 1 SMN appears well-positioned to continue its growth trajectory while navigating the challenges of an uncertain global economic environment.
Full presentation:
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