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Introduction & Market Context
Voss Veksel- og Landmandsbank ASA (OB:VVL), a Norwegian regional bank celebrating its 125th anniversary this year, reported a 5% increase in profit before tax for Q2 2025. The bank’s shares closed at 380 NOK on August 12, down 1.04% from the previous session, but remain near the upper end of their 52-week range of 270-398 NOK.
The quarterly presentation, released on August 13, 2025, highlighted solid loan and deposit growth, improved capital ratios, and strong liquidity metrics, positioning the bank well for continued expansion despite a slightly deteriorating cost-to-income ratio.
Quarterly Performance Highlights
Voss Veksel reported a profit before tax of 61.9 million NOK for Q2 2025, up 5% from 59.0 million NOK in the same period last year. Net profit increased to 46.4 million NOK, also representing a 5% year-over-year growth. The bank’s total comprehensive income saw a significant 28% jump to 52.8 million NOK, compared to 41.3 million NOK in Q2 2024.
As shown in the following income statement, the bank maintained stable net interest income while significantly increasing other operating income:
A key positive development was the reversal of loan losses, with the bank recording a 940,000 NOK positive impact compared to a 1.16 million NOK loss provision in the same quarter last year. This reversal suggests improving credit quality across the bank’s loan portfolio.
The historical profit chart demonstrates Voss Veksel’s consistent earnings growth trajectory over the past 17 years:
Detailed Financial Analysis
The bank reported gross lending growth of 8.0% year-over-year, with total loans including EBK (Eika Boligkreditt, a mortgage company) reaching 6.65 billion NOK. The private market segment dominates the loan portfolio at 71.45%, while business market loans account for 15.24% and EBK loans make up 13.30%.
As illustrated in the following loan growth analysis, the bank has maintained steady expansion of its lending activities:
Deposit growth has kept pace with lending, increasing by 8.17% over the past 12 months to reach 4.86 billion NOK. This growth has improved the bank’s deposit coverage ratio to 84.38% from 80.86% a year earlier, reducing reliance on wholesale funding.
The deposit growth trend is clearly visible in this chart:
While the bank’s growth metrics remain strong, there are some signs of margin pressure. The net interest margin declined slightly to 2.11% year-to-date in June 2025, down from 2.12% a year earlier. Additionally, the cost-to-income ratio increased to 36.35% from 33.34%, indicating some deterioration in operational efficiency.
Capital and Liquidity Position
Voss Veksel significantly strengthened its capital position during the past year. The Common Equity Tier 1 (CET1) ratio improved to 21.23% from 17.74% a year earlier, while the total capital ratio reached 25.76%, up from 21.20%. These levels substantially exceed regulatory requirements and provide a solid foundation for future growth.
The following chart illustrates the bank’s capital ratio improvements:
Liquidity metrics also showed remarkable strength, with the Liquidity Coverage Ratio (LCR) more than doubling to 572 from 273 a year earlier. The Net Stable Funding Ratio (NSFR) remained stable at 138, slightly up from 137 in June 2024. Both metrics are well above regulatory requirements.
As shown in the liquidity ratios chart, the bank has maintained exceptionally strong liquidity throughout the period:
The bank’s balance sheet grew to 6.71 billion NOK, with customer loans representing the largest asset category at 5.74 billion NOK. Customer deposits remain the primary funding source at 4.86 billion NOK, supplemented by 935 million NOK in issued securities.
Forward-Looking Statements
While the presentation did not include explicit forward guidance, the bank’s consistent profit growth, strong capital position, and robust loan and deposit growth suggest a positive outlook. The slight deterioration in the cost-to-income ratio and net interest margin bear watching, as they could impact profitability if the trends continue.
The bank’s exceptionally strong liquidity and capital ratios provide significant flexibility for future growth initiatives or potential challenges in the economic environment. With capital ratios well above regulatory requirements, Voss Veksel appears well-positioned to navigate the Norwegian banking landscape while continuing its 125-year legacy of serving local communities.
Full presentation:
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