English summary
Key figures
| Key figures Q3 (amounts in million NOK) | 2024 | 2023 |
|---|---|---|
| Profit before tax | 83,3 | 69,4 |
| Profit after tax | 63,0 | 53,5 |
| Net interest | 105,6 | 97,3 |
| Net commission | 27,3 | 20,1 |
| Losses and write-downs | -2,1 | 0,8 |
| Net interest in % of ATA | 2,31 % | 2,23 % |
| Net commission in % of ATA | 0,60 % | 0,46 % |
| Operating costs in % of ATA | 1,16 % | 1,21 % |
| Operating costs in % of income | 39,6 % | 42,8 % |
| Return on equity before tax | 13,4 % | 11,8 % |
| Return on equity after tax | 10,0 % | 8,9 % |
| Key figures as of 30.09 (amounts in million NOK) | 2024 | 2023 |
|---|---|---|
| Profit before tax | 267,0 | 223,5 |
| Profit after tax | 223,2 | 192,0 |
| Net interest | 308,2 | 272,6 |
| Net commission | 77,6 | 65,1 |
| Losses and write-downs | -8,2 | 0,9 |
| Net interest in % of ATA | 2,31 % | 2,13 % |
| Net commission in % of ATA | 0,58 % | 0,51 % |
| Operating costs in % of ATA | 1,15 % | 1,19 % |
| Operating costs in % of income | 37,2 % | 40,4 % |
| Deposits to loan ratio | 81,1 % | 80,6 % |
| Transfer ratio Eika Boligkreditt (EBK) | 43,2 % | 42,1 % |
| Core tier 1 capital adequacy (consolidated, without added profit) | 18,1 % | 18,6 % |
| Return on equity before tax | 14,4 % | 13,0 % |
| Return on equity after tax | 12,0 % | 11,1 % |
Quarterly report Q3 2024
Solid underlying operations and rising lending growth
The accounts at the end of Q3 show positive development within the bank’s core business areas. This was mainly due to a positive trend in net interest and net commissions. Defaults remained at a relatively low level, and we are seeing a reversal within losses and write-downs. Operating expenses showed reasonably stable development compared with the same period last year, some increase related to personnel cost.
The growth rate in loans remains high compared to credit growth in our primary market area. Total lending growth over the past 12 months is 7,6 % – including the volume transferred to EBK. Overall customer deposits show stable and positive development – growth over the past year amounts to 6,4 %.
The bank aims to continue its annual savings scheme in equity capital certificates in Jæren Sparebank for 2025. The savings scheme is designed so that all permanent employees are given the opportunity to purchase equity capital certificates at a discount of 30 %. The savings scheme is limited to the purchase of equity certificates worth between NOK 12.000 and NOK 60.000. The certificates will be allotted during January 2025. The term of the allotted equity certificates will be 12 months.
Result, Q3 2024
For Q3, the bank achieved a pre-tax profit of NOK 83,3 million, compared with NOK 69,4 million for the previous year. The increase in profit was primarily due to higher net interest and net commissions. Operating expenses are reasonably stable compared with the same quarter last year. Defaults remain at a relatively low level, and we are seeing a reversal within losses and write-downs.
Profit after tax was NOK 63,0 million, compared with NOK 53,5 million for the previous year.
Result as at 30.09.2024
As at 30.09.2024, the bank’s pre-tax profit was NOK 267,0 million, compared with NOK 223,5 million last year. The increase in profit was primarily due to increases in net interest. Net commissions have also seen positive development. Operating expenses showed reasonably stable development compared with the same period last year. In addition, we can see a reversal in write-downs and losses in the first half of the year.
Profit after tax was NOK 223,2 million, compared with NOK 192,0 million for the previous year.
The return on equity after tax was 12,0 % (11,1 %). The bank’s long-term goal in a normal situation is a return on equity after tax of at least 10,0 %.
Net interest
Net interest income at the end of Q3 amounted to NOK 308,2 million (NOK 272,6 million).
As a ratio of average total assets (ATA), net interest income amounted to 2,31 % at the end of Q3 (2,13 %). Net interest in monetary terms is NOK 35,5 million higher compared with the same period last year. The money market rate has shown stable development year to date. Norges Bank has kept its policy rate stable at 4.50% since December last year.
Net commission
Net commission income as at 30.09.2024 amounted to NOK 77,6 million (NOK 65,1 million). Commission from Eika Boligkreditt (EBK) totalled NOK 25,9 million at the end of Q3, an increase from NOK 18,5 million at the same time last year. The margin is now stabilising – following a long period of interest rate increases and notification deadlines issued to customers. The net volume of the EBK portfolio increased by NOK 740,6 million in the past year. This corresponds to growth of 11.5%.
Net income from financial investments
Net income from financial investments as at 30.09.2024 amounted to NOK 25,9 million (NOK 38,0 million). This decline is mainly due to lower dividends from Eika Gruppen this year than last. Returns on securities are higher compared with the same period last year.
Operating expenses
Total operating expenses as at 30.09.2024 were NOK 153,3 million (NOK 151,8 million). This moderate increase relates mainly to salaries and personnel. The ratio of operating expenses to ATA was 1,15 % (1,19 %) at the end of Q3. Expenses as a ratio of income were 37,2 % at the end of Q3 (40,4 %). The bank’s long-term target is a cost ratio below 40,0 %.
Compensation in relation to fraud cases has been recognised in the amount of approximately NOK 2,9 million as at the end of Q3. The increase compared with last year is approximately NOK 0,8 million.
Losses and defaults
Write-downs and losses on loans and guarantees as at 30.09.2024 amounted to minus NOK 8,2 million net (NOK 0,9 million).
Gross non-performing commitments (over 90 days) amounted to NOK 38,0 million (NOK 26,8 million) at the end of Q3. Gross other defaulted exposures (doubtful) amounted to NOK 68,0 million (NOK 62,7 million).
Non-performing commitments and other defaulted exposures (doubtful) thereby totalled NOK 106,0 million (NOK 89,6 million) at the end of Q3. Measured as a percentage of gross lending, including volumes at EBK, this is an increase from 0,44 % to 0,48 % in the last 12 months.
Provision levels for non-performing commitments and other defaulted exposures (doubtful) were 4,8 % (15,9 %) and 6,8 % (3,9 %) respectively at the end of Q3.
Total write-downs in stage 3 show a moderate reduction from NOK 6,7 million last year to NOK 6,4 million this year.
The sum of write-downs in stage 1+2 shows a decrease from the same period last year and amounts to a total of NOK 22,5 million at the end of Q3 compared with NOK 29,1 million the year before.
The bank’s balance sheet
The bank’s assets totaled NOK 18,3 billion at the end of Q3. This represents an increase of 5,9 % over the past 12 months. The bank’s total assets included loans transferred to EBK was NOK 25,5 billion at the end of Q3. This represents an increase of 7,4 % over the past 12 months.
Lending via EBK totaled NOK 7,2 billion at the end of Q3. The development in volume terms during the past 12 months shows solid growth of 11.5 %.
Loans on the balance sheet for the past 12 months show an increase from NOK 13,9 billion to NOK 14,7 billion. This corresponds to growth of 5,8 %. Including the transferred volume in EBK, total lending to customers has increased by 7,6 % over the past 12 months.
Deposits from customers show an increase of 6,4 % for the last 12 months, amounting to NOK 12,0 billion at the end of Q3. We continue to see good stability for deposits.
The deposit to loan ratio was 81,1 % at the end of Q3, moderately up from 80,6 % at the same time last year. The deposit to loan ratio, including EBK, was 54,6 % at the end of Q3, down from 55,2 % at the same time last year. The deposit spread is considered to be good, with relatively few large customer deposits in the portfolio.
Key figures
| RESULTS (amounts in NOK 1,000) | Q3 2024 | Q3 2023 | 30.09.24 | 30.09.23 | Year 2023 |
|---|---|---|---|---|---|
| Net interest income | 105 578 | 97 277 | 308 155 | 272 632 | 378 742 |
| Total other operating income | 28 667 | 25 527 | 103 880 | 103 490 | 120 885 |
| Total operating expenses | 53 096 | 52 621 | 153 261 | 151 766 | 209 869 |
| Operating profit before loan losses | 81 149 | 70 183 | 258 775 | 224 356 | 289 757 |
| Write-downs and losses on loans | -2 137 | 816 | -8 182 | 906 | 2 718 |
| Operating profit before tax | 83 286 | 69 367 | 266 957 | 223 450 | 287 040 |
| Tax cost | 20 330 | 15 839 | 43 784 | 31 488 | 47 899 |
| Profit after tax | 62 956 | 53 528 | 223 173 | 191 962 | 239 141 |
| BALANCE SHEET (amounts in NOK 1,000) | Q3 2024 | Q3 2023 | 30.09.24 | 30.09.23 | Year 2023 |
|---|---|---|---|---|---|
| Total assets | 18 347 | 17 325 | 17 399 | ||
| Average total assets (ATA) | 18 194 | 17 308 | 17 847 | 17 074 | 17 146 |
| Net loans to customers | 14 708 | 13 885 | 14 064 | ||
| Net loans to customers incl. EBK | 21 878 | 20 314 | 20 624 | ||
| Net loans to customers via EBK | 7 170 | 6 429 | 6 560 | ||
| Deposits from customers | 11 954 | 11 232 | 11 217 | ||
| Certificates and bonds | 1 766 | 1 673 | 1 695 | ||
| Shares and fund units | 1 083 | 949 | 1 021 | ||
| Equity capital | 2 552 | 2 415 | 2 515 |
| KEY RATIOS | Q3 2024 | Q3 2023 | 30.09.24 | 30.09.23 | Year 2023 |
|---|---|---|---|---|---|
| Development during the quarter/year to date | |||||
| - Assets | 1,7 % | 0,5 % | 5,3 % | 3,7 % | 4,1 % |
| - Loans | 1,1 % | 1,0 % | 4,5 % | 3,0 % | 4,3 % |
| - Loans incl. EBK | 1,8 % | 1,5 % | 6,0 % | 4,0 % | 5,6 % |
| - Deposits | -0,2 % | -0,5 % | 6,6 % | 3,8 % | 3,7 % |
| Deposits to loan ratio | 81,1 % | 80,6 % | 79,5 % | ||
| Profitability | |||||
| Net interest income as % of ATA | 2,31 % | 2,23 % | 2,31 % | 2,13 % | 2,21 % |
| Cost percentage | 39,6 % | 42,8 % | 37,2 % | 40,4 % | 42,0 % |
| Costs as % of ATA | 1,16 % | 1,21 % | 1,15 % | 1,19 % | 1,22 % |
| Return on equity before tax | 13,4 % | 11,8 % | 14,4 % | 13,0 % | 12,3 % |
| Return on equity after tax | 10,0 % | 8,9 % | 12,0 % | 11,1 % | 10,1 % |
| Losses and non-performing exposures | |||||
| Defaulted exposures (>90 past due) as % of gross lending | 0,3 % | 0,2 % | 0,2 % | ||
| Other non-performing exposures as % of gross lending | 0,5 % | 0,5 % | 0,4 % | ||
| Solidity (consolidated) | |||||
| Capital adequacy | 22,0 % | 22,8 % | 23,3 % | ||
| Core capital adequacy | 19,8 % | 20,5 % | 21,0 % | ||
| Core tier 1 capital adequacy | 18,1 % | 18,6 % | 19,3 % | ||
| Risk-weighted capital | 11 776 | 10 759 | 10 982 | ||
| Personnel | |||||
| Number of man-labour years | 90 | 87 | 87 | ||
| Equity capital certificates (ECC) | |||||
| Equity capital certificate proportion | 52,2 % | 52,2 % | 52,1 % | ||
| Market price per ECC | 314 | 250 | 264 | ||
| Market cap (NOK million) | 1 549 | 1 233 | 1 302 | ||
| Book equity per ECC | 254 | 240 | 251 | ||
| Result/fully-diluted result per ECC | 6,3 | 5,4 | 22,6 | 19,4 | 24,1 |
| Dividend per ECC | n.a | n.a | 16,00 | ||
| Price/profit per ECC | 10,4 | 9,6 | 11,0 | ||
| Price-to-book ratio | 1,24 | 1,04 | 1,05 | ||
Income Statement
| (amounts in NOK 1,000) | Note | Q3 2024 | Q3 2023 | 30.09.24 | 30.09.23 | Year 2023 |
|---|---|---|---|---|---|---|
| Total income from interest | 27 349 | 22 952 | 80 941 | 55 129 | 85 539 | |
| Total income from interest on lending to customers amortised cost | 232 757 | 199 228 | 676 793 | 539 810 | 754 121 | |
| Sum rentekostnader | 154 528 | 124 904 | 449 579 | 322 308 | 460 917 | |
| Net interest income | 105 578 | 97 277 | 308 155 | 272 632 | 378 742 | |
| Commission income etc. | 29 667 | 22 811 | 85 052 | 72 278 | 92 956 | |
| Commission expenses etc. | 2 360 | 2 707 | 7 464 | 7 205 | 9 684 | |
| Other operating income | 117 | 214 | 350 | 427 | 427 | |
| Net commission and other income | 27 424 | 20 318 | 77 938 | 65 500 | 83 699 | |
| Dividend and result from investments according to equity method | 505 | -155 | 19 325 | 31 925 | 30 786 | |
| Net value changes per financial instrument at fair value through profit or loss | 6 | 739 | 5 364 | 6 617 | 6 065 | 6 400 |
| Netto inntekter fra finansielle investeringer | 1 243 | 5 209 | 25 942 | 37 990 | 37 186 | |
| Payroll and social expenses | 31 348 | 29 422 | 83 249 | 79 875 | 108 515 | |
| Depreciations and write-downs on tangible fixed assets and intangible assets | 3 225 | 3 188 | 9 720 | 9 220 | 12 419 | |
| Other operating expenses | 18 522 | 20 011 | 60 292 | 62 672 | 88 936 | |
| Total operating expenses | 53 096 | 52 621 | 153 261 | 151 766 | 209 869 | |
Operating profit before loan losses | 81 149 | 70 183 | 258 775 | 224 356 | 289 757 | |
| Write-downs and losses on loans and guarantees | 2 | -2 137 | 816 | -8 182 | 906 | 2 718 |
| Operating profit before tax | 83 286 | 69 367 | 266 957 | 223 450 | 287 040 | |
| Tax cost | 20 330 | 15 839 | 43 784 | 31 488 | 47 899 | |
| Profit after tax | 62 956 | 53 528 | 223 173 | 191 962 | 239 141 | |
| Other comprehensive income | ||||||
| Actuarial gains and losses on defined benefit pensions | -4 825 | |||||
| Tax on actuarial gains and losses on defined benefit pensions | 1 206 | |||||
| Changes in value for financial assets available for sale | -4 225 | -1 156 | -31 069 | -9 239 | 53 750 | |
| Element of profit that will not be reclassified to the income statement, after tax | -4 225 | -1 156 | -31 069 | -9 239 | 50 131 | |
| Comprehensive income for the period | 58 731 | 52 372 | 192 104 | 182 724 | 289 272 | |
Balance Sheet
| (amounts in NOK 1,000) | Note | 30.09.24 | 30.09.23 | Year 2023 |
|---|---|---|---|---|
| Cash and receivables with central banks | 34 003 | 33 830 | 32 764 | |
| Loans and receivables with credit institutions | 624 441 | 656 447 | 469 159 | |
| Loans to customers | 2, 3 | 14 708 118 | 13 884 879 | 14 063 606 |
| Certificates and bonds | 1 766 262 | 1 673 113 | 1 695 465 | |
| Shares and fund units (fair value through profit or loss) | 217 838 | 164 930 | 167 453 | |
| Financial instruments with change in value through OCI | 865 515 | 784 503 | 853 818 | |
| Financial derivatives | 3 097 | 6 539 | 3 777 | |
| Ownership interests in associates | 9 | 6 287 | 6 578 | 5 005 |
| Intangible assets | 1 128 | 5 640 | 4 512 | |
| Tangible fixed assets | 37 950 | 35 485 | 34 752 | |
| Right-of-use assets | 51 187 | 50 695 | 51 849 | |
| Other assets | 9 261 | 3 815 | 3 766 | |
| Advance payments and earned income | 21 854 | 18 841 | 12 937 | |
| TOTAL ASSETS | 18 346 942 | 17 325 295 | 17 398 862 | |
| Deposits from customers | 3 | 11 954 255 | 11 231 652 | 11 217 143 |
| Liabilities for securities | 7 | 3 475 044 | 3 325 265 | 3 298 397 |
| Other liabilities | 29 635 | 36 023 | 31 923 | |
| Accrued costs and income paid in advance | 20 174 | 18 907 | 16 921 | |
| Financial derivatives | 1 042 | 677 | ||
| Provisions for liabilities | 60 170 | 45 674 | 63 997 | |
| Liabilities relating to right-of-use assets | 53 307 | 52 153 | 53 498 | |
| Subordinated loan capital | 7 | 200 974 | 200 943 | 200 951 |
| Total liabilities | 15 794 601 | 14 910 617 | 14 883 508 | |
| Equity certificate capital | 10 | 123 313 | 123 313 | 123 313 |
| Holdings of own equity certificates | -378 | |||
| Share premium | 425 285 | 425 285 | 425 285 | |
| Hybrid capital | 7 | 150 000 | 150 000 | 150 000 |
| Other paid-in capital | 5 745 | 4 589 | 5 745 | |
| Equalisation reserve | 443 963 | 405 626 | 443 963 | |
| Dividend | 78 920 | |||
| Customers dividend and gift fund | 2 880 | 72 164 | ||
| Savings bank fund | 911 418 | 876 367 | 911 418 | |
| Other equity | 266 564 | 237 535 | 304 923 | |
| Unappropriated result | 223 173 | 191 962 | ||
| Total equity | 2 552 341 | 2 414 677 | 2 515 354 | |
| TOTAL EQUITY AND LIABILITIES | 18 346 942 | 17 325 295 | 17 398 862 |