Kvartalsrapport4. kvartal 2024

The accounts at the end of Q4 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, the same applies to 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 is high compared to credit growth in our primary market area. Total lending growth over the past 12 months is 10,0 % – including the volume transferred to EBK. Overall customer deposits show stable and positive development – growth over the past year amounts to 9,2 %.

For Q4, the bank achieved a pre-tax profit of NOK 69,3 million, compared with NOK 63,6 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, the same applies to losses and write-downs.

Profit after tax was NOK 51,9 million, compared with NOK 47,2 million for the previous year.

As at 31.12.2024, the bank’s pre-tax profit was NOK 336,2 million, compared with NOK 287,0 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.

Profit after tax was NOK 275,1 million, compared with NOK 239,1 million for the previous year.

The return on equity after tax was 10,9 % (10,1 %). The bank’s long-term goal in a normal situation is a return on equity after tax of at least 11,0 %. The goal was increased from 10.0% in 2024.

Net interest income at the end of Q4 amounted to NOK 413,8 million (NOK 378,7 million).

As a ratio of average total assets (ATA), net interest income amounted to 2,29 % at the end of Q4 (2,21 %). Net interest in monetary terms is NOK 35,0 million higher compared with the same period last year. The money market rate has shown a stable development over time - Norges Bank kept the policy rate stable at 4,50 % throughout last year.

Net commission income as at 31.12.2024 amounted to NOK 106,1 million (NOK 83,3 million). Commission from Eika Boligkreditt (EBK) totalled NOK 35,8 million at the end of Q4, an increase from NOK 21,5 million at the same time last year. The margin on the portfolio in EBK stabilized at a normal level during the 1st quarter of 2024 – following a long period of interest rate increases and notification deadlines to customers. The net volume of the EBK portfolio increased by NOK 830,1 million in the past year – corresponding to a growth of 12.7 %. This growth naturally also contributes to higher commissions.

Net income from financial investments as at 31.12.2024 amounted to NOK 22,3 million (NOK 37,2 million). This decline is mainly due to lower dividends from Eika Gruppen this year than last. Returns from securities are also at a somewhat lower level compared to the same period last year.

Total operating expenses as at 31.12.2024 were NOK 212,5 million (NOK 209,9 million). This moderate increase, amounting to approximately 1,2 %, relates mainly to salaries and personnel. The ratio of operating expenses to ATA was 1,18 % (1,22 %) at the end of Q4. Expenses as a ratio of income were 39,2 % at the end of Q4 (42,0 %). 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 3,3 million as at the end of Q4. The increase compared with last year is approximately NOK 0,1 million. In other words, the development is stable.

Write-downs and losses on loans and guarantees as at 31.12.2024 amounted to a net minus of NOK 6,0 million (NOK 2,7 million).

Gross non-performing commitments (over 90 days) amounted to NOK 30,0 million (NOK 32,2 million) at the end of Q4. Gross other defaulted exposures (doubtful) amounted to NOK 83,9 million (NOK 51,2 million).

Non-performing commitments and other defaulted exposures (doubtful) thereby totalled NOK 113,9 million (NOK 83,4 million) at the end of Q4. Measured as a percentage of gross lending, including volumes at EBK, this is an increase from 0,40 % to 0,50 % in the last 12 months.

Provision levels for non-performing commitments and other defaulted exposures (doubtful) were 7,5 % (13,7 %) and 6,3 % (3,8 %) respectively at the end of Q4.

Total write-downs in stage 3 show a moderate increase from NOK 6,4 million last year to NOK 7,6 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 25,1 million at the end of Q4 compared with NOK 31,3 million the previous year.

The bank’s assets totaled NOK 18,9 billion at the end of Q4. This represents an increase of 8,4 % over the past 12 months. The bank’s total assets included loans transferred to EBK was NOK 26,2 billion at the end of Q4. This represents an increase of 9,5 % over the past 12 months.

Lending via EBK totaled NOK 7,4 billion at the end of Q4. The development in volume terms during the past 12 months shows solid growth of 12,7 %.

Loans on the balance sheet for the past 12 months show an increase from NOK 14,1 billion to NOK 15,3 billion. This corresponds to growth of 8,7 %. Including the transferred volume in EBK, total lending to customers has increased by 10,0 % over the past 12 months.

Deposits from customers show an increase of 9,2 % for the last 12 months, amounting to NOK 12,2 billion at the end of Q4. We continue to see good stability for deposits.

The deposit to loan ratio was 79,9 % at the end of Q4, moderately up from 79,5 % at the same time last year. The deposit to loan ratio, including EBK, was 53,9 % at the end of Q4, down from 54,3 % at the same time last year. The deposit spread is considered to be good, with relatively few large customer deposits in the portfolio.