Uddrag fra Danske Banks kredit-analyse af Spar Nord:
Spar Nord (MW) has released its Q1 report this morning, achieving net profits of DKK295m which is 8% above Bloomberg consensus and corresponding to an RoE of 11.6%.
Looking at the core income lines, NII was slightly below consensus (-1%) at DKK414m but nevertheless well above last year’s level (+7% y/y). The increase was driven by deposit repricing measures (Spar Nord changed the threshold for deposits exempt from negative interest rates to DKK100k from DKK250k with effect from 8 December 2020) as well as the take-over of BankNordik’s Danish activities.
Fee income was strong, rising 23% y/y to DKK396m. Meanwhile, trading income was also decent with value adjustments contributing DKK90m.
Costs were 9% higher y/y, mainly due to higher personnel costs stemming from the take-over of BankNordik’s Danish activities.
Loan loss provisions amounted to DKK2m, which compares with DKK175m taken in Q1 20 and DKK45m on average in Q1-Q4 20. Provisions were driven by corporate clients, while Spar Nord continues to book reversals on its exposure towards agriculture. As the bank had disclosed in April, the management provision overlay related to Covid-19 is kept unchanged in Q1 at DKK320m. The NPL ratio improved by 20bp to 3.2% during the quarter.