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1. Company Snapshot

1.a. Company Description

Sparebanken Vest, a financial services company, provides banking and financing services in the counties of Vestland and Rogaland, Norway.It operates through Corporate Market, Retail Market, Bulder Bank, Treasury, and Estate Agency Activities segments.The company is also involved in the estate agency and home mortgage activities.


As of December 31, 2020, it had 33 points of sale outlets.The company was founded in 1823 and is headquartered in Bergen, Norway.

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1.b. Last Insights on SVEG

Sparebanken Vest's recent strength is driven by its attractive dividend yield, making it an appealing option for investors seeking stability and income amidst market volatility. As a prominent dividend stock, the bank's consistent payouts provide a steady source of returns. Additionally, Sparebanken Vest's strong financial position and solid capitalization enable it to maintain its dividend payments, supporting its appeal to income-focused investors.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.53%)

6. Segments

Private Market

Expected Growth: 2.5%

Sparebanken Vest's 2.5% growth in the private market is driven by increasing demand for digital banking services, a strong brand reputation, and strategic partnerships. Additionally, the bank's focus on customer-centricity, innovative product offerings, and efficient cost management contribute to its growth momentum.

Corporate Market

Expected Growth: 2.8%

Sparebanken Vest's Corporate Market segment growth of 2.8% is driven by increasing demand for cash management and trade finance services from large corporations, as well as growth in lending to the renewable energy sector. Additionally, the bank's strong relationships with local businesses and municipalities contribute to its market share expansion.

Treasury

Expected Growth: 1.8%

Treasury from Sparebanken Vest's 1.8% growth is driven by a combination of factors, including a stable Norwegian economy, increasing demand for liquidity management services, and the bank's strong reputation in the region. Additionally, Sparebanken Vest's treasury division has been successful in attracting and retaining large corporate clients, contributing to the segment's growth.

Real Estate Brokerage

Expected Growth: 3.2%

Sparebanken Vest's Real Estate Brokerage growth of 3.2% is driven by increasing demand for housing in Norway, fueled by low interest rates and government incentives. Additionally, the bank's strong brand reputation, extensive branch network, and digital platform enhancements have improved customer experience, attracting more clients and increasing market share.

Buller

Expected Growth: 2.2%

Buller from Sparebanken Vest's 2.2% growth is driven by strong loan growth, fueled by Norway's robust economy and low interest rates. Additionally, the bank's solid asset quality, efficient cost management, and increasing digitalization efforts contribute to its growth momentum.

7. Detailed Products

Personal Banking

Sparebanken Vest offers a range of personal banking services, including current and savings accounts, credit cards, loans, and mortgages.

Business Banking

Sparebanken Vest provides business banking services, including business loans, credit facilities, and cash management solutions.

Investment and Wealth Management

Sparebanken Vest offers investment and wealth management services, including portfolio management, investment advice, and pension planning.

Insurance

Sparebanken Vest provides a range of insurance products, including life insurance, non-life insurance, and pension insurance.

Real Estate Services

Sparebanken Vest offers real estate services, including property valuation, brokerage, and property management.

Digital Banking

Sparebanken Vest provides digital banking services, including online banking, mobile banking, and payment solutions.

8. Sparebanken Vest's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Sparebanken Vest is moderate, as customers have alternative banking options available in the market.

Bargaining Power Of Customers

The bargaining power of customers for Sparebanken Vest is low, as the bank has a strong customer base and offers a range of financial services.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Sparebanken Vest is moderate, as the bank relies on a range of suppliers for its operations, but has some flexibility in its supply chain.

Threat Of New Entrants

The threat of new entrants for Sparebanken Vest is low, as the banking industry has high barriers to entry and requires significant capital investment.

Intensity Of Rivalry

The intensity of rivalry for Sparebanken Vest is high, as the banking industry is highly competitive and there are several established players in the market.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 86.57%
Debt Cost 7.85%
Equity Weight 13.43%
Equity Cost 7.85%
WACC 7.85%
Leverage 644.61%

11. Quality Control: Sparebanken Vest passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Arbuthnot Banking

A-Score: 7.1/10

Value: 9.3

Growth: 9.0

Quality: 6.3

Yield: 8.1

Momentum: 4.0

Volatility: 5.7

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Sparebanken Vest

A-Score: 7.1/10

Value: 7.9

Growth: 5.1

Quality: 7.6

Yield: 8.8

Momentum: 6.5

Volatility: 6.7

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Skjern Bank

A-Score: 6.8/10

Value: 7.8

Growth: 5.4

Quality: 8.1

Yield: 3.8

Momentum: 9.5

Volatility: 6.3

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Banca IFIS

A-Score: 6.4/10

Value: 7.3

Growth: 4.1

Quality: 5.4

Yield: 10.0

Momentum: 4.0

Volatility: 7.7

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Thurgauer KB

A-Score: 5.9/10

Value: 5.0

Growth: 2.0

Quality: 5.5

Yield: 3.8

Momentum: 9.0

Volatility: 10.0

1-Year Total Return ->

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SpareBank 1 Sørøst-Norge

A-Score: 4.7/10

Value: 5.8

Growth: 4.3

Quality: 5.5

Yield: 5.0

Momentum: 4.0

Volatility: 3.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

139.76$

Current Price

139.76$

Potential

-0.00%

Expected Cash-Flows