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1. Company Snapshot

1.a. Company Description

SpareBank 1 SR-Bank ASA, together with its subsidiaries, provides various financial products and services for personal and corporate customers in Southern and Western Norway.The company offers its products and services in the areas of savings, loans, advice, insurance, and pensions.It also provides foreign exchange, administrative securities, commercial properties, leasing, accounting, estate agency, payroll/HR, and securities trading services, as well as management and securities management services.


In addition, the company facilitates debt and equity funding; and sells real estate properties comprising holiday homes, new builds, and used homes.Further, it is involved in the customer trading of interest rate instruments; and purchasing of home mortgages.Additionally, the company offers green loan; credit and debit cards; consulting; and mobile and online banking services.


The company also serves retail and corporate, small business, and agricultural customers, as well as the public sector.As of December 31, 2021, it had 34 branches in the counties of Rogaland, Vestland, Agder, and Oslo.SpareBank 1 SR-Bank ASA was founded in 1839 and is headquartered in Stavanger, Norway.

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1.b. Last Insights on SRBNK

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1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.53%)

6. Segments

Retail Market

Expected Growth: 4.5%

Strong demand for consumer loans and credit cards, driven by Norway's low unemployment and rising disposable income, contributes to the 4.5% growth in Retail Market for SpareBank 1 SR-Bank ASA. Additionally, the bank's digital transformation and expansion of online services have increased customer acquisition and retention, further fueling growth.

Corporate Market

Expected Growth: 5.2%

SpareBank 1 SR-Bank ASA's 5.2% corporate market growth is driven by increasing demand for digital banking services, strategic partnerships, and expansion into new markets. Additionally, the bank's focus on customer experience, cost efficiency, and risk management has contributed to its growth. Furthermore, the Norwegian economy's stability and growth have also positively impacted the bank's corporate market segment.

Other

Expected Growth: 3.8%

SpareBank 1 SR-Bank ASA's 3.8% growth is driven by strong lending growth, particularly in the mortgage segment, supported by Norway's robust housing market. Additionally, the bank's focus on digitalization and cost efficiency measures have improved operational efficiency, contributing to the growth. Furthermore, the bank's diversified revenue streams and solid asset quality have also contributed to its growth momentum.

Small and Medium Enterprises & Agriculture

Expected Growth: 4.8%

SpareBank 1 SR-Bank ASA's 4.8% growth in Small and Medium Enterprises (SMEs) and Agriculture segments is driven by increased lending to SMEs, growth in agricultural production, and government initiatives supporting rural development. Additionally, the bank's digitalization efforts and tailored financial solutions for these segments have contributed to the growth.

Eliminations

Expected Growth: 0.0%

With 0.0% growth, Eliminations from SpareBank 1 SR-Bank ASA is stagnant. Key drivers include lack of innovation, intense competition, and inefficient cost structure. Additionally, the bank's conservative risk appetite and limited investment in digital transformation may be hindering growth. Furthermore, the Norwegian banking industry's maturity and saturated market may also be contributing to the stagnant growth.

7. Detailed Products

Personal Banking

SpareBank 1 SR-Bank ASA offers a range of personal banking services, including current and savings accounts, credit cards, personal loans, and mortgages.

Business Banking

The bank provides business banking services, including business accounts, loans, and credit facilities, to support the growth and development of businesses.

Investment and Wealth Management

SpareBank 1 SR-Bank ASA offers investment and wealth management services, including portfolio management, investment advice, and pension planning.

Insurance

The bank provides a range of insurance products, including life insurance, non-life insurance, and pension insurance.

Real Estate Financing

SpareBank 1 SR-Bank ASA offers real estate financing solutions, including mortgages and construction loans, for individuals and businesses.

Corporate Banking

The bank provides corporate banking services, including cash management, trade finance, and risk management solutions, to large corporations and institutions.

8. SpareBank 1 SR-Bank ASA's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for SpareBank 1 SR-Bank ASA is medium, as customers have some alternatives for banking services, but the bank's strong brand and customer loyalty mitigate this threat.

Bargaining Power Of Customers

The bargaining power of customers is low, as SpareBank 1 SR-Bank ASA has a strong market position and customers have limited negotiating power.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low, as SpareBank 1 SR-Bank ASA has a strong negotiating position and can choose from a range of suppliers.

Threat Of New Entrants

The threat of new entrants is low, as the banking industry has high barriers to entry and SpareBank 1 SR-Bank ASA has a strong market position.

Intensity Of Rivalry

The intensity of rivalry is high, as SpareBank 1 SR-Bank ASA operates in a competitive market with several strong competitors, and the bank must continually innovate and improve its services to maintain its market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 84.76%
Debt Cost 9.02%
Equity Weight 15.24%
Equity Cost 9.02%
WACC 9.02%
Leverage 556.19%

11. Quality Control: SpareBank 1 SR-Bank ASA passed 5 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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Bank Handlowy

A-Score: 7.6/10

Value: 5.8

Growth: 7.6

Quality: 8.0

Yield: 10.0

Momentum: 7.0

Volatility: 7.0

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ING Bank Slaski

A-Score: 7.1/10

Value: 6.5

Growth: 9.1

Quality: 7.4

Yield: 7.5

Momentum: 6.5

Volatility: 5.7

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SpareBank 1 SR-Bank

A-Score: 6.8/10

Value: 5.1

Growth: 7.4

Quality: 6.8

Yield: 4.4

Momentum: 8.0

Volatility: 9.3

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Raiffeisen Bank International

A-Score: 6.2/10

Value: 9.4

Growth: 3.8

Quality: 5.4

Yield: 6.9

Momentum: 8.5

Volatility: 3.3

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PKO Bank Polski

A-Score: 6.2/10

Value: 5.4

Growth: 5.2

Quality: 7.2

Yield: 7.5

Momentum: 7.5

Volatility: 4.3

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Santander Bank Polska

A-Score: 6.2/10

Value: 5.3

Growth: 6.0

Quality: 8.0

Yield: 8.8

Momentum: 5.0

Volatility: 4.0

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

184.6$

Current Price

184.6$

Potential

-0.00%

Expected Cash-Flows