Interim report from the Board of Directors

All figures relate to the Group. Figures in brackets refer to the corresponding period last year. The financial statements have been prepared in accordance with IFRS, and the interim report has been prepared in conformity with IAS 34 Interim Financial Reporting.

RESULTS FOR H1 2025
Sparebanken Møre’s profit before tax after the first half of 2025 was NOK 619 million, compared with NOK 727 million after the first half of 2024, a decrease of 14.9 per cent.

Total income was NOK 16 million lower than for the same period in 2024. Net interest income decreased by NOK 38 million and other income increased by NOK 22 million. Capital gains in the bond portfolio amounted to NOK 19 million, compared with capital gains of NOK 16 million in the first half of 2024. Capital gains from equities amounted to NOK 6 million compared with capital losses of NOK 3 million in the first half of 2024. Income from foreign exchange and interest rate trading for customers amounted to NOK 4 million in the first half-year, NOK 15 million less than in the same period last year. Income from other financial instruments decreased from NOK 0 million in the first half of 2024 to NOK -1 million in the first half of 2025.

Expenses amounted to NOK 504 million, NOK 27 million higher in the first half of 2025 than in the first half of 2024. Personnel expenses were NOK 11 million higher than last year and other operating expenses NOK 16 million higher.

Losses on loans and guarantees amounted to NOK 47 million and were NOK 65 million higher than in the same period last year.

The cost income ratio was 43.1 per cent for the first half of the year, an increase of 2.8 percentage points compared with the first half of 2024.

Profit after tax amounted to NOK 475 million, compared with NOK 555 million for the same period last year.

The return on equity in the first half of 2025 amounted to 11.5 per cent, compared with 14.1 per cent after the first half of 2024.

Earnings per equity certificate were NOK 4.39 (NOK 5.26) for the Group and NOK 5.19 (NOK 5.69) for the parent bank.

RESULTS FOR Q2 2025
Profit before losses amounted to NOK 351 million for the second quarter of 2025, or 1.32 per cent of average assets, compared with NOK 359 million, or 1.46 per cent, for the corresponding quarter last year.

The profit after tax for the second quarter of 2025 amounted to NOK 243 million, or 0.92 per cent of average assets, compared with NOK 301 million, or 1.22 per cent, for the corresponding quarter last year.

Return on equity was 11.7 per cent in the second quarter of 2025, compared with 15.1 per cent in the second quarter of 2024, and the cost income ratio was 41.8 per cent compared with 41.0 per cent in the second quarter of 2024.

Earnings per equity certificate were NOK 2.26 (NOK 2.85) for the Group and NOK 1.81 (NOK 2.37) for the parent bank. 

Net interest income 
Net interest income was NOK 503 million for the quarter, which is NOK 15 million, or 2.9 per cent, lower than in the corresponding quarter of last year. This represents 1.90 per cent of total assets, which is 0.22 percentage points lower than for the corresponding quarter last year.

Interest rate margins contracted in both the retail and corporate markets compared with the second quarter of 2024. The lending margin in the retail market was stable compared with the same period in 2024, while it decreased in the corporate market.

Other income
Other income was NOK 100 million in the quarter, which is NOK 10 million higher than in the second quarter of last year. The net result from financial instruments of NOK 13 million for the quarter was NOK 7 million less than in the second quarter of 2024. Capital gains from bond holdings were NOK 14 million in the quarter, compared with NOK 11 million in the second quarter of 2024. Capital gains from equities amounted to NOK 5 million compared with capital gains of NOK 1 million in the second quarter of 2024. The negative change in value for fixed-rate lending amounted to NOK -5 million, compared with a negative change in value of NOK -1 million in the same quarter last year. Income from foreign exchange and interest rate business for customers amounted to NOK -2 million in the quarter, NOK 9 million less than in the same quarter last year.

Other income excluding financial instruments increased by NOK 17 million compared with the second quarter of 2024. The increase was mainly attributable to income from guarantee- commissions, real estate brokerage and money-transfer services.

Expenses
Operating expenses amounted to NOK 252 million for the quarter, which is NOK 3 million higher than for the same quarter last year. Personnel expenses were NOK 2 million lower compared with the same period last year and totalled NOK 135 million. Other operating expenses increased by NOK 5 million from the same period last year.

Provisions for expected credit losses and credit-impaired commitments 
Losses on loans and guarantees amounted to NOK 34 million in the quarter (NOK -35 million), corresponding to 0.13 per cent of average assets (-0.14 per cent of average assets). Losses in the corporate segment amounted to NOK 21 million in the quarter, while losses in the retail segment amounted to NOK 12 million.

At the end of second quarter of 2025, provisions for expected credit losses totalled NOK 307 million, equivalent to 0.33 per cent of gross loans and guarantee commitments (NOK 240 million and 0.28 per cent).  Of the total provision for expected credit losses, NOK 31 million relates to credit-impaired commitments more than 90 days past due (NOK 27 million), which represents 0.03 per cent of gross loans and guarantee commitments (0.03 per cent), while NOK 101 million relates to other credit-impaired commitments (NOK 74 million), corresponding to 0.11 per cent of gross loans and guarantee commitments (0.09 per cent).

Net credit-impaired commitments (commitments more than 90 days past due and other credit-impaired commitments) have decreased by NOK 41 million in the past 12 months. At end of the second quarter of 2025, the corporate market accounted for NOK 135 million of net credit-impaired commitments and the retail market NOK 165 million. In total, this represents 0.33 per cent of gross loans and guarantee commitments (0.39 per cent). 

Lending to customers
At the end of the second quarter of 2025, net lending to customers amounted to NOK 89,447 million (NOK 85,076 million). In the past 12 months, gross customer lending has increased by a total of NOK 4,427 million, equivalent to 5.2 per cent. Retail lending has increased by 5.9 per cent and corporate lending has increased by 3.9 per cent in the past 12 months. Retail lending accounted for 66.0 per cent of total lending at the end of the second quarter of 2025 (65.8 per cent).

Customer deposits 
Customer deposits have increased NOK 3,202 million, or 6.5 per cent, in the past 12 months. At the end of the second quarter of 2025, deposits amounted to NOK 52,442 million (NOK 49,240 million). Retail deposits have increased by 3.8 per cent in the past 12 months, while corporate deposits and public sector deposits have increased by 11.1 per cent. The retail market’s relative share of deposits amounted to 61.2 per cent (62.8 per cent), while deposits from the corporate market accounted for 38.8 per cent (37.2 per cent).

LIQUIDITY AND FUNDING
Sparebanken Møre’s liquidity and funding are managed based on frameworks for its liquidity coverage ratio (LCR), net stable funding ratio (NSFR), deposit-to-loan ratio and others. The regulatory minimum LCR and NSFR requirements are both 100 per cent. The Group has established minimum internal targets that exceed the regulatory requirements for LCR and NSFR as well as an internal target corridor for its deposit-to-loan ratio.

Sparebanken Møre’s liquidity coverage ratio (LCR) was 207 per cent (156 per cent) for the Group and 191 per cent (144 per cent) for the parent bank at the end of the quarter.

The NSFR ended at 125 (122) at the end of the second quarter of 2025 (consolidated figure), while the bank’s and Møre Boligkreditt AS’s NSFR ended at 126 (126) and 113 (106), respectively.

Both LCR and NSFR meet both external and internal requirements by good margin.

Deposits from customers represent the bank’s main source of funding. The deposit-to-loan ratio was 58.4 per cent (57.6 per cent) at the end of the second quarter of 2025, and this is within the established target corridor.

Total net market funding amounted to NOK 44.8 million at the end of the quarter. Senior bonds with a remaining term to maturity of more than 1 year have a weighted remaining term to maturity of 2.47 years, while covered bond funding through Møre Boligkreditt AS correspondingly has a weighted remaining term to maturity of 3.06 years – overall for market funding in the Group (inclusive of T2 and T3) the remaining term to maturity is 3 years.

Møre Boligkreditt AS issues bonds based on the transfer of loans from the parent bank. Gross retail lending transferred to Møre Boligkreditt AS amounted to NOK 41,642 million at the end of the quarter, which corresponds to 43.06 per cent of the bank’s total lending.

RATING
In a Credit Opinion published on 17 January 2025, the rating agency Moody's confirmed Sparebanken Møre’s counterparty, deposit and issuer ratings as A1 with a stable outlook.

Møre Boligkreditt has the same issuer rating as the parent bank, while the mortgage credit company’s issuances are rated Aaa.

CAPITAL ADEQUACY 
Capital adequacy is calculated and reported in line with the EU capital requirements for banks and investment firms – CRD /CRR. Sparebanken Møre has authorisation from the Financial Supervisory Authority of Norway to use internal rating methods, the foundation IRB (Internal Rating Based) approach for credit risk. Market risk calculations are based on the standardised approach (SA) and operational risk calculations on the basic indicator approach. The use of IRB involves comprehensive requirements for the bank’s organisation, expertise, risk models and risk management systems.

CRR3 entered into force in Norway on 1 April 2025. The bank has implemented CRR3 in its calculation of capital adequacy as at the end of the second quarter of 2025. The new LGD for corporates, elimination of the scaling factor in the risk-weighted formula and a lower conversion factor for undrawn commitments for corporates have a positive effect on the bank’s capital adequacy.

The Ministry of Finance has decided to increase the risk-weighted floor for mortgages from 20 to 25 per cent with effect from 1 July 2025. The bank will thus report in line with a new mortgage floor as at the end of the third quarter of 2025 and expects a negative effect on the bank’s capital adequacy of around 1.5 percentage points as a result of this.

In January 2025, a new application was submitted for the acquisition of equity certificates. Sparebanken Møre received a response to this application on 25 February 2025. New permission to acquire equity certificates was granted for a total amount of up to NOK 42 million. Authorisation was granted on the condition that the buybacks would not reduce CET1 capital by more than NOK 42 million. Sparebanken Møre deducted NOK 42 million from CET1 capital between the date authorisation was granted and its expiry on 30 June 2025. On 7 July 2025, a new application was submitted for the acquisition of equity certificates.

At the end of the second quarter of 2025, the CET1 capital ratio was 20.1 per cent (19.1 per cent), including 50 per cent of the result for the year to date. This is 3.95 percentage points higher than the total minimum requirement and the Financial Supervisory Authority of Norway’s expected capital adequacy margin (P2G) totalling 16.15 per cent. The primary capital ratio, including 50 per cent of the result for the year to date, was 24.5 per cent (23.4 per cent) and the Tier 1 capital ratio was 22.1 per cent (21.1 per cent).

Sparebanken Møre’s total internal minimum CET1 capital ratio requirement is 16.15 per cent. The requirement consists of a minimum requirement of 4.5 per cent, a capital conservation buffer of 2.5 per cent, a systemic risk buffer of 4.5 per cent and a countercyclical buffer of 2.5 per cent. The Financial Supervisory Authority conducted a SREP in 2023. The individual Pillar 2 requirement for Sparebanken Møre has been set at 1.6 per cent, and the expected capital adequacy margin has been set at 1.25 per cent. At least 56.25 per cent of the Pillar 2 requirement (P2R) that resulted from the aforementioned SREP must be met with CET1 capital (0.9 per cent), while a minimum of 75 per cent must be met with Tier 1 capital. The capital requirement (P2G) margin must be met with CET1 capital.

The leverage ratio (LR) at the end of the second quarter of 2025 was 7.1 per cent (7.7 per cent). The regulatory minimum requirement (3 per cent) was met by a good margin. 

MREL
On 1 January 2025, the Financial Supervisory Authority of Norway set Sparebanken Møre’s effective MREL requirement at 35.7 per cent of the risk-weighted assets at any given time. The minimum subordination requirement was set at 28.7 per cent. At the end of the quarter, Sparebanken Møre’s actual MREL level was 40.3 per cent, while the level of subordination was 30.9 per cent of the risk-weighted assets.

Sparebanken Møre had issued NOK 3,750 million in subordinated bond debt at the end of second quarter of 2025.

SUBSIDIARIES 
The aggregate profit of the bank's subsidiaries amounted to NOK 90 million after tax in the first half of the year (NOK 89 million).

Møre Boligkreditt AS was established as part of the Group’s long-term funding strategy. The main purpose of the covered bond company is to issue covered bonds for sale to Norwegian and international investors. At the end of the first half of the year, the company had nominal outstanding covered bonds of NOK 33.7 billion in the market. Around 34 per cent was issued in a currency other than NOK. At the end of the quarter, the parent bank held NOK 160 million in bonds issued by the company. Møre Boligkreditt AS contributed NOK 86 million to the result in the first half of 2025 (NOK 88 million).

Møre Eiendomsmegling AS provides real estate brokerage services to both retail and corporate customers. The company contributed NOK 0 million to the result in the first half of 2025 (NOK -1 million). At the end of the quarter, the company employed 26 FTEs. 

The purpose of Sparebankeiendom AS and Storgata 41-45 Molde AS is to own and manage the bank’s own commercial properties. The company contributed NOK 4 million to the result in the second quarter of 2025 (NOK 1 million). The companies have no staff. 

EQUITY CERTIFICATES
At the end of the second quarter of 2025, there were 7,710 holders of Sparebanken Møre's equity certificates. The proportion of equity certificates owned by foreign nationals and enterprises amounted to 3.8 per cent at the end of the quarter. 49,795,520 equity certificates have been issued.

Note 14 includes a list of the 20 largest holders of the bank’s equity certificates. As at 30 June 2025, the bank owned 171,741 of its own equity certificates. These were purchased on the Oslo Stock Exchange at market price.

At the end of the second quarter of 2025, equity certificate capital accounted for 49.1 per cent of the bank’s total equity.

FUTURE PROSPECTS
The US government surprised the entire world with the high tariffs that were announced on 2 April. Financial markets responded with marked falls in both equities and interest rates, while the USD weakened significantly.

The movements were in large part reversed after the US announced a 90-day pause regarding the tariffs and opened the door to negotiations. Belief in an amicable solution to the trade conflict provided grounds for underlying optimism in financial markets, which persisted throughout the second quarter and into the summer.

Recently, tariffs have been introduced for several countries. Goods from both the EU and Norway are subject to a tariff of 15 per cent, in line with what was expected and indicated. While the effect on the Norwegian economy as a whole is relatively limited, this is obviously a hard blow for many industries and companies. At the same time, the fact that some of the uncertainty has been removed is positive, as is the fact that the fear of an escalation of the trade war has subsided.

Uncertainty, however, remains a keyword with regards to the international picture. Much remains unclear with respect to the trade policy talks between the US and China, the world’s two largest economies. At the same time, the geopolitical situations in both Europe and the Middle East are a clear risk factor. Several examples of the fact that conflicts can both flare up quickly and also calm down again were seen in the second quarter. While the world has to some extent grown accustomed to the US government’s rhetoric, there is also reason to believe that political announcements will continue to cause fluctuations in international financial markets.

The Norwegian economy’s starting point in the face of a more uncertain world continues to appear relatively robust. Growth in the mainland economy was higher than expected in the first quarter, and unemployment remains at low levels. The prospect of real wage growth is bolstering household consumption, while steadily declining inflationary pressures have allowed Norges Bank to start on the path to more normalised interest rate levels.

Further, activity in several industries continues to pick up cautiously, and the bottom also seems to have been passed for several interest rate-sensitive industries. The coming rearmament of Europe and Norway is expected to help boost economic activity going forward. This will also cause ripple effects in our region, Nordvestlandet.

Sparebanken Møre’s overall lending growth remains high. At the end of the second quarter of 2025, the 12-month growth rate was 5.1 per cent, slightly below the growth rate at the end of 2024 of 6.5 per cent. The year-on-year growth in lending to the retail market ended at 5.9 per cent at the end of the second quarter, while lending growth in the corporate market amounted to 3.9 per cent. Deposits have increased by 6.5 per cent in the past 12 months and the deposit-to-loan ratio remains high.

The bank has a solid capital base and good liquidity and will remain a strong and committed supporter of our customers also going forward. The focus will always be on good operations and profitability.

The bank's return on equity for the first half of 2025 was 11.5 per cent, while its cost income ratio was 43.1 per cent. Sparebanken Møre’s long-term strategic financial performance targets are a return on equity of above 13 per cent and a cost income ratio below 40.

Ålesund, 30 June 2025
13 Augsust 2025

THE BOARD OF DIRECTORS OF SPAREBANKEN MØRE 

ROY REITE, Chair of the Board
KÅRE ØYVIND VASSDAL, Deputy Chair
JILL AASEN  
TERJE BØE
BIRGIT MIDTBUST
ANNE JORUNN VATNE 
MARIE REKDAL HIDE BJØRN FØLSTAD

TROND LARS NYDAL, CEO