Good afternoon, and heartily welcome to a very short presentation of SpareBank 1 SR-Bank's results for the second quarter of 2024. We have, over time, worked consistently, both structurally and organically in order to strengthen SR-Bank's position, both in the market, as well as contribute to a stronger SpareBank 1 Alliance over time. And this is what we actually now see some results from in the present quarter. In the first half of 2024, we had a good underlying growth in the group. We had increased loan growth, growth in other income, and low loan losses. In addition, we have worked in order to prepare for the merger with SpareBank 1 Sørøst-Norge, which will take place from October 1.
When we merge the seventh largest and the largest these two banks, number seven and number one, both SpareBank 1 banks, we will by far become the largest savings bank in Norway, and we will have a loan book close to NOK 400 billion. If you look at our retail and offices distribution, we will have 65 offices along the Norwegian coast in the southern south of Norway. If you look really well at the picture, it is a very nice smile. The merger will give us increased competitive advantage, and also an opportunity to give loans to larger corporates.
We have, we'll have an increased presence in Southern Norway, our market area, and we hope to become even more attractive to both customers, our employees, as well as our shareholders and owners. We will become a very forceful savings bank, and with a head office and head office functions outside the Oslo region, and with a loan book composition of approximately 65% retail and 35% corporate loan book. We have had or asked for business as usual from our employees in the period since we announced the merger in October of last year, and until the merger will actually take place first of October, as mentioned.
I must say, I'm very impressed with the two organizations' ability to actually deliver increased growth, and acquiring increased market shares in both banks leading up to the merger. All the necessary permissions from regulatory authorities are now in place, although subject to some conditions, but we will lift all of those conditions, and very confident that we will actually merge on the first of October as planned. The synergies from the merger will be around NOK 2.5 billion in capital synergies, and NOK 150 million a year in cost synergies. We also have a very clear ambition to deliver on income synergies going forward.
We have announced the new group management of SpareBank 1 Sør-Norge, the new entity, and it will be operational from the first of October. We have as one of the changes is actually to increase the customer divisions by 1, and introduce Private Banking as a separate area of new growth in the merged bank. We've also 3 divisions which will deliver services and efficiency to all 4 customer divisions and operate across the 4 customer segments. We also are very not concerned, but we want the real estate brokerage and the accounting house to be a very integrated part of our business, and we've organized those two important subsidiaries into the private markets segment and the corporate market segment, respectively.
SpareBank 1 SR-Bank's loan book today is NOK 285 billion at the end of the second quarter, and it's distributed across southern Norway, with the highest weight in the Rogaland, where we have more than 60% of our loan book. We've had a loan growth over the last 12 months of 7.5%, equivalent to NOK 20 billion, which we are very satisfied with. Our growth is solid in all market segments, but we have the highest growth outside our home base, Rogaland, also in the second quarter. If we look at the return on equity, we delivered 14.6 in the second quarter, well above our target of 13.
It was at the same level as last quarter, as well as same period last year. Our result before tax was NOK 1,472 million, up 10.2%, or NOK 136 million, compared to the same period last year. If we look at the first six months in total, our result increased by 20.4% to NOK 2,971 million. The strong result is a result of that we succeed with our growth strategy, and if we look at the quarter on an isolated basis, we grew on a group level by 2.3% and by 2.6% in the retail segment.
We consistently work to take out efficiency in our distribution and make and fine-tune our operations in order to optimize our advisors' work, and to have enough capacity to serve the customers well. The strong growth we deliver in today's market confirms that those initiatives are giving results. We have increased our presence in Oslo, and we have also higher activity and growth, and that gives us somewhat higher costs. The cost-to-income ratio is at 34.9% for the group, down from 39.6% last year, and at 31.5% in the parent bank.
As in earlier quarters, we have low loan losses, and we have loan loss provision in this quarter of NOK 103 million, equivalent to 15 basis points, which we consider is at a normalized level. The requirement for core capital at present is 16.4%, and we are at 17.7%, which also is higher than the new requirement of 17.4%, one percentage point higher than we have today, which will be introduced the 30th of September of this year.
In our region, the businesses and are more optimistic this year than they, or now, than they were in January, and we think we have a well diversified portfolio and are positioned for further growth in Southern Norway, and not the least, as exciting and merged bank in with a new name, SpareBank 1 Sør-Norge from the 1st of October. With that introduction, I'll hand you over to Inge Reinertsen, our CFO, for to go through the numbers in more detail.
Thank you, Benedicte. First, a short reminder that you're more than welcome to ask questions, as shown on the screen. Benedicte and myself, we will do our best to answer after my short presentations of the figures. If we look at key figures, as commented on from Benedicte, we are achieving the return on equity target by 14.6% versus the target of 13%. Our capital ratio stands 126 basis points above the requirement, but as also commented on, the requirement will increase by 100 basis points as of the last of this quarter.
The cost-to-income ratio, far below the target of 40%, and this gives an earnings per share of 4.20 NOK per share. If we look at the main figures, we deliver a profit after tax of NOK 1,162 million, which is fairly in line with the numbers from the previous quarter. Net interest income is down NOK 3 million on the same number of interest days. The reason why we have a decrease of NOK 3 million, despite the significant growth, is the fact that we paid dividend by approximately NOK 2 billion at the end of April, and also the payable tax of approximately the same amount, which had then to be funded by market funding at a cost.
So the underlying trend of the net interest income still is positive, although there are some pressure on the deposit margin. Net commission and other income shows a increase of 13% quarter-on-quarter, and 4% year-on-year. This quarter, we have a specific strong contribution from the real estate broker. The net income on financial investment stands at NOK 148 million, which is slightly below what we regard as an average during a longer period. So that means that the 14.6% return on equity now is delivered with a below average net financial income line, and the impairments on loan which is NOK 103 million, which is equal to 15 basis points, is what we regard as normalized level through the cycle.
Although the underlying credit quality still remains very positive, so the largest share of this amount has arisen from one specific engagement. So, altogether, this continues the very positive trend with respect to the credit quality. If we look at the lending growth, which stands at 7.5% for the group as such, you also see that the margins altogether are fairly stable, both on the deposit side and the lending side. What perhaps is especially interesting this quarter is the significant growth in the retail market, both on the lending side and the deposit side, and I'm also very pleased to see that we have managed to increase the lending margin by 5 basis points, although we have a significant growth within the quarter.
Some pressure on the deposit margin, but after having for some quarters had a interest margin on the deposit side on a very high level. The competition is, of course, fierce, both on the lending and the deposit side, but our position remains strong, with a very strong distribution power on both sides of the balance. If we look at some early warning indicators, it shows that underlying credit quality remains on a very robust level. We don't see any signs of deterioration, neither in the retail nor the corporate market, so we feel very confident with the credit quality, and also this is with a very low unemployment rate in Norway, as such. I commented on the net commission and other income.
The real estate broker, EiendomsMegler 1, increased from NOK 91 million last quarter to NOK 134 million this quarter. We have some seasonal variations in this segment, but also compared to the same quarter last year with NOK 120 million, it shows a very strong underlying growth within the real estate broker, which, of course, also is important for our ability to grow the retail side in the parent bank. If we look at loans and financial commitments, as shown on the right-hand side, the stage 3 commitments show still a continuous downward trend, with which underpins that we have a very strong underlying credit quality.
And also, with 138 as of first half this year, it also shows that the net amount of loan losses for the last 4 quarters for last year is close to zero after the challenging 2020. Finally, looking at the capital ratio, as it shows, we are over 126 basis points beyond the requirement. That will increase by 100 basis points as of the end of this quarter, but that gives us a leeway of 26%. And of course, we also expect to increase this further during the quarter, due to a profitable growth and our ability to strengthen the capital ratio. So altogether, we are in a perfectly good shape and ready for the merger, which will give us a very strong platform for continuously profitable growth.
With this presentation, we will like to hand it over to you if there are any questions. My dear colleague, Morten, on the first row, he is showing me that we don't have any questions. Just, if you at any time have any questions, don't hesitate to give a call to me or Morten in the IR department, and we will do our very best to answer your question at a later stage. With these words, I thank you all for participating, and wishing you a good day.
Thank you very much.