8 May 2025
Profit up 43% YoY - Raising return target following Swedish banking license - new products to drive growthQ1 results 2025
Morrow Bank delivered another solid quarter with profit before tax of NOK 83.1 million in Q1 2025, up 43% from NOK 58.2 million in Q1 2024.CEO Øyvind Oanes commented:"Morrow Bank will become a Swedish bank around year-end, following the granting of our banking license by the Swedish FSA on 1 April 2025. This reflects our Nordic footprint, aligns us with peers and unlocks significant value creation potential. We are raising our mid-term return on target equity (ROTE) target from 12-14% to 15-17% by the end of 2026. Longer term, we see potential for ROTE to exceed 20% as the platform scales."
o Gross loans at NOK 15.4 billion, up 26% year-on-year
o Total income increased by 16% to NOK 344 million, with improving net interest margin on performing loans
o Highly competitive cost/income ratio of 27.5% (24.4% excluding redomiciliation-related items)
Improved credit quality and increased profitability
o Loan loss ratio improved for the fifth consecutive quarter, to 4.3% (Q1 2024: 5.2%)
o Profit before tax up 43% to NOK 83.1 million
o Return on equity (ROE) at 10% (7.4%), return on target equity (ROTE) at 10.7% (8.4%)
Strategic progress
o Swedish banking license granted on 1 April 2025
o Redomiciliation and listing on Nasdaq Stockholm around year-end
o Mid-term ROTE target raised to 15-17% by end-2026, driven by lower capital requirements and improved returns
Growth outlook
o Following a stable Q1 after portfolio acquisitions in 2024, new product launches to accelerate organic growth from H2
o Targeting ~5% annualised loan growth and ~23% cost/income ratio by end-2026
Øyvind Oanes added:
"We're preparing to launch a refinancing product in Norway and an upsell solution in Sweden during Q2, enabling existing customers to increase their loan limits through a simplified process. Further growth, combined with a stable cost base, improved credit metrics, and increased capital generation will position us to deliver higher returns."
The Q1 2025 report and presentation are available here.
Highlights of the quarter:
Solid operational performanceo Gross loans at NOK 15.4 billion, up 26% year-on-year
o Total income increased by 16% to NOK 344 million, with improving net interest margin on performing loans
o Highly competitive cost/income ratio of 27.5% (24.4% excluding redomiciliation-related items)
Improved credit quality and increased profitability
o Loan loss ratio improved for the fifth consecutive quarter, to 4.3% (Q1 2024: 5.2%)
o Profit before tax up 43% to NOK 83.1 million
o Return on equity (ROE) at 10% (7.4%), return on target equity (ROTE) at 10.7% (8.4%)
Strategic progress
o Swedish banking license granted on 1 April 2025
o Redomiciliation and listing on Nasdaq Stockholm around year-end
o Mid-term ROTE target raised to 15-17% by end-2026, driven by lower capital requirements and improved returns
Growth outlook
o Following a stable Q1 after portfolio acquisitions in 2024, new product launches to accelerate organic growth from H2
o Targeting ~5% annualised loan growth and ~23% cost/income ratio by end-2026
Øyvind Oanes added:
"We're preparing to launch a refinancing product in Norway and an upsell solution in Sweden during Q2, enabling existing customers to increase their loan limits through a simplified process. Further growth, combined with a stable cost base, improved credit metrics, and increased capital generation will position us to deliver higher returns."
The Q1 2025 report and presentation are available here.