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10 Aug 2023

H1 and Q2 Results 2023

Improving efficiency and solid overall performance
Morrow Bank continues to strengthen its operational efficiency and delivered solid results in the second quarter. To maintain a healthy balance between growth and credit risk, the Bank will reduce the growth pace in the near term and continue to adjust credit policies in response to a more challenging macroeconomic environment. The outlook for Nordic consumer finance remains favourable in the medium- to long-term, and the Bank continues to deliver on its improvement efforts targeting to produce an annual growth rate of around 10% and a return on target equity above 12%.

Highlights of the quarter:

Solid growth and stable net yield

  • 3% loan balance growth vs. Q1 (15% growth YTD)
  • Stable net yield; total income up almost 15% vs. Q1
  • Higher market interest rate trajectory to pressure margins in H2

Further improved cost/income, increased credit losses

  • Cost/income ratio of 31% (vs. 35% in Q1), in line with the year-end target of 30%
  • Loan loss ratio of 4.8% (3.9%) driven by a change in customer payment behaviour
  • Stable profitability; PAT at MNOK 41 and ROE of 8% (8%)

Reducing growth in H2 amid a more challenging macroeconomic picture

  • Further tightening of credit policies and close dialogue with customers
  • Some downside risk seen vs. normalized loan loss ratio of 4-5%, hence H2 2023 profits expected below H1 2023 levels
  • Solid capital position with CET1 ratio of 20.6% (19.4%) vs. 17.9% requirement

Commenting on the results, Morrow Bank’s CEO Øyvind Oanes said: “During 2022 and the first half of 2023, we’ve managed to significantly increase throughput, protect our yield, and bring down the cost/income ratio towards our target 30% mark – which is a very competitive level for our industry. As part of our mission to build a new and future-proof bank, we’ve also rebranded in Q2, and I’m delighted to see the alignment and engagement across our highly capable organisation. Combining that with a diversified Nordic consumer loans portfolio and a solid financial position, we are well-positioned for delivering long-term growth and value creation. Near-term, however, we see a more challenging macroeconomic picture where the balance between credit risk and growth needs to be carefully managed. As a result, we’ve tightened our credit policies and reduced sales which will slow loan balance growth in H2 2023. While the macro-outlook is more positive for the medium term, our focus in the near term continues to be on improving operational efficiency”.

The interim report and presentation are available on