14 Aug 2024
Profit before tax of NOK 67 million, increased ROE and accelerated value creationQ2 results 2024
Morrow Bank delivered another solid quarter with profit before tax of NOK 67 million, up 16% from the previous quarter.Commenting on the results, Morrow Bank's CEO Øyvind Oanes said: "Following a successful turnaround, we have already exceeded our 2024 targets by improving our processes and streamlining our operations. In Q2 2024, Morrow Bank continued its positive development from the recent quarters, with solid underlying growth and operational performance."
o Gross loans up 1.9% to NOK 12.5 billion, continued solid growth in Finland and Sweden
o Total income up 3.1% to NOK 305 million, positively impacted by commissions income and fees Stable costs and credit risk
o Operating expenses remained stable, cost/income ratio at industry-leading 26% (27%)
o Loan loss ratio at 5.1% (5.2%), credit risk continued to develop positively
Increased profitability, organically and structurally
o Profit before tax of NOK 67 million (NOK 58 million) and profit after tax of NOK 51 million (NOK 44 million)
o ROE (return on equity) of 8.5% (7.4%) and ROTE (return on target equity) of 9.7% (8.4%)
o Agreed to acquire SEK ~700 million (NOK ~700 million) Swedish consumer loan portfolio and closed transaction in July - in line with strategy to pursue structural opportunities that can accelerate value creation. Expected positive effect on profitability from 2025 and onwards
On track for 2025 targets
o Year-end organic 2025 targets maintained at ~10% annualized loan growth, cost/income ratio of ~26% and ROTE of 10-12%
Øyvind Oanes commented further:
"With a positive macro-outlook in the Nordics, we will continue to grow in the most profitable markets while keeping costs stable. The loan loss ratio has started to decline and is set to continue declining - driving the Bank's profitability and returns up. Our cost-efficiency and scalability enable us to look at inorganic growth opportunities to improve returns further, and we will continue pursuing relevant structural opportunities to leverage the scalability of our platform and accelerate value creation beyond the organic."
The Q2 2024 report and presentation are available here.
Highlights of the quarter:
Solid growth in most profitable marketso Gross loans up 1.9% to NOK 12.5 billion, continued solid growth in Finland and Sweden
o Total income up 3.1% to NOK 305 million, positively impacted by commissions income and fees Stable costs and credit risk
o Operating expenses remained stable, cost/income ratio at industry-leading 26% (27%)
o Loan loss ratio at 5.1% (5.2%), credit risk continued to develop positively
Increased profitability, organically and structurally
o Profit before tax of NOK 67 million (NOK 58 million) and profit after tax of NOK 51 million (NOK 44 million)
o ROE (return on equity) of 8.5% (7.4%) and ROTE (return on target equity) of 9.7% (8.4%)
o Agreed to acquire SEK ~700 million (NOK ~700 million) Swedish consumer loan portfolio and closed transaction in July - in line with strategy to pursue structural opportunities that can accelerate value creation. Expected positive effect on profitability from 2025 and onwards
On track for 2025 targets
o Year-end organic 2025 targets maintained at ~10% annualized loan growth, cost/income ratio of ~26% and ROTE of 10-12%
Øyvind Oanes commented further:
"With a positive macro-outlook in the Nordics, we will continue to grow in the most profitable markets while keeping costs stable. The loan loss ratio has started to decline and is set to continue declining - driving the Bank's profitability and returns up. Our cost-efficiency and scalability enable us to look at inorganic growth opportunities to improve returns further, and we will continue pursuing relevant structural opportunities to leverage the scalability of our platform and accelerate value creation beyond the organic."
The Q2 2024 report and presentation are available here.