14 Feb 2024

Q4 Results 2023

Solid growth, improved interest margins and efficiency drives pre-tax profits of NOK 51 million in Q4 2023

Morrow Bank delivered another quarter with growth and operational improvements in Q4 2023.Commenting on the results, Morrow Bank’s CEO Øyvind Oanes said: “Q4 2023 marked another quarter with healthy growth and improved efficiency. We are pleased to see that a large portion of new loans now have both higher yield and lower risk than older loans. As we conclude 2023, we have delivered on the roadmap and ambitions we set in Q1 2022. We’ve grown the loan book by more than 50%, reduced the cost/income ratio to highly competitive levels below 30% and we’ve managed to keep the net interest margin stable amid a challenging macro backdrop.”

Highlights of the quarter:

Solid loan growth

• Underlying loan balance growth of 4% (5% in Q3), year-end balance at NOK ~12 billion • 22% growth y-o-y as better customer processes and automation have driven throughput

Improved margins

• Net interest margin up 0.2%p in Q4 driven by extensive pricing measures • Total income surpassed NOK 1 billion in 2023, up 30% y-o-y

Improved cost efficiency

• Operating expenses remained stable at NOK ~80 million in Q4 (NOK 78 million in Q3) • ~20% normalised cost reduction y-o-y driven by cost efficiency initiatives: C/I at 28% in Q4

Credit risk control

• Loan loss ratio at 5.4%, up 0.4%p in Q4 driven by macro and growth • Increase more than offset by income growth both in quarter and y-o-y

Profitability maintained

• Profit after tax of NOK 35 million (NOK 36), impacted by NOK 4 million higher tax expense; pre-tax profits of NOK 51 million (NOK 48) • ROE (return on equity) of 6.1%, equal to the level in Q3 • Full-year 2023 profit before tax of NOK 206 million vs NOK 2 million in 2022 Commenting on the outlook, Oanes furthermore said: “With a loan book of close to NOK 12 billion and a scalable banking platform now in place, our ambition is to deliver steady growth around 10% annually while generating attractive returns. Growing the loan book while keeping costs stable, combined with higher risk-adjusted margins, should take us to 10-12% ROE by the end of 2025.”
The interim report and presentation are available on Reports and presentations page