Q4 Results 2024
Morrow Bank delivered another solid quarter with profit before tax of NOK 83.6 million, up 65% year-on-year. Full-year profit before tax was NOK 281 million, up 37%. Commenting on the results, Morrow Bank’s CEO Øyvind Oanes said: “With record-high income, improved cost efficiency and declining loan losses, Morrow Bank delivered significant shareholder value, achieving a total shareholder return of ~140% for the year. Since launching our turnaround early 2022, we’ve reduced the cost/income ratio from 54% to a best-in-class 26%, doubled the loan book to NOK 15.4 billion and we are now in the position to pay a dividend for 2024.”
Øyvind Oanes commented further: “Looking ahead, the prospects are encouraging. Nordic macroeconomic conditions are improving, with declining interest rates and renewed GDP growth on the horizon. These trends support stable to improving net interest margins, continued reductions in loan losses and higher risk-adjusted returns. From 2025, we expect growing excess capital generation which we are committed to allocate to where it can generate the highest long-term shareholder return. Our redomiciliation process is on track, with a decision from the Swedish FSA expected in Q2 2025. Aligning our capital requirements with Swedish peers is expected to enhance our return on target equity to as much as 20%, unlocking further value in the mid-term.” The Q4 and full-year 2024 report and presentation is available here.
Highlights
Built a scalable banking platform
• Gross loans at NOK 15.4 billion, up 31% from NOK 11.8 billion end-2023 • All-time-high total income of NOK 354 million in Q4 and NOK 1.3 billion in 2024, up 24% and 21% vs 2023 respectively • Cost/income ratio at industry-leading 25.9% in the quarter (28.0% in Q4 2023) enabled by a scalable banking platformStrong value drivers in place
• Nordic macro improving, with expected higher GDP growth and lower inflation in 2025-2026 compared to last year • Loan loss ratio to continue to decline supported by stricter policies, a maturing loan book and improving macro – enabling higher risk-adjusted margins • Current business plan set to generate excess capital from 2025 as returns exceed growthIncreased profitability and proposed dividend
• Loan loss ratio declined for the fourth quarter in a row to 4.6% (5.4% in Q4 2023) • Profit before tax increased by 65% to NOK 83.6 million in Q4 (NOK 50.6 million in Q4 2023) and 37% to NOK 281 million for 2024 (NOK 206 million for 2023) • Return on target equity (ROTE) of 10.6% in the quarter and 10.1% for 2024• The board to recommend a dividend of up to 50% of 2024 profits available for distribution to the AGM (10 April 2025), approximately NOK 0.4 per shareAttractive value creation potential
• Targeting annualized organic loan growth of ~5 %, cost/income ratio of 23% and return on target equity of 12-14% by year-end 2026 • Submitted Swedish banking license application to achieve regulatory level playing field with Swedish peers • With capital requirements like Swedish peers, return on target equity could reach 20% in the mid-term • Swedish FSA decision expected in Q2 2025 – planning to start Swedish operation and transfer listing to Nasdaq Stockholm early 2026Øyvind Oanes commented further: “Looking ahead, the prospects are encouraging. Nordic macroeconomic conditions are improving, with declining interest rates and renewed GDP growth on the horizon. These trends support stable to improving net interest margins, continued reductions in loan losses and higher risk-adjusted returns. From 2025, we expect growing excess capital generation which we are committed to allocate to where it can generate the highest long-term shareholder return. Our redomiciliation process is on track, with a decision from the Swedish FSA expected in Q2 2025. Aligning our capital requirements with Swedish peers is expected to enhance our return on target equity to as much as 20%, unlocking further value in the mid-term.” The Q4 and full-year 2024 report and presentation is available here.