Pareto Bank (PARB) investor relations material

Executive summary

• Profit after tax fell to NOK 76.7m in Q1-26 from NOK 178.5m in Q1-25, mainly due to high loan loss provisions related to real estate development exposures, with return on equity dropping to 5.0% from 13.5% year-over-year and EPS at NOK 0.84 (NOK 2.16 in Q1 2025).

• Operational efficiency remained high, with a cost/income ratio of 18.1% (18.5%).

• Lending at quarter-end was NOK 19,249m, down from NOK 20,864m a year earlier, though average lending rose 1.5% sequentially.

• Highest quarterly impairments and losses recorded at NOK 155.9m, mainly within residential property development.

Financial highlights

• Net interest income declined to NOK 299.4m from NOK 329.4m year-over-year, mainly due to reduced lending volume.

• Cost/income ratio remained stable at 18.1% versus 18.5% in Q1-25, reflecting continued operational efficiency.

• Earnings per share dropped to NOK 0.84 from NOK 2.16 year-over-year.

• Deposit volume decreased by NOK 1.4bn (12%) in Q1-26, with customer deposits at NOK 10,315m (NOK 14,324m), and deposit coverage at 53.6%.

• Operating expenses were NOK 56.3m (NOK 61.5m), with lower personnel costs due to no accrual for variable compensation.

Outlook and guidance

• Flat lending volume and exposure growth expected in residential property for Q2-26 due to weak new-build demand and restrictive credit practices.

• Commercial property financing expected to remain flat amid low transaction activity and risk appetite.

• Corporate financing and ship financing anticipate increased exposure in Q2-26, with growth supported by Swedish operations and higher activity.

• Continued high loan loss provisions expected due to ongoing challenges in the new housing market.

• Long-term ROE target remains above 15%, with a dividend policy of 50% or more payout annually.