Artea bankas (ROE1L) Q4 2024 earnings summary

Executive summary

• Exceeded 2024 guidance across all key metrics, delivering record net profit of €78.8 million (adjusted €84.9 million), and raising long-term targets.

• Achieved robust loan and deposit growth, strong fee and commission income diversification, and significant progress on strategic initiatives including replatforming, rebranding, and INVL integration.

• Announced record-high dividend (50% payout) and expanded share buyback program, supporting enhanced shareholder returns.

• Maintained strong capital and liquidity positions, supporting future growth.

• Retail transformation and client-centric strategy advanced, with continued focus on efficiency and customer experience.

Financial highlights

• Net profit €78.8 million (+5% YoY); adjusted net profit €84.9 million; ROE 14.0% (adj. 15.1%).

• Net interest income €160.2 million (+2% YoY); NIM contracted from 4.1% to 3.7%.

• Net fee and commission income €29.1 million (+44% YoY); operating expenses €116.4 million (+36% YoY, driven by one-offs and headcount growth).

• Loan book €3.4 billion (+17% YoY); deposits €3.6 billion (+12% YoY), both surpassing guidance.

• Cost-to-income ratio 49.0% (adj. 45.6%); total shareholder return 28% in 2024.

Outlook and guidance

• Upgraded 2025 guidance: loan book growth of 18%, with long-term CAGR targets of ~8% for loans and ~10% for deposits.

• Projecting net fee and commission income growth of ~10% annually through 2027, with faster growth post-2028 after core banking transformation.

• Long-term ROE target increased to 17%; minimum 50% dividend payout policy maintained.

• All core banking upgrade costs to be expensed in 2025–2026, temporarily increasing expenses but improving long-term efficiency.

• NIM expected to stabilize in 2025; cost of funding to decrease.