Ikano Bank (IKANO) H1 2024 earnings summary

Executive summary

• Operating result for H1 2024 was SEK -282m, down from SEK -153m year-over-year, due to higher costs and increased loan losses amid ongoing transformation and inflationary pressures.

• Net interest income (excluding leasing) fell to SEK 1,024m (1,091) due to lower volumes; net commission income also declined.

• Deposits from the public rose 7.4% to SEK 33,689m, mainly driven by growth in Germany; loans to the public decreased by 1.9% to SEK 24,923m.

• Ingka Investments agreed to acquire the remaining 51% of Ikano Bank, aiming for completion in H2 2024, strengthening growth prospects.

• Strategic acquisition of a SEK 3.8bn Swedish consumer loan portfolio expected to close in H2 2024.

Financial highlights

• Total operating income for H1 2024 was SEK 3,222m, down 0.3% year-over-year.

• Operating expenses increased 2.5% to SEK 3,091m; loan losses rose to SEK 413m (370), mainly in the corporate loan portfolio.

• Net leasing income slightly increased to SEK 178m (174); net commission income decreased to SEK 133m (140).

• Return on adjusted equity remained negative.

• Loan loss ratio increased to 2.3% (2.0).

Outlook and guidance

• Ongoing transformation to a function-based bank, with focus on efficiency, digitalization, and customer experience.

• New loan and savings platform for Sweden and a factoring product for corporate clients to launch in H2 2024.

• New IKEA UK credit card planned for launch in H1 2025.

• Acquisition of Nordnet Bank's consumer loan portfolio to expand Swedish consumer lending.