KRAFT BANK (KRAB) Q4 2024 earnings summary

Executive summary

• Focuses on providing mortgage loans to individuals facing financial challenges, aiming to improve their financial situation and help them return to mainstream banking.

• Net profit after tax for Q4 2024 was NOK 10.6 million, up from NOK 2.8 million in Q4 2023.

• 1,931 customers have been financially rehabilitated since 2018, with 143 in the last quarter.

• 81% overall success rate since inception, rising to 86% in 2024, defined as customers refinancing to ordinary banks.

• Varde Finans AS, the wholly owned loan brokerage subsidiary, achieved profitability in Q4.

Financial highlights

• Net profit after tax for Q4 was NOK 10.6 million, up from NOK 10.2 million in the previous quarter and NOK 2.8 million in Q4 2023.

• Net loan growth in Q4 was NOK 98 million; full-year net loan growth was NOK 438 million; net loans to customers reached NOK 3,643 million.

• Customer deposits increased by NOK 214 million to NOK 3,848 million.

• Net interest income was NOK 41.1 million, up 20% year-over-year.

• Return on equity after tax was 9.3% for Q4 and 6.1% for 2024.

Outlook and guidance

• Expects continued increase in interest income and stable cost development in line with inflation and wage growth.

• Targeting 15% return on equity by end of 2025; forecasts 13% for 2025.

• Projected loan portfolio at year-end 2025 is NOK 3.9–4.2 billion; target for new lending in 2025 is NOK 1,700 million.

• Expects continued strong customer inflow due to high household debt and fewer competitors.

• No changes anticipated in capital or buffer requirements for 2025; expects a 2% increase in capital adequacy from new standard method in Q1 2025.