Lea Bank (LEA) Q3 2024 earnings summary

Executive summary

• Profit before tax reached 35.0 MNOK in Q3 2024, with profit after tax at 26.4 MNOK, reflecting ongoing profit generation and a more positive outlook amid interest rate changes and lower losses.

• The bank is advancing its redomiciliation to Sweden, with approvals from the AGM and Norwegian FSA, and is awaiting Swedish FSA approval; a Nasdaq Stockholm listing is targeted for 2025.

• Deposit funding increased in Sweden and deposits were launched in Finland, strengthening funding capabilities.

• The Swedish subsidiary was renamed Lea Bank AB, and a new HQ is being established in Gothenburg.

• Completed acquisition of Captum Group AB in May 2024, now reporting group consolidated numbers.

Financial highlights

• Interest income for Q3 2024 was 204.4 MNOK, up from 180.4 MNOK in Q3 2023, driven by higher volumes and interest rates.

• Net interest income for Q3 2024 was 135.5 MNOK, with net other income at 21.3 MNOK, both showing year-over-year growth.

• Operating expenses rose to 48.1 MNOK in Q3 2024 from 44.5 MNOK last year, mainly due to funding diversification and redomiciliation costs.

• Loan losses in Q3 2024 were 73.6 MNOK, with an annualized loss ratio of 4.0%, slightly down from 4.1% in Q3 2023.

• Gross loans increased to 7,353 MNOK as of Q3 2024, compared to 6,913 MNOK at year-end 2023.

Outlook and guidance

• The outlook for consumer finance is more optimistic due to lower interest rates and reduced household pressure.

• The bank is adapting risk appetite and growth in line with market conditions, focusing on profitable growth and dividends.

• Positioning for activation of the Swedish banking license from early 2025.

• Focus on expanding digital consumer finance in core markets, leveraging scalable operations and technology.

• General uncertainty remains regarding future market and regulatory developments.