Morrow Bank (MORROW) Q4 2024 earnings summary

Executive summary

• Achieved strong 2024 performance with a 38% increase in loan book to NOK 15.4 billion and total income up 21% to NOK 1.3 billion.

• Profit before tax rose 36% to NOK 281 million, with Q4 profit before tax up 65% year-over-year to NOK 83.6 million.

• Built a scalable banking platform, achieving a 27% loan balance CAGR since 2022 and outperformed peers in growth and efficiency.

• Board proposes first dividend since turnaround: NOK 0.40 per share, up to 50% of 2024 profits.

• Initiated redomiciliation to Sweden, with banking license application submitted and Nasdaq Stockholm listing expected post-approval.

Financial highlights

• Gross loan balance grew over 30% in 2024, driven by organic growth and acquisition of NOK 2.3 billion in Swedish portfolios.

• Total income for 2024 was NOK 1.3 billion, up 21% year-over-year; Q4 income reached NOK 354 million, a 24% increase.

• Cost/income ratio improved to 25.9% in Q4 2024, including a NOK 10 million one-off for Swedish license application.

• Loan loss ratio declined to 4.6% in Q4, down from 5.4% a year ago, marking four consecutive quarters of improvement.

• Net profit after tax for 2024 was NOK 209 million, with EPS of NOK 0.82.

Outlook and guidance

• Targeting ~5% annualized organic loan growth and ROTE of 12-14% by end-2026, with potential for 20% midterm after Swedish redomiciliation.

• Cost/income ratio expected to drop to 23% by end of 2025.

• Loan loss ratio expected to continue declining, supported by improved credit policies and macro conditions.

• Dividend policy to distribute excess capital not allocated to growth.

• Redomiciliation to Sweden expected to enable further value creation and capital optimization.