Pareto Bank (PARB) Q1 2025 earnings summary

Executive summary

• Profit after tax reached NOK 178.5m in Q1-25, up from NOK 176.1m in Q1-24, with return on equity at 13.5% compared to 14.3% last year.

• Net interest income increased to NOK 315.4m from NOK 299.8m year-over-year, driven by loan growth and stable margins.

• Lending at quarter-end was NOK 20,864m, up from NOK 18,928m, with continued expansion in Sweden and strong capital focus.

• Total impairments and loan loss provisions rose to NOK 37.1m from NOK 15.3m, mainly within residential property development.

• Cost/income ratio remained low at 18.5% (18.4% in Q1-24), reflecting strong operational efficiency.

Financial highlights

• Operating profit before impairments was NOK 270.8m, up from NOK 246.6m in Q1-24.

• Net interest margin held steady at 4.6% year-over-year and quarter-over-quarter.

• Earnings per share were NOK 2.16, slightly above NOK 2.15 in Q1-24.

• Deposit volume increased by over NOK 1bn in Q1-25, mainly in long-term fixed rate contracts.

• Fair value gains of NOK 12.6m compared to a negative NOK 0.3m last year.

Outlook and guidance

• Flat to weak loan growth expected in Q2-25 due to capital discipline and market uncertainty.

• Residential property financing expects some exposure growth in Q2-25, while commercial property financing anticipates subdued volume growth.

• Loan losses and write-downs may remain elevated in coming quarters, especially in residential development.

• Long-term profitability target of 15% ROE and dividend payout of 50% or more maintained.

• CRR3 implementation in Norway from April 2025 expected to have neutral to slightly positive effect on capital ratios.