Pareto Bank (PARB) Q2 2024 earnings summary

Executive summary

• Profit after tax reached NOK 178.2m in Q2-24, up from NOK 154.4m in Q2-23, with return on equity at 14.2% and EPS of NOK 2.15.

• H1 2024 net income after tax was NOK 354.3m, up from NOK 285.3m in H1 2023, with ROE of 14.3% and EPS of NOK 4.31.

• Net interest income increased to NOK 303.0m from NOK 271.5m year-over-year, with lending to customers growing by NOK 657m to NOK 19,585m.

• Strong operational efficiency with a cost/income ratio of 17.8% in Q2-24.

• Activity improved late in the quarter, especially in residential development and corporate/offshore financing.

Financial highlights

• Net interest income for Q2-24 was NOK 303.0m, up from NOK 271.5m in Q2-23; net interest margin was 4.6%.

• Operating profit before impairments was NOK 259.3m, up from NOK 214.7m year-over-year.

• Cost/income ratio improved to 17.8% from 19.3% in Q2-23.

• Earnings per share increased to NOK 2.15 from NOK 2.03 in Q2-23.

• Net loans to customers at quarter-end were NOK 19,585m, up from NOK 18,344m a year earlier.

Outlook and guidance

• Moderate growth expected in core business areas in Q3-24.

• CRR3 regulation expected in Norway in 2025, likely improving CET1 ratio.

• Cautious lending growth expected in residential property for Q3-24.

• Flat lending volume anticipated for commercial property in Q3-24.

• Loan losses and impairments may remain elevated in H2-24 compared to historical levels.