Pareto Bank (PARB) Q3 2024 earnings summary

Executive summary

• Profit after tax reached NOK 173.2m in Q3-24, up from NOK 155.2m in Q3-23, with return on equity at 13.7% compared to 13.9% last year.

• Net interest income increased to NOK 313.1m from NOK 281.3m year-over-year, driven by higher average lending volumes and stable margins.

• Earnings per share rose to NOK 2.08 from NOK 1.89 year-over-year.

• Cost/income ratio was 18.3%, slightly higher than Q2-24 due to increased staffing and IT expenses.

• The Swedish branch was established and operational, staffed by two employees from Oslo.

Financial highlights

• Operating profit before impairments and losses was NOK 257.4m in Q3-24, up from NOK 233.9m in Q3-23.

• Net interest margin increased to 4.7% from 4.5% year-over-year.

• Operating expenses were NOK 57.7m, up from NOK 50.4m year-over-year, mainly due to higher personnel and IT costs.

• Total assets stood at NOK 25,829m at quarter-end, compared to NOK 25,189m a year earlier.

• Customer deposits stood at NOK 12,057m, up from NOK 11,473m year-over-year.

Outlook and guidance

• Residential and commercial property lending volumes expected to remain flat in Q4-24, with low development activity and subdued demand.

• Corporate financing projected to see stronger growth in Q4-24, supported by high activity and long-term prospects.

• Ship financing volume expected to remain flat, with continued offshore activity but subdued shipping demand.

• Implementation of CRR3 in 2025 is anticipated to have a neutral to slightly positive effect on core capital.

• Swedish branch aims to build a diversified and profitable loan portfolio, targeting ROE above 15%.