Pareto Bank (PARB) Q4 2024 earnings summary

Executive summary

• Achieved record profit after tax of NOK 687.3m for 2024, up 14% year-over-year, driven by 12% lending growth and strong performance in corporate and residential development segments.

• Return on equity after tax was 13.6% for 2024, slightly down from 13.8% in 2023, impacted by higher impairments and capitalisation.

• Cost/income ratio improved to 18.0% for 2024, reflecting strong operational efficiency despite investments in Sweden.

• Lending at year-end reached NOK 20.7bn, with average lending up 2% quarter-over-quarter.

• Swedish branch established, with exposure growing to NOK 2,778m and a new website launched for Swedish customers.

Financial highlights

• Net interest income for 2024 was NOK 1,227.3m, up from NOK 1,112.6m in 2023.

• Profit after tax in Q4-24 was NOK 159.8m, down from NOK 165.0m in Q4-23.

• Earnings per share for 2024 reached NOK 8.29, up from NOK 7.38 in 2023.

• Total operating expenses for 2024 were NOK 225.4m, up from NOK 203.5m in 2023.

• Proposed dividend for 2024 is NOK 4.15 per share, with a payout ratio of 50–52.9%.

Outlook and guidance

• Lending growth expected to continue, with some growth in residential property financing in Q1-25.

• Commercial property, corporate, and ship financing volumes expected to remain flat in Q1-25.

• Loan loss provisions and credit losses may remain elevated in coming quarters due to ongoing market uncertainty, especially in the housing market.

• Long-term ROE target remains at 15%, with a minimum dividend payout of 50%.

• Swedish operations to focus on building a diversified and profitable loan portfolio, targeting ROE above 15%.