Pareto Bank (PARB) Q4 2025 earnings summary

Executive summary

• Profit after tax for 2025 was NOK 676m, down 2% year-over-year, marking the first annual profit decline in the bank's history, mainly due to negative lending growth and high impairments.

• Return on equity after tax was 12.4% for 2025, compared to 13.6% last year, impacted by higher impairments and strong capitalisation.

• Q4 2025 net profit after tax was NOK 119.7m, down from NOK 159.8m in Q4 2024; ROE was 8.3% in Q4 2025.

• Cost/income ratio remained low at 18.3% for 2025, reflecting excellent operational efficiency despite investments.

Financial highlights

• Net interest income for Q4 2025 was NOK 293.0m, down from NOK 311.4m in Q4 2024; net interest margin fell to 4.5%.

• Lending at year-end was NOK 18,774m, down from NOK 20,713m a year earlier.

• Customer deposits at year-end were NOK 11,674m, a decrease from NOK 13,249m.

• Total impairments and losses in Q4 2025 were NOK 105.5m, up from NOK 55.3m in Q4 2024.

• Earnings per share for 2025 was NOK 8.13, down from NOK 8.29 in 2024.

Outlook and guidance

• Low lending growth expected in Q1 2026 for residential property; new-build market remains soft and sales slow.

• Commercial property and corporate/ship financing volumes expected to be flat or decrease in Q1 2026.

• Further exposure growth expected in Sweden in Q1 2026, supported by strong deal flow.

• Long-term profitability target remains at 15% ROE; dividend policy of at least 50% payout is unchanged.

• A dividend of NOK 8.00 per share is proposed for 2025, representing 98% payout.