Morrow Bank ASA: Q3 2024 highlights – Strong growth, increased profitability and updated ambitions

31 Oct 2024 07:00 CET

Morrow Bank delivered another solid quarter with profit before tax of NOK 72
million, up 7% from the previous quarter and 50% year-on-year.

Commenting on the results, Morrow Bank’s CEO Øyvind Oanes said:
“With a highly scalable banking platform in place, Morrow Bank delivered
improvements across all KPIs in Q3 – which was very much line with our
previously stated ambitions. Most remarkably, we managed to grow our loan
balance by around 25% while reducing our cost base. The backdrop is that we now
leverage our streamlined platform, as it enables us to further automate
processes and increase scalability.”

Highlights of the quarter:

Strong growth
• Gross loan up 24.6% from Q2 2024 driven by organic demand and loan portfolio
acquisitions
• All-time-high total income of NOK 321 million, up 5.2% quarter-on-quarter amid
stable yields

Improved cost efficiency
• Cost/income ratio at industry-leading 25.7% (26.3%) enabled by a scalable
banking platform
• Underlying cost level reduced as increased automation enabled ~13% FTEs
reduction in Q3

Improved loan loss ratio
• Loan loss ratio declined for the third quarter in a row to 4.8% (5.1%)
• Driven by stricter credit policies implemented in 2023 and a maturing loan
book

Increased profitability
• Profit before tax up 7% to NOK 72 million
• Return on equity of 9.0% (8.5%) and return on target equity of 10.1% (9.7%)

Updated ambitions, outlook for excess capital generation from 2025
• Medium-term targets extended to year-end 2026 (vs year-end 2025), now
targeting annualised organic loan growth of 5% (10%), cost/income ratio of 23%
(26%) and return on target equity of 12-14% (10-12%)
• Current business plan set to generate excess capital from 2025; to be
allocated to where it generates the highest long-term shareholder returns
• Application for Swedish banking license submitted; with conditions similar to
Swedish peers, return on target equity could increase to 20% in the mid-term

Øyvind Oanes commented further:
“Looking ahead, we see several strong value drivers. The combined effect of our
recent loan acquisitions and continuous operational improvements is that the
Bank is increasingly profitable and positioned to generate excess capital from
2025. In addition, structural opportunities could significantly accelerate
further value creation.”

The Q3 2024 report and presentation are attached to this release and available
at ir.morrowbank.com.

CEO Øyvind Oanes and CFO Eirik Holtedahl will present the Bank's results today
at 08:30 CEST.

The presentation and following Q&A will be conducted via Microsoft Teams.
Registration form for the presentation:

https://tinyurl.com/morrowbankQ32024

For further information, please contact:

Eirik Holtedahl, CFO
tel: +47 96912291
email: ir@morrowbank.com


About Morrow Bank ASA
Morrow Bank is a Nordic niche bank offering personal loans, credit cards and
deposit accounts to consumers. The target group is creditworthy individuals with
stable personal finances and no payment remarks. Credit risk is managed largely
by automated processes for credit assessment and underwriting. The Bank has a
diversified and balanced distribution model utilizing both public and
proprietary channels. Operational efficiency and low cost are a foundation for
Morrow Bank, enabled by centralized operations, modern systems and digital
set-up.
To learn more, visit ir.morrowbank.com

This information is considered to be inside information pursuant to the EU
Market Abuse Regulation article 7 and is subject to the disclosure requirements
pursuant to section 5-12 of the Norwegian Securities Trading Act. This stock
exchange announcement was published by Henning Fagerbakke, Head of Finance,
Morrow Bank ASA, on Thursday 31 October 2024 at 07:00 CET.

More information:
Access the news on Oslo Bors NewsWeb site

630806_Morrow Bank - Q3 2024 presentation_final.pdf
630806_Morrow Bank - Q3 2024 report_final.pdf