Pareto Bank (PARB) investor relations material

Executive summary

• Profit after tax for Q2 2026 was NOK 36.9m, a sharp decline from NOK 200.7m in Q2 2025, mainly due to record-high impairments and losses on loans, especially within residential property development.

• Return on equity after tax dropped to 2.0% from 15.1% year-over-year.

• Earnings per share fell to NOK 0.32 from NOK 2.44 year-over-year.

• Lending at quarter-end was NOK 19,406m, with average lending down 0.3% sequentially.

• Substantial increase in loan loss provisions, mainly due to continued challenges in residential development exposures, led to significantly lower profitability year-over-year.

Financial highlights

• Net interest income for Q2 2026 was NOK 288.0m, down from NOK 335.5m in Q2 2025.

• Total net income was NOK 298.8m, with operating profit before impairments at NOK 245.9m.

• Impairments and losses on loans and guarantees reached NOK 201.0m, the highest in the bank's history.

• Cost/income ratio improved slightly to 17.7% from 18.3% in Q2 2025.

• Net loans to customers increased to NOK 19,406m, up NOK 157m from the previous quarter.

Outlook and guidance

• Elevated loan loss provisions are expected to persist due to a weak new housing market and ongoing project-specific challenges.

• Ship financing and corporate financing are expected to see continued growth in Q3 2026, while residential and commercial property financing volumes are projected to remain flat or slightly decline.

• Sweden branch anticipates stable exposure in Q3 2026, with further growth expected towards year-end.

• The long-term profitability target remains at 15% ROE, and the dividend policy of distributing 50% or more annually is unchanged.

• Market uncertainties include potential interest rate increases and geopolitical risks affecting shipping and oil markets.