Instabank (INSTA) Q4 2024 earnings summary

Executive summary

• Profit after tax reached 26.6 MNOK in Q4-24, up 1.4 MNOK year-over-year, with return on equity at 11.3%.

• Business lending grew by 168 MNOK in the quarter, now representing 7% of total lending.

• Strategic expansion includes a planned banking license application in Finland and a credit card launch in Germany in 2025.

• Regulatory capital relief of 100 MNOK was achieved due to a revised Pillar 2 capital composition decision.

Financial highlights

• Total income for Q4-24 was 126.4 MNOK, up 1.3 MNOK year-over-year, driven by a 13.4 MNOK increase in net interest income.

• Net interest income rose due to 884 MNOK gross lending growth over 12 months, excluding a 469 MNOK sale of non-performing loans.

• Operating expenses increased to 61.1 MNOK, up 7.9 MNOK sequentially, due to non-recurring costs and preparations for new product launches.

• Loan losses were 32.2 MNOK (2.0%), down 14.4 MNOK year-over-year, aided by a one-off reduction in loan loss allowances.

• Gross loans increased by 172 MNOK to 6,689 MNOK; customer deposits totaled 6,747 MNOK.

Outlook and guidance

• 2025 profit after tax is guided at 125 MNOK, with a mid-term ambition of over 200 MNOK.

• ROE target for 2025 is above 12%, with a mid-term ambition above 15%.

• Gross loans expected to reach 8.7 BNOK in 2025, with a mid-term ambition above 10 BNOK.

• Lending growth is expected to accelerate in 2025, with a lending increase capacity of 2 BNOK.

• Credit card launch in Germany and business lending expansion in Finland planned for 2025.