Morrow Bank (MORROW) Investor Update summary

Business performance and growth

• Achieved 31% loan balance growth in 2024, with a 65% year-on-year pre-tax profit increase in Q4 2024.

• Total income reached an all-time high in Q4 2024, up 24% year-on-year, driven by organic growth and Swedish portfolio acquisitions.

• Cost/income ratio improved to 25.9% in Q4 2024 from 28.0% a year earlier, reflecting stable costs despite loan growth.

• Loan loss ratio declined to 4.6% in Q4 2024 from 5.4% in Q4 2023, with further improvement expected due to tightened credit policies and a maturing loan book.

• Return on target equity (ROTE) improved for five consecutive quarters, reaching 10.6% in Q4 2024.

Strategic initiatives and outlook

• Built a highly scalable banking platform, enabling efficient growth and value creation.

• Board proposes a dividend of up to 50% of 2024 profits, NOK 0.4 per share, supported by strong capital adequacy and excess capital generation.

• Redomiciliation to Sweden is progressing, with a banking license application submitted and share listing transfer to Nasdaq Stockholm expected within 12 months of approval.

• Targeting 5% annualized organic growth and 12-14% ROTE by year-end 2026; redomiciliation could increase ROTE to ~20%.

• Continuing to pursue M&A and structural opportunities to enhance shareholder value.

Market positioning and shareholder value

• Delivered ~140% shareholder return in 2024, significantly outperforming Swedish peers.

• Despite strong performance, shares trade at a ~35% discount to Swedish peers on a price/book basis (P/B ~0.9x).

• Diversified Nordic loan portfolio of NOK 15.4 billion, with 45% in Norway, 36% in Finland, and 19% in Sweden.

• Typical loan customers are middle-aged homeowners with above-average income and strong credit profiles.

• Platform enables further M&A and supports continued growth and value creation.