Morrow Bank (MORROW) Investor update summary

Strategic positioning and business model

• Established in 2014 and listed in 2017, Morrow Bank targets creditworthy Nordic consumers in a resilient BNOK 600 market.

• Developed a scalable banking platform, enabling significant value creation and operational efficiency.

• Offers flexible consumer loans, no-fee credit cards, and competitive deposit accounts, with a diversified loan portfolio across Norway, Finland, and Sweden.

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

• Core processes are optimized and highly automated, with extensive use of distribution and collection partners.

Financial performance and growth

• Achieved over 50% loan balance growth, reaching BNOK 12.2, and a cost/income ratio below 35% ahead of 2024 targets.

• LTM revenue grew 33% year-over-year to BNOK 1.1, and LTM pre-tax profit rose 114% to MNOK 212 (adjusted).

• Net interest margin remains strong at 8.8% in Q1 2024, with profit after tax at MNOK 43.7 for the quarter.

• Gross loan balance increased market share from ~1.3% in 2022 to ~2.0% in 2024.

• Cost efficiency improved, with OPEX stable and cost/income ratio projected to decline further by end-2025.

Risk management and profitability

• Loan loss ratio is stabilizing, with tightened credit policies and improved collection processes reducing risk.

• Profitability is increasing, with return on target equity (ROTE) trending toward 10-12% and potential for further improvement.

• Liquidity and funding metrics remain robust, with high liquidity coverage and deposit coverage ratios.

• Capital position supports >10% annual growth, with active capital allocation to higher-margin segments.