Pareto Bank Asa · OSL:PARB
Pareto Bank Asa — Q1 2025 Earnings Presentation
37 slides from Pareto Bank Asa's earnings presentation, Apr 30, 2025
Slide 1: Pareto Bank Financial Results – First Quarter 2025
PARETO BANK Financial Results – First Quarter 2025
Slide 2: Highlights, Financials, Business Area Update & Outlook
Highlights Financials Business Area Update & Outlook 2 INTERNAL
Slide 3: First Quarter 2025 Highlights
FIRST QUARTER 2025 Highlights • Profit after tax NOK 178.5m (NOK 176.1m in Q1-24). • Return on equity after tax 13.5% (14.3%). • Net interest income up to NOK 315.4m (NOK 299.8m). • Lending at the end of the quarter stood at NOK 20,864m (NOK 18,928m). Average lending was up 4% q/q after strong growt
Slide 4: Key Figures
KEY FIGURES Profit after tax (NOKm) Return on Equity * CET1 ratio 176.1 178.2 173.2 178.5 159.8 18.2% 18.3% 17.9% 14.3% 14.2% 13.7% 17.2% 17.1% 13.5% 12.2% Q1-24 Q2-24 Q3-24 Q4-24 Q1-25 Q1-24 Q2-24 Q3-24 Q4-24 Q1-25 Q1-24 Q2-24 Q3-24 Q4-24 Q1-25 Net interest income (NOKm) Cost/Income ratio Loss rati
Slide 5: Financials
Highlights Financials Business Area Update & Outlook 5 INTERNAL
Slide 6: Income Statement
INCOME STATEMENT P&L (NOKm) Q1-25 Q1-24 2024 2023 • Interest income up with average lending volumes up Net interest income 315.4 299.8 1,227.3 1,112.6 4% q/q. Net other operating income 16.9 2.4 25.9 6.7 Total net income 332.3 302.2 1,253.2 1,119.4 • Lending margins relatively stable, while pressure
Slide 7: Change in Quarterly Net Interest Income
CHANGE IN QUARTERLY NET INTEREST INCOME (NOKm) 9.9 19.2 7.1 1.8 315.4 311.4 - 7.7 - 19.2 - 1.9 - 5.4 200.0 Q4-24 Lending volume Lending rate Fee income Surplus liquidity Deposit volume Depost rate Market funding Interest days Q1-25 7 INTERNAL
Slide 8: Interest Margins
INTEREST MARGINS Lending and deposit margin 5.7% 5.6% 5.7 % 5.5% 5.6% 4.7% 4.6% 4.7% 4.6% 4.5% 0.7% 0.5% 0.5% 0.4% 0.2% Q1-24 Q2-24 Q3-24 Q4-24 Q1-25 Lending margin Deposit margin Net interest margin 8 Note: Lending and deposit margins relative to average 3M NIBOR. Net interest margin is total net i
Slide 9: Quarterly Change in Stage 2, 3 and Impairments
QUARTERLY CHANGE IN STAGE 2, 3 AND IMPAIRMENTS Stage 2 and 3 and provisions for stage 3 lending (NOKm) Impairments and losses on loans and guarantees (NOKm) 55.3 1,012 37.1 626 739 30.9 619 734 26.0 1,138 15.3 1,013 940 853 836 195 224 134 162 108 Q1-24 Q2-24 Q3-24 Q4-24 Q1-25 Stage 3 Stage 2 Stage
Slide 10: Solidity and Capital Requirements
SOLIDITY AND CAPITAL REQUIREMENTS • Long-term CET1 target 16.3%, in line with the NFSA expectation. • Pareto Bank holds a buffer above this target. 17.1% 16.6% 16.3% NFSA expectation • The impact of CRR3 is still uncertain: Lower 16.3% capital requirements for operational risk and homes for rent, bu
Slide 11: Business Area Update & Outlook
Highlights Financials Business Area Update & Outlook 11 INTERNAL
Slide 12: A Niche Player Financing Medium-Sized Enterprises
A NICHE PLAYER FINANCING MEDIUM-SIZED ENTERPRISES Exposure (NOKm) SHIP FINANCING NOK 1,810m 7% RESIDENTIAL FINANCING NOK 3,667m 14% 42% COMMERCIAL PROPERTY RESIDENTIAL DEVELOPMENT FINANCING 11% FINANCING NOK 2,815m NOK 10,933m 27% CORPORATE FINANCING NOK 7,086m 12 INTERNAL
Slide 13: Quarterly Exposure per Business Area
QUARTERLY EXPOSURE PER BUSINESS AREA (NOKbn) 10.93 9.87 9.24 8.69 8.22 7.34 7.09 6.34 6.43 6.07 3.67 3.16 3.20 3.12 3.32 3.32 3.24 3.12 2.96 2.81 1.81 1.97 1.97 1.81 1.54 Residential development financing Residential financing Commercial property financing Corporate financing Ship financing Q1-24 Q2
Slide 14: Residential Property Financing
RESIDENTIAL PROPERTY FINANCING Residential property exposure (NOKm) Total NOK 14,600m SOME EXPOSURE GROWTH EXPECTED IN Q2-25. 1,448 Land w/ houses • Decent financing demand despite continued low development activity and few residental starts. 2,536 • Variations in volume is in the nature of project
Slide 15: Commercial Property Financing
COMMERCIAL PROPERTY FINANCING Commercial property exposure (NOKm) Total NOK 2,815m SUBDUED VOLUME GROWTH EXPECTED IN Q2-25. • Long-term rate outlook remain high and the prospects of an interest rate cut have diminished significantly. • The expected increase in transaction activity draws out. • Conti
Slide 16: Corporate Financing
CORPORATE FINANCING Corporate exposure (NOKm) Total NOK 7,086m (Q4-24: NOK 7,344m) 13% Real Estate STEADY DEVELOPMENT EXPECTED IN Q2-25. 3% Investment Company 3% IT/Telecommunications 4% 44% • Steady deal flow and financing demand. Loan 5% Retail redemptions will affect net lending growth in Q2-25.
Slide 17: Ship Financing
SHIP FINANCING Exposure (NOKm) Total NOK 1,810m (Q4-24: NOK 1,975m) FLAT TO DECREASING VOLUME EXPECTED FOR Q2-25. Offshore Accommodation 351 LTV 7%* Offshore Subsea 279 LTV 39%* • Higher appetite from other banks reduces growth outlook within offshore. Dry bulk 236 LTV 39% • Offshore markets and esp
Slide 18: Total Return
TOTAL RETURN Price Annual Equity Total Return Change Return Pareto 301 % 519 % 18 % Bank OSEBX 187 % 187 % 10 % Index 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 OSEBX PARB 18 INTERNAL
Slide 19: Appendix
APPENDIX (Pareto bank
Slide 20: Long-Term Ambitions
LONG-TERM AMBITIONS ROE Dividend 15% min. 50% 14.63% 52.9% 13.99% 49.4% 50.1% 50.0% 13.75% 13.56% 2021 2022 2023 2024 2021 2022 2023 2024 20 INTERNAL
Slide 21: ROE and Leverage Ratio
ROE AND LEVERAGE RATIO Profitability with increasing solidity 16.0 % 15.9 % 16.0 % 15.6 % 14.8 % 15.0 % 25.0 % 14.3 % 14.6 % 14.0 % 14.0 % 13.8 % 13.6 % 13.5 % 12.7 % 13.0 % 12.0 % 20.0 % 18.2 % 17.1 % 17.1 % 16.6 % 16.5 % 10.0 % 15.7 % 16.3 % 16.0 % 14.3 % 14.6 % 15.0 % 8.6 % 13.7 % 8.0 % 12.4 % 11
Slide 22: Lending Growth
LENDING GROWTH Per business area (NOKm) 20,000 Ship Financing 15,000 Corporate Financing * Commercial Residential Financing ** 10,000 Commercial Property Financing 5,000 Residential Property Financing - 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 *) Including
Slide 23: Largest Shareholders
LARGEST SHAREHOLDERS 31 March 2025 Name Shares % Total • The Company has 76,782,423 shares outstanding. One class 1 Pareto AS 15,356,484 20.00 % of shares where each share carries one voting right. 2 Société Générale 6,943,049 9.04 % • Diversified investor base with 3,759 shareholders. 3 AWC AS 5,21
Slide 24: The Share
THE SHARE Earnings per share (NOK) Book value per share (NOK) 2.15 2.15 2.16 2.08 65.79 1.91 63.64 61.74 61.44 59.67 Q1-24 Q2-24 Q3-24 Q4-24 Q1-25 Q1-24 Q2-24 Q3-24 Q4-24 Q1-25 24 INTERNAL
Slide 25: Quarterly Income Statement
QUARTERLY INCOME STATEMENT P&L (NOKm) Q1-25 Q4-24 Q3-24 Q2-24 Q1-24 Net interest income 315.4 311.4 313.1 303.0 299.8 Net other operating income 16.9 8.9 2.1 12.5 2.4 Total net income 332.3 320.4 315.1 315.5 302.2 Total operating expenses 61.5 55.7 57.7 56.3 55.6 Operating profit before 270.8 264.6
Slide 26: Quarterly Balance Sheet
QUARTERLY BALANCE SHEET (NOKm) Q1-25 Q4-24 Q3-24 Q2-24 Q1-24 Loans to credit institutions 2,144 2,640 1,930 1,432 1,174 Loans to customers 20,864 20,713 19,419 19,585 18,928 Bonds and other securities 5,158 3,659 4,240 5,331 5,923 Shareholdings in associated companies 34 34 22 22 22 Other assets 218
Slide 27: Margins and Interest Contribution
MARGINS AND INTEREST CONTRIBUTION Margins per business area Interest contribution per business area Estimated annualized margins including commissions, excluding front and back-end fees over 3M NOKm, estimated interest contribution including commissions, excluding front and back-end fees over 3M Nib
Slide 28: Real Estate Financing Exposure
REAL ESTATE FINANCING EXPOSURE Geographical residential property exposure Total NOK 14,600m* Geographical commercial property exposure Total NOK 2,815m* 11% 12% 4% 4% 6% 36% 39% Oslo 7% Oslo Akershus Sweden 7% Vestfold Vestland Sweden Akershus Østfold Telemark Others Others 17% 34% 23% 28 *) Residen
Slide 29: Sweden
SWEDEN Stable Exposure Exposure in Sweden (NOKm) Total NOK 2,835m • High deal flow throughout 2024 ensured strong volume growth towards year-end. Relatively unchanged exposure in Q1-25. • High focus on expanding network and customer base. 2,835 2,778 • Good credit quality ensures an attractive risk/
Slide 30: Liquidity Buffer
LIQUIDITY BUFFER Low credit and market risk (NOKm) Comments • Cash on hand. 80 • Highly liquid bonds. • Low credit risk. 2,367 • No interest rate or foreign exchange risk. Cash (Norges Bank & DNB) • Access to central bank 3,470 Bonds issued by government & PSEs facilities and repo market. Covered bo
Slide 31: Funding
FUNDING Sources (NOKm) Deposits & senior debt NOKm, Deposits 14,324 Percent customer deposits of net lending to customers Senior debt 7,336 68.7% 65.4% 66.4% AT1 & T2 debt 1,250 64.0% 62.1% 7,336 Other debt 456 7,366 7,347 7,570 7,284 Equity capital 5,052 Key funding and liquidity ratios 14,324 • De
Slide 32: Customer Deposits
CUSTOMER DEPOSITS Deposits by size (NOKm) Deposits by product (NOKm) > NOK 20m 3,642 547 NOK 10 - 20m 1,259 245 223 NOK 5 - 10m 867 372 Floating rate retail 216 NOK 2 - 5m 1,064 2,354 2,798 NOK 0 - 2m 997 2,847 Floating rate corporate 2,538 - 1,000 2,000 3,000 4,000 5,000 Floating rate Fixed rate 4,
Slide 33: Market Funding
MARKET FUNDING Market funding maturities (NOKm) * Cost of new market funding ** 129 127 250 575 103 101 300 83 81 120 58 2250 54 1975 45 0 0 39 1520 1550 38 30 750 750 2025 2026 2027 2028 2029 2030 3M 6M 12M 2Y 3Y 5Y Senior Call on Subordinated Capital 31.12.2024 31.03.2025 *) Net of own holdings as
Slide 34: Commitments by Size
COMMITMENTS BY SIZE Commitment size per customer (NOKm) Distribution of commitments by size (NOKm) 593 2% < 10 451 18% 5,053 10 - 50 28% 4,634 5,418 50 - 100 < 10 5,042 10 - 50 2,085 50 - 100 100 - 150 2,360 100 - 150 150 - 200 2,681 150 - 200 19% 200 - 250 4,344 > 250 8% 2,394 200 - 250 2,185 4,229
Slide 35: Commitments by Risk Classification
COMMITMENTS BY RISK CLASSIFICATION Risk classification (NOKm) Historical risk classification 8,285 None / very low risk 8,896 52% 50% 49% 47% 11,258 45% Low risk 13,582 40% 40% 37% 37% 2,380 34% Moderate risk 2,914 341 Some risk 652 13% 2 12% 12% 11% High risk 11% 89 188 Very high risk 318 Q1-24 Q2-
Slide 36: Proven Track Record for Credit Quality
PROVEN TRACK RECORD FOR CREDIT QUALITY • No losses from 2008 to 2012. 2008 0.00% 2009 0.00% • Total confirmed losses limited to NOK 194m during 17 years of 2010 0.00% operation. 2011 0.00% • Accumulated lending amounted to approx. NOK 173 billion during 2012 0.00% the past 17 years. Total confirmed
Slide 37: INTERNAL
( Pareto bank