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25 Oct 2023
Q3 Results 2023
Solid performance with strong cost and credit risk control
Highlights of the quarter:
Controlled loan growth
• Underlying loan balance growth of 5% vs. Q2 2023 (4%) a mid prudent risk management• 34% growth y-o-y supported by better customer processes and automation (throughput)
Stable margins • Net interest margin stable at 9%, in line with the four previous quarters• 2%p increase in borrowing cost y-o-y compensated by growth and loan repricing
Continued cost reductions • Operating expenses reduced to NOK 77 million, down 7% vs Q2• 19% cost reduction y-o-y driven by successful initiatives to improve cost efficiency
Solid credit risk control • Loan loss ratio at 5%, up 0.2%p in Q3 driven by macroeconomic and other provisions• Improved credit risk and pricing capabilities to build a more robust and scalable platform Profitability maintained Profit after tax of NOK 36 million, vs. NOK 41 million in Q2 for which total income was positively impacted by a NOK 5 million one-off• Increased loan loss provisions offset by further cost improvements • Return on equity of 6.1% vs 7.5% in Q2
Comment from the CEO, Øyvind Oanes:"In the third quarter of 2023, we delivered a solid annualised loan balance growth in the 5-10% range while maintaining margins and controlling credit risk. This against a backdrop of a more challenging macroeconomic environment where inflation continued to be high across the Nordic region and market interest rates increased-driving up our funding costs. Since the beginning of 2022, we have focused on continuously improving efficiency. As a result, our operational cost base has been reduced by more than 20% in a period where the Bank's loan balance has grown by more than 40%. Importantly, we have built a robust bank that is competitive versus peers on key performance metrics and is well-positioned for delivering growth and value creation."
The interim report and presentation are available onReports and presentations page
Stable margins • Net interest margin stable at 9%, in line with the four previous quarters• 2%p increase in borrowing cost y-o-y compensated by growth and loan repricing
Continued cost reductions • Operating expenses reduced to NOK 77 million, down 7% vs Q2• 19% cost reduction y-o-y driven by successful initiatives to improve cost efficiency
Solid credit risk control • Loan loss ratio at 5%, up 0.2%p in Q3 driven by macroeconomic and other provisions• Improved credit risk and pricing capabilities to build a more robust and scalable platform Profitability maintained Profit after tax of NOK 36 million, vs. NOK 41 million in Q2 for which total income was positively impacted by a NOK 5 million one-off• Increased loan loss provisions offset by further cost improvements • Return on equity of 6.1% vs 7.5% in Q2
Comment from the CEO, Øyvind Oanes:"In the third quarter of 2023, we delivered a solid annualised loan balance growth in the 5-10% range while maintaining margins and controlling credit risk. This against a backdrop of a more challenging macroeconomic environment where inflation continued to be high across the Nordic region and market interest rates increased-driving up our funding costs. Since the beginning of 2022, we have focused on continuously improving efficiency. As a result, our operational cost base has been reduced by more than 20% in a period where the Bank's loan balance has grown by more than 40%. Importantly, we have built a robust bank that is competitive versus peers on key performance metrics and is well-positioned for delivering growth and value creation."
The interim report and presentation are available onReports and presentations page
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Morrow Bank ASA published this content on 25 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 October 2023 05:08:04 UTC.
