As you heard, and as usual, we will go through a presentation and then open up for questions at the end. Now, flipping to Page 3 of the presentation, a quick recap of Morrow Bank, for those of you new to the case. Morrow Bank is a Pan-Nordic consumer lending specialist. We have a fairly focused product portfolio, providing consumer loans, credit cards, and also savings products, across a SEK 600 billion large lending market in Norway, Sweden, and Finland. We target, call it a, a near-prime segment with creditworthy individuals, typically above average income. And also, 60% of our customers own their own home. You can't have any payment remarks, and you need to be in permanent employment to become a customer of ours.
A big step has been made the last few years at Morrow Bank from what we call the restart back in 2022. We have seen a fantastic growth. What we've executed on is we brought in a completely new management. We've exited quite a few unprofitable products and segments. We've simplified our tech platform, worked a lot on automating processes to build a very scalable banking platform, and also streamlined and aligned our organization to our new business model. As you can see from this page, the results have been great. We report now, at the end of the fourth quarter, a lending book at SEK 17 billion.
Now to the fourth quarter, and the fourth quarter was yet another very strong quarter for the bank. We reported this morning a profit before tax of NOK 100 million. That is still Norwegian krona. For those of you who've followed us for a while, you would understand that we were actually a Norwegian bank up until the end of last year. So the report that you saw today, with fourth quarter and 2025 overall, is for a year when we were a Norwegian bank, and we hence report in Norwegian krona. But NOK 100 million, as I said, profit before tax, which is a very, very strong quarter.
Looking at 2025 overall, we delivered a results improvement of 31%, so 31% higher earnings in 2025 compared to 2024. Again, enabled by this highly scalable banking platform that we have established. Looking at earnings per share, that's around SEK 1.13 per share in 2025. As I said, we've grown very nicely, especially in the second half of the year. We report now a loan book growth of 21% for the year and about 7% for fourth quarter. To the right of this page, you will see sort of the composition of our loan book across the three countries in which we operate, and it's fairly evenly distributed, I would say.
The fourth quarter was also very much for us, focused on re-domiciling the bank. We talked about that at quite a few earlier calls, but moving the bank from Norway to Sweden and becoming actually a Swedish bank, a Swedish regulated bank. And we've now established, at the beginning of the year, our Swedish bank and the Swedish headquarters. And, in connection with that, we also moved our listing from the Oslo Stock Exchange to Nasdaq Stockholm.
When you look at some of the other KPIs, and Eirik will go through those in a minute, but you would see that both in terms of cost-income, loan-loss ratio, and as an output, also looking at the return figures that we could report for the fourth quarter, they are all moving in the right direction. Return on target equity for the quarter came in at 12.6%. Had we already been a Swedish bank on the last day of the quarter, you would, we would have been able to report a return on target equity of 15.5%, which we believe is very strong.
That also gives us quite a good confidence when we now both guide in terms of where we think we will end up at the end of this year, but also, as we look a bit further out and restate now our ambitions. On the back of these good results, we have now increased our year-end loan book target up to SEK 19 billion. That's up from SEK 18 billion in the previous guiding. Our long-term ambitions, as I said, remains strong with a return on target equity ambition of around 20% at the end of 2028. That is basically built on, we'll come back to that a little later, on continued focus on growing organically, but also looking at accretive M&A opportunities....
Now, I think I've alluded to most of the topics on this page, but we typically bring up this page to show you the progress on our main KPIs, but also take a bit further look, both in terms of what we're guiding on for the end of the year, but also illustrating our longer-term ambitions. And as I just said on the previous page, in terms of lending growth, we've seen a very strong lending growth, especially in the second half of last year. That gives us now good confidence to increase our year-end 2026, or this year's target, to grow that lending book further up till SEK 19 billion.
As we've stated on a few previous calls, we believe that we will be able to grow at least 10% annually in the next three years, and therefore, we restate our ambition to be at around NOK 23 billion at the end of 2028. In terms of lending book, and lending book is basically what drives then pretty much everything at the bank, all the other KPIs, especially now that we've built such a scalable banking platform, where we can grow the lending book without necessarily taking on more cost, which is then again reflected on the KPI here in terms of cost-income ratio. We reported a very strong cost-income ratio for the quarter and also for overall 2025.
We have a target of bringing that further down towards the end of the year to 23, and then the, in the sort of longer-term outlook, we believe that that could come down, as much as down to 22%. Eirik will talk a bit more about loan losses, but what I can say here is that we are reporting a yet another strong, solid quarter in terms of losses, where we are basically now delivering at the target level of around 4%. All in all, what that basically does is give the output, with the, which is the returns. And as I already alluded to, we've seen increasing returns, and if you take a bit of sort of look at the historic development here, it's been a strong development in terms of returns.
We could report a return on target equity of 12.6% for the quarter. That would have been 15.5% on Swedish regulation, which again gives us quite some confidence then in terms of stating a year-end target for this year of 17%. And also, again, lifting the head and looking a bit forward into the more longer term, we have an ambition of moving that further up towards 20% by the end of 2028. With that, I will hand over to Eirik, who will review the financial figures for the quarter and the year in a bit more detail.
Thank you, Øyvind. As usual, we start with the balance sheet, and I'm actually quite happy to see this steady pace of development over the years here. As you can see, we are growing our loan book steadily. This applied to 2025 for the whole year, but also for the quarter, where we actually had a growth of 7%, and it was actually quite interesting quarter. What we're seeing is that the trend from the last two quarters is that we have a good success with our Norwegian refinancing product, and you can now see that the Norwegian loans are starting to take a relative larger share of our loan book. Sales are also steady in Sweden and Finland and on credit cards.
But also, what's interesting is that, as you know, we acquired a Swedish portfolio from Moank of SEK 640 million. That was taken on our books on the 1st of December, and also reflects the third acquisition in 15 months, where we in total have acquired SEK 3 billion worth of portfolios. Also, when you're looking at the growth this quarter, you need to take into consideration that we sold SEK 72 million in non-performing Finnish loans. That is about SEK 840 million. But despite that reduction, we still have the growth. And also from that point of view, we see that we are quite confident that we will be able to reach our goal of reaching around SEK 20.5 billion towards the end of this year, 2026.
As always, we're always looking opportunistically for M&A opportunities which are accretive to our shareholders. Going to the margin picture, we can see that we're following the underlying rate. As you know, the underlying market rates in Sweden and Finland, namely the euro rate, has decreased over the last year or so, whereas it has remained stable. But on average, since most of our loans are in Sweden and Finland, that means that the underlying general average market rate has decreased, and so has the yield on our loans as well, as you can see.
But we have also been able to decrease our deposit yield, and by that, we have been able to maintain stable margin over time, and we expect to be able to do that going forward. Jumping to the total income picture, this is a product of the loan book as well as the margin, and you can see we're making a nice improvement here. We increase it by 7% year-on-year. The Moank portfolio came also in, in December, but that only gives one month worth of interest income, and we will have the full quarter effect now in Q1 this year. And again, the loan book growth is set to drive the total income further.
Going to the cost picture, we will still be reporting on our. We still report that we have the extraordinary costs related to moving to Sweden. These are one-off costs, and the SEK 8.9 million we are reporting here are the costs that are directly attributable to that. There are particularly now costs relating to issuing a prospectus, which we had now as we listed on the Nasdaq Stockholm main list, as well as other costs. And there were also, as we said before, there will be some costs in Q1. The overall cost picture is also increasing somewhat, but that is reflecting the larger loan book we had.
We also think that there may be some opportunities for working on that going forward as we are optimizing our setup between Oslo and Stockholm. But what's important to show here is that the cost income picture is steadily decreasing. You can see here the underlying cost income was 25%, and we're maintaining a target of 23% towards the end of 2026. Now, jumping to the picture of credit quality, it's actually... We're very happy to see that we're maintaining our good development here. In the third quarter of 2025, we were at 3.9%, so we have that rate unchanged from into this quarter. But if you compare that to the quarter a year ago, you can see a nice 0.7 percentage point decrease, going from 4.6% to 3.9%.
We maintain this rate to be where we should be at around 4%, and we expect to have that going forward. What you also need to take into consideration is that we had the sale of the Finnish non-performing loans in Q4. That was P&L neutral, meaning that our loan loss provisions were sufficient to cover for the sales price. Also, as we announced yesterday, we have now sold some further SEK 440 million, just Swedish non-performing loans. Those were sold at a with a little profit. Again, this is what we consider to be that we have sufficient loan loss provisions. And by that, we're bringing our NPL ratio down.
In the fourth quarter, it was 12.2%, and had we undertaken the Swedish NPL sale in the fourth quarter, that NPL ratio would have been 9.9%. Now, going over to the combination of the development of our key drivers: total income, cost picture, and loan losses, you can see that we have this nice development over time, and quite happy that we now, in the fourth quarter of 2025, reached the mark of NOK 100 million . The underlying return on target equity, as Øyvind has explained, is 12.6%. Had we, in 2025, been on Swedish requirements, we could have, these figures would have been 15.5%.
And with that basis on the prospects of further development, and given now that we are on Swedish requirements, we guide after achieving approximately 17% at the end of this year. Finally, a word on our capitalization and capital position. We have maintained. Despite our solid growth that we have seen now over the last year, we have more or less maintained our total capital ratio. However, as our requirements have decreased, even in Norway, what you see here are on Norwegian requirements, we have therefore maintained our headroom throughout the year of approximately 3.6%. Now, with the move to Sweden, we will have capital efficiencies, and as we've been talking about before, we will have a certain capital relief.
Our available capital post the redomiciliation, that means on the second of January this year, that was approximately NOK 620 million or SEK 570 million. We have previously said that this could be close to NOK 1 billion. Yes, but you need to take into consideration that, first of all, we had a strong growth in the fourth quarter, including the portfolio acquisition of Moank. That ate more than NOK 100 million of our available capital. And also, towards the end of last year, there was an appreciation of the Swedish krona versus the Norwegian krone. As we needed to convert our equity of roughly NOK 2.45 billion Norwegian krone to Swedish krona, that had a negative effect again of equivalent to NOK 120 million.
So if you add those two factors together, you could have seen that the available capital would have been around NOK 850 million. But still, we have the SEK 620 million or now SEK 570 million available. And going forward, we reiterate our capital allocation priorities. Again, first, organic growth. Two, opportunistically looking for accretive M&A. And third, what is left, we would like to return to our shareholders. As to a 2025 dividend, that has yet to be decided; we will revert with that when we send the AGM notice in March this year. And with that, I leave the word to Øyvind.
Thank you, Eirik. A couple of more slides here, at the end before we open up for questions. We're actually quite competitive at the bank, so we like to compare ourselves and our performance with our competitors, our peers in the Nordic region. We continue to outperform on all the main KPIs, we believe. Looking at loan growth, the last three years, we have reported a CAGR growth of 24%, against 15% across our peers. We see that we can report a very competitive and strong cost-income ratio, continue to do that. Looking at returns, we reported a return on equity of 12%. That would have been 15% had we been Swedish. Most of our peers are Swedish, so again, I think we're doing quite good there as well.
I'll be a bit careful on guiding or saying something about our pricing in the market, but looking at our current trading and our price book, we believe there is room for a higher valuation of the bank. We will continue to execute on all the KPIs, all the initiatives that we talked about throughout the presentation. And then we hope that the market will appreciate that. Now, re-domiciling to Sweden obviously ensures also that we now have that level playing field with all the peers that we see here on the page, which means that we are very well positioned to continue to strongly compete in this market. Now, the next page is an illustration, and that's important to understand.
But we often get the question, "Should we pay dividends or should we grow?" Most of you would say, "Grow. Grow if you can grow." With a scalable platform that we have established, with return levels that we are able now to produce, growth will be our priority. And as Eirik already said a couple of pages ago, our capital deployment priority remains organic growth, accretive M&A growth, and then ultimately, if we do have some excess capital after that, we will obviously return that to our shareholders in form of dividend. However, what we wanted to just illustrate on this page is a couple of scenarios, again, referring back to our end 2028 ambitions. Now, scenario A on the left-hand side of this page basically shows the organic development.
So if we continue to grow organically 10%, as we've illustrated or stated as our ambitions the next three years, we should expect that we could create an accumulated excess capital over those three years of SEK 700 million-SEK 800 million. So SEK 700 million-SEK 800 million in excess capital generated over the next three years. What we would also see then, if we basically grow 10% a year over the next three years, is that we could target to deliver a bottom line profit of SEK 400 million-SEK 500 million for 2028. So that would be the scenario in which we return the excess capital. We grow 10% organically a year, we return the excess capital that we generate in terms of dividend, and we produce, deliver SEK 400 million-SEK 500 million on bottom line in 2028.
Now, the alternative scenario that we potentially like the most is a bit of an extreme scenario, saying we can actually deploy all that excess capital to profitable growth. So no dividends. We take all the NOK 700-NOK 800 plus what we sort of have generated in and apply that into profitable growth. What we believe then is that we can obviously grow faster. We grow more organically. We acquire portfolios, should that become available. What we believe is that we would be able then to lift our profit for 2028 from NOK 400-NOK 500 up to NOK 650-NOK 750.
So basically produce SEK 250 million more in bottom line results in 2028, in a scenario where we can apply all the capital, excess capital that we generate, to growth. Should we then apply sort of what we see in the market now as sort of our pricing and how pricing looks for our peers? And we've used here the price earnings multiple of 13, which we're basically trading on today, and apply that 13 to that result, we could basically see that we could have a potential here of creating an additional long-term value for the shareholders of around SEK 3 billion.
Now, SEK 3 billion is roughly what the bank is worth today, so you could basically say we're adding another bank on top of that, should we be able to deploy all that capital to growth over that period. So that's basically just... We wanted to bring this page up. It is an illustration, but it basically gives you a good insight, I believe, into how we're thinking about growth versus dividend. With that, just a last page before we open up to questions. We have reported a very strong quarter and a strong year, 2025. We managed to deliver on the Swedish redomiciliation and a Stockholm listing, as we've talked about a few times. We have seen already the benefit of that in terms of returns being higher on Swedish capital requirements.
We grew the bank book, the loan book, to NOK 17 billion. That is 21% year-on-year growth, 2 times basically what we targeted as organic growth in the year. It is driven by a good demand in the market, but also that we, as Eirik talked about, we've done an acquisition towards the end of the year. Looking at profit for the year, we delivered very strong profit before tax of around NOK 370 million . That is 31% up versus 2024. And again, it just again demonstrate the scalability and efficiency of the banking platform that we have built over the past few years.
In terms of targeting, looking then a bit ahead, we continue to target an organic growth of 10% a year, which should bring us to a return on target equity of around 20% by year-end 2028, our longer-term ambition. Should we, as illustrated on the previous page, manage to deploy all excess capital to growth, we could potentially generate an additional SEK 3 billion of shareholder value over that time. So with that, I think we were through the presentation for this morning, and we can open up for questions.
Thank you so much for the presentation here. And just a quick recap. If you wanna send in a question, you can use the form to the right, and if you wanna call in, you can press star nine to raise your hand, and then star six to unmute, and more information about calling in is under the broadcast text. But first of all, a question here. Is it an option to have no dividends for 2025 and allocate all cash for growth?
Basically, what Eirik said is, we will communicate whether we will pay a dividend or not for 2025 when we issue the notice for our annual general meeting a bit later, sort of around mid-March, I believe it is. So we're still contemplating. We have quite some excess capital. We could deploy that into growth. We could pay that out as dividend, or we could end up doing something in the middle, some reserves for growth and some dividend. It's a process. There are quite a few moving parts around that at the moment, so we'll have to come back to that in a month's time.
Thank you. What guidance can you give for the year and result after tax in SEK for 2026?
We are a bit careful with guiding on direct profit after tax numbers. But what you can see, if you deduce there the return on equity towards the end of the year, you can pretty much do the math and also our growth and looking at our how we also developed, you should be able to give a guesstimate that, but obviously, it will be higher than the 2025 result.
Thank you. Next question here: Congratulations on a great Q4. Some of your competitors are growing credit card lending significantly in Germany.
Mm-hmm.
With the superior credit card, a scalable banking platform, and available capital for growth, for how long can Morrow stay on the sidelines in Germany?
Mm-hmm. Good question. We obviously noticed that some of our peers are having great success with credit cards in Germany, and that's obviously inspiring to see. We don't have any concrete plans at the moment to enter the German credit card market. We believe there's ample room for growth in the Nordic market. We have about 3% market share across Norway, Sweden, and Finland in consumer lending, and we believe we've, with our scalable platform, developed a pretty strong growth machine. So our growth and priority remains consumer lending and remains the Nordics. Now, taking, you know, a longer view, we do absolutely have a credit card platform in place. We provide credit cards across Nordics.
We have a banking license that could easily be passported to Germany. So I think we have most of the ingredients, and should we decide on a later stage to also look at Germany as the market, but as at the moment, we don't have any concrete plans of entering that market.
Thank you. Could you please talk about the landscape for the portfolio acquisition?
Mm.
Is it difficult to find portfolios with desired profile?
It's not us who really decide what profiles come around. There's a, there needs to be a seller.
Mm.
But whenever there is a seller that has something attractive, which, or from our perspective, attractive, which was the case now on Moank in Q4, we're definitely looking into it. As soon as other opportunities arise, we will definitely be looking at them.
Well, but maybe just adding to that-
Mm
... we do know that there are quite a few pockets of subscale consumer loan portfolios across the Nordics. So obviously, we have strong focus on that, also together with our advisors, to have dialogues with potential sellers and potentially even sellers that don't know they are sellers yet. So yes, this is definitely high up on our agenda.
Thank you. Can you give some examples of AI, particularly in collections and loan book origination?
You wanna say that?
No, I'll leave it to you.
Okay.
Yeah.
I think I didn't catch the 100% that question, so-
AI.
Yeah. The AI, okay.
Yeah, particularly in collections and loan book.
Very, very, very good question. AI is definitely a topic, and we're experimenting with AI quite a bit, and potentially two places where we experiment with AI. We do quite a few things together with our service provider around consumer.
Call center
... the customer call center. We work with Transcom there to work on and applying and testing different AI tools in terms of responding to customer requests. And also in terms of using AI, potentially more machine learning into our modeling in the credit risk modeling and analysis. So those are the two areas where we have come quite some way in terms of experiencing with AI. Also, in collection, just a couple of things on collection. Even if we do hold non-performing loans now quite a bit on our own book, we reported now an NPL ratio of ±10%, depending on how you look at it.
We do not do the collection ourselves, so we outsource the actual collection to different DCAs in the region. And the DCAs, I know, have come quite a way in terms of applying AI tools. And we're obviously monitoring that and working with them quite closely to further develop that.
Thank you. How long can the 10% growth last as the Morrow Bank might become big at a certain point?
Mm-hmm. Very good question, and it's obviously a mathematical question. But what we like to show is that you see, as one of our initial slides show, that we estimate the market in Norway, Sweden, and Finland to be around SEK 600 billion. We now have a roughly three... No, Swedish krona, sorry. We now roughly have a 3% market share of that.
Mm-hmm.
We have doubled that market share over the last two or three years. I still think that there is room, or we still think that there is room for further growth in this market. There's quite large to take from. So for the next foreseeable years, we think that the 10% is achievable. Now, after that, it's anyone's guess, but for the near to medium term, 10% is certainly possible.
Thank you. For the loans that you acquire, do we also onboard them as a Morrow customer? Do we have some stats on this type of cross-sell?
We do absolutely onboard them. They become fully Morrow Bank customers. So basically, what typically would or has to happen is that the seller would communicate to the customers that they are now being sold or transferred to Morrow Bank. We apply a full sort of welcome pack to the customers in terms of onboarding them to become Morrow Bank customers. Their product remains largely the same, but they will then experience the Morrow Bank customer experience then on their new products.
Thank you. How sustainable is the 20% loan growth, and how should we think about organic growth versus M&A in 2026?
Well, the 20% was more for 2025. We're guiding at 10% for 2026, and we're not guiding further than that. Of course, should it be possible, we would like to grow more. We have the capital for that. And also for the organic growth, it's this is based on what we consider the market to be, to be like. We talked about that a couple of questions ago. But also, should there be any M&A opportunities, that will come on top of that, and then we can have a high growth of 10% or which could reach 20% or more. But that is, again, given that there is such an opportunity.
Thank you. Moving on to the last question we have received here. What are you seeing in credit, credit quality and loss trends, and do you expect any macro-related pressure ahead?
Mm-hmm. We're seeing that now it's—we've had, as you saw on the loan loss picture we had, that we had a quite nice decrease in our loan loss ratio over the last year or so, going from 5.4% now down to 3.9%. That is a result of our loan book maturing, our credit processes and collection processes being further improved, and also that there has been a benign macro picture in this, namely mostly driven by the fact that interest rates have come down. That helps. Going forward, we're guiding at these 3.94%. This is a mixture of what we think is what the market conditions will be like, as well as the kind of clients we take aboard.
As to the market, as to the macro expectations, we see that on average, for the three Nordic markets that we're in, Norway, Sweden, and Finland, the average development is benign, meaning that there will be growth on average, that the interest rates will remain low, and that unemployment will also remain flat or low. There are some individual variations. For instance, Finland is struggling more than Norway and Sweden, but on the overall, we see that the macro picture is benign, and that is also count in that our that for our loan losses, that should not be impacting our loan losses negatively.
Thank you. We actually received one more question here.
Right.
A follow-up question to loan acquisitions: Is the cost-income trend going downwards caused by new customers via portfolio acquisition?
It's basically both. I mean, the scalable platform basically means that we can either, you know, grow organically as we demonstrated, but also take on portfolios. We've over the last 18 months, we've acquired three portfolio of totaling around SEK 3 billion. We've added both that 20% growth last year, plus those portfolios, without taking on any significant cost. So both of those ways to grow, if you put it that way, is basically helping our cost-to-income ratio go down. Because, again, the scalable platform means that you... the, the bigger we become, the better our cost-to-income ratio actually becomes.
Thank you. That was the last question we had. So now thank you, Eirik and Øyvind, for presenting it today. And I'll now hand over to Øyvind for some final remarks.
Yeah. Well, thank you. Just to say thank you for listening to us dialing in this morning. If you have any further questions, you're always welcome to contact us on ir@morrowbank.com, or basically reach out to us, and we'll be happy to take questions or take meetings if you like. If we don't hear from each other until the next time, then we'll see each other when we report our first quarter results, sometime in May, I believe it is. Thank you, and have a good day.