Morrow Bank-Stronger growth outweighed by higher Q1 OPEX – Limited revisions expected-05/13/2026

Research evidence excerpt

Morrow Bank-Stronger growth outweighed by higher Q1 OPEX – Limited revisions expected-05/13/2026

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• Net interest income of SEK 348m is 1% below our SEK 353m est. Gross lending growth of 7% q/q vs. our 3% estimate. Adjusted for the

FX-tailwind in the quarter (NOK strengthening) and NPL sales, loan growth was 4.6%. The bank notes some softness in the reported net

interest margins, as growth was driven by Norway where net yields are lower. In addition, we believe the strengthening of the NOK towards

the end of the quarter (SEK down 7% between balance sheet days, but only down 1% when measured quarterly avg.) has likely deflated

the NIM slightly this quarter.

• Other income of SEK 22m vs. our SEK 15m estimate, driven by net gains on financial instruments. In sum, total income 1% ahead of our

estimate.

• Operating expenses of SEK 104m are SEK 10m above our SEK 94m estimate. The bank notes SEK 13.5m in one-offs related to advisory

in connection with the announced MedMera acquisition and the Swedish redomicilation. This compares to our expectation of roughly half

of this in extraordinary expenses. The bank expects some one-off costs in the coming quarters as well and we could lift our Q2 cost

estimate somewhat.

• Loan losses of SEK 180m, in line with our SEK 180m estimate. This is slightly lower than we had expected, accounting for the higher

lending growth.

• Net profit of SEK 61m is 11% below our SEK 68m estimate.

• CET1 ratio of 15.5% vs. our 15.7% estimate.

Outlook

• The MedMera acquisition is still expected to close in early Q3’26. Post transaction, the bank expects cost/income to decline to around

20%, driven by SEK 150m in cost synergies, with an ambition to ‘more than double’ EPS by 2028. This implies EPS’28E > SEK 2.0.