Source: Inderes

Multitude will report its Q2’25 results on the morning of August 21. We expect continued growth, driven by the smaller business units (SME Banking & Wholesale Banking) and a clear profit improvement from the comparison period, driven mainly by an improved impairment loss ratio. We have made slight positive adjustments to Q2 results by lowering our impairment loss forecast, as we expect the payment behavior of consumers/SMEs to have remained strong. 

We expect growth to accelerate  

We expect Multitude’s Q2 net operating profit (NOI) to have grown about 6% to 56.6 MEUR. This would imply an acceleration of growth from the Q1 level (1%). In line with Q1, we expect a slight decrease in the net interest income (NII) of the largest business unit, Consumer Banking. This is driven especially by lower interest rates as the interest expenses decrease with a lag. We expect that the loan portfolio has continued to grow. We expect to see clearly positive and fast growth from the earlier-stage business units, SME Banking and Wholesale Banking although we expect the growth rate to unwind in the latter from very high levels. In addition to growing net interest income, we expect the net operating income to be supported by increased fee income (as seen in previous quarters) and income from associates (the Lea Bank investment is fully visible here). Overall, we expect the demand outlook to have remained largely stable despite the global macroeconomic uncertainties during the quarter.

We anticipate clear earnings growth

We expect Multitude’s Q2 earnings before taxes (EBT) to have grown to 7.0 MEUR (Q2’24. 5.4 MEUR). A major component of the earnings growth in our estimates comes from a decreasing impairment loss ratio as we expect impairment losses to slightly decrease in absolute terms despite the growth in NOI. It’s good to note that the comparison period is now more challenging as the impairment losses saw clear improvements from Q1’24 onwards (Q2’24 already a better quarter). We expect some cost inflation and the cost/income ratio to be approximately at the same level as it was in the comparison period. We expect Consumer Banking to be largely responsible for the Group-level profit. We should also see clear improvements in the profitability of the smaller business units as the company targets SME Banking to be profitable on a quarterly basis in H2 (Q1’25: -0.6 MEUR) and Wholesale Banking to make EBT of 4-5 MEUR for the year (Q1’25: 0.3 MEUR).

The development of SME Banking and Wholesale Banking is the highlight of the report

Multitude’s guidance for 2025 expects the net profit to be in the range of 24-26 MEUR. Our current estimate for net profit is 25.7 MEUR, which means it’s in the upper end of the range. Thus, we see a possibility of improved guidance in the latter part of the year. In our estimates, net profit growth is driven by growth in NOI (estimate +4%) and a decreasing impairment loss ratio. In our estimates, the cost/income ratio is rather stable for the year, although cost efficiency is a clear priority for the company at the moment. Once again, the growth and profitability of the SME Banking and Wholesale Banking business units stands out as a key highlight in the report. We expect no major changes regarding demand outlook and payment behavior.