Multitude Q2’25 flash comment: Lower impairment losses enabled profit growth to continue

Source: Inderes

Multitude’s growth in Q2 was slower than we estimated, but profit exceeded our expectations clearly, indicating that the company’s focus on profitability is paying off. The profit guidance was reiterated, but based on our initial reaction, we believe the likelihood for another positive guidance revision has increased. 

Growth slightly below our estimates

Multitude’s Q2 total net operating income (NOI) grew by 2% to 54.7 MEUR, which was slightly below what we had anticipated (56.6 MEUR). At Group level, the largest income stream, net interest income, decreased in total by 4%. This was patched up by net fee and commission income (2.5 MEUR) and income from associates (0.5 MEUR). Loans to customers and debt investments grew in total to 852 MEUR (Q2’24: 697 MEUR).

The growth rate was below our expectations in the largest segments, Consumer Banking and SME Banking, but the newest and smallest segment, Wholesale Banking, exceeded our expectations. Especially the growth of SME Banking was bit sluggish in our view (NOI growth 4%) as the company aims at double digit growth for the segment. Wholesale Banking growth was very promising (121%).

Profit well above our estimate

Multitude’s Q2 earnings before taxes (EBT) was 8.0 MEUR (Q2’24: 5.4 MEUR), which came in above our expectations (7.0 MEUR) even though we had slightly increased our Q2-estimates prior to the earnings. The profit improvement was driven mainly by lowered impairment losses, which also came down in absolute terms (20.2 MEUR vs. Q2’24: 23.8 MEUR). Also, growth in net fee and commission income and income from associates played a crucial role. Thus, the positive trend in impairment losses continued as the company had anticipated earlier. Operating expenses were 26.5 MEUR in total, which was in line with our estimates. Overall, the profit development was very strong, considering that growth was below our estimates. The interest on the perpetual bonds was below our estimates (-0.9 MEUR), and the diluted EPS of the Group came in at EUR 0.27 per share, clearly above our estimates.

At the business unit level, EBT decreased marginally in the largest segment, Consumer Banking (8.7 MEUR vs. Q2’24: 8.8 MEUR). In the smaller segments, we saw improvements as expected. The largest improvement came from SME Banking, where EBT was -0.9 MEUR (Q2’24: -3.3 MEUR). Wholesale Banking EBT was at 0.1 MEUR (Q2’24: -0.1 MEUR).

Guidance reiterated, although we find it conservative

Multitude reiterated its guidance, which expects net profit to be 24-26 MEUR. Our estimate before the Q2-report was at the upper end of the range and given the Q2-performance, we find the guidance to be rather conservative as the company has cumulated net profit of 14.2 MEUR in H1. We will try to find out whether there could, e.g., be some additional cost pressure coming in H2.