Mandatum Q1'26 flash comment: Commission income development raises questions

Source: Inderes, Vara Research (consensus)

Translation: Original published in Finnish on 5/8/2026 at 9:32 am EEST.

Mandatum published a Q1 result that was clearly below our expectations. This was mainly due to a larger-than-expected net finance loss, which is not particularly relevant to investors. However, fee result, the most important item for the Group's value, also decreased from the previous quarter and fell short of both our and consensus expectations. However, asset management sales continued to perform strongly, which underlines the good competitiveness of the company's products. This morning's earnings live broadcast can be viewed here (in Finnish).

Asset management earnings growth was clearly below expectations

The performance of capital-light businesses was mixed. On the other hand, the Group’s sales continued to perform excellently, with the company collecting 248 MEUR in net subscriptions (forecast 240 MEUR). This did not yet include the capital of the new closed-end fixed income fund (> 300 MEUR in the first closing) at least in material respects, so the signs confirm that the demand outlook has remained strong. Assets under management were also in line with our expectations at 15.4 BEUR, as negative changes in market values dampened the impact of successful new sales.

However, fee income surprisingly declined from the previous quarter. In the report, the company highlighted that the tax deductibility of premiums for voluntary individual pension insurance policies for private individuals will be removed at the beginning of 2027. According to the company, this will have a negative impact on the Retail Clients segment's fee income starting from Q1. Based on segment reporting, the weakness in fee income was concentrated in this segment, which explains a large part of the forecast miss. In any case, we will be listening to management's comments on the matter during today's earnings call. Relative to the comparison period, however, fee income grew by 10%.

Earnings miss was mainly due to quarterly fluctuations in balance sheet investments

The result of term life insurance was clearly better than our estimate. However, this item fluctuates quarterly, especially with insurance claims. Net finance result, however, was significantly more negative than we expected due to the weak performance of the investment portfolio's market values. However, net finance result fluctuates quarterly with market developments, so the significance of the forecast deviation is very small. In addition, net finance result was weighed down by the already announced change in the discount rate.

Due to the lower net finance result, the Group's result also fell short of our estimates by a relatively wide margin. Earnings per share were EUR -0.02 for the quarter. Organic capital generation (EUR 0.10) exceeded EPS, as usual. Organic capital generation is a key figure published by the company that reflects growth in distributable wealth.

Solvency strengthened as expected

Mandatum's solvency increased as expected from the previous quarter, as the company completed the sale of Saxo Bank shares. The deal price was 308 MEUR, of which Mandatum used 200 MEUR to repay a bank loan. The Solvency II ratio stood at 203% (Q4’25: 169%). We note that the solvency already accounts for the dividend to be distributed soon. Mandatum's target Solvency II ratio is 160–180%, and thus the company has a clear excess of capital on its balance sheet for dividend distribution in the coming years.

Meanwhile, the outlook for the current year is fully in line with expectations, as  Mandatum estimates that its fee result will increase from the previous year and that its with-profit portfolio will continue to decrease further. However, the informative value of this is minimal, as we consider both to be almost certain.