Multitude reported stronger-than-expected Q4 numbers. Total net operating income growth came in as expected, and the profit beat was mainly due to lower-than-expected impairment losses. Guidance for 2025 and 2026 was unchanged and indicated profit improvements to continue in the coming years, although, with the stronger-than-expected 2024, the improvement required for 2025 doesn’t seem that demanding anymore. We will try to gain more insight into the numbers during the day.

Growth was on an expected level

Multitude’s Q4 total net operating profit came in at 57.7 MEUR according to our calculations (numbers given only for the full year 2024), which was almost exactly our estimate. The growth between the business units was also very much in line with our expectations although the smallest business unit, Wholesale Banking, grew faster than we had anticipated (total growth in 2024 89.5%). The development in the new business unit is promising, and the total loan portfolio grew (loans to customers + debt investments) to 132.8 MEUR from 62.4 MEUR one year ago. Thus, we expect the growth of the business unit to continue on a strong level going forward. Consumer Banking’s (largest business unit) net interest income grew by 1.4% in 2024, and SME Banking grew by 32.1%.

Strong result and a dividend surprise

Multitude’s Q4 earnings before taxes (EBT) was 8.9 MEUR, which exceeded our expectations (7.2 MEUR). The beat was mainly due to lower-than-expected impairment losses, where the company witnessed a positive trend, especially from Q2’24 onwards. The improvement occurred both in Consumer Banking and SME Banking (Wholesale Banking’s impairment losses on a very low level). The EPS came in at EUR 0.28 per share, which naturally also beat our estimate of EUR 0.23.

The board of Multitude proposed a dividend of EUR 0.44 per share, consisting of a EUR 0.24 base dividend and a EUR 0.20 extraordinary dividend. The dividend was clearly above our expectation (EUR 0.22) and came as a surprise to us as we had anticipated that the company would want to focus its capital allocation more on growth. On the other hand, the higher-than-expected dividend signals that the company considers its financial position and growth outlook strong. We believe this signal has value in the case of Multitude, as the visibility of the Group’s solvency level is not perfect (solvency reported on Multitude Bank level). On the other hand, we expect the company to elaborate on how the high dividend and the new, rather expensive Tier 2 -financing go hand in hand.

Guidance unchanged

The 2025 and 2026 guidance remained unchanged, as we anticipated. Multitude forecasts a net profit of 23 MEUR for 2025 and 30 MEUR for 2026. Given the stronger-than-expected 2024 (net profit 20.2 MEUR), the required improvement for 2025 isn’t that demanding anymore. Our current estimates expect a net profit of 23.4 MEUR for 2025 and 27.1 MEUR for 2026, but we see some upward pressure on these estimates. Overall, the trend for Multitude seems positive as demand appears robust and the company seems to have improved its risk management (lower impairment losses). Improving cost efficiency also seems to be high on the new CEO’s agenda. We expect to hear more about drivers for the profit improvements in the webcast arranged today.