Mandatum Q4'25 flash comment: Profit distribution below expectations, wealth management earnings growth remained strong

Translation: Original published in Finnish on 02/12/2026 at 09:29 am EET

Source: Inderes, Vara Research (consensus)

Mandatum published a Q4 result that fell short of our expectations. However, the earnings miss was mainly due to quarter-on-quarter volatility in net finance income, and the earnings performance of asset management, which is the most important for the group's value development, progressed as anticipated. New sales in asset management remained at a moderate level, although they were more subdued than we expected. The company proposed a dividend of EUR 0.85 per share.

Strong cost efficiency boosted earnings growth

Development in capital-light businesses remained robust, with fee result growing 18% year-on-year to 21.9 MEUR. The good profitability development was driven by continued significant improvements in cost efficiency. New sales, however, were only at a moderate level at the end of the year compared to the company's rapid pace over the past three years. According to the company's comments, this was influenced by capital returns from some alternative investment funds. This, together with the previously announced fixed income fund (initial investment commitments of approximately 200 MEUR), suggests that the attractiveness of the company's products does not appear to have deteriorated. Even though new sales fell short of our expectations (141 MEUR vs. 250 MEUR estimate), revaluations compensated for this and raised AUM to our estimated level of 15.3 BEUR (+3% from the previous quarter).

The earnings miss was due to volatility in balance sheet investments, which fluctuate quarterly

The result of term life insurance was slightly better than our estimate. However, this item fluctuates quarterly, especially with insurance claims.

The net finance result, on the other hand, was clearly more subdued than we expected, as both interest and equity investments yielded less than anticipated during the quarter. In addition, the imputed positive impact of rising market interest rates was slightly more moderate than estimated. However, the net finance result fluctuates quarterly with market developments, so the significance of the earnings deviation remains small. In addition, the group's overheads (reported under "Other income") were higher than our estimate, which we assume was due to incentive scheme costs driven by the share price increase.

Due to the net finance result and higher overheads, the group's profit before taxes also fell short of our estimates by a relatively wide margin. Q4 PTP was 30.3 MEUR, while our estimate was 47.5 MEUR. The EPS in the quarter was EU´ 0.06. Organic capital generation (EUR 0.12) exceeded earnings per share, as usual. Organic capital generation is a key figure issued by the company that reflects growth in distributable profit.

Profit distribution was more moderate than expected

Mandatum's dividend proposal for fiscal year 2025 is EUR 0.85 per share, which is more moderate than our estimate of EUR 1.0. Following the profit distribution proposal, Mandatum's solvency (169%) is at the midpoint of the target range (160-180%). However, the sale of Saxo Bank shares will increase the Solvency 2 ratio by approximately 30 percentage points. Therefore, we preliminarily assume that the proceeds from the sale of Saxo will only be distributed next year. Regarding the sale of Saxo, the company commented that it still expects the transaction to be completed in early 2026. We will examine our profit distribution estimates more closely in our company update, on the back of, e.g., management's comments.

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.