Mandatum Q4'25: Earnings development progressed as anticipated

Translation: Original published in Finnish on 02/13/2026 at 08:01 am EET

Mandatum's Q4 result fell short of our expectations, which was explained by the volatile net finance result. Capital-light businesses (wealth and asset management and risk life insurance), on the other hand, developed as expected. Despite the strong growth outlook, we still consider the stock highly priced, so we reiterate our  Reduce recommendation. However, we revise our target price to EUR 6.3 per share (was EUR 5.6) in line with our dividend model.

Q4 performance did not offer any major surprises

Mandatum's wealth and asset management earnings performance continued its strong development at the end of the year. New sales were slightly softer than our estimate, partly explained by returned capital from alternative funds. Therefore, we do not see a change in the strong demand outlook for the company’s products. However, the net finance result was clearly lower than our expectations, which is why the group-level result also fell short of our estimate. Mandatum distributed less dividend than we expected (EUR 0.85 vs. EUR 1.0 forecast), which we interpreted as being due to poor visibility regarding the timing of the Saxo Bank share sale. Our comment on Mandatum’s Q4 development can be read here.

Earnings growth in the coming years

We included an 8 MEUR write-down in our estimates as a result of the administrative fine imposed on Saxo Bank. This decreased our 2026 estimate for the Group's pre-tax profit by approximately 3%. In other respects, the estimate changes remained very moderate, and we continue to expect strong development in wealth and asset management's AUM and cost efficiency. In our profit distribution estimate, we have shifted the capital proceeds from the sale of Saxo Bank to next year, but the overall outlook for profit distribution remains unchanged.

Overall, we expect Mandatum's group-level earnings to bottom out in 2026 and then grow gradually. While we anticipate a significant increase in Mandatum's wealth and asset management earnings, the decline in the investment portfolio will impede earnings growth, maintaining a moderate earnings growth rate for the group. However, the earnings mix is continuously improving as the share of wealth and asset management increases.

The flip side of the reduction in the investment portfolio is that profit distribution will remain generous, as Mandatum will return the funds released from this to its shareholders. In the coming years, the focus of dividend distribution will be strongly on returning excess capital, with accumulated earnings playing a smaller role. Consequently, our estimates indicate that the dividend per share will exceed earnings per share by a clear margin.

Expectations for the stock are too demanding

Mandatum’s expected return relies heavily on high dividend returns. We have gauged the value of Mandatum first and foremost by using the dividend discount model as it best reflects the company's high payout ratio and the unwinding of its overcapitalized balance sheet. Our DDM model indicates a value of some EUR 6.3 for Mandatum (was EUR 6.0). The increase from our previous update is explained by a rise in long-term growth estimates, as the growth in wealth and asset management appears to compensate for the contraction of the with-profit portfolio more rapidly than we previously estimated. According to our dividend model, the value is below the share price, so we consider the share to be fully priced. Also, with sum-of-the-parts, the wealth and asset management business trades at a significant premium relative to domestic peers, which sets an extremely high bar for performance. However, the high dividend yield also limits the share's downside, and, with excellent operational performance continuing, there are no clear downward drivers for the share. This prevents us from taking a stronger investment view on the stock.