Alisa Bank - Loan volume pick-up needed
Alisa Bank’s H2 was in line with our expectations on profitability while growth was more constrained than anticipated by loan volume declines in H2. Earnings are seen to increase notably in 2025, but the volume outlook remains on the cautionary side.
Weaker than anticipated income but adj. PTP as expected
Alisa Bank’s H2 financials were fairly in line with our expectations. The main deviation was in net interest income (EUR 8.3m/8.8m act./Evli) and subsequently total income (EUR 9.3m/9.8m act./Evli). Lending volume development was unfavourable during the second half of 2024, leading to notable declines from H1. OPEX development was as expected (EUR 6.4m/6.3m act./Evli) and with a downward trend on expected and realized credit losses the adj. PTP of EUR 0.9m was in line with our estimate (Evli EUR 0.9m).
Good potential in 2025 but short-term outlook still cautious
Alisa Bank expects that its operating result will continue to develop positively during 2025, which should be interpreted as compared with H2/24, although not explicitly stated. Decreased interest expenses will be a key driver on a still fairly conservative growth outlook. 2025 will be all about getting volume growth back on track. Success within partnerships, both new and existing ones, should pave the way for growth pick-up during the latter half. The company announced a new partnership with provide business financing services to Administer’s (leading financial management services provider) over 4,000 clients. Furthermore, the company is again looking at expansion abroad. With these initiatives, we expect to see growth in total income in 2025, and profitability to remain on par with H2/24 levels and subsequently increase clearly y/y due to the weak H1/24. We have lowered our 2025 PTP estimate to EUR 1.7m (2.4m) following weaker growth anticipations. With the scalability potential earnings could well improve further towards H2 should market conditions support more rapid growth in loan volumes, but the short-term outlook is still fairly cautious.
REDUCE with a target price of EUR 0.18
In light of the still uncertain near-term outlook and mixed estimate revisions (adj. PTP: 25e -30%, 26e +20%) we retain our TP of EUR 0.18 and REDUCE-rating. Valuation upside would in our view require better loan volume development, signs of which will be important heading into 2025.