Alisa Bank - Accelerating strategic refocus
Alisa Bank intends to sell the majority of its consumer loan portfolio. Proceeds should reasonably be used to accelerate business lending growth, organically and inorganically, to fill the gap from lost income.
To sell the majority of its consumer loan portfolio
Alisa Bank on Oct 31st announced intentions to sell a significant portion of its consumer loan portfolio to Bankaktiebolaget Nordiska. The part to be sold represents approx. 75% of the consumer loan portfolio, which at the end of H1/25 amounted to EUR 78m. The purchase price amounts to approx. EUR 51m, to be paid in cash, with the sale subject to approval from the Swedish FSA and to be specified once conditions for the sale have been completed. The asset sale is part of the earlier announced strategic decision to gradually withdrawal from consumer financing.
Accelerated organic/inorganic growth needed to fill gap
The transaction through the purchase price is in our view favourable. Although the near-term earnings potential is clearly reduced, consumer lending volumes were in any case being phased out in favour of business lending, and the transaction offers solid financial support to drive current organic growth and in our view to now also very likely further execute inorganic growth avenues in business lending. Our revised estimates (transaction P&L profit impact not yet included) assume completion of the transaction at the end of 2025 and essentially reflect a full withdrawal from consumer lending during 2026 assuming further loan portfolio sales. The near-term profit impact to our previous estimates is more limited due to expected changes in credit loss provisions. We expect some cost base reduction in 2026, mainly through actions taken in 2025, while assuming growth investments to pick up because of the capital infusion and offset some of the savings. Profitability will on our revised estimates be negative in the coming years despite fairly aggressive growth assumptions.
REDUCE with a target price of EUR 0.19
The transaction offers notable, albeit yet to be determined potential. We anticipate a fairly large inorganic addition in the near-term. The focus on one customer group coupled with inorganic opportunities has potential to provide better ROI, but for now we can only wait and see.