Alisa Bank - Expectations remain cautious

Slightly weaker than expected H1
Alisa Bank’s H1 results were slightly weaker than anticipated. Total income amounted to EUR 7.4m (Evli EUR 7.8m) and the adj. pre-tax profit to EUR -1.4m (Evli EUR -1.0m). OPEX was higher than anticipated (EUR 6.6m/6.2m act./Evli), with synergies from the PURO acquisition not captured as expected. Net credit losses were below expectations, as although realized credit losses were at an elevated level, ECL changes through sales of loan receivables of personal customers in Sweden and Denmark had a positive impact. Compared with previous half-year, the loan portfolio of business financing increased slightly while personal customers decreased by some 25%. The deposit base decreased by a similar pace to EUR 299.0m.

Cautious outlook but potential still remains
The bank’s monthly profit before taxes and non-recurring items is expected to turn positive during the latter part of 2025. We have kept our H2 estimate at around zero and full year estimate slightly down through the weaker H1. We have lowered our coming year estimates and 2026 in particular due to a perceived weak visibility into accelerating the growth of business financing, while simultaneously expecting further declines in personal customer financing due to an unfavourable profitability profile. Although we assume a conservative stance on the near-term development, we note that the scalability of the business model and likely at least minor near-term cost reductions offer notable potential in terms of profitability, should SME headwinds ease and the BaaS-partnerships start to provide more volumes. Although H1 was quiet, we expect more news on partnerships during H2.

REDUCE-rating with a TP of EUR 0.16
Although we have taken a more conservative stance on our near-term estimates, the potential for scaling earnings remains in place, and we retain our TP or EUR 0.16 and REDUCE-rating. Valuation upside would in our view require clearer signs of growth and PTP levels of over EUR 2m.