Bond successfully placed // Stake in Lea Bank increased; chg

Tier 2 bond placement to strengthen capital base and to fulfil Tier 2 capital requirements. The conditions (pricing of 99% of the aggregate principal amount and a coupon of 3 months EURIBOR plus 11.00% p.a.) are not exactly favorable, as it is the first bond with that size placed via Multitude bank but should improve with future potential bond placements through Multitude bank. Importantly, the proceeds strengthen the capital base of the bank and give the Group more flexibility when it comes to growth and seizing attractive opportunities.

Higher stake in Lea Bank makes future cooperations more likely. After the approval from the Swedish Financial Authority, Multitude Bank increased its stake in Lea Bank to 20.9%, by executing another five share purchase agreements. With that Multitude Bank strengthens its strategic foothold in the Nordic consumer finance market and execute on its long-term growth strategy through organic expansion, partnerships, and acquisitions. Further, it increases synergy potentials, such as 1) referrals/product cooperations, (2) joint development projects and (3) cross-selling between both banks. Still, for now the acquisition is only a financial investment that is expected to be partially consolidated. Importantly potential revenues from Lea bank (via dividends/consolidation) are not reflected in the guidance.

Looking at current trading (not considering direct positive effects from Lea Bank), we see Multitude fully on track to achieve its guidance: We expect moderate yoy growth on both top and bottom line (eNuW for Q1´25: € 71m sales and € 5.2m net income). That said, the Group's net income (including contributions from Lea Bank) should come in clearly above the guidance for FY25 of € 23m. Tailwinds are seen to come from lowering interest expenses for customer deposits that should have peaked in Q3´24.

Given that the company is still trading at 4.8x PE´25, despite the strong growth, the resilience and the positive outlook, we reiterate BUYwith an unchanged PT of € 12, based on our residual income model. Multitude remains a NuWays Alpha pick.