FY26 outlook: Margin expansion set to continue

Our outlook for FY26 is optimistic, yet cautious. On top line, we model interest income (sales) to land at € 261m for FY26, or +4.6% yoy (eNuW).

Last year, 9M’25 saw a decrease in sales of 3.8% yoy, mainly driven by two factors: 1) divestments within Consumer Banking and 2) the lower interest rate environment. While interest rates have stabilised since June 2025, top line is likely to continue facing negative impacts through Q1'26 due to the lagged effects of prior rate cuts, though lower funding costs should partially offset net interest income compression. In December, the ECB left its rates unchanged for a fourth consecutive time. The ECB projects headline inflation at 1.9% for 2026, slightly down from 2.1% in 2025. A Reuters poll of 96 economists shows 75% expect unchanged rates through 2026. Provided the stable interest rate environment persists, we should see top line growth this year at +4.6% yoy (eNuW). Wholesale Banking is set to continue to grow strongly at a comfortable double digit rate at +36% yoy (eNuW), albeit with a deceleration from prior years.

Multitude shines on profitability, as the business becomes more efficient, capital-light and scalable. For FY26, EBT is seen at € 35.1m (+15.2% yoy) with 13.5% margin, while net profit is expected at € 30.5m (+11.7% yoy) with 11.7% margin (eNuW), above guidance of € 30m.

In FY25, the partnership model beat our estimates every quarter. Net fee and commission income grew from virtually zero in FY24 to a robust € 8m YTD in 9M'25. For FY26, we model € 16.7m, implying a 40% yoy increase, consistent with management's ambitions to strongly scale the business. Here, balance-sheet risk is minimal, as Multitude only supports loan origination. Multitude’s loan book quality also continues to improve. For reference, in FY18 the gross loan book was € 468m with impairment levels of 31.5%. In Q3’25, the gross loan book stood at € 880m with impairment levels of 15.2%. We have no reasons to believe that this trend should not continue in FY26 and beyond.

We think that Multitude is a quality digital bank at a bargain. Adjusting for perpetuals as AT1 equity, Multitude trades at a FY25e P/E of 6.9x vs. 13.8x for peers, reflecting a ~50% discount. We will write a separate preview for Q4’25 closer to preliminary results. We reiterate our BUY rating with a PT of € 11, based on our residual income model.