The company is indeed listed in Germany, but was founded in Finland. The Nordics and Finland are also significant operating areas for the company. The largest owner is still the Finnish founder Jorma Jokela. Many Finns may be familiar with the company through the Ferratum brand (the group’s name changed to Multitude a few years ago), through which the company’s Consumer Banking business area still operates.
It is indeed a digital bank, targeting consumers, small and medium-sized enterprises, and other fintechs that traditional banks typically do not serve (”overlooked by traditional banks”). Thus, the company’s loan portfolio is riskier compared to many traditional banks (naturally, with higher margins as a counterbalance). Historically, the company has demonstrated strong growth, but it has also experienced challenging times, especially after the COVID-19 pandemic, from which the company’s earnings level has clearly started to recover.
But I won’t write a longer piece here; please do check out the report yourselves! A video will also be released in the near future. I’m going on a slightly longer holiday now and will get back to any questions after my vacation.
Just chiming in, but nowadays you can buy it, e.g., from Nordnet.
Previously, a Finnish parent company was listed, and at that time, residents of Finland could not yet own the company (Euroclear’s peculiarities). The domicile of the company listed in the summer moved, and now the company can be owned from Finland as well
We have initiated coverage of the digital bank Multitude. Multitude has returned to profitable growth after a few difficult years, and we expect the company to continue on this path in the coming years.
Multitude’s English initiation of coverage report is freely available here.
Topics:
00:00 Introduction
00:25 What does Multitude do?
02:15 Business model
04:10 Industry
06:06 Competition
08:21 Value drivers
10:14 Risks
12:02 Strategy and financial targets
14:00 Forecasts
15:45 Valuation
“According to Arvopaperi, Jokela first considered listing on the Helsinki stock exchange, but the investment bank concluded that Finns would hardly be enthusiastic about a payday loan company.”
A well-reasoned perspective. That whole mess also has built-in unnecessary complexities, such as a peculiar group structure and perpetual bonds, which make monitoring and comparison to competitors difficult. Lending is also quite aggressive when credit losses are at that level.
On the other hand, with multiples of 0.5x book value and 6x P/E, it’s hard to see much downside risk, unless the loan portfolio completely melts down.
Multitude has increased its ownership in Lea Bank to 20.9 percent, exceeding the previous target of 18.9 percent. The transaction supports the company’s acquisition strategy and provides access to “higher-quality loan portfolios.”
Multitude Bank’s 25 million euro Tier 2 notes did not come as a surprise, but their size and costs were larger than expected. The notes raise the bank’s capital adequacy, but their high price raises questions about the profitability of growth.
Here are Roni Peuranheimo’s comments regarding the matter.
Multitude’s Wholesale Banking has started a strategic cooperation with Estonian fintech company Hoovi, providing it with 8 million euros in debt financing through a bond.
Multitude will report its Q4 results next Thursday, and here are Roni’s comments on it.
Multitude has not issued any pre-announcements regarding its Q4 figures, and therefore the company is likely to achieve its guidance. As our forecast was slightly below the range, we made small positive forecast revisions before the results. Overall, Multitude appears to have ended the year on a strong note, and the 2025 guidance suggests continued earnings growth. We believe that the risk/reward ratio at the current valuation level is skewed positively. We reiterate our Add recommendation and our target price of 5.7 euros.
Multitude reported its 2024 figures today. Here are the first impressions of the results - an even stronger outcome than expected, even though forecasts had already been slightly raised before the results. Later today, there will be a webcast, from which we hopefully get more color on the figures. Only “preliminary results” have been reported now, and the full annual report will be released in a couple of weeks.
Later today, the first CEO interview in Finnish will also be released!
Roni discussed with Multitude CEO Antti Kumpulainen.
Topics:
00:00 Introduction
00:18 CEO Antti Kumpulainen introduces himself
02:49 Multitude’s business
07:19 Strategy progression
09:37 Multitude’s competitive advantages
11:00 Focus areas for this year
12:58 Domicile changed to Switzerland
14:35 Key highlights of 2024
17:22 Decrease in credit loss provisions
18:47 Financial position and dividends
20:26 Investment in Lea Bank
22:36 Guidance and outlook
24:16 Impact of interest rates
Roni has prepared a new company report on Multitude following Q4.
Multitude’s Q4 result exceeded our expectations due to lower-than-expected credit losses, where development has also been positive during recent quarters. In addition, the business is growing very organically, which allows the cost structure to scale. In this light, the 2025 guidance appears achievable. Despite the positive share price reaction, the valuation remains low and we see the risk/reward ratio as attractive. We raise our target price to 6.0 euros (previously 5.7 euros) and reiterate our ‘add’ recommendation.
Here are Roni’s preview comments as Multitude announces its results this Thursday morning.
We expect continuous growth and significant earnings improvement compared to the corresponding period last year, which was overshadowed by increased credit losses. Business unit level targets for 2025 are scheduled to be published in connection with the Q1’25 report, and they are particularly interesting. Naturally, comments regarding the macroeconomic situation are also interesting. We expect the company to reiterate the group-level guidance provided for this year.
Here are Roni’s preliminary comments as Multitude announces its results next Thursday.
Multitude will publish its Q2’25 results on the morning of August 21. We expect growth to continue, driven by smaller business units (SME banking and wholesale banking), and a clear improvement in results from the comparison period, mainly due to an improved credit loss ratio. We have made small positive revisions to the Q2 report by lowering our credit loss forecast, as we expect consumer/SME payment behavior to have remained strong.
Here are some quick comments from Ron as Multitude reported its Q2 results today.
Multitude’s growth in Q2 was slower than we predicted, but the result significantly exceeded our expectations, which indicates that the company’s focus on profitability is yielding results. The profit guidance was reiterated, but based on our initial reaction, we believe the probability of another positive guidance change has increased.
Roni is in Switzerland interviewing Multitude’s CEO Antti Kumpulainen.
Topics:
00:00 Introduction
00:32 Q2 Highlights
01:57 Credit Losses Declining
03:23 Consumer Banking
05:02 SME Banking
06:18 Wholesale Banking
07:23 Guidance
08:56 Focus Areas for the Rest of the Year
09:35 Capital Markets Day Later This Year
Roni has made a new company report on Multitude regarding Q2.
Multitude’s Q2 result improvement exceeded our expectations, driven mainly by a decrease in credit losses and good growth in fee income, which could potentially be a good capital-light growth driver in the future. This year’s guidance was reiterated, although we consider it quite conservative and see a possibility for it to be revised upwards. With small positive forecast changes and a slightly lowered cost of equity, we raise our target price to EUR 8.0 (previously EUR 7.0) and change our recommendation to Add (previously Reduce).
Quoted from the report:
Small estimate revisions
We made small negative revisions to our growth estimates but positive revisions to profit estimates after the Q2 report. In general, in our view Multitude is still very much focusing on profitability.
We now expect Multitude’s total net operating income (NOI) to grow 2% to 224 MEUR in 2025. We expect the same trend to continue between the segments. In Consumer Banking, we expect the NII to decline slightly (NII 2025e -6%), SME grows at a double-digit pace (NII 2025e +8%), and Wholesale Banking continues very high growth (NII 2025e 70%). On top of net interest income, net operating income growth is supported by growth in fee income. We expect the net profit to reach 26.7 MEUR, which would indicate an improved guidance.
Here are Roni’s preliminary comments as Multitude publishes its Q3 results on Thursday.
We expect growth to continue, driven by smaller segments such as SME banking and wholesale banking, as well as fee income. While we expect earnings growth to continue, the pace will slow as comparison periods become more challenging. We consider the 2025 guidance conservative, and we believe in a potential upward revision of the guidance. On the same day, the company will host a Capital Markets Day (CMD), where we expect to hear about long-term financial targets, drivers for various business units (especially wholesale banking), and growth prospects for fee income.
