Morrow Bank (formerly Komplett Bank) is a small Norwegian digital consumer-lending bank (unsecured consumer loans, credit cards, point-of-sale finance) funded by deposits across the Nordics. It earns a ~9.6% return on equity — roughly its cost of equity — with the higher credit risk inherent to unsecured consumer lending.
On the ROE/P-B frame it is modestly full — 1.18× book against a Gordon-justified ~1.01× (ROE 9.6%, COE ~9.5%, g 3%). With returns only matching the cost of equity and elevated consumer-credit risk, the valuation leaves little cushion.
Gordon fair P/B = (9.6%−3%)/(9.5%−3%) ≈ 1.01×, versus the current 1.18× — modestly full. Returns barely cover the cost of equity, and unsecured consumer credit is cyclically exposed.
Base NOK 11.5 (−10%, modest de-rate); bull NOK 15 (ROE expansion as the turnaround/rebrand matures and credit normalises); bear NOK 9 (consumer-credit losses rise in a Nordic downturn).
The operating reverse-DCF (NOPAT / invested capital / WACC) does not apply to a balance-sheet business — leverage is the raw material and "net debt" is not meaningful. The equity is valued on residual income: book equity plus the present value of returns above the cost of equity, discounted at Ke; the single-stage lens is the Gordon fair price-to-book, (ROE−g)/(Ke−g). The market prices in a sustainable ROE of 10.7% vs 9.7% currently earned; at a sustained 9.7% ROE the warranted P/B is 1.03× (SEK 11/sh, -13%).
| Scenario | 24m target | Impl. ROE | Upside | Prob. | Driver |
|---|---|---|---|---|---|
| Bull | SEK 15 | 12% | +18% | 30% | Turnaround matures; ROE expands, credit normalises |
| Base | SEK 12 | 10% | -10% | 40% | Modest de-rate; ROE ≈ COE |
| Bear | SEK 9 | 8% | -29% | 30% | Consumer-credit losses rise in a downturn |
| Prob-weighted | SEK 12 | — | -7% | 100% | Scenario-weighted expected value |
| Ke \ ROE | 10% | 14% | 18% | 22% | 26% | 30% | 34% |
|---|---|---|---|---|---|---|---|
| 8.00% | 15 | 24 | 32 | 41 | 50 | 58 | 67 |
| 8.75% | 13 | 21 | 28 | 36 | 43 | 51 | 58 |
| 9.50% (base) | 12 | 18 | 25 | 32 | 38 | 45 | 52 |
| 10.25% | 10 | 16 | 22 | 28 | 34 | 40 | 46 |
| 11.00% | 9 | 15 | 20 | 26 | 31 | 36 | 42 |
Green = fair value above the current price of SEK 12.72. For a financial the surface is dominated by cost of equity and sustainable ROE — not unit growth.
⤓ Download the full model (.xlsx) — formula-driven sheets; flex the blue input cells and the model cascades in Excel.
A digital, deposit-funded Nordic consumer bank with a low-cost platform.
The Komplett-to-Morrow rebrand and strategy reset aim to lift returns.
Operational improvement could push ROE above the cost of equity.
Lending across Nordic markets diversifies the consumer-credit book.
Adequate capital supports growth and loss absorption.
Morrow Bank earns about its cost of equity at a modest premium to the Gordon-justified P/B, with elevated consumer-credit risk. HOLD with a bearish lean, medium conviction; base target NOK 11.5 (−10%).
A successful turnaround that lifts ROE above the cost of equity would justify the premium; a consumer-credit downturn is the principal risk.