NOBA.ST — mttssn research

HOLD

Conviction: MEDIUM

A growing Nordic consumer/SME bank (formerly Nordax/Bank Norwegian) earning a 13% ROE, fairly valued: 1.52× book versus a Gordon-justified ~1.54×. Fair on the frame, with consumer-credit risk the swing factor. HOLD.

Return on Equity

13.0%

Cost of equity ~9.5%

Price / Book

1.38×

1.52× book; fair

Fair P/B (Gordon)

1.53×

(ROE−g)/(COE−g); g 3%

Price / Target

SEK 76 → SEK 82

+7% base; HOLD

Price / Earnings

10.7×

≈11.7× earnings

P / TBV

1.96×

Price / tangible book

Economic Profit

+SEK 1,372M

+SEK 1.31B; 13% ROE

Equity (book)

SEK 27.7B

Bank equity

Thesis

NOBA Bank (the combination of Nordax and Bank Norwegian) is a Nordic consumer- and SME-lending bank with a digital, deposit-funded model and a ~13% return on equity. It has grown strongly across the Nordics in unsecured/consumer and mortgage lending.

On the ROE/P-B frame the equity is fairly valued — 1.52× book against a Gordon-justified ~1.54× (ROE 13%, COE ~9.5%, g 3%). The key variable is consumer-credit quality through a weaker Nordic consumer cycle.

Valuation · residual income (equity frame) & scenarios

Gordon fair P/B = (13%−3%)/(9.5%−3%) ≈ 1.54×, essentially the current 1.52× — fairly valued. The IPO/listing seasoning and consumer-credit cycle are the swing factors.

Base SEK 82 (+3%) holding the ROE; bull SEK 95 (ROE expansion and credit normalisation); bear SEK 65 (consumer-credit losses rise in a Nordic downturn).

Market-implied ROE

12.0%

sustainable ROE the price already demands — vs 13.0% observed

Current → Fair P/B

1.38× → 1.53×

at a sustained 13.0% ROE, K_e 9.5%, g 3%

Excess-return premium

SEK 29 / sh

value above SEK 55.36 book from the +3.5pp ROE−K_e spread

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 K_e; the single-stage lens is the Gordon fair price-to-book, (ROE−g)/(K_e−g). The market prices in a sustainable ROE of 12.0% vs 13.0% currently earned; at a sustained 13.0% ROE the warranted P/B is 1.53× (SEK 85/sh, +11%).

Scenario	24m target	Impl. ROE	Upside	Prob.	Driver
Bull	SEK 95	14%	+24%	30%	ROE expansion + credit normalisation
Base	SEK 82	13%	+7%	45%	Fair: trades at Gordon-justified P/B
Bear	SEK 65	11%	-15%	25%	Consumer-credit losses rise in a downturn
Prob-weighted	SEK 82	—	+7%	100%	Scenario-weighted expected value

Sensitivity — fair value / share at K_e × ROE

K_e \ ROE	10%	14%	18%	22%	26%	30%	34%
8.00%	78	122	166	210	255	299	343
8.75%	67	106	144	183	221	260	298
9.50% (base)	60	94	128	162	196	230	264
10.25%	53	84	115	145	176	206	237
11.00%	48	76	104	131	159	187	214

Green = fair value above the current price of SEK 76.50. For a financial the surface is dominated by cost of equity and sustainable ROE — not unit growth.

Method & data. ROE 13.0% and book equity are observed (net income / total equity). Cost of equity 9.5% and terminal g 3% are assumptions, shown explicitly and overridable. The underwriting bridge (combined ratio → float → ROE) is [DATA SAKNAS] — it requires a financial deep-dive to extract the combined ratio and investment yield, and is omitted here rather than estimated.

⤓ Download the full model (.xlsx) — formula-driven sheets; flex the blue input cells and the model cascades in Excel.

Key drivers

1. Nordic consumer/SME growth

A scaled, multi-market digital lending platform with growth runway.

2. Deposit funding

A digital deposit franchise provides stable, low-cost funding.

3. 13% ROE

A solid return on equity for a consumer-focused bank.

4. Diversification

Spread across Nordic markets and product lines diversifies credit risk.

5. Fair valuation

Trades at its Gordon-justified P/B — no valuation stretch.

Key risks

Consumer-credit qualityUnsecured/consumer lending is sensitive to a Nordic consumer downturn — the key risk.
Funding/deposit competitionDeposit pricing competition could pressure net interest margins.
RegulatoryConsumer-credit regulation (caps, affordability rules) could constrain the model.
Listing seasoningA relatively recent listing with evolving free float.
Rate cycleNet interest income is sensitive to the rate cycle.

Conclusion

NOBA is a growing Nordic consumer/SME bank fairly valued on the ROE/P-B frame, with consumer-credit quality the swing factor. HOLD, medium conviction; base target SEK 82 (+3%).

Credit normalisation and ROE expansion would be the upside; a consumer-credit downturn is the principal risk.