Classification of NuWays AG to Multitude AG

Company Name:	Multitude AG
ISIN:	CH1398992755
Reason for the research:	Update
Recommendation:	BUY
Target price:	EUR 11
Target price on sight of:	12 months
Last rating change:
Analyst:	Julius Neittamo

Q1 miss on cost ramp up, but fundamentals remain intact

Multitude released its Q1'26 results yesterday. Q1 displayed Multitude's momentum in the de-risking strategy, moving the business towards a more diversified, lower-risk earnings mix driven by Wholesale Banking, partnerships and fee-based income stream. While profitability was dragged by elevated funding and OPEX, the underlying business developped better than expected.

Interest income came in stronger than anticipated. Interest income was € 56.7m, down 12% yoy (+13% beat vs eNuW). Per segment, Consumer Banking displayed q/q growth for the first time since Q4'24, with € 41m or -21% yoy (+13% beat vs eNuW). CapitalBox was back to growth with € 8.8m, up 3% yoy (+9% beat vs eNuW). Wholesale Banking, the fast-growing profitable segment, was very strong with € 6.9m, up 76% yoy (+17% beat vs eNuW).

For the group, net interest income was € 45.0m, down 17% yoy (+8% beat vs eNuW). Interest expense was € 11.7m, up 13% yoy, higher than eNuW € 8.6m, driven by the full quarter contribution of the 2025 Tier 2 notes and aggregate higher deposit costs, as the deposit base grew by € 159m in Q1'26 alone to a total of € 1.19bn.

Net fee and commission income was € 4.7m, up a strong 141% yoy. This came in slightly below our expectations for the quarter (eNuW: € 5.5m), though not a cause for concern given the inherent q/q volatility in this line.

Share of results of associates was € 1.1m, up 108% yoy (vs eNuW € 0.6m), as Lea Bank and Sortter continued to perform well. Wednesday, Multitude announced increasing its stake in Sortter from 19.97% to a majority stake. Valuation and precise ownership numbers were not disclosed. In FY25, Sortter generated revenues of € 17.2m, posting a net profit of € 1.6m. Sortter has displayed consistent strong double digit growth with +69% sales CAGR between 2021-25. Sortter's financials and business model suggest significant operating leverage potential.

Importantly, impairment losses were € 18m, down 19% yoy, well below eNuW of € 20.1m. The impairment loss ratio on the loan book ran at a 7.3% annualised, a continued improvement reflecting portfolio de-risking and Wholesale Banking's near-zero loss rate on its fully collateralised book.

OPEX excl. impairments was noticeably elevated, with the cost-to-income ratio at 55% vs 45% in Q1'25, driven by the ramp-up of partnerships and Wholesale Banking, which Multitude sees as necessary investments to fuel growth.

Net profit was € 4.4m, down 39% yoy and 20% below eNuW, with the shortfall largely attributable to higher than anticipated interest expense and OPEX. Multitude reiterated the € 30m FY26 guidance, implying a meaningful H2 weighting. FY26e net profit is seen at € 29.4m (eNuW).

While the ramp-up of product portfolio is elevating the cost base, the fundamentals are developing better than expected. Thus, we keep our PT of € 11 based on residual income model and reiterate our BUY rating.

You can download the research here: multitude-ag-2026-05-22-previewreview-en-f335f
For additional information visit our website: https://www.nuways-ag.com/research

Contact for questions:
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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