Morrow Bank AB · OMXSTO:MORROW
Morrow Bank AB — Komplett Bank — Q1 2020 Earnings Presentation
27 slides from Morrow Bank AB's earnings presentation, May 7, 2020
Slide 1: First Quarter 2020
@ KOMPLETT bank FIRST QUARTER 2020
Slide 2: Disclaimer
Disclaimer This Presentation has been produced by Komplett Bank ASA (the “Company” or “Komplett Bank”), solely for use at the presentation to investors and is strictly confidential and may not be reproduced or redistributed, in whole or in part, to any other person. To the best of the knowledge of t
Slide 3: Today's presenters
Today’s presenters CEO Jan Haglund CFO Henning Fagerbakke 3
Slide 4: Covid-19 update: Navigating through uncharted territory
Covid-19 update: Navigating through uncharted territory • Safeguarding the health and well-being of our employees and their families Safeguarding employees and • Assisting existing customers overcome short-term challenges in servicing their loans supporting customers • Maintained operational activit
Slide 5: Highlights of the quarter
Highlights of the quarter Q1 2020 Growth NOK million Growth Q/Q Growth Y/Y • Net loan growth of NOK 326 million, NOK -189 million adjusted for FX effects Net loans 8,821 4% 12% • Reduced risk levels and volumes of new lending to mitigate risks related to Covid-19 Total income 291 -4% 3% Profit after
Slide 6: Broad based improvement of credit quality in Q1
Broad based improvement of credit quality in Q1 Consumer Loans Norway Consumer Loans Finland Consumer Loans Sweden • Improvement in 90 days past due levels • Stable 90 days past due levels in Q1 • Improvement in 90 days past due levels in Q1 compared to previous quarter compared to previous quarter
Slide 7: Profitability, solidity and flexibility to withstand increase in loan loss provisions
Profitability, solidity and flexibility to withstand a potential increase in loan loss provisions Net interest margin Profit before tax (pre loss provisions) NOK million 14% 12.5 % 12.3 % 250 11.7 % 11.9 % 11.9 % 203 12% 189 194 200 175 167 10% 8% 150 • Efficient business model with significant 6% 1
Slide 8: First quarter 2020 financial review
First quarter 2020 financial review 8
Slide 9: Growth was driven by FX in the quarter
Growth was driven by FX in the quarter Growth in net loans (NOK million) Net loan growth distribution (NOK million) 356 19Q4 20Q1 886 125 102 98 105 15 27 -32 655 -124 -214 Loans Norway Loans Finland Loans Sweden Credit cards Point-of-sales finance 453 389 326 Impact of currency changes and forward
Slide 10: Stable income as new lending is reduced
Stable income as new lending is reduced Total income (NOK million) Number of customers (thousands) 3% growth 278 269 303 296 295 295 291 247 27 283 23 270 230 24 214 245 209 20 13 14 220 179 119 115 12 95 153 84 75 77 129 11 50 9 29 13 51 52 53 55 56 48 50 47 48 2 3 4 5 6 7 7 1 1 12 14 17 19 20 22 2
Slide 11: Decrease in operational expenses due to lower marketing activity
Decrease in operational expenses due to lower marketing activity Operational expenses (NOK million) and cost ratios* (%) 140 70% • OPEX NOK 97 million in Q1 2020 compared NOK 99 million in Q4 2019 120 60% AML admin fee ‐ Marketing costs reduced to actively manage loan growth ‐ Increase in external c
Slide 12: Improvement in loan losses
Improvement in loan losses Past due (days) at end of quarter Quarterly loan loss ratio (LLR)** (%) 25% 70% 60% 20% 50% 5.6 % 15% 40% 4.7 % 3.9 % 4.0 % 3.8 % 3.7 % 3.8 % 30% 10% 3.3 % 2.9 % 20% 5% 10% 0% 0% 18Q1 18Q2 18Q3 18Q4 19Q1 19Q2 19Q3 19Q4 20Q1 18Q1 18Q2 18Q3 18Q4 19Q1 19Q2 19Q3 19Q4 20Q1 PD 3
Slide 13: Additional loan loss provisions of NOK 50 million related to Covid-19
Additional loan loss provisions of NOK 50 million related to Covid-19 Break-down of Q1 2020 losses on loans • Decrease in stage 1 provisions due to reduction in new lending • Decrease in stage 2 provisions due to better performance as less customers are overdue • Stage 3 + Other on same level as in
Slide 14: Increase in profit after tax
Increase in profit after tax Profit after tax (NOK million) Annualised ROE** (%) 25.9% 25.4% 97 88 21.4% 20.9% 83 79 80 75 76 18.8% 18.5% 72 18.1% 18.1% 18 63 38 13.6% 97 88 76 80 61 78 46 -15 18Q1 18Q2 18Q3 18Q4 19Q1 19Q2 19Q3 19Q4 20Q1 18Q1 18Q2 18Q3 18Q4 19Q1 19Q2 19Q3 19Q4 20Q1 NPL sale effect*
Slide 15: Solid capital position
Solid capital position Regulatory capital structure (%) 22.1% 21.5% 0.7% • CET1 regulatory requirement lowered to 17.0% in Q1 2020 20.5% 0.5% 2.0% 2.0% • CET1 ratio was to 20.9% compared to 21.2% in Q4 2019 and well above 1.5% 1.5% 1.0 % 18.0% target • Transition to Standardised Approach during 2020
Slide 16: Outlook and summary
Outlook and summary 16
Slide 17: A solid and diversified platform for value creation
A solid and diversified platform for value creation Komplett Bank’s diversified product footprint Geographic split of net loans (NOK) Consumer Credit Point-of-sales Deposit loans cards finance accounts Q1 Q4 Q3 Q1 2014 2015 2017 2014 Norway 4.7bn Q1 Q2 (53%) Finland TBD TBD 2017 2019 2.8bn (32%) Q1
Slide 18: Our strategic priorities remain – even more important in times of uncertainty
Our strategic priorities remain – even more important in times of uncertainty Strategic priorities Focus areas • Continue to improve customer acquisition processes Reduce credit losses • Strengthen risk strategy, policy rules and scorecards • Enhance invoicing- and collection processes, and bill pay
Slide 19: Komplett Bank's financial targets
Komplett Bank’s financial targets Capital adequacy CET1 target of 18.0% Comprised of regulatory CET1 requirement of 17.0% + 1.0% management buffer Return on Equity Above 20% return on equity The Bank does not expect to meet its ROE target in 2020 Excess capital not deployed for growth purposes will
Slide 20: Q&A
Q&A
Slide 21: Appendix
APPENDIX @ KOMPLETT bank
Slide 22: Diversified product portfolio across the Nordics
Diversified product portfolio across the Nordics Total net loans (NOK million) Distribution of net loans end of Q1 2020 12% growth 9 000 Tusener 8 000 6% Loans Norway 7 000 9% Loans Finland 6 000 41% 13% Loans Sweden 5 000 Credit cards 4 000 Point-of-sales 3 000 32% finance 2 000 1 000 0 18Q1 18Q2 1
Slide 23: Stable yield on consumer loans and declining funding cost
Stable yield on consumer loans and declining funding cost Yields (%) Gradual yield decline due to growth in new markets 25% • Stable yields for consumer loans • Decrease in yield for credit cards due to growth in new markets 20% 18.4 % Funding 15% 14.8 % • Positive trend due to increased diversifica
Slide 24: Profit and loss
Profit and loss Q1 2020 Q1 2019 2019 Amounts in NOK million Net interest margin* (%) Interest income 326.4 310.5 1,282.5 Interest expenses -40.5 -46.0 -167.2 12.7 % 12.5 % 12.5 % 12.3 % 12.0 % 11.9 % Net interest income 285.9 264.1 1,115.3 11.7 % 11.7 % 11.7 % Income commissions and fees 40.8 44.6 1
Slide 25: Balance sheet
Balance sheet Amounts in NOK million 31.03.2020 31.03.2019 31.12.2019 Liquidity and funding Assets Loans and deposits with credit institutions 666.1 1,059.8 614.7 800% Net loans to customers 8,821.4 7,902.9 8,495.8 600% 536% Certificates and bonds 1,005.6 449.9 1,329.8 Other intangible assets 145.5
Slide 26: Shareholders and Management and Board ownership
Shareholders and Management and Board ownership Top 20 shareholders* Management and Board of Directors ownership Shares Shares Share options # Shareholder % Role Name (thousand) (thousand) (thousand) 1 CANICA INVEST AS 35,747 19.4 % Director Legal & HR Wilhelm B. Thomassen 2,018 270 2 STATE STREET
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