Morrow Bank AB · OMXSTO:MORROW
Morrow Bank AB — Q3 2023 Earnings Presentation
22 slides from Morrow Bank AB's earnings presentation, Oct 24, 2023
Slide 1: Third quarter results 2023
morrowbank.com Third quarter results 2023 Morrow Bank ASA
Slide 2: Morrow Bank ASA – a diversified Nordic consumer finance company
Morrow Bank ASA – a diversified Nordic consumer finance company morrowbank.com Key facts Gross loan balance of BNOK 11.3 ▪ Established in 2014, listed in 2017 Norway Finland Sweden Loans Credit Cards POS ▪ Norwegian banking license (EU passporting) 2% ▪ Fully centralised operations (<80 FTEs) 7% 24%
Slide 3: Q3 2023 highlights: solid performance with strong cost and credit risk control
Q3 2023 highlights: solid performance with strong cost morrowbank.com and credit risk control ▪ Underlying loan balance growth of 5% vs. Q2 2023 (4%) amid prudent risk management Controlled loan growth ▪ 34% growth y-o-y supported by better customer processes and automation (throughput) ▪ Net intere
Slide 4: Strategic turnaround: efficient and scalable platform
Strategic turnaround: efficient and scalable platform morrowbank.com Strategic progress since Q1 2022 Gross loans (MNOK) and cost/income (%) 14,000 60% 50% 12,000 50% Improved product performance driving balance growth 44%* 10,000 40% Growth and loan repricing protecting margins 35% 8,000 31% 29% <3
Slide 5: Attractive and resilient Nordic market
Attractive and resilient Nordic market morrowbank.com Resilient Nordic market ▪ The Nordic region has proven to be stable with a strong demand for consumer lending products Macroeconomic outlook improving in the medium term ▪ GDP growth outlook supportive of spending increase and consumer finance de
Slide 6: Third quarter Financial review
morrowbank.com Third quarter Financial review Photo: craftedbygc
Slide 7: Steady loan growth
Steady loan growth morrowbank.com Underlying loan growth of 5% in Q3 (vs. 4% in Q2) in local currencies and excluding NPL sales. Total gross loans Finland ▪ Continued strong sales performance 11,114 11,303 ~ 11,500 ▪ Underlying loan Q3 development: MNOK 578 (+13.6%) 10,790 ▪ Focus on profitable grow
Slide 8: Successful loan repricing protecting margins
Successful loan repricing protecting margins morrowbank.com Yield, performing loans and deposits Repricing of loan book to protect net yield ▪ Deposit rates trending upwards reflecting market development 16.5 % 16.2 % 16.6 % 16.2 % 15.6 % 15.6 % ▪ Multiple rate increases on loans to maintain margins
Slide 9: Stable total income
Stable total income morrowbank.com Q3 total income of MNOK 264 Total income (MNOK) ▪ Increase in interest income of MNOK ~15 vs. Q2, however outweighed by slightly higher interest expenses 269 264 ~ 270 235 ▪ MNOK ~7 in gain on investments in financial instruments 220 in Q3 vs. MNOK 6 in Q2 2023 189
Slide 10: Delivering on target cost efficiency level
Delivering on target cost efficiency level morrowbank.com Opex reduced: cost/income ratio at 29% in Q3 Operational expenses (MNOK) and cost/income ratio (%) ▪ Total operating expenses before depreciation and write- 55% offs reduced to MNOK 76.7 (MNOK 82.7) 50% 200 ▪ Result of strategic initiatives t
Slide 11: Strong credit risk control
Strong credit risk control morrowbank.com Increased provisions impacting loan loss ratio Loan loss ratio (LLR) ▪ Loan loss ratio increased to 5.0% compared to 4.8% in Q2 Shrinking loan book (NPL sales) Strong volume growth Macro impacting provisions ▪ Increase mainly driven by higher model-based pro
Slide 12: Solid Q3 and YTD profits
Solid Q3 and YTD profits morrowbank.com Profit after tax (MNOK) 41 Q3 profit of MNOK 36 40 36 ▪ Total income stable when adjusting for one-off in Q2 ▪ Further cost improvements ▪ Somewhat increased loan loss provisions 18 ▪ ROE of 6.1% in quarter (ROTE of 6.9%) Outlook ▪ Stable level expected in the
Slide 13: Capital levels provide headroom and support growth
Capital levels provide headroom and support growth morrowbank.com Regulatory capital structure (%) Q-o-Q 24.1 24.0 1.4 1.5 2.1 2.0 18.8% CET1 target 17.8% CET1 requirement ▪ H1 equity and debt capital raises combined with stable profit generation provide headroom to requirements ▪ Capital allocated
Slide 14: Summary
morrowbank.com Summary Photo: Rose Lamond / roselamond.com
Slide 15: Competitive on KPIs vs Norwegian and Swedish peers
Competitive on KPIs vs Norwegian and Swedish peers morrowbank.com Net loans: Compound quarterly growth rate Annualised net interest margins1 Cost/income ratio2 Q2’22-Q2’23 Q2’23 Q2’23 Morrow 8.4% 10.0% 24.8% 6.2% Morrow 9.3% 27.3% 3.5% 8.1% Morrow 30.8% 2.9% 7.3% 38.7% 2.8% 6.7% 41.2% 0.6% 6.4% 41.4
Slide 16: Morrow Bank well-positioned to deliver improved returns
Morrow Bank well-positioned to deliver improved returns morrowbank.com Q3: Solid performance with strong Macroeconomic outlook improving Maintaining medium-term targets cost and credit risk control in the medium term Controlled loan growth Annual loan balance growth ~ 10% • GDP growth outlook suppor
Slide 17: Q&A
17 Q&A ri RROW morrowbank.com
Slide 18: Appendix
[MORROW morrowbank.com APPENDIX
Slide 19: Profit and loss
Profit and loss morrowbank.com Amounts in MNOK Q3 2023 Q2 2023 2022 2021 Net interest margin* (%) Interest income 352.0 337.2 907.0 965.5 9.2 % 8.8 % 8.8 % 9.3 % 8.9 % Interest expenses -96.6 -80.0 -113.7 -81.8 Net interest income 255.4 257.1 793.3 883.7 Commission income and fees 13.7 22.2 53.0 51.
Slide 20: Balance sheet
Balance sheet morrowbank.com Amounts in MNOK 30.09.2023 30.06.2023 31.12.2021 Liquidity and funding Assets 567% Loans and deposits with credit 1,191.5 544.7 807.8 institutions 451% Net loans to customers 10,664.7 10,523.4 9,110.7 Certificates and bonds 510.9 813.4 1,453.5 290% 302% Other intangible
Slide 21: Shareholder overview
Shareholder overview morrowbank.com Largest 20 shareholders Management and members of the Board of Directors Shares Shares Share options Warrants # Shareholder % Role Name (thousand) (thousand) (thousand) (thousand) 1 Kistefos AS 44,927 19.6% CFO Eirik Holtedahl 2,464 44 800 2 UBS AG 19,716 8.6% CO
Slide 22: morrowbank.com
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