Morrow Bank AB · OMXSTO:MORROW
Morrow Bank AB — Komplett Bank — Q4 2021 Earnings Presentation
30 slides from Morrow Bank AB's earnings presentation, Feb 10, 2022
Slide 1: Fourth quarter 2021
@ KOMPLETT’bank Fourth quarter 2021
Slide 2: Disclaimer
Disclaimer This Presentation has been produced by Komplett sometimes identified by the words “believes”, expects”, performance or achievements of the company to be information, including projections, estimates, targets Bank ASA (the “Company” or “Komplett Bank”), solely “predicts”, “intends”, “proje
Slide 3: Today’s presenters
Today’s presenters Picture Øyvind Oanes Eirik Holtedahl CEO CFO 3
Slide 4: Highlights of the quarter
Highlights of the quarter Q4 2021 NOK million Q4 2021 Q-o-Q Y-o-Y Profitability & growth • Profit after tax NOK 34 million, reflecting de-risking and lower interest income on NPLs Net loans 7,398 -7.9% -11.5% • Yield on performing loans at 13.0% in Q4, up from 12.5% in Q3 Total income 218 35.4% -14.
Slide 5: Strategy update
Strategy update 5
Slide 6: Attractive NOK 600 billion market with changing dynamics
Attractive NOK 600 billion market with changing dynamics Market development during two years of pandemic • Lower demand and prudent lending have driven volumes down • Positive outlook for consumption in 2022 ... forecast up 8% • Refinancing, debt consolidation and secured lending growing • Some grow
Slide 7: Komplett Bank’s performance below expectations
Komplett Bank’s performance below expectations Net loan volume and yield development MNOK Growth has levelled off 10 000 25% 9 000 • Application levels remain high ... conversion challenging 8 000 20% 7 000 • Refinancing product (NO) gave some uplift in 2021 6 000 15% 5 000 4 000 10% 3 000 Yield com
Slide 8: Focus on efficiency and profitability: Repositioning for growth
Focus on efficiency and profitability: Repositioning for growth Solid base Defined initiatives Clear goals • NOK 7.4 bn net loan book Product Performance • Profitable operation • Well capitalized • Clean balance sheet Strengthen Increase • Solid loan application base Process Automation platform Prof
Slide 9: Lean management team in place to execute strategic agenda
Repositioning for Growth: A) Lean management team in place to execute strategic agenda 1) Enhanced focus • Chief Commercial Officer (New) • Broadened Ops role & focused Tech role CEO Ø. Oanes 2) Strategic alignment • Analytics-driven commercial development • Process automation and efficiency CFO CCR
Slide 10: Addressing income and yield challenges
Repositioning for Growth: B) Adressing income and yield challenges Broaden funnel – Significant impact Illustration 1) Optimize existing products and markets Application • Convert more applications to volume • Develop better processes & products to reduce churn Processing • Simplify processes for cu
Slide 11: Restoring operational efficiency
Repositioning for Growth: C) Restoring operational efficiency 1) Streamline organisation Cost distribution by key processes - and areas for improvements • Align org. structure with strategic focus Tech efficiencies Automation 2) Drive process efficiency & cost-out measures Sales & mar- • Re-engineer
Slide 12: Executing on a clear plan
Repositioning for Growth: Executing on a clear plan Focus 2022 2023 and beyond Q3 2021 Balance sheet clean-up ➢ Risk adjusted margin improvement • Optimized product portfolio Q1 New management team & • Markets and segments organizational structure • Data and analytics Q1 Product portfolio review ➢ E
Slide 13: Fourth Quarter Financial review
Fourth Quarter Financial review 13
Slide 14: Profitability trend being addressed and set to improve
Profitability trend being addressed and set to improve Profit after tax (NOK million) Annualised ROE (%) 13.1 % 66 12.0 % 63 50 9.3 % 7.1 % 34 -356 20Q4 21Q1 21Q2 21Q3 21Q4 20Q4 21Q1 21Q2 21Q3 21Q4 • Profitability in Q4 rebound from Q3, but impacted by drop in total income, as result of write-downs
Slide 15: Underlying growth in net loans of 1.8% (Q-o-Q)
Underlying growth in net loans of 1.8% (Q-o-Q) Reduction Norway Total net loans (NOK million) due to • Solid market for refinancing product NPL sales 8 361 8 042 8 354 8 029 • Growth in low-yield segment with according lower credit risk 7 398 • Underlying growth: NOK 83 million in Q4 Finland • Stron
Slide 16: Yield now trending upwards; underlying income trend positive
Yield now trending upwards; underlying income trend positive Yield, performing loans Yield increase in Norway, Finland & Sweden 16.4 % 16.9 % 15.5 % • Increased interest rate in Norway in Q4 14.6 % 14.3 % • Interest cap in Finland lifted October 2021 • Interest increased for selected segments in Swe
Slide 17: Cost reduction measures starting to materialise
Cost reduction measures starting to materialise Operational expenses (NOK million) and cost ratios (%) • OPEX down 2.2% to NOK 103 million in 21’Q4 vs 21’Q3 120 70% -5 % • Gains from implemented efficiency measures materialising 60% 100 Marketing • Cost/income ratio still increasing as income, due t
Slide 18: Improved credit risk management; completion of NPL sales
Improved credit risk management reducing volumes sent to collection; completion of NPL sales • Underlying improvement driven by lower (better) PDs Break-down of Q4 2021 losses on loans (NOK million) (probability of default) in the portfolio. • Stage 1 and 2 provisions improving compared to previous
Slide 19: Stable loan losses and higher coverage ratios
Stable loan losses and higher coverage ratios Loan loss ratio (LLR), adjusted for one-offs* (%) • No remaining NPL portfolios in Sweden & Finland; Stage 3 balance reduced by 21% in Norway • Post portfolio sales, overall NPL ratio down from 22% to 10% 4.0 % 3.8 % 3.2 % 3.0 % 3.0 % • New forward flow
Slide 20: Balance sheet de-risking and solid capital position
Balance sheet de-risking and solid capital position support strategic roadmap Regulatory capital structure (%) Q-o-Q 24.0% 22.0% 0.8% 0.8% 2.5% 2.4% • Clean balance sheet after significant de-risking 18.1% CET1 target 17.1% CET1 req. • Total capital ratio: 24.0% 20.7 % 18.8 % • Solid capital positio
Slide 21: Summary and Key take-aways
Summary and Key take-aways 21
Slide 22: Summary and key take-aways
Summary and key take-aways ✓ Balance sheet clean-up completed ... strong capital base maintained ✓ Extensive business analysis conducted ... key challenges identified ✓ Strategic roadmap developed … repositioning for growth ✓ New management team in place ... executing on a clear plan ✓ Encouraging i
Slide 23: Q&A
Q&A
Slide 24: Komplett Bank
@ KOMPLETT’ bank 24
Slide 25: Appendix
APPENDIX 25
Slide 26: Profit and loss
Profit and loss Amounts in NOK million Q4 2021 Q4 2020 2021 2020 Net interest margin* (%) 965.5 9.8 % 10.1 % 9.6 % Interest income 239.3 276.9 1,213.9 10.0 % 10.1 % 7.1 % Interest expenses -16.9 -28.8 -81.8 -144.8 Net interest income 222.4 248.2 883.7 1,069.1 Income commissions and fees 10.9 15.0 51
Slide 27: Balance sheet
Balance sheet Amounts in NOK million 31.12.2021 31.12.2020 Liquidity and funding Assets 980% Loans and deposits with credit institutions 1,301.8 1,204.2 888% 774% Net loans to customers 7,397.8 8,361.2 Certificates and bonds 882.2 1,848.0 517% Other intangible assets 153.5 154.2 386% Deferred tax as
Slide 28: Shareholder overview
Shareholder overview Largest 20 shareholders Management and members of the Board of Directors Shares Shares Share options # Shareholder % Role Name (thousand) (thousand) (thousand) 1 Kistefos As 35,747 19.1% COO Wilhelm B. Thomassen 1,860 330 2 Ubs Ag 17,243 9.2% CTO Steffen Ryengen 1,621 444 3 Al
Slide 29: A Nordic specialised consumer finance company
A Nordic specialised consumer finance company • Offering flexible consumer financing solutions to customers across the Nordics • ~355,000 customers across four product areas in Norway, Sweden, Finland and Germany • Strategic partnership with Komplett Group, largest e-commerce company in the Nordics
Slide 30: Komplett Bank
@ KOMPLETT’ bank 30