Morrow Bank Ab · OMXSTO:MORROW

Morrow Bank Ab — Komplett Bank — Q1 2019 Earnings Presentation

24 slides from Morrow Bank Ab's earnings presentation, May 9, 2019

  1. Slide 1: First Quarter 2019

    @ KOMPLETT bank WE KOMPLETE ono Ce HEM IN REFNANSIRING —KREDITIKORT HANDLEKONTO. SING KUNDESENTER OM OS6/1R Behov for lane penger? Sakom et Fleksibelt Lan. 1 komPLer Tessin FIRST QUARTER 2019

  2. 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

  3. Slide 3: Highlights of the quarter

    Highlights of the quarter Q1 2019 Growth NOK million Growth Q/Q Growth Y/Y • Net loan growth of NOK 58.6 million, NOK 364 million adjusted for NPL sales and FX effects • Total net Loans of NOK 7.9 billion at end of quarter Net loan growth 58.6 1% 34% Total income 282.8 -5% 28% Profitability Profit a

  4. Slide 4: Loan growth impacted by regulatory environment and FX effects

    Loan growth impacted by regulatory environment and FX effects Growth in net loans (NOK million) Net loan growth distribution (NOK million) 259 18Q4 19Q1 886 160 166 92 105 23 -9 -36 663 655 -127 595 -187 570 Loans Norway Loans Finland Loans Sweden Credit cards Point-of-sales 515 finance 453 403 360

  5. Slide 5: Ambition to increase sales through own distribution

    Ambition to increase sales through own distribution Net consumer loan growth sales channel distribution 20% 17% 29% 26% 31% 35% 35% 39% 46% • 61% of total sales generated through own distribution 44% 28% 34% 44% 21% 24% 29% 28% • Increasing share of sales to existing customers 25% • Higher direct sa

  6. Slide 6: Continuously improved loan portfolio diversification

    Continuously improved loan portfolio diversification Total net loans (NOK million) Distribution of net loans end of Q1 2019 34% growth 9,000 Tusener Loans Sweden Point-of-sales finance 8,000 Loans NO Loans Finland 8% 7,000 5% Credit cards Loans FI Loans Norway 6,000 10% Credit cards 5,000 54% Point-

  7. Slide 7: 28% growth in income y-o-y despite challenging Q1

    28% growth in income y-o-y despite challenging Q1 Total income (NOK million) Number of customers (thousands) 28% growth Loans Sweden 296 214 Point-of-sales finance 209 283 4 270 3 Loans Finland 179 245 Credit cards 2 220 75 77 153 208 Loans Norway 1 50 181 129 173 Deposit customers 29 1 110 13 17 19

  8. Slide 8: Efficient, digital operations enables low cost base

    Efficient, digital operations enables low cost base Operational expenses (NOK million) and cost ratios (%) • Efficient, digital operational model will drive 120 70% low- and improving cost income ratio over time • Non-recurring costs of NOK 8 million relating to: 60% ‐ External support in investigat

  9. Slide 9: Slight improvement in losses in loans

    Slight improvement in losses in loans Quarterly loan loss ratio (LLR)* (%) Break-down of NOK 72.3 million Q1 2019 losses on loans 4.7 % IAS 39 IFRS 9 3.9 % 3.8 % 3.6 % 3.7 % 3.7 % Q3 2017 adj. for 3.3 % NPL one-off sale 2.9 % 17Q1 17Q2 17Q3 17Q4 18Q1 18Q2 18Q3 18Q4 19Q1 • IFRS 9 Accounting standard

  10. Slide 10: Quarterly profitability negatively affected by one-offs

    Quarterly profitability negatively affected by one-offs Profit after tax (NOK million) Quarterly annualised ROE* (%) 50% One-off NPL sale One-off NPL sale 96.9 92.2 44.3% 45% 87.6 76.4 40% 75.1 72.9 71.5 35% 29.7% 30.0% 56.8 30% 52.0 26.1% 25.9% 25.4% 25% 21.4% 20.9% 18.8% 20% 15% 10% 5% 0% 17Q1 17Q

  11. Slide 11: Stable yields and funding costs

    Stable yields and funding costs Yields (%) Lending Yields 25% • Stable yields for loans across the markets for Loans and 22.2% 22.2% 22.5% 21.9% 22.1% Cards 21.4% 21.0% 21.1% 20.7% • High yield for Point-of-sales finance, mainly driven by 20% commission income, in line with expectations 16.6% 16.4%

  12. Slide 12: Well capitalised with solid profitability and capacity for AT1 and T2

    Well capitalised with solid profitability and capacity for AT1 and T2 Regulatory capital structure (%) 23.3% 22.7% 21.7% 0.8% 0.6% • Komplett Banks CET1 ratio grew to 21.8% in Q1 19 (Q4 18: 20.0%) 2.0% 2.0% 1.5% • Received CET1 Pillar 2 buffer requirement of 6.5%, resulting in a total 1.5% 1.0 % CET

  13. Slide 13: Strategy and outlook

    Strategy and outlook 13

  14. Slide 14: Komplett Bank was the most profitable Nordic consumer finance bank in 2018

    Komplett Bank was the most profitable Nordic consumer finance bank in 2018 in terms of ROA Total assets 2018 (NOK million) Profit after tax 2018 (NOK million) Return on Assets 2018 (%)* #1 #1 Komplett Bank 4.1% #2 #2 #2 #3 #3 #3 #4 #4 #4 #5 #5 #5 #6 #6 #6 #7 #7 #7 #8 Komplett Bank 331 #8 #9 #9 #9 #1

  15. Slide 15: Following a balanced strategic approach to ensure sustainable growth

    Following a balanced strategic approach to ensure sustainable growth To achieve sustainable growth Komplett Bank strives to optimise the balance between three key areas Markets Enter markets and product areas in which there are substantial opportunities for growth and value creation Capabilities Cap

  16. Slide 16: Executing on the strategic roadmap

    Executing on the strategic roadmap Komplett Bank follows a Komplett Bank’s strategic roadmap product-wise and Consumer Credit Point-of-sales Deposit geographical expansion loans cards finance accounts strategy to ensure: March November September March 2014 2015 2017 2014 Reduced business risk Februa

  17. Slide 17: Financial targets

    Financial targets CET1 capital ratio target of 19.2% Capital adequacy Comprised of regulatory CET1 requirement of 18.2% + 1% management buffer Return on Equity Above 20% return on equity Excess capital not deployed for growth purposes will be Dividend Policy distributed to shareholders 17

  18. Slide 18: Q&A

    Q&A

  19. Slide 19: Appendix

    APPENDIX @ KOMPLeTT bank

  20. Slide 20: Profit and loss

    Profit and loss Full year Q1 2019 Q4 2018 Q1 2018 Amounts in NOK million 2018 Interest income 310.2 311.5 233.7 1,100.4 Net interest margin* (%) Interest expenses -46.1 -40.4 -26.2 -141.3 Net interest income 264.1 271.1 207.5 959.1 13.6 % 12.9 % 13.1 % 12.7 % 12.7 % 12.5 % 11.7 % 11.7 % 11.2 % Incom

  21. Slide 21: Balance Sheet

    Balance Sheet Amounts in NOK million 31.03.2019 31.12.2018 31.03.2018 Liquidity and funding Assets Loans and deposits with credit institutions 1,059.8 1,232.4 490.2 300% Net loans to customers 7,902.9 7,844.3 5,914.6 250% 213% Certificates and bonds 449.9 436.4 381.8 200% 168% Other intangible asset

  22. Slide 22: Solid investor base

    Solid investor base Top 20 shareholders Management and Board of Directors ownership Shares Shares Share options # Shareholder % Role Name (million) (thousand) (thousand) 1 CANICA INVEST AS 35.747 19.6% CCO Wilhelm B. Thomassen​ 3,460 211 2 STATE STREET BANK AND TRUST COMP 13.750 7.5% CRO Tommy Öster

  23. Slide 23: Past due (days) at end of quarter

    Past due (days) at end of quarter 20% 70% IAS 39 IFRS 9 18% 60% 16% 14% 50% 12% 40% 10% 30% 8% 6% 20% 4% 10% 2% 0% 0% 15Q1 15Q2 15Q3 15Q4 16Q1 16Q2 16Q3 16Q4 17Q1 17Q2 17Q3 17Q4 18Q1 18Q2 18Q3 18Q4 19Q1 PD 31-60 PD 61-90 PD 90 + Coverage Ratio Coverage ratio = total impairments of loans/ gross defau

  24. Slide 24: Slide 24

Komplett Bank — Q1 2019 Earnings Presentation on 6ix