Morrow Bank AB · OMXSTO:MORROW
Morrow Bank AB — Q4 2023 Earnings Presentation
25 slides from Morrow Bank AB's earnings presentation, Feb 14, 2024
Slide 1: Fourth quarter results 2023
morrowbank.com Fourth quarter results 2023 Morrow Bank ASA
Slide 2: Q4 2023 highlights: Solid growth, improved margins and efficiency
Q4 2023 highlights: morrowbank.com Solid growth, improved margins and efficiency ▪ Underlying growth of 4% in Q4 (5% in Q3), year-end balance at NOK 12 billion Solid loan growth ▪ Balance growth of 22% y-o-y; continuous improvement increase throughput ▪ Net interest margin up 0.2%p in Q4 driven by e
Slide 3: Status and medium-term outlook
Status and medium-term outlook 2025 ambitions for growth and value creation
Slide 4: Delivered on roadmap and ambitions
Delivered on roadmap and ambitions morrowbank.com Q1’22: Q4’24 ambitions set Q4’22: Accelerated ambitions to Q4’23 Q4’23: Actual performance Loan balance ~ 15% ~ 20% ~ 20% growth* annualised annualised Cost/ income < 35% ~ 30% 28% ratio • Exited POS and simplified customer • Optimize product portfol
Slide 5: Delivered on growth, efficiency and pricing
Delivered on growth, efficiency and pricing - focus on morrowbank.com improving risk-adjusted margin and returns Key factors impacting returns (ROE) Loan balance growth Cost efficiency Risk-adjusted margin Strong loan balance growth through Cost efficiency improved since Q1’22 driven Risk adj. margi
Slide 6: Tighter credit policy, improved collection processes and maturing loan book to reduce loan losses
Tighter credit policy, improved collection processes and morrowbank.com maturing loan book to reduce loan losses Gross loan balance (BNOK) Drivers reducing loan losses 13.4 11.8 ▪ Invested in growth during “high growth phase” driving balance up >40%. Initially higher risk +92% but non-performing por
Slide 7: 2025 ambitions for growth and value creation
2025 ambitions for growth and value creation morrowbank.com Loan balance growth to stabilise at ~10% annually Scalability driving down cost/income ratio Loan balance (BNOK) Normalised OPEX (MNOK), cost/income ratio (%) Risk-adjusted margin driven by lower losses Improving ROE, upside in regulatory r
Slide 8: Fourth quarter Financial review
morrowbank.com Fourth quarter Financial review Photo: craftedbygc
Slide 9: Allocating growth capacity to most profitable markets
Allocating growth capacity to most profitable markets morrowbank.com Underlying loan growth of 4% in Q4 (vs. 5% in Q3) in local Total gross loans currencies and excluding NPL sales, up 22% year-on-year 11,789 11,114 11,303 Finland 10,790 ▪ Underlying loan Q4 development: MNOK 489 (+10.6%) 9,640 ▪ Fo
Slide 10: Successful loan repricing supporting solid margins
Successful loan repricing supporting solid margins morrowbank.com Yield, performing loans and deposits Increased interest rates across loan book 16.5 % 16.5 % ▪ Strengthened pricing capabilities for both loans and deposits 16.2 % 16.2 % 15.6 % ▪ Repriced loan rates on new and existing customers 14.3
Slide 11: Total income improved
Total income improved morrowbank.com Q4 total income of MNOK 286 Total income (MNOK) ▪ Increase in net interest income of MNOK ~23 vs. Q3, despite higher interest expenses 286 ▪ MNOK ~11 in gain on investments in financial instruments 269 264 in Q4 vs. MNOK ~7 in Q3 2023 235 220 ▪ Year-on-year incom
Slide 12: Delivering on target cost efficiency level
Delivering on target cost efficiency level morrowbank.com Cost/income ratio reduced to 28% in Q4 Operational expenses (MNOK) and cost/income ratio (%) ▪ Total operating expenses amounted to MNOK 80.1 in Q4 (MNOK 76.6 in Q3 2023) ▪ Result of strategic initiatives and other measures to improve cost ef
Slide 13: Tighter risk control and stable growth to improve loan loss provisions
Tighter risk control and stable growth to improve loan morrowbank.com loss provisions in the medium term Increased provisions impacting loan loss ratio Loan loss ratio (LLR) ▪ Loan loss ratio increased to 5.4% vs. 5.0% in Q3 One-off adjustments Volume growth and adverse macro Tighter policies, ▪ Mai
Slide 14: Stable Q4 profits
Stable Q4 profits morrowbank.com Profit after tax (MNOK) Q4 profit of MNOK 35 ▪ Total income increased ▪ Cost/income ratio continued to improve ▪ Increased loan loss provisions more than offset by total income growth ▪ Pre-tax profit of MNOK 51 vs MNOK 48 in Q3 ▪ ROE of 6.1% in quarter (ROTE of 7.1%
Slide 15: Capital levels provide headroom and support growth
Capital levels provide headroom and support growth morrowbank.com Regulatory capital structure (%) Q-o-Q 24.0 23.6 1.5 1.6 2.0 1.9 ▪ Regulatory capital requirement decreased by 1.7%p in 17.1% CET1 target Q4 as a result of systemic risk buffer reciprocity 16.1% CET1 requirement ▪ Current capital situ
Slide 16: Summary
morrowbank.com Summary Photo: Rose Lamond / roselamond.com
Slide 17: Highlights: Delivering on roadmap and ambitions
Highlights: Delivering on roadmap and ambitions morrowbank.com • Delivered on loan balance growth ambitions: loan book at NOK 12 billion Solid loan balance growth • Targeting a stable ~10% annual growth going forward • Improved throughput + reduced costs = scalable banking platform Scalability drivi
Slide 18: Q&A
18 Q&A ri RROW morrowbank.com
Slide 19: Appendix
[MORROW morrowbank.com APPENDIX
Slide 20: 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 11.8 ▪ Established in 2014, listed in 2017 Norway Sweden Finland Loans Credit Cards ▪ Norwegian banking license (EU passporting) ▪ Fully centralised operations (<75 FTEs) 8% 30% ▪ Cons
Slide 21: 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 22: Profit and loss
Profit and loss morrowbank.com Amounts in MNOK Q4 2023 Q3 2023 2023 2022 Net interest margin* (%) Interest income 398.2 352.0 1,380.0 907.0 8.8 % 8.8 % 9.3 % 8.9 % 9.1 % Interest expenses -120.1 -96.6 -359.8 -113.7 Net interest income 278.1 255.4 1,020.2 793.3 Commission income and fees 13.5 13.7 62
Slide 23: Balance sheet
Balance sheet morrowbank.com Amounts in MNOK 31.12.2023 30.09.2023 31.12.2022 Liquidity and funding Assets 567% Loans and deposits with credit 1,530.0 1,191.5 807.8 institutions 451% Net loans to customers 11,076.0 10,664.7 9,110.7 Certificates and bonds 926.1 510.9 1,453.5 310% 302% Other intangibl
Slide 24: 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 20,862 9.1% CO
Slide 25: morrowbank.com
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