Morrow Bank AB · OMXSTO:MORROW
Morrow Bank AB — Komplett Bank — Q3 2022 Earnings Presentation
22 slides from Morrow Bank AB's earnings presentation, Nov 3, 2022
Slide 1: Third quarter 2022
@ KOMPLETT’bank Third quarter 2022
Slide 2: Q3 2022 highlights: Investing in accelerated growth, reducing cost base
Q3 2022 highlights: Investing in accelerated growth, reducing cost base NOK million Q3 2022 Q-o-Q Y-o-Y Growth engine restarted • Record sales and 14% net loan growth in quarter • Strong growth across geographies amid continued robust demand Net loans 7,990 +13.8% -0.5% • Significantly improved thro
Slide 3: Strategic and operational review
Strategic and operational review 3
Slide 4: Strategic initiatives: product and process improved, more to come from tech
Strategic initiatives: product and process improved, more to come from tech Defined 2022 initiatives Q3 progress Product Q1 - Q2 New management team & • Record-high quarterly sales volume and net loan balance growth (14%) organisational structure • Throughput significantly improved across all three
Slide 5: Repositioning continues – growth on track, further cost reductions to follow
Repositioning continues – growth on track, further cost reductions to follow Solid base Defined initiatives Clear goals Run-rate 2024 ambitions Product performance Loan balance increase (vs. Q2 2022) • NOK 8.0 bn net loan book (Q3 22) • Improved throughput • Focus on risk adjusted return > 50% • Cle
Slide 6: Third quarter Financial review
Third quarter Financial review 6
Slide 7: Strong growth across all markets, net loans: +14% (Q-o-Q)
Strong growth across all markets, net loans: +14% (Q-o-Q) Norway Total net loans (NOKm) • Strong new sales 8,029 7,990 • Underlying loan growth: NOK 326 million in Q3 7,398 7,185 7,022 Finland • Positive development continuing • Underlying loan growth: NOK 303 million in Q3 Sweden 21Q3 21Q4 22Q1 22Q
Slide 8: Stable loan yields across geographical markets
Stable loan yields across geographical markets Near-term net yield pressure amid increasing deposit rates Stable yield outlook Yield, performing loans and deposits • Stable yields for loans across geographies 15.9 % 18.00% 14.6 % 15.1 % 14.9 % 14.3 % 16.00% • Yield increase on cards driven by improv
Slide 9: Cost efficiency initiatives starting to yield results
Cost efficiency initiatives starting to yield results Operational expenses (NOKm) and cost ratios (%) Opex of NOK 94 million, down 9.3% compared to Q2 120 70% • Personnel costs reduced by NOK 7.3 million as improved processes have enabled a leaner organization 100 60% Marketing • Cost/income ratio d
Slide 10: Strong balance growth increases loan losses
Strong balance growth increases loan losses • Higher loan loss ratio in Q3 compared to prior quarters, as Loan loss ratio (LLR) 1BNOK loan growth prompts provision increase (Stage 1). • Consequence of IFRS 9 requiring 12 months expected loan losses at loan origination (paid out) 3.5 % 2.6 % 2.6 % 2.
Slide 11: Q3 performance reflecting accelerated growth
Q3 performance reflecting accelerated growth Profit after tax (NOKm) and returns (%, annualised) Initiatives on track to improve returns 40 9.3% 10.0% 8.6% 8.0% Loan growth: On track to deliver on ambition of 50% growth 30 7.4% 7.4% 4.2% 6.0% 4.0% 20 34 35 36 3.3% 2.0% Yield: Adjusting interest rate
Slide 12: Solid capital position, capacity to scale
Solid capital position, capacity to scale Regulatory capital structure (%) Q-o-Q 27.9% 0.9% 25.4% 2.7% 0.8% 2.5% 18.4% CET1 target • Capital ratios down due to strong growth 17.4% CET1 reqm’t. • Solid capital position provides flexibility for further growth 24.3 % 22.1 % • Dividend policy of distrib
Slide 13: Summary
Summary 13
Slide 14: Q3 summary: Delivering on growth and cost efficiency
Q3 summary: Delivering on growth and cost efficiency Net loans and opex (NOKm) Recap: Run-rate 2024 ambitions 8,200 108 Loan balance increase (vs. Q2 2022) 8,000 106 106 7,800 105 104 104 > 50% 103 102 7,600 100 7,400 98 7,200 Cost/income 96 7,000 94 94 < 35% 6,800 92 6,600 8,029 7,398 7,185 7,022 7
Slide 15: Q&A
Q&A
Slide 16: @ KOMPLETT’ bank
@ KOMPLETT’ bank 16
Slide 17: Appendix
APPENDIX 17
Slide 18: A Nordic specialised consumer finance company
A Nordic specialised consumer finance company • Offering flexible consumer financing solutions to customers across the Nordics • ~335,000 customers across four product areas in Norway, Sweden, Finland and Germany • Strategic partnership with Komplett Group, largest e-commerce company in the Nordics
Slide 19: Profit and loss
Profit and loss Amounts in NOK million Q3 2022 Q3 2021 2021 Net interest margin* (%) Interest income 221.8 190.4 965.5 10.6 % 10.1 % 9.4 % 9.1 % 9.2 % Interest expenses -28.3 -17.4 -81.8 Net interest income 193.5 173.0 883.7 7.6 % Commission income and fees 11.5 11.8 51.6 Commission expenses and fee
Slide 20: Balance sheet
Balance sheet Amounts in NOK million 30.09.2022 31.12.2021 Liquidity and funding Assets 517% Loans and deposits with credit institutions 1,028.4 1,301.8 408% 386% 380% Net loans to customers 7,990.0 7,397.8 Certificates and bonds 877.7 882.2 290% Other intangible assets 138.6 153.5 181% 174% 174% 16
Slide 21: 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 1,882 358 2 UBS AG 17,493 9.3% CFO Eirik Holtedahl 961 110 3 DNB
Slide 22: @ KOMPLETT’ bank
@ KOMPLETT’ bank 22