Morrow Bank AB · OMXSTO:MORROW
Morrow Bank AB — Komplett Bank — Q2 2021 Earnings Presentation
28 slides from Morrow Bank AB's earnings presentation, Aug 12, 2021
Slide 1: Second quarter 2021
@ KOMPLETT’bank Second 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 Eirik Holtedahl Henning Fagerbakke Interim CEO CFO 3
Slide 4: Loan growth in Q2
Loan growth in Q2 Further growth and efficiency measures expected to drive profits • Investing in growth, bucking negative development in Q1 Returning to growth • On track for around 5% loan growth in 2021 • Expected continued loan growth from existing portfolio, further geographical expansion in 20
Slide 5: Highlights of the quarter
Highlights of the quarter Q2 2021 Growth • Net loans increase of NOK 261 million adjusted for FX and forward flow effects (NOK -62 NOK million Q2 2021 Q/Q Y/Y million in Q1 2021) Net loans 8,354 3.9% -0.6% • Refinancing sales in Norway main growth driver in the quarter Total income 241 -5.9% -15.9%
Slide 6: Growth in all countries, dominated by new sales in refinancing Norway
Growth in all countries, dominated by new sales in refinancing Norway Growth in net loans (NOK million) Net loan growth distribution (NOK million) 224 21Q1 21Q2 63 59 -20 -35 -8 -23 -26 -64 -178 326 312 271 Loans Norway Loans Finland Loans Sweden Credit cards Point-of-sales finance 134 20 -62 19Q3 1
Slide 7: Stable underlying credit quality, high repayments in June
Stable underlying credit quality, high repayments in June Loans Norway Loans Finland Loans Sweden • Improved default level in June • Improved default level in June • Stable default levels in June compared to previous quarter compared to previous quarter compared to previous quarter • Improved past d
Slide 8: Second Quarter 2021 Financial review
Second Quarter 2021 Financial review 8
Slide 9: Total income decline driven by lower yield on refinancing and negative return on investments
Total income decline driven by lower yield on refinancing and negative return on investments Total income (NOK million) Number of customers (thousands) 324 327 331 293 37 37 38 278 277 269 303 35 295 291 286 247 27 30 23 269 254 256 24 241 156 157 158 115 119 119 128 95 53 55 56 57 60 62 62 63 6 7 7
Slide 10: Q2 OPEX increase driven by increased activity level and new projects
Q2 OPEX increase driven by increased activity level and new projects Operational expenses (NOK million) and cost ratios (%) • OPEX NOK 108 million in Q2 2021, up from NOK 98 million in Q1 120 70% 2021 • Personnel expenses up NOK 3.5 million driven by the general 60% wage settlement and investments f
Slide 11: Improved credit risk performance during the quarter
Improved credit risk performance during the quarter Break-down of Q2 2021 losses on loans (NOK million) • Increase in stage 1 losses due to increased new sales in Q2 2021 • Decrease in stage 2 provisions due to better performance as less balances are overdue 0 • Stage 3 losses including effects of N
Slide 12: Loan loss ratio down, positively impacted by high repayments in June
Loan loss ratio down, positively impacted by high repayments in June Coverage ratios Loan loss ratio (LLR)* (%) 2.6 % 2.4 % 2.5 % 2.5 % 2.5 % 2.3 % 5.6 % 2.1 % 17.5 % 16.2 % 16.2 % 1.8 % 17.1 % 17.4 % 16.1 % 14.6 % 12.2 % 3.9 % 4.0 % 4.0 % 3.7 % 3.8 % 3.8 % 3.8 % 3.8 % 3.2 % 39.1 % 41.6 % 40.8 % 40.
Slide 13: ROE impacted by yield decline, investments, increased OPEX and high capital adequacy
ROE impacted by yield decline, investments, increased OPEX and high capital adequacy Profit after tax (NOK million) Annualised ROE * (%) 83 80 77 73 17.9 % 66 17.9 % 63 63 38 16.1 % 50 13.9 % 13.6 % 13.1 % 12.0 % 63 9.3 % 19Q3 19Q4 20Q1 20Q2 20Q3 20Q4 21Q1 21Q2 19Q3 19Q4 * 20Q1 * 20Q2 20Q3 20Q4 21Q1
Slide 14: Solid capital position provides capacity for both growth and dividends
Solid capital position provides capacity for both growth and dividends Regulatory capital structure (%) 25.4% 0.8% 21.5% 2.3% • CET1 ratio decreased to 22.3% (22.5%) in Q1 2021, and well above 18.0% 20.5% target which includes a 1.0%-point management buffer 2.0% 2.0% 1.5% 1.5% 1.0 % • Solid total ca
Slide 15: Outlook and summary
Outlook and summary 15
Slide 16: Summary of our priorities for 2021
Summary of our priorities for 2021 • Continue activity levels and improve customer acquisition processes; prepare for market launch Growth • Around 5% loan growth in 2021 • Maintain high focus on credit risk and collection performance Credit quality • Continue to improve data, analytics and processi
Slide 17: Komplett Bank's strategic roadmap for growth: expansion planned for 2022
Komplett Bank’s strategic roadmap for growth: expansion planned for 2022 Point-of- Consumer Credit Deposit sales loans cards accounts Komplett Bank follows a product- finance wise and geographical expansion strategy to ensure: Q1 Q4 Q3 Q1 2014 2015 2017 2014 • Reduced business risk • Economies of sc
Slide 18: Ambition for growth and shareholder value creation
Ambition for growth and shareholder value creation Ambition Key drivers Total income Improvement • Expected loan balance growth in existing portfolio; further potential from expansion • Somewhat offset by yield pressure Cost/income ratio Improvement • Full effect realised from already initiated effi
Slide 19: Komplett Bank's long-term financial targets
Komplett Bank’s long-term financial targets Capital adequacy CET1 target of 18.0% Comprised of current regulatory CET1 requirement of 17.0% + 1.0% management buffer Return on equity Above 20% return on equity Excess capital not deployed for growth and solidity will be Dividend Policy distributed to
Slide 20: Q&A
Q&A
Slide 21: Appendix
APPENDIX 21
Slide 22: A Nordic specialised consumer finance company
A Nordic specialised consumer finance company • Offering flexible consumer financing solutions to customers across the Nordics • ~331,000 customers across four product areas in Norway, Sweden, Finland and Germany • Strategic partnership with Komplett Group, largest e-commerce company in the Nordics
Slide 23: Diversified product portfolio across the Nordics
Diversified product portfolio across the Nordics Total net loans (NOK million) Distribution of net loans end of Q2 2021 10,000 Thousands 8,821 8,496 8,403 9,000 8,361 8,341 8,361 8,354 7,903 8,094 8,042 8,000 6% Loans Norway 7,000 8% Loans Finland 6,000 39% Loans Sweden 5,000 17% 4,000 Credit cards
Slide 24: Declining yields and funding cost over time
Declining yields and funding cost over time Yields performing loans * (%) Gradual yield declines due to growth in new markets • Yields for loans are affected by temporary interest cap in 25% Finland, and market conditions in Norway 20.9 % • Temporary restrictions on interest rates in Finland 19.7 %
Slide 25: Profit and loss
Profit and loss Amounts in NOK million Q2 2021 Q2 2020 2020 2019 Net interest margin* (%) Interest income 253.8 302.5 1,171.9 1,254.2 11.6 % 12.1 % 11.6 % 11.0 % 10.5 % Interest expenses -23.1 -37.9 -144.8 -167.2 9.8 % 10.1 % 10.0 % Net interest income 230.7 264.6 1,027.1 1,087.0 Income commissions
Slide 26: Balance sheet
Balance sheet Amounts in NOK million 30.06.2021 31.12.2020 Liquidity and funding Assets 1013% 980% Loans and deposits with credit institutions 999.8 1,204.2 888% 774% Net loans to customers 8,353.8 8,361.2 716% Certificates and bonds 2,093.5 1,848.0 539% 536% 525% Other intangible assets 148.0 154.2
Slide 27: Shareholders and Management and Board ownership
Shareholders and Management and Board ownership Top 20 shareholders Management and members of the Board of Directors ownership Shares Shares Share options # Shareholder % Role Name (thousand) (thousand) (thousand) 1 Kistefos AS* 35,747 19.1% Director Legal & HR Wilhelm B. Thomassen 2,018 330 2 UBS
Slide 28: Komplett Bank
@ KOMPLETT’ bank 28