Morrow Bank AB · OMXSTO:MORROW
Morrow Bank AB — Komplett Bank — Q3 2021 Earnings Presentation
21 slides from Morrow Bank AB's earnings presentation, Nov 4, 2021
Slide 1: Third quarter 2021
@ KOMPLETT’bank Third 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 Øyvind Oanes Henning Fagerbakke CEO CFO 3
Slide 4: Highlights of the quarter
Highlights of the quarter Q3 2021 De-risking of balance sheet NOK million Q3 2021 Q/Q Y/Y • Non-Performing Loan (NPL) portfolios totalling NOK 1.4 bn sold in October • Overall NPL ratio down from 22% to 9% after completion Net loans 8,029 -3.9% -3.4% • Forward flow agreements established for portfol
Slide 5: Third Quarter Financial review
Third Quarter Financial review 5
Slide 6: Underlying growth in net loans of 3.2% (Q-o-Q)
Underlying growth in net loans of 3.2% (Q-o-Q) • Norway Total net loans (NOK million) • Solid markets for refinancing products 8 094 8 361 8 496 8 821 8 403 8 341 8 361 8 354 7 903 8 042 8 029 • Growth in low yield segment with expected lower credit risks • Underlying growth of NOK 209 million in Q3
Slide 7: Product mix and regulatory changes put pressure on yield
Product mix and regulatory changes put pressure on yield • Reported total income affected by NPL disposals Total Income (NOK mill) • Total income reduced by NOK 290 mill in 21’Q3 303 283 295 295 291 286 269 254 256 241 • Adjusted total income down 4.3% to NOK 230 mill vs Q2 230 • Combination of yiel
Slide 8: C/I ratio affected by revenue decline - strong focus on efficiency measures
C/I ratio affected by revenue decline - strong focus on efficiency measures • OPEX down 2.7% to NOK 105 million in 21’Q3 vs 21’Q2 Operational expenses (NOK million) and cost ratios (%) 140 70% • Adm. expenses down NOK 5.1 mill as cost programs materialise 120 60% • Gains from implemented efficiency
Slide 9: Sale of NPLs and review of portfolio increase loan losses by NOK 256 million
Sale of NPLs and review of portfolio increase loan losses by NOK 256 million • Model parameter updates related to NPL sale and review Break-down of Q3 2021 losses on loans (NOK million) • NOK 256 million is related to the additional loan losses • One–time increase in LGD accounting for 150 million a
Slide 10: Increase in coverage ratios due to NPL sales and review of loan book
Increase in coverage ratios due to NPL sales and review of loan book • No remaining NPL portfolio in Sweden & Finland Loan loss ratio (LLR)* (%) • Post completion of portfolio sales NPL ratio down from 22% to 9% 5.6 % • New Forward Flow agreements (“FFA”) established for loans 3.9 % 4.0 % 4.0 % 3.7
Slide 11: Summary and Key take-aways
Summary and Key take-aways 11
Slide 12: Falling profitability trend being addressed and will improve
Falling profitability trend being addressed and will improve Profit after tax* (NOK million) Annualised ROE * (%) 83 80 76 63 77 18.6 % 73 18.3 % 17.9 % 17.9 % 66 61 63 16.1 % 50 54 13.9 % 13.6 % 13.1 % 12.0 % 10.1 % 46 9.3 % -15 -356 19Q1 19Q2 19Q3 19Q4 20Q1 20Q2 20Q3 20Q4 21Q1 21Q2 21Q3 19Q1 19Q2
Slide 13: Short term focus: drive roadmap to improve profitability
Short term focus: drive roadmap to improve profitability 1) Improve product profitability in existing markets • Improve sales and margins • Product and market (economics) reviews • Focus, priorities and capital allocation 2) Improve efficiency • Process optimization and automation • Streamlining of
Slide 14: De-risking of balance sheet and solid capital position provides capacity for growth and dividends
De-risking of balance sheet and solid capital position provides capacity for both growth and dividends going forward Regulatory capital structure (%) 23.3% 22.0% 0.8% 0.8% 2.4% 2.4% 18.0% CET1 target • Clean balance sheet after significant de-risking in Q3 17.0% CET1 req. • Solid capital position pr
Slide 15: Q&A
Q&A
Slide 16: APPENDIX
APPENDIX 16
Slide 17: A Nordic specialised consumer finance company
A Nordic specialised consumer finance company • Offering flexible consumer financing solutions to customers across the Nordics • ~337,000 customers across four product areas in Norway, Sweden, Finland and Germany • Strategic partnership with Komplett Group, largest e-commerce company in the Nordics
Slide 18: Profit and loss
Profit and loss Amounts in NOK million Q3 2021 Q3 2020 2020 2019 Net interest margin* (%) Interest income -40.7 292.8 1,171.9 1,254.2 Interest expenses -17.4 -37.7 -144.8 -167.2 Net interest income -58.1 255.1 1,027.1 1,087.0 12.1 % 11.6 % 11.0 % 10.5 % 9.8 % 10.1 % 10.0 % 9.6 % Income commissions a
Slide 19: Balance sheet
Balance sheet Amounts in NOK million 30.09.2021 31.12.2020 Liquidity and funding Assets 1013% 980% Loans and deposits with credit institutions 885.5 1,204.2 888% 774% Net loans to customers 8,029.5 8,361.2 716% Certificates and bonds 1,291.3 1,848.0 536% 525% 517% Other intangible assets 144.9 154.2
Slide 20: 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 1,860 330 2 UBS
Slide 21: Komplett Bank
@ KOMPLETT’ bank 21