Morrow Bank Ab · OMXSTO:MORROW
Morrow Bank Ab — Komplett Bank — Q2 2019 Earnings Presentation
25 slides from Morrow Bank Ab's earnings presentation, Aug 15, 2019
Slide 1: Second Quarter 2019
@ KOMPLETT bank Bank MasterCard SECOND QUARTER 2019
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
Slide 3: Highlights of the quarter Q2 2019
Highlights of the quarter Q2 2019 Growth NOK million Growth Q/Q Growth Y/Y • Net loan growth of NOK 187 million, NOK 408 million adjusted for NPL sales and FX effects Net loan growth 187.4 2% 19% • Loans in Finland experienced strong growth while growth in Sweden remained at a stable good level Tota
Slide 4: Regulatory update - Strengthening the organisation
Regulatory update - Strengthening the organisation New organisation as of June, 2019 Risk and Audit Board Internal Audit Committee • Complete re-structuring of the management team • Clarified roles and responsibilities to ensure accountability Compliance & CEO Risk Control • Implemented a Board Risk
Slide 5: Regulatory update – Measures taken to address shortcomings
Regulatory update – Measures taken to address shortcomings In its report on 10 May 2019, the FSA identified several areas of improvement and shortcomings, including the Banks anti-money laundering (AML) procedures. No money laundering activities or attempted money laundering activities were identifi
Slide 6: Continued growth in Finland and Sweden
Continued growth in Finland and Sweden Growth in net loans (NOK million) Net loan growth distribution (NOK million) 260 19Q1 19Q2 886 166 92 113 23 8 -36 -18 663 655 595 -187 -174 570 Loans Norway Loans Finland Loans Sweden Credit cards Point-of-sales 515 finance 453 403 376 393 389 Impact of curren
Slide 7: Lending growth in Sweden and Finland drives portfolio diversification
Lending growth in Sweden and Finland drives portfolio diversification Total net loans (NOK million) Distribution of net loans end of Q2 2019 19% growth 9,000 Tusener Loans Sweden Point-of-sales finance 8,000 5% Loans Norway Loans Finland 7,000 10 % Credit cards Loans Finland Loans Norway 6,000 9% Lo
Slide 8: Increase in income and customer base
Increase in income and customer base Total income (NOK million) Number of customers (thousands) 21% growth 230 Loans Sweden 214 5 296 295 209 283 Point-of-sales finance 4 270 3 Loans Finland 179 245 84 Credit cards 2 220 75 77 153 208 Loans Norway 1 50 181 129 173 Deposit customers 29 1 22 110 13 17
Slide 9: Costs impacted by AML fee and non-recurring items
Costs impacted by AML fee and non-recurring items Operational expenses (NOK million) and cost ratios* (%) 140 70% • OPEX NOK 128 million (Q1 2019: NOK 108 million) 120 60% AML admin fee • NOK 18 million one-off AML administrative fee Marketing 100 50% • Non-recurring costs of NOK 11 million, in line
Slide 10: Stable past-due days and loan loss ratio
Stable past-due days and loan loss ratio Past due (days) at end of quarter Quarterly loan loss ratio (LLR)** (%) 20% 70% 4.7 % 18% IAS 39 IFRS 9 IAS 39 IFRS 9 60% 16% 3.9 % 3.9 % 3.8 % 50% 3.6 % 3.7 % 3.7 % 14% Q3 2017 adj. for 3.3 % 12% 40% NPL one-off sale 2.9 % 10% 30% 8% 6% 20% 4% 10% 2% 0% 0% 1
Slide 11: Losses on loans impacted by parameter updates in the quarter
Losses on loans impacted by parameter updates in the quarter Break-down of Q2 2019 losses on loans Model parameter updates Credit conversion factor (CCF) • CCF estimates how much of unused credit limits will be drawn by a customer in the future • Based on historical data analysis, the CCF estimate u
Slide 12: Quarterly profitability negatively affected by non-recurring costs and AML administrative fee
Quarterly profitability negatively affected by non-recurring costs and AML administrative fee Profit after tax (NOK million) Annualised ROE* (%) Adj. for AML admin fee 96.9 Adj. for NPL sale 92.2 87.6 79.4 29.7 % 30.0 % 30.2 % 75.1 76.4 72.9 71.5 26.1 % 25.9 % 25.4 % 18.0 56.8 21.4 % 20.9 % 20.3 % 2
Slide 13: Stable yields and funding costs
Stable yields and funding costs Yields (%) Lending 25% • Stable yields for consumer loans and credit cards across the different markets • High yield for Point-of-sales finance driven by commission 20.7 % 20% income Funding 15% 15.1 % • More diversified funding from deposits ‐ As of Q2 2019 EUR 198 m
Slide 14: 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 (%) 23.4% 22.7% 21.7% 0.8% 0.6% 2.0% 2.0% 1.5% 1.5% 1.0 % • Komplett Banks CET1 ratio grew to 22.0% in Q2 19 (Q1 19: 21.8%) • Pillar 2 capital requirement of 6.5% results in a total CET1 requirement of
Slide 15: Strategy and outlook
Strategy and outlook 15
Slide 16: Short-term product development ensures competitive offering
Short-term product development ensures competitive offering May 2019 July – August 2019 H2 2019 Launch of new annuity loan product Launch of Google Pay and Apple Pay Annuity loan with refinance functionality • Compliant with new Norwegian consumer • Enables Komplett Bank Mastercard for true • Enabli
Slide 17: 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
Slide 18: Financial targets remain unchanged
Financial targets remain unchanged CET1 capital ratio target of 19.2% Capital adequacy Comprised of regulatory CET1 requirement of 18.2% + 1.0% management buffer Above 20% return on equity Return on Equity Excluding non-recurring items Komplett Bank expects to meet the ROE target for 2019 Excess cap
Slide 19: Q&A
Q&A
Slide 20: Appendix
APPENDIX @ KOMPLeTT bank
Slide 21: Profit and loss
Profit and loss Full year Q2 2019 Q2 2018 1H 2019 1H 2018 Amounts in NOK million 2018 Interest income 316.7 265.2 626.9 499.0 1,100.4 Net interest margin* (%) Interest expenses -41.7 -34.3 -87.8 -60.6 -141.3 Net interest income 275.0 230.9 539.1 438.4 959.1 13.6 % 12.9 % 13.0 % 12.7 % 12.5 % 12.7 %
Slide 22: Balance Sheet
Balance Sheet Amounts in NOK million 30.06.2019 31.12.2018 30.06.2018 Liquidity and funding Assets Loans and deposits with credit institutions 1,313.5 1,232.4 811.8 600% Net loans to customers 8,090.4 7,844.3 6,801.0 500% Certificates and bonds 1,150.8 436.4 396.8 400% Other intangible assets 118.7
Slide 23: 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 % Director Legal & HR Wilhelm B. Thomassen 3,460 211 2 STATE STREET BANK AND TRUST COMP 14,200 7.
Slide 24: Ambition to increase sales through own distribution
Ambition to increase sales through own distribution Net consumer loan growth sales channel distribution 20% 17% 16% 29% 26% 31% 35% 35% 39% 46% • 55% of total sales generated through own 39% distribution 44% 28% 34% 44% 21% 24% 29% 28% • Significant share of sales to existing customers 25% • Higher
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