Morrow Bank Ab · OMXSTO:MORROW
Morrow Bank Ab — Komplett Bank — Q3 2019 Earnings Presentation
24 slides from Morrow Bank Ab's earnings presentation, Nov 7, 2019
Slide 1: Third Quarter 2019
@ KOMPLETT bank THIRD 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 Q3 2019
Highlights of the quarter Q3 2019 Growth NOK million Growth Q/Q Growth Y/Y • Net loan growth of NOK 271 million, NOK 397 million adjusted for NPL sales and FX effects Net loans 8,361 3% 12% • Continued strong performance in Sweden and Finland Total income 294.7 0% 9% • Growth in Norway impacted by r
Slide 4: Regulatory update – Shortcomings addressed and final report submitted
Regulatory update – Shortcomings addressed and final report submitted 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 we
Slide 5: Improved lending growth, driven by Finland and Sweden
Improved lending growth, driven by Finland and Sweden Growth in net loans (NOK million) Net loan growth distribution (NOK million) 260 19Q2 19Q3 231 886 205 113 8 28 -18 -7 663 655 595 -174 -185 570 Loans Norway Loans Finland Loans Sweden Credit cards Point-of-sales 515 finance 453 403 376 393 389 I
Slide 6: Increasingly diversified across products and markets
Increasingly diversified across products and markets Total net loans (NOK million) Distribution of net loans end of Q3 2019 12% growth 9 000 Tusener Loans Sweden Point-of-sales finance 8 000 5% Loans Norway Loans Finland 7 000 9% Credit cards Loans Finland Loans Norway 6 000 11% Loans Sweden 47% 5 0
Slide 7: Stable income and growing customer base
Stable income and growing customer base Total income (NOK million) Number of customers (thousands) 9% growth Loans Sweden 296 295 295 247 283 Point-of-sales finance 270 230 6 Loans Finland 214 5 245 209 Credit cards 3 4 220 208 179 95 Loans Norway 84 2 181 153 75 77 173 Deposit customers 1 50 148 12
Slide 8: Cost improvements driven by reduction in non-recurring costs
Cost improvements driven by reduction in non-recurring costs Operational expenses (NOK million) and cost ratios* (%) 140 70% • OPEX NOK 106 million ‐ Q2 2019: NOK 128 million incl. NOK 18 million AML fee 120 18.0 60% AML admin fee • Non-recurring costs of NOK 6 million Marketing ‐ External support r
Slide 9: Stable loan loss ratio and loan provisions
Stable loan loss ratio and loan provisions 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 % 4.0 % 3.9 % 3.8 % 50% 3.6 % 3.7 % 3.7 % 14% 3.3 % 12% Q3 2017 adj. for 40% 2.9 % NPL one-off sale 10% 30% 8% 6% 20% 4% 10% 2%
Slide 10: Loan losses slightly increased
Loan losses slightly increased Break-down of Q3 2019 losses on loans • Increase of losses in stage 1 and stage 2 primarily from growth in new markets, as these products have higher provisioning rate level compared to Norway • Quarterly model parameter updates result in a NOK 4 million additional los
Slide 11: Quarterly profitability impacted by continued capital build-up
Quarterly profitability impacted by continued capital build-up Profit after tax (NOK million) Annualised ROE* (%) Adj. for AML admin fee Adj. for NPL sale 96.9 92.2 87.6 29.7% 30.0% 30.2% 79.4 80.5 75.1 76.4 26.1% 25.9% 72.9 71.5 25.4% 18.0 21.4% 20.9% 56.8 18.8% 52.0 18.5 % 18.1% 17Q1 17Q2 17Q3 17Q
Slide 12: Stable yields and funding costs
Stable yields and funding costs Yields (%) Lending 25% • Stable yields for consumer loans and credit cards – new markets are slightly lower on yields than loans in Norway • High yield for Point-of-sales finance driven by commission 20% 20.3 % income Funding 15% 14.8 % • Decreased deposit yield in th
Slide 13: 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 (%) 23.8% 22.8% 0.8% • The CET1 ratio grew to 22.5% in Q3 19 (Q2 19: 22.0%), well above the 21.5% 0.5% 2.0% Bank’s financial target of 19.3% 2.0% 1.5% 1.0 % ‐ The targeted capital has been adjusted to
Slide 14: Strategy and outlook
Strategy and outlook 14
Slide 15: 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 16: Product developments enhance customer experience and ensure competitive offering
Product developments enhance customer experience and ensure competitive offering Q2-Q3 2019 Q4 2019 H1 2020 Launch of new annuity loan product Annuity loan with refinancing functionality Komplett Bank mobile app • Compliant with new Norwegian consumer • Enabling loan refinancing with more than five
Slide 17: Financial targets
Financial targets CET1 target of 19.3% Capital adequacy Comprised of regulatory CET1 requirement of 18.3% + 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 capital not deployed for growth pu
Slide 18: Q&A
Q&A
Slide 19: Appendix
APPENDIX @ KOMPLeTT bank
Slide 20: Profit and loss
Profit and loss Full year Q3 2019 Q3 2018 YTD 2019 YTD 2018 Amounts in NOK million 2018 Net interest margin* (%) Interest income 322.6 289.9 949.4 788.9 1,100.4 Interest expenses -40.2 -40.3 -128.0 -100.9 -141.3 13.6 % Net interest income 282.4 249.6 821.4 688.0 959.1 13.0 % 12.9 % 12.7 % 12.7 % 12.
Slide 21: Balance Sheet
Balance Sheet Amounts in NOK million 30.09.2019 30.06.2019 31.12.2018 30.09.2018 Liquidity and funding Assets Loans and deposits with credit institutions 1,145.2 1,313.5 1,232.4 1,095.4 600% Net loans to customers 8,361.4 8,090.4 7,844.3 7,455.7 500% Certificates and bonds 1,197.4 1,150.8 436.4 437.
Slide 22: Solid investor base
Solid investor base Top 20 shareholders* Management and Board of Directors ownership Shares Shares Share options # Shareholder % Role Name (thousand) (thousand) (thousand) 1 CANICA INVEST AS 35,747 19.4 % Director Legal & HR Wilhelm B. Thomassen 1,960 211 2 STATE STREET BANK AND TRUST COMP 15,005 8
Slide 23: Ambition to increase sales through own distribution
Ambition to increase sales through own distribution Net consumer loan growth sales channel distribution 17% 16% 13% 20% 29% 26% 31% 35% 35% 39% 46% • 50% of total sales generated through own 37% 39% distribution 44% 28% 34% 44% 21% 24% 29% 28% • Significant share of sales to existing customers 25% •
Slide 24: Slide 24