Morrow Bank AB · OMXSTO:MORROW
Morrow Bank AB — Komplett Bank — Q4 2019 Earnings Presentation
23 slides from Morrow Bank AB's earnings presentation, Feb 13, 2020
Slide 1: Fourth Quarter 2019
@ KOMPLETT bank FOURTH 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
Highlights of the quarter Q4 2019 Loan Losses • Losses on loans were NOK 222 million in Q4 2019. Loss ratio was 5.6% adjusted for additional loan loss NOK million Growth Q/Q Growth Y/Y provisions (4.0% in Q3 2019) Net loans 8,496 2% 8% ‐ Increase in non-performing loans, mainly for consumer loans an
Slide 4: Increased loan losses
Increased loan losses Break-down of Q4 2019 losses on loans • Revision of risk strategy underway and additional measures to lower the risk profile taken • Revision of model parameters across the Bank’s entire product portfolio resulting in additional loan loss provisions of NOK 105 million, mainly d
Slide 5: Q4 loan loss development per main portfolio
Q4 loan loss development per main portfolio Consumer Loans Norway Consumer Loans Finland Consumer Loans Sweden • 45% of customers who defaulted in Q4 • Default levels relatively stable for the • Q4 2019 losses driven by growth and 2019 originated in 2018 quarter 2018 vintages ‐ High sales combined w
Slide 6: Increased loan loss ratio and coverage ratio
Increased loan loss ratio and coverage ratio Past due (days) at end of quarter Quarterly loan loss ratio (LLR)** (%) 20% 70% 8% 18% IAS 39 IFRS 9 IAS 39 IFRS 9 60% 7% 16% 14% 50% 6% 5.6 % 12% 4.7 % 40% 5% 10% 4.0 % 3.9 % 3.8 % 3.7 % 3.9 % 30% 4% 3.6 % 3.7 % 8% 3.3 % 2.9 % 6% 20% 3% 4% 10% 2% 2% 0% 0
Slide 7: Lending growth in Finland, Sweden and POS Finance
Lending growth in Finland, Sweden and POS Finance Growth in net loans (NOK million) Net loan growth distribution (NOK million) 231 19Q3 19Q4 886 205 125 102 105 15 28 -7 663 655 595 -185 -214 515 Loans Norway Loans Finland Loans Sweden Credit cards Point-of-sales finance 453 393 389 Impact of curren
Slide 8: Diversified across products and markets
Diversified across products and markets Total net loans (NOK million) Distribution of net loans end of Q4 2019 8% growth 9 000 Tusener Loans Sweden Point-of-sales finance 8 000 6% Loans Norway Loans Finland 7 000 9% Credit cards Loans Finland Loans Norway 6 000 12% 44% Loans Sweden 5 000 Credit card
Slide 9: Stable income and growing customer base
Stable income and growing customer base Total income (NOK million) Number of customers (thousands) 2% growth Loans Sweden 269 303 296 295 295 247 7 283 Point-of-sales finance 270 230 6 Loans Finland 214 5 245 209 Credit cards 3 4 220 115 208 179 95 Loans Norway 84 2 181 153 75 77 173 Deposit custome
Slide 10: Cost/Income ratio of 32.9% in the quarter
Cost/Income ratio of 32.9% in the quarter Operational expenses (NOK million) and cost ratios* (%) 140 70% • OPEX NOK 99 million in Q4 2019 compared to NOK 106 million in Q3 2019 120 60% AML admin fee • Non-recurring costs of NOK 7 million Marketing ‐ External support in investigating strategic oppor
Slide 11: Profit after tax impacted by additional loan loss provisions
Profit after tax impacted by additional loan loss provisions Profit after tax (NOK million) Annualised ROE** (%) 97 92 30% 30% 30% 88 79 80 26% 75 76 26% 25% 73 72 29 18 63 21% 21% 57 52 19% 18% 18% 14% 63 61 78 -15 17Q1 17Q2 17Q3 17Q4 18Q1 18Q2 18Q3 18Q4 19Q1 19Q2 19Q3 19Q4 17Q1 17Q2 17Q3 17Q4 18Q1
Slide 12: Stable yields and funding costs
Stable yields and funding costs Yields (%) Lending 25% • Stable yields for consumer loans – loans in Sweden and Finland have slightly lower yields than loans in Norway • Decrease in yield for credit cards due to seasonality and growth 20% in new markets 19.2 % • High yield for Point-of-sales finance
Slide 13: Well capitalised on CET1 with solid profitability and capacity for AT1 and T2
Well capitalised on CET1 with solid profitability and capacity for AT1 and T2 Regulatory capital structure (%) 22.8% 22.5% 21.8% 2.0% 0.7% 0.5% • The CET1 ratio decreased to 21.3% in Q4 2019 (Q3 19: 22.5%), but remains 2.0% well above target of 19.3%, which includes the management buffer (1.0%) 1.5%
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: Q1 Q4 Q3 Q1 2014 2015 2017 2014 Reduced business risk Q1 Q2 TBD TBD 2017 2019 E
Slide 16: 2020 key priorities
2020 key priorities Strategic priorities Focus areas • Continue to improve customer acquisition processes and strengthen risk strategy, policy rules Reverse negative trend in credit and scorecards losses • Enhance invoicing- and collection processes, and bill payment functionality Strengthen operati
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 Loss levels are expected to remain high and the Bank does not expect to meet its ROE target of 20% in 2020 Excess capital not
Slide 18: Q&A
Q&A
Slide 19: Appendix
APPENDIX @ KOMPLeTT bank
Slide 20: Profit and loss
Profit and loss Full year Full year Q4 2019 Q4 2018 Amounts in NOK million 2019 2018 Net interest margin* (%) Interest income 333.1 311.5 1,282.5 1,100.4 Interest expenses -39.2 -40.4 -167.2 -141.3 13.6 % Net interest income 293.8 271.1 1,115.3 959.1 13.0 % 12.9 % 12.7 % 12.7 % 12.5 % 12.5 % Income
Slide 21: Balance Sheet
Balance Sheet Amounts in NOK million 31.12.2019 30.06.2019 31.12.2018 Liquidity and funding Assets Loans and deposits with credit institutions 614.7 1,313.5 1,232.4 800% Net loans to customers 8,495.8 8,090.4 7,844.3 Certificates and bonds 1,329.8 1,150.8 436.4 600% Other intangible assets 143.3 118
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 15,034 8.
Slide 23: Slide 23