Morrow Bank AB · OMXSTO:MORROW
Morrow Bank AB — Q2 2023 Earnings Presentation
22 slides from Morrow Bank AB's earnings presentation, Aug 10, 2023
Slide 1: Second quarter results 2023
morrowbank.com Second quarter results 2023 Morrow Bank ASA
Slide 2: New brand – and first week in new offices!
New brand – and first week in new offices! morrowbank.com ir.morrowbank.com
Slide 3: Morrow Bank ASA – a diversified Nordic consumer finance company
Morrow Bank ASA – a diversified Nordic consumer finance company morrowbank.com Key facts Gross loan balance of BNOK 11.1 ▪ Established in 2014, listed in 2017 Norway Finland Sweden Loans Credit Cards POS ▪ Norwegian banking license (EU passporting) 2% ▪ Fully centralised operations (~80 FTEs) 7% 25%
Slide 4: Q2 2023 highlights: Improving efficiency and solid overall performance
Q2 2023 highlights: Improving efficiency and solid overall performance – reducing growth in H2 morrowbank.com Solid growth and stable net yield ▪ 3% loan balance growth vs. Q1 (15% growth YTD) MNOK Q2 2023 vs Q1 23 vs Q2 22 ▪ Stable net yield; total income up almost 15% vs. Q1 ▪ Higher market intere
Slide 5: Ongoing IT transformation enabling increased scalability
Ongoing IT transformation enabling increased scalability morrowbank.com Delivering on strategic plan, focus on IT in 2023 Gross loans (MNOK) and cost/income (%) 14,000 60% 53% Organisation streamlined: new management team & 50% 12,000 organisational structure in place, front-office outsourced 50% 44
Slide 6: A growing and resilient BNOK 600 Nordic market
A growing and resilient BNOK 600 Nordic market morrowbank.com ▪ The Nordic region proven to be stable and resilient during times of global macro-economic uncertainty ▪ Higher cost of living drives demand for new credit and debt consolidation across the region ▪ Stable volume in Norway since the intr
Slide 7: Second quarter Financial review
morrowbank.com Second quarter Financial review Photo: craftedbygc
Slide 8: Quarterly loan growth in line with ~10% annualised target
Quarterly loan growth in line with ~10% annualised target morrowbank.com Overall loan growth rate reduced to 3% in the quarter (vs 12% in Q1) in response to increased macroeconomic uncertainty Norway ▪ Decreasing balances Total gross loans ▪ Underlying loan Q2 development: MNOK -183 (-5%) ▪ Focus on
Slide 9: Margins maintained in Q2, near-term pressure expected
Margins maintained in Q2, near-term pressure expected morrowbank.com Yield, performing loans and deposits Stable net yield 20% 17.6 % ▪ Deposit rates trending upwards reflecting market development 18% 16.4 % 16.2 % 15.9 % 15.8 % 14.9 % 16% ▪ Multiple yield increases on loans to defend margin 14% 14.
Slide 10: Total income driven by loan growth, interest rate increases and higher net commissions
Total income driven by loan growth, interest rate morrowbank.com increases and higher net commissions and fees Q2 total income of MNOK 269, up 14.6% from Q1 2023 Total income (MNOK) ▪ Increase in interest income of MNOK 44 vs. Q1, partly offset by higher interest expenses 269 ~270 ▪ One-off items ne
Slide 11: Initiatives to reduce cost base continue to materialise
Initiatives to reduce cost base continue to materialise morrowbank.com Opex trending down: cost/income ratio at 31% in Q2 Operational expenses (MNOK) and cost/income ratio (%) ▪ Total operating expenses before depreciation and write- 53.3% 55% offs stable at NOK 82.7 million (NOK 81.3 million) 200 5
Slide 12: Loan loss ratio increased due to change in customer payment behaviour
Loan loss ratio increased due to change in customer morrowbank.com payment behaviour towards end of Q2 Higher market interest rates impacting debt servicing capacity Loan loss ratio (LLR) ▪ Loan loss ratio increased to 4.8% compared to 3.9% in Q1 Shrinking loan book (NPL sales) Strong volume growth
Slide 13: Stable profitability in H1
Stable profitability in H1 morrowbank.com Profit after tax (MNOK) ▪ Stable profitability in the quarter, on par with Q1, 50 driven by: 40 41 40 36 ▪ Increased total income 30 ▪ Stable operating expenses 18 20 ▪ Increased loan losses 10 ▪ H2 2023 profits expected below H1 2023 levels, due to tighter
Slide 14: Capital ratios improvement driven by profits and issue of equity and T2 loan
Capital ratios improvement driven by profits and issue of morrowbank.com equity and T2 loan Regulatory capital structure (%) Q-o-Q 24.1% ▪ In June, the Bank successfully completed a private placement equivalent to MNOK 100 in gross proceeds 22.3% 1.4% to strengthen the CET1 capital. 0.7% 2.1% 2.1% 1
Slide 15: Summary
morrowbank.com Summary Photo: Rose Lamond / roselamond.com
Slide 16: Controlled growth and focus on operational efficiency to drive medium-term returns
Controlled growth and focus on operational morrowbank.com efficiency to drive medium-term returns Gross loans (MNOK) and cost/income ratio (%) Medium-term targets 14,000 53% 50% 12,000 Annual loan balance growth 44%* 10,000 ~ 10% 35% 8,000 31% ~30% Cost/income ratio 6,000 < 30% 4,000 2,000 Return on
Slide 17: Q&A
Crefrd-cel tif morrowbank.com Q&A
Slide 18: Appendix
MORROW morrowbank.com APPENDIX
Slide 19: Profit and loss
Profit and loss morrowbank.com Amounts in MNOK Q2 2023 Q1 2023 2022 2021 Net interest margin* (%) Interest income 337.2 292.7 907.0 965.5 9.1 % 9.2 % 8.8 % 8.8 % 9.3 % Interest expenses -80.0 -63.0 -113.7 -81.8 Net interest income 257.1 229.6 793.3 883.7 Commission income and fees 22.2 13.3 53.0 51.
Slide 20: Balance sheet
Balance sheet morrowbank.com Amounts in MNOK 30.06.2023 31.03.2023 31.12.2021 Liquidity and funding Assets 567% Loans and deposits with credit 544.7 745.9 807.8 institutions 451% Net loans to customers 10,523.4 10,241.1 9,110.7 380% Certificates and bonds 813.4 1,605.1 1,453.5 302% 290% Other intang
Slide 21: Shareholder overview
Shareholder overview morrowbank.com Largest 20 shareholders Management and members of the Board of Directors Shares Shares Share options Warrants # Shareholder % Role Name (thousand) (thousand) (thousand) (thousand) 1 Kistefos AS 44,527 19.6% COO Wilhelm B. Thomassen 2,108 227 800 2 UBS AG 19,716 8
Slide 22: morrowbank.com
cef{-d-celtf morrowbank.com