Slide 1: Interim Presentation Q1 – 2020
Instabank Interim Presentation Q1 – 2020 May 7 th 2020 instabank.no www.instabank.no
Slide 2: Important information and disclaimer
Important information and disclaimer THIS PRESENTATION (THE “PRESENTATION”) HAS BEEN PRODUCED BY INSTABANK ASA (THE “COMPANY” OR “INSTABANK”), 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 PE
Slide 3: Key highlights Q1-20
Key highlights Q1-20 No negative effects on payments related to Covid-19 observed No observation of changed payment behavior following Covid-19, however Profit before tax of 7.1 MNOK negatively affected by an increase in loan loss allowance related to Covid-19 of 5 MNOK Strategy transition towards
Slide 4: Key figures Q1-2020
Key figures Q1-2020 Net profit before tax of 7.1 MNOK + 62 % vs Q1-19 Total income of 67.0 MNOK + 15 % vs Q1-19 Losses on loans 4.6 % vs 3.4 % Q1-19 Quarterly increase in net loans of 72 MNOK vs +122 MNOK Q1-19 Outstanding net loans of 2,768 MNOK vs 2,604 Q1-19 Equity per share of 1.53 N
Slide 5: Towards a paytech partner position
Towards a paytech partner position Our ambition is to establish Instabank as a paytech partner for companies seeking to innovate and digitize their business models This leverage our existing expertise within paytech and sales financing 5
Slide 6: Paytech partner levels
Paytech partner levels Develop services with multiple partners Develop new services with a partner Integrate sales financing solutions as a vital part of the sales process Digitize and simplify traditional sales financing 6
Slide 7: Benefits of a paytech partner strategy
Benefits of a paytech partner strategy – Potential growth as companies switch from selling products to selling product-as-a-service – Increase profit through long-term integration with partners and clients, and lower acquisition cost – Reduce risk due to smaller loans and potential for recurring
Slide 8: Status partner agreements
Status partner agreements One new partner signed and piloted during Q1 One new partner launched Ongoing discussion with several potential partners 8
Slide 9: Distribution channels
Distribution channels Instabank Agents Partners Volume Volume Volume as of Q1-20 17 % as of Q1-20 76 % as of Q1-20 7% 9 DRAFT
Slide 10: Present product portfolio
Present product portfolio Unsecured consumer loans Sales financing Deposit accounts KEY METRICS KEY METRICS KEY METRICS KEY METRICS NOK 2,692m NOK 77m NOK 48 m NOK 2,887m in net loans in net loans in invoice balance in deposits 23,674 5,648 2,396 9,406 customers customers customers customers NOK 98k
Slide 11: Net loan development
Net loan development Net loan balance growth Net loans to customers Key comments MNOK MNOK 3 200 Instabank suspended all new loans sales, except for sales financing through paytech partners, in 179 2 719 2 697 2 769 mid-March in conjunction with risk associated 112 2 605 2 618 155 123 103 83 148 2
Slide 12: Total income
Total income Total income detailed Total income MNOK MNOK 63,7 67,0 58,3 58,3 61,7 2,3 4,4 1,9 3,2 6,1 8,6 8,4 8,6 7,8 8,2 74,5 78,0 80,0 83,4 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 73,5 Key comments -13,5 -13,4 -13,4 -13,0 -12,5 -12,2 -13,8 -15,2 -16,2 -16,7 A new principle for calculating interest on loa
Slide 13: Funding cost and yields
Funding cost and yields Development in funding cost and yields Key comments Although loan yield vary across markets and products and the mix among them changes, the total yield remains stable. Interest rate on deposits has decreased during 2019 as the deposit mix has changed in favor of EUR and
Slide 14: Operating expenses
Operating expenses Operating expenses detailed Key comments MNOK 31,9 28,9 29,8 2,2 25,0 26,7 Instabank have succeed in bringing costs down by decreasing the use of 2,7 10,1 10,3 1,5 1,7 external advisory as well as operational efficiency improvements mainly 10,2 8,2 8,8 related to reduced credit
Slide 15: Credit risk
Credit risk Impairment losses Key comments MNOK 40,0 33,1 10,0 % The increase in losses on loans is mainly due to extra provisions for loan 30,0 22,0 losses related to Covid-19 of 5 MNOK, as well as a new principle of 20,0 15,8 17,2 16,5 5,0 % 4,6 % calculating interest on loans in debt collection
Slide 16: IFRS volume distribution and ECL %
IFRS volume distribution and ECL % IFRS 9 Impairment losses Volume distribution % Expected Credit Losses (ECL) % Stage 1: Performing loans, past due <30 days Stage 1: ECL next 12 months IFRS 9 vs IAS 39 Whereas IAS 39 is an incurred loss model based on Stage 2: Past due 30-60 days or signifi
Slide 17: Profit development
Profit development Net profit before tax Key comments MNOK 20,3 • Net profit before tax 7,1 MNOK, up 2,7 MNOK from Q1-19 17,6 • Q1-20 profit strongly affected by Covid-19 related loan loss provisions Although operational cost increased slightly from the previous quarter, the 12,8 operational costs
Slide 18: Capital adequacy
Capital adequacy Developments in capital adequacy ratios Key comments 23,7 % 23,7 % 23,6 % 23,5 % 22,1 % 1,7 % 1,7 % 1,6 % 1,5 % • Instabank issued Tier 2 capital of 16 MNOK in the quarter, strengthening 1,1 % 1,0 % 1,0 % 1,5 % 2,0 % 1,4 % the capital adequacy ratio • Common equity Tier 1 Capital ra
Slide 19: Outlook 2020
Outlook 2020 • Growth in net loans expected to be 200-250 million for remainder of year • Covid-19 pandemic increases uncertainty and risk • Paytech partner strategy strengthened with new agreements signed • Cost and availability of capital will continue to limit growth potential • Mortgag
Slide 20: Financial summary
Financial summary P&L (NOK ‘000) Balance sheet (NOK ‘000) Items Q1-20 FY 2019 Q4-19 Q3-19 Q2-19 Q1-19 Items Q1-20 Q4-19 Q3-19 Q2-19 Q1-19 Operating income Assets Interest income 83 432 305 725 79 957 77 950 74 466 73 351 Loans and deposits with credit institutions 229 380 183 014 155 611 185 466 150
Slide 21: Share price and ownership
Share price and ownership Top 20 shareholders as of 28.04.2020 Share price development since OTC listing in October 2016 # Shareholders # of shares % Share price (NOK) 1 KISTEFOS AS 83 126 568 25,0% 2 HODNE INVEST AS 29 208 636 8,8% 3 VELDE HOLDING AS 23 775 000 7,1% 4 BIRKELUNDEN INVESTERINGSSELSKA
Slide 22: Thank You
Thank You instabank.no www.instabank.no