Morrow Bank AB · OMXSTO:MORROW
Morrow Bank AB — Q1 2023 Earnings Presentation
21 slides from Morrow Bank AB's earnings presentation, May 11, 2023
Slide 1: First quarter results 2023
morrowbank.com First quarter results 2023 Morrow Bank ASA
Slide 2: 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 • Established in 2014, listed in 2017 Norway Finland Sweden Loans Credit Cards POS • Norwegian banking license (EU passporting) 4% • Fully centralised operations (~80 FTEs) 7% 26% •
Slide 3: Q1 2023 highlights: Improved performance driving increased profitability
Q1 2023 highlights: morrowbank.com Improved performance driving increased profitability vs vs Solid income growth and stable net yield MNOK Q1 2023 Q4 22 Q1 22 • 12% loan balance growth vs. Q4 2022, (7% adjusted) • Increase of loan book interest rates continued, stable net yield Gross loans 10,790 +
Slide 4: Strategic initiatives driving growth and efficiency improvements
Strategic initiatives driving growth and efficiency morrowbank.com improvements 2022 initiatives delivered, focus on IT in 2023 Gross loans (MNOK) and cost/income (%) 14,000 60% 54% 53% Reorganisation: new management team & organisational 50% 12,000 structure in place, decision to outsource front-of
Slide 5: A growing and resilient BNOK 600 Nordic market
A growing and resilient BNOK 600 Nordic market morrowbank.com • The Nordic region proven to be a stable and resilient market during times of global macro-economic uncertainty • Higher cost of living drives demand for new credit and debt consolidation across the region • Increased demand from higher-
Slide 6: First quarter Financial review
First quarter Financial review
Slide 7: 10.8 BNOK loan balance: all-time high – Q growth 12%
10.8 BNOK loan balance: all-time high – Q growth 12% morrowbank.com Norway Total gross loans (MNOK) Stable development ~ 12,000 Underlying loan Q1 growth: MNOK 37 (+1%) 10,790 Finland 9,640 Strong new sales 8,455 7,998 Underlying loan Q1 growth: MNOK 615 (+22%) 7,503 Sweden Positive development cont
Slide 8: Margins maintained: deposit interest increases passed on to loan customers
Margins maintained: deposit interest increases morrowbank.com successfully passed on to loan customers Yield, performing loans and deposits Stable net yields 20% 17.6 % 18% – Deposit rates trending upwards reflecting market development 16.4 % 15.9 % 15.8 % 15.1 % 14.9 % 16% – Multiple yield increase
Slide 9: Total income driven by loan growth and interest rate increases
Total income driven by loan growth morrowbank.com and interest rate increases Q1 total income of MNOK 235, up 6.5% from Q4-2022 Total income (MNOK) • Increase in interest income of MNOK 39 vs. Q4, partly offset by higher interest expenses • MNOK 4 in gain on investments in financial instruments in ~
Slide 10: 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 35% in Q1 Operational expenses (MNOK) and cost/income ratio (%) • Total operating expenses before depreciation and write- 225 60% offs reduced by 18% vs. Q4 2022 54% 53% 55% • Organisation
Slide 11: Loan loss ratio normalising – stable underlying credit quality
Loan loss ratio normalising – stable underlying credit quality morrowbank.com Loan loss ratio closely linked to growth Loan loss ratio (LLR) • The development of underlying credit quality in Q1 was Strong volume growth stable and most NPLs are sold on forward flow Normalising Shrinking loan book (NP
Slide 12: Investments to increase scale and efficiency now yielding results
Investments to increase scale and efficiency morrowbank.com now yielding results Profit after tax (MNOK) 50 • Q1 profits result from loan balance growth, 40 >40 stable yields, and reducing operating expenses 40 and loan losses. 30 35 36 • Investment in scale in order to deliver 20 18 attractive retu
Slide 13: Capital ratios impacted by high growth, balanced by strong earnings and equity issue
Capital ratios impacted by high growth, balanced by morrowbank.com strong earnings and equity issue Regulatory capital structure (%) Q-o-Q 23.6% 22.3% 0.7% 2.3% 0.7% 2.1% 18.7% CET1 target 17.7% CET1 reqm’t • To support strong growth, the Bank raised MNOK 100 of equity in Q1 2023 • To further optimi
Slide 14: Summary
Summary
Slide 15: Strong performance in the quarter, well on track for year-end estimates
Strong performance in the quarter, morrowbank.com well on track for year-end estimates Gross loans (MNOK) and cost/income ratio (%) 14,000 Q4 2023 estimates 54% 53% 50% 12,000 2023 Loan balance growth 44%* 10,000 ~ 20% 35% 8,000 ~30% Cost/income ratio 6,000 ~ 30% 4,000 2,000 Return on target equity
Slide 16: Q&A
morrowbank.com Q&A
Slide 17: APPENDIX
morrowbank.com APPENDIX
Slide 18: Profit and loss
Profit and loss morrowbank.com Amounts in MNOK Q1 2023 Q4 2022 2022 2021 Net interest margin* (%) Interest income 292.7 254.0 907.0 965.5 9.4 % 9.1 % 9.2 % Interest expenses -63.0 -45.9 -113.7 -81.8 8.8 % 8.8 % Net interest income 229.6 208.1 793.3 883.7 Commission income and fees 13.3 15.7 53.0 51.
Slide 19: Balance sheet
Balance sheet morrowbank.com Amounts in MNOK 31.03.2023 31.12.2021 Liquidity and funding Assets 567% Loans and deposits with credit institutions 745.9 807.8 451% 408% Net loans to customers 10,241.1 9,110.7 380% Certificates and bonds 1,605.1 1,453.5 290% Other intangible assets 54.5 45.3 Deferred t
Slide 20: 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 40,293 19.5% COO Wilhelm B. Thomassen 1,949 336 800 2 UBS AG 17,493 8
Slide 21: morrowbank.com
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