Morrow Bank AB · OMXSTO:MORROW
Morrow Bank AB — Komplett Bank — Q1 2022 Earnings Presentation
28 slides from Morrow Bank AB's earnings presentation, May 2022
Slide 1: First quarter 2022
@ KOMPLETT’bank First quarter 2022
Slide 2: Disclaimer
Disclaimer This Presentation has been produced by Komplett sometimes identified by the words “believes”, expects”, performance or achievements of the company to be information, including projections, estimates, targets Bank ASA (the “Company” or “Komplett Bank”), solely “predicts”, “intends”, “proje
Slide 3: Today's presenters
Today’s presenters Picture Øyvind Oanes Eirik Holtedahl CEO CFO 3
Slide 4: Highlights of the quarter
Highlights of the quarter Profitability NOK million Q1 2022 Q-o-Q Y-o-Y • Profit after tax at NOK 35 million, improvement driven by lower loan losses • Stable yield on performing loans at 12.9% in Q1, from 13.0% in Q4 Net loans 7,185 -2.9% -10.7% • Net loans of NOK 7.2 billion, +0.2% adjusted for FX
Slide 5: Strategic and operational review
Strategic and operational review 5
Slide 6: Attractive NOK 600 billion market – overall positive market dynamics in Q1 22
Attractive NOK 600 billion market – overall positive market dynamics in Q1 22 Challenges • Seasonally soft first quarter: tail of pandemic into February • Continued pressure on margins • Some market uncertainty related to Ukraine crisis NOK ~600Bn Opportunities • Positive macroeconomic outlook for r
Slide 7: Focus on efficiency and profitability – repositioning for growth
Focus on efficiency and profitability – repositioning for growth Solid base Defined initiatives Clear goals • NOK 7.2 bn net loan book Product performance • Profitable operation • Well capitalized • Clean balance sheet Improve Increase • Solid loan application base Process automation platform profit
Slide 8: Defined 2022 initiatives well underway – good progress made in Q1
Defined 2022 initiatives well underway – good progress made in Q1 • Enhanced focus on Risk Adjusted Margin; new scorecards for Sweden and Finland developed Product performance • Improved refinancing product in final stages of development • Multiple initiatives to broaden distribution of Credit Cards
Slide 9: NPL portfolio sold, forward flow on all new defaults
NPL portfolio sold, forward flow on all new defaults • At the end of Q3 2021, Komplett Bank’s portfolio consisted of 23% 23% 22% 23% non-performing loans (NPL) • In October 2021, the bank sold NPL portfolios totalling NOK 1.4bn, reducing the NPL ratio to < 10% • Following the NOK 0.7 billion NPL por
Slide 10: Executing on a clear plan - repositioning Komplett Bank for accelerated growth
Executing on a clear plan - repositioning Komplett Bank for accelerated growth 2022 initiatives 2023 - 2024 focus 2023-2024 focus Organic 2024 ambitions Q1 - Q2 Balance sheet clean-up completed Loan balance increase Organic growth Q1 New management team & • Simplified customer journeys > 50% organiz
Slide 11: First quarter Financial review
First quarter Financial review 11
Slide 12: Profitability trend flattened out and set to improve
Profitability trend flattened out and set to improve Profit after tax (NOK million) Annualised ROE (%) 12.0 % 63 50 9.3 % 7.1 % 7.2 % 35 34 -356 21Q1 21Q2 21Q3 21Q4 22Q1 21Q1 21Q2 21Q3 21Q4 22Q1 • Profitability slightly improved vs Q4 2021; slight decline in net loans, stable yield and underlying co
Slide 13: Underlying flat development in net loans: +0.2% (Q-o-Q)
Underlying flat development in net loans: +0.2% (Q-o-Q) Reduction due to Norway Total net loans (NOK million) NPL sales • Slight decrease as COVID-19 still limited spending in the 8,042 8,354 8,029 beginning of Q1 2022 7,398 7,185 • Growth in refinancing segment with lower yield and credit risk • Un
Slide 14: Stable yield in the quarter despite challenging environment
Stable yield in the quarter despite challenging environment Yield, performing loans Yield maintained in Norway, Finland & Sweden • Long-term trend of reducing yields flattening out 16.9 % • Increased interest rate in Norway in Q4 15.5 % 15.1 % 14.3 % 14.6 % • Interest cap in Finland lifted October 2
Slide 15: Improving underlying cost development
Improving underlying cost development Restructuring cost of NOK 5 million in the quarter Operational expenses (NOK million) and cost ratios (%) • OPEX up 3.1% to NOK 106 million vs NOK 103 million in Q4 2021 120 70% • Q1 costs include NOK 5 million for restructuring as part of initiative to create a
Slide 16: Improved credit risk management reducing volumes sent to collection
Improved credit risk management reducing volumes sent to collection • Underlying improvement driven by lower (better) PDs Break-down of Q1 2022 losses on loans (NOK million) (probability of default) in the portfolio. • Reduced provisions in all stages compared to previous quarter, reflecting positiv
Slide 17: Improving loan losses and coverage ratios
Improving loan losses and coverage ratios • Loan loss rate continuing to develop favourably Loan loss ratio (LLR), adjusted for one-offs* (%) • Post portfolio sales in 2021, overall NPL ratio down from 22% to 10% 3.3 % • Higher coverage ratios; reducing risk in balance sheet 2.8 % 2.6 % 2.6 % 2.1 %
Slide 18: Balance sheet de-risking and solid capital position broadening opportunities
Balance sheet de-risking and solid capital position broadening opportunities Regulatory capital structure (%) Q-o-Q 25.4% 24.0% 0.9% 0.8% 2.7% • Capital ratio increase driven by earnings for the quarter and 2.5% cleaner balance sheet after significant de-risking 18.1% CET1 target 17.1% CET1 req. • C
Slide 19: Summary
Summary 19
Slide 20: Summary Q1
Summary Q1 ✓ Clearly defined strategy focused on improving efficiency and profitability of the Bank ✓ Attractive Nordic market with significant room to grow ✓ Continued solid loan application base – and good speed out of the quarter ✓ Significantly reduced credit risk due to NPL sales and forward fl
Slide 21: Q&A
Q&A
Slide 22: @ KOMPLETT’ bank
@ KOMPLETT’ bank 22
Slide 23: Appendix
APPENDIX 23
Slide 24: Profit and loss
Profit and loss Amounts in NOK million Q1 2022 Q1 2021 2021 Net interest margin* (%) 10.1 % 10.0 % 9.6 % 10.1 % Interest income 221.9 271.8 965.5 9.4 % Interest expenses -17.4 -24.5 -81.8 7.1 % Net interest income 204.6 247.3 883.7 Commission income and fees 9.0 15.2 51.6 Commission expenses and fee
Slide 25: Balance sheet
Balance sheet Amounts in NOK million 31.03.2022 31.12.2021 Liquidity and funding Assets 980% Loans and deposits with credit institutions 1,517.0 1,301.8 888% Net loans to customers 7,185.2 7,397.8 Certificates and bonds 869.0 882.2 517% Other intangible assets 145.3 153.5 386% 408% Deferred tax asse
Slide 26: Shareholder overview
Shareholder overview Largest 20 shareholders Management and members of the Board of Directors Shares Shares Share options # Shareholder % Role Name (thousand) (thousand) (thousand) 1 Kistefos AS 35,747 19.1% COO Wilhelm B. Thomassen 1,882 358 2 UBS AG 17,243 9.2% CFO Eirik Holtedahl 905 166 3 Alfa
Slide 27: A Nordic specialised consumer finance company
A Nordic specialised consumer finance company • Offering flexible consumer financing solutions to customers across the Nordics • ~360,000 customers across four product areas in Norway, Sweden, Finland and Germany • Strategic partnership with Komplett Group, largest e-commerce company in the Nordics
Slide 28: @ KOMPLETT’ bank
@ KOMPLETT’ bank 28