Slide 1: Interim Presentation Q4 – 2019
Instabank Interim Presentation Q4 – 2019 February 12 th 2020 www.instabank.no 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 Q4-19
Key highlights Q4-19 Record high Q4 net profit before tax of 20.3 MNOK Driven by increased margins, low losses on loans and operational efficiency improvements Net loans decreased by 22 MNOK in Q4 Temporarily decreased new loan volume to limit growth Strengthened capital adequacy by issuance of
Slide 4: Key figures Q4-2019
Key figures Q4-2019 Net profit before tax of 20.3 MNOK + 96 % vs Q4-18 Total income of 61.7 MNOK + 14 % vs Q4-18 Losses on loans 2.4 % vs 2.9 % Q4-18 Quarterly decrease in net loans of 22 MNOK vs +271 MNOK Q4-18 Outstanding net loans of 2,697 MNOK + 9 % vs Q4-18 Equity per share of 1.71
Slide 5: Present product portfolio
Present product portfolio Unsecured consumer loans Sales financing Deposit accounts KEY METRICS KEY METRICS KEY METRICS NOK 2,619m NOK 77m NOK 2,849m in net loans in net loans in deposits 22,914 5,871 8,639 customers customers customers NOK 114k NOK 13k NOK 330k in avg. loan size in avg. loan size a
Slide 6: Point of sale financing have never been easier
Point of sale financing have never been easier 6
Slide 7: Distribution channels
Distribution channels Brand distribution Agent distribution Partner distribution Brand Agent Partner distribution volume as of Q4-19 24 % distribution volume as of Q4-19 67 % distribution volume as of Q4-19 9% 7 DRAFT
Slide 8: Strategic core
Strategic core MARKETS A clear strength for the bank Capital as a critical factor Still uncertainty but… Key conditions • Effects of IFRS9 are known (NOK 85 million) • Capital for growth is scarce • Changed system risk • Earnings must be strengthened buffer is cleared • Further focus on credit risk
Slide 9: Borrowing for specific purposes is natural and an accepted thing to do
STRATEGIC INSIGHT Borrowing for specific purposes is natural and an accepted thing to do in today's society Ambition Distinguish Instabank from traditional consumer loan banks by creating a new position through a focus on target financing, payment solutions and a network of commercial partners that
Slide 10: Net loan development
Net loan development Net loan balance growth Net loans to customers Key comments MNOK MNOK 3 200 Finland 2 719 Reduced marketing spending and increased 2 697 2 605 2 618 103 83 2 700 2 482 offered interest rates to limit growth short term 47 25 resulted in a lower net loans growth of 50 MNOK vs 15
Slide 11: Total income
Total income Total income detailed Total income MNOK MNOK 63,7 61,7 54,3 58,3 58,3 6,1 2,3 0,7 1,9 3,2 8,2 8,6 8,8 8,6 7,8 73,5 74,5 78,0 80,0 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 70,2 Key comments -14,5 -13,5 -13,4 -13,4 -13,0 -11,0 -12,2 -13,8 -15,2 -16,2 Net interest income increased despite lower loa
Slide 12: 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 13: Operating expenses
Operating expenses Operating expenses detailed Key comments MNOK 31,9 29,8 28,9 26,4 2,2 2,7 25,0 Instabank have succeed in bringing costs down by decreasing the use of 1,5 10,1 10,3 1,5 8,3 10,2 external advisory as well as operational efficiency improvements mainly 8,8 6,3 5,8 related to reduced
Slide 14: Credit risk developing well
Credit risk developing well Impairment losses Key comments MNOK 30,0 10,0 % 22,0 Losses on loans stable at a relatively low level the last three quarters 20,0 17,5 17,2 16,5 15,8 5,0 % So far no significant negative impact from the introduction of the debt 10,0 3,4 % register have been observed
Slide 15: Transition to impairment losses according to IFRS 9 per 01.01.20
Transition to impairment losses according to IFRS 9 per 01.01.20 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:
Slide 16: Solid profit development
Solid profit development Net profit before tax Key comments MNOK • Instabank has been operative for three years this September and has a history of increased profit quarter by quarter, except for Q1-19 profit affected by a one-time adjustment of 5 MNOK in loan loss provisions • Although total income
Slide 17: Capital adequacy
Capital adequacy Developments in capital adequacy ratios Key comments 23,7 % 23,7 % 23,6 % 23,5 % 22,7 % 1,7 % 1,7 % 1,6 % 1,5 % 1,7 % 1,1 % 1,0 % 1,0 % 1,5 % 1,1 % • CET 1 was 20.5 %, 2.8 % above the capital requirement, while the total capital ratio was 23.5 % 21,0 % 21,0 % 21,0 % 20,5 % 19,8 % •
Slide 18: Outlook 2020
Outlook 2020 The Norwegian debt register have reduced risk of new loan volume and any negative effect as increased loans losses or lock in effects of customers with low credit quality, Updated outlook for growth has not been observed and net loans (MNOK) Risk reduced The IFRS 9 one off impact of
Slide 19: Financial summary
Financial summary P&L (NOK ‘000) Balance sheet (NOK ‘000) Items FY 2019 Q4-19 Q3-19 Q2-19 Q1-19 FY 2018 Q4-18 Items Q4-19 Q3-19 Q2-19 Q1-19 Q4-18 Operating income Assets Interest income 305 725 79 957 77 950 74 466 73 351 222 546 70 207 Loans and deposits with credit institutions 183 014 155 611 185
Slide 20: Share price and ownership
Share price and ownership Top 20 shareholders as of 31.01.2020 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 28 889 765 8,7% 3 VELDE HOLDING AS 23 775 000 7,1% 4 BIRKELUNDEN INVESTERINGSSELSKA
Slide 21: Thank You
Thank You instabank.no www.instabank.no