Slide 1: Instabank Investor Presentation
Instabank Investor Presentation | 4 May 2023 Solely for review in connection with the proposed equity issues – not for reproduction or distribution. The information contained herein may be subject to change without prior notice. THIS DOCUMENT MAY NOT BE DISTRIBUTED IN, OR TO ANY PERSON RESIDENT IN T
Slide 2: Important information | Disclaimer (I)
Important information | Disclaimer (I) This presentation (the "Presentation") has been prepared by Instabank ASA (the "Company"), with the assistance of Pareto Securities AS (the "Manager"), solely for information purposes in connection with a proposed private placement of shares by the Company. Thi
Slide 3: Important information | Disclaimer (II)
Important information | Disclaimer (II) This presentation is directed at persons in member states of the European Economic Area ("EEA") who are "qualified investors" as defined in Article 2(e) of Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2019, repealing Direc
Slide 4: Important information | Risk factors (I)
Important information | Risk factors (I) Investing in the shares of the Company (the "Shares") and other securities issued by the Company involves inherent risks. Before making an Risk related to competitive markets investment decision with respect to the Shares, investors should carefully consider
Slide 5: Important information | Risk factors (II)
Important information | Risk factors (II) The Company's ability to further develop and implement initiatives and the overall strategy is subject to for example execution risks, management of Risks associated with non-face-to-face automated customer processes and procedures its cost base and limitati
Slide 6: Important information | Risk factors (III)
Important information | Risk factors (III) The Company's business is exposed to liquidity risk The Company is exposed to the risk of material deterioration in the quality of its loan portfolio and resulting impairments The Company is exposed to liquidity risk, which is the risk of losses due to a ma
Slide 7: Important information | Risk factors (IV)
Important information | Risk factors (IV) In recent years, several legislative measures have been introduced for consumer finance, such as the regulation on bank's consumer loan practices Finally, further changes to CRD and CRR have been proposed by the EU Commission (also known as the Banking Packa
Slide 8: Important information | Risk factors (V)
Important information | Risk factors (V) Changes to debt collection legislation may impede with the Company's ability to recover overdue claims and/or the Company's financial Future issuances of Shares or other securities could dilute the holdings of shareholders and could materially affect the pric
Slide 9: Table of contents | Overview
Table of contents | Overview 01 Investment considerations 02 About the bank 03 Key financial figures 9
Slide 10: Business overview | Instabank at a glance
Business overview | Instabank at a glance Key comments Net loans (NOKm) Key milestones since inception ▪ Operates in Norway, Finland and Sweden ▪ Official banking license received 4 Jul. 2016 Q3 2016 ▪ First broad equity issue of NOK 240m ▪ Offering competitive mortgages, unsecured loans, ▪ Successf
Slide 11: Product strategy | Continued expansion and increased diversification
Product strategy| Continued expansion and increased diversification From a specialised consumer finance bank Diversification and scale up To a focused commercial bank Savings NO Savings FI/SE Mortgages NO Credit Card FI Credit cards DE Consumer loans NO/FI Consumer loans SE Sales finance FI Multi pr
Slide 12: The Market | Strong demand for lending in the Nordic region
The Market | Strong demand for lending in the Nordic region ▪ Higher cost of living following increasing interest rates and inflation is expected to increase demand ▪ Credit risk is expected to remain at an attractive level as the Nordic economy is set to avoid recession and unemployment will remain
Slide 13: Financials | Issuance of NOK 70m equity enables growth beyond existing guiding
Financials| Issuance of NOK 70m equity enables growth beyond existing guiding Guiding as per Q1-23 Outlook 2023 Strategic ambitions Profit after tax ~100 mill. >210 mill. Strong improvement in profits Among the better Proof of success ROE >13 % >19 % Strong improvement in performance Among the bette
Slide 14: Transaction rationale | Enhanced growth in loans and profits
Transaction rationale | Enhanced growth in loans and profits Growth in net loans (NOKm) Strengthening regulatory capital structure (%) ▪ Instabank experiences continued attractive demand across key segments ▪ Increasing equity by NOK 70m represents a ~1.9 % points strengthening of the CET1 as of Q1-
Slide 15: Investment highlights | Key value propositions
Investment highlights | Key value propositions ✓ Lean operational platform and organisation with significant scalability enabling cross border 01 operations from one location 02 Strong and experienced management team with significant track record within consumer finance ✓ 03 Well diversified loan po
Slide 16: Table of contents | Overview
Table of contents | Overview 01 Investment considerations 02 About the bank 03 Key financial figures 16
Slide 17: Diversified loan portfolio | Transparent and simple
Diversified loan portfolio | Transparent and simple Net Loans # Customers* Avg Ticket Size* Yield Consumer Loans Unsecured loans offered in Norway, Finland and Sweden 2,635’’ 25,398 104’ 11.6 % Mortgages First or second priority mortgages for refinancing of unsecured debt or house improvements 1,955
Slide 18: Diversified funding volume
Diversified funding volume Volume # customers Avg. deposit Avg. deposit size rate in Q1-23 Norway 3,237’’ 11,381 284’ 3.06 % Finland 274’’ 4,012 68’ 0.85 % Germany* 1,697’’ 9,167 185’ 1.65 %** Sweden 27’’ 1,731 16’ 0.55 % Total 5,235’’ 26,291 199’ 2.47 % Note(*): Deposits in Germany are offered thro
Slide 19: Management | Experienced and competent
Management | Experienced and competent Robert Berg | CEO Kjetil Knudsen | CRO ▪ Berg is one of the Co-founders who established Instabank in 2016 ▪ Knudsen joined the Company in 2018 ▪ Prior to that he has been CEO in yA Bank, Commercial Director in Ikano ▪ He has previously held various positions in
Slide 20: Board of Directors | Seasoned and diligent
Board of Directors | Seasoned and diligent Mona Cathrine Nylander | Chairperson Odd Harald Hauge | Board member ▪ Nylander is currently CFO in Kitron ▪ Hauge is an investor, consultant and author ▪ Her previous experiences include positions as CFO in Diplom-Is, CFO in ▪ He is the founder of Nettavis
Slide 21: The share | Strong shareholder base and aligned incentives
The share | Strong shareholder base and aligned incentives TOP 20 shareholders * Internally owned shares and warrants ** Share performance on Euronext Growth*** # Shareholders # of shares % Position Name # of shares % of total 1 KISTEFOS AS 83 126 568 24,99% CEO Robert Berg (Sonsinvest AS) 5 841 195
Slide 22: Table of contents | Overview
Table of contents | Overview 01 Investment considerations 02 About the bank 03 Key financial figures 22
Slide 23: Key highlights Q1-23
Key highlights Q1-23 Profit before tax increased 25 % to 31.6 MNOK from Q1-22 Strong growth in Total income Cost to income ratio decreased to 38 % from 46 % in Q1-22 Record-high growth in net loans of 438 MNOK Net lending exceeds 5 billion NOK Strong mortgages volume growth of 207 MNOK Mortgag
Slide 24: Net loan development | Well diversified loan book
Net loan development | Well diversified loan book Net loan balance growth Net loans to customers MNOK MNOK 5,056 438 4,618 4,427 5 000 398 4,334 3,936 290 1 955 266 4 000 1 437 1 632 1 748 207 195 1 147 191 163 77 149 153 3 000 129 96 77 116 104 87 93 68 2 000 1 239 1 402 1 388 1 517 1 783 1 000 -20
Slide 25: Yield and funding cost | Attractive margins
Yield and funding cost | Attractive margins Development in yields and funding cost Key comments 11.3 % 11.6 % ▪ Increased interest rates for existing and new lending customers have 10.9 % 10.6 % 10.8 % resulted in increased loan yield for both consumer loans and mortgages over two last quarters 7.1
Slide 26: Total income | High growth in income
Total income | High growth in income Total income Total income detailed MNOK MNOK 100.8 17.0 98.0 16.6 85.4 88.0 86.2 8.4 5.7 7.1 109.3 120.9 90.3 94.8 98.9 -12.2 -15.2 -18.5 -28.0 -37.1 Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Total Interest income Interest expenses Net other inc
Slide 27: Operating expenses | Demonstrating economy of scale
Operating expenses | Demonstrating economy of scale Operating expenses breakdown Cost/income ratio MNOK 39.7 40.2 38.0 38.4 1.6 2.3 36.1 2.0 1.8 1.9 12.6 17.3 14.0 11.6 15.2 47% 46% 8.1 3.0 44% 3.2 3.6 2.7 43% 40% 16.3 38% 14.5 13.9 15.1 15.7 37% 37% 35% 34% 3.1 3.4 3.3 3.3 2.9 Q1-22 Q2-22 Q3-22 Q4-
Slide 28: Credit risk | Mortgages represent low credit risk
Credit risk | Mortgages represent low credit risk Impairment losses Losses per type of loan MNOK 4.5 % 4.2 % 40.0 10.0 % 3.8 % 32.1 30.8 3.5 % 30.0 24.0 23.7 2.9 % 2.8 % 2.7 % 2.5 % 2.6 % 2.4 % 20.5 2.2 % 20.0 5.0 % 2.0 % 2.1 % 1.5 % 10.0 2.2 % 2.7 % 2.4 % 2.0 % 2.1 % 0.5 % 0.5 % 0.6 % 0.3 % 0.2 % 0
Slide 29: Profits | Long term growth in profits
Q4-16 -14.2 Q1-17 -4.2 Q2-17 1.6 2.1 % Q3-17 2.9 3.7 % Q4-17 3.8 3.2 % Q1-18 5.4 5.6 % Q2-18 8.9 8.4 % Q3-18 9.3 7.3 % Profit before tax (NOKm) & Return on Equity after tax Q4-18 10.4 7.5 % Q1-19 4.4 2.6 % Q2-19 12.8 7.2 % Q3-19 17.6 9.7 % Q4-19 20.3 10.8 % Profits | Long term growth in profits Q1-2
Slide 30: Regulatory capital | Satisfactory adequacy
Regulatory capital | Satisfactory adequacy Capital adequacy ratios (%) CET1 requirement per country and total CET1 T1 T2 24.9 % 23.3 % 22.3 % 22.5 % 2.7 % 21.7 % 1.6 % 2.5 % 18.7 % Systemic risk 1.7 % 1.6 % 2.3 % 1.2 % 1.2 % 2.1 % 17.2 % 17.6 % buffer 1.2 % 3.0 % 16.2 % 3.0 % 3.0 % Countercyclical 2
Slide 31: Income statement & Balance sheet | Overview
Income statement & Balance sheet | Overview Income statement (NOK thousand) Balance sheet (NOK thousand) P&L Q1-23 FY 2022 Q4-22 Q3-22 Q2-22 Q1-22 Balance Sheet 31.03.23 31.12.22 30.09.22 30.06.22 31.03.22 Total income: Assets Interest Income using the effective interest method 120,926 393,623 109,3
Slide 32: Instabank ASA
Instabank ASA | #816914582 | Drammensveien 175– 0277 Oslo | www.instabank.no