Slide 1: Interim Presentation Q3 – 2020
Instabank Interim Presentation Q3 – 2020 October 29 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 Q3-20
Key highlights Q3-20 Profit before tax of 17.6 MNOK, after tax 13.2 MNOK Total income increased and loan losses decreased from the previous quarter Net loans increased by 222 MNOK The Norwegian market with a strong comeback, while Finland has temporarily become less attractive Mortgages loan bal
Slide 4: Key figures Q3-2020
Key figures Q3-2020 Net profit before tax of 17.6 MNOK + vs 17.6 Q3-19 Total income of 65.9 MNOK + 3 % vs Q3-19 Losses on loans 2.6 % vs 2.5 % Q3-19 Quarterly increase in net loans of 222 MNOK vs +101 MNOK Q3-19 Outstanding net loans of 2,787 MNOK vs 2,718 Q3-19 Equity per share of 1.59
Slide 5: Diversified loan portfolio
Diversified loan portfolio Net Loans # Customers Avg Ticket Size Yield Consumer Loans 2 526’’ 21 691 98’ 13.0 % Mortgages 56’’ 111 507’ 7.3 % Sales Finance 108’’ 8 533 13’ 15.1 % Credit Card 97’’ 2 926 33’ 14.9 % Total 2 787’’ 33 284 84’ 13.0 % 5
Slide 6: Diversified high funding volume
Diversified high funding volume Deposit rates Deposit rates Volume end Q3-20 end Q4-20* Norway 1 998’’ 1.80 % 1.15 % Finland 1 084’’ 0.70 % 0.60 % Sweden 349’’ 0.75 % 0.55 % Germany 117’’ 0.20 % 0.18 % Total 3 548’’ 1.31 % 0.89 % *) Implemented before 30.09.20. Two months notice period in Norway and
Slide 7: Net loan development
Net loan development Net loan balance growth Net loans to customers Key comments MNOK MNOK ▪ Instabank introduced second priority mortgage 222 3 200 2 787 loans at the end of Q2-20. Through Q3-20, the 2 719 2 697 2 769 115 112 2 565 distribution has been strengthened by agreements 103 83 2 700 179 1
Slide 8: Total income
Total income Total income Total income detailed MNOK MNOK 63,7 67,0 65,9 4,4 1,9 61,7 60,1 6,1 2,3 1,0 8,6 8,4 8,4 11,2 8,2 78,0 80,0 83,4 79,9 82,5 -13,4 -13,0 -12,5 -13,2 -13,6 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 -15,2 -16,2 -16,7 -16,1 -16,0 Key comments Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 ▪ Interest income
Slide 9: 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 13,2 % 13,3 % 13,0 % 13,0 % 12,9 % them changes, the total yield remains relatively stable. ▪ The deposit rates have dropped in all currencies, especia
Slide 10: Operating expenses
Operating expenses Operating expenses breakdown Key comments MNOK 28,9 29,5 25,0 26,7 25,2 1,6 ▪ Instabank maintain a strong focus on cost control and operational 10,3 1,5 1,7 1,1 efficiency and had lower operating expenses in Q2-20 compared to the 8,2 11,0 8,8 9,5 same quarter in both 2019 and 2018
Slide 11: Credit risk
Credit risk Impairment losses Key comments 40,0 MNOK 33,1 10,0 % 30,0 ▪ Instabank has not observed any negative effects in the customer’s 21,7 17,2 18,8 payment behaviour as a consequence of the Covid-19 outbreak 20,0 16,5 5,0 % 4,6 % 10,0 2,5 % 2,4 % 3,0 % 2,6 % ▪ The relatively low loan losses pro
Slide 12: IFRS 9 volume distribution and ECL %
IFRS 9 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 In 2020, the bank transitioned from IAS 39 to IFRS 9 ▪ Whereas IAS 39 is an incurred loss model based on ▪ S
Slide 13: Profit development
Profit development Net profit before tax Key comments MNOK ▪ The increase in total income and relatively low losses on loans had a positive effect, while increased operating expenses 20,3 partly due to one-offs had a negative effect on the net profit 17,6 17,6 ▪ Net profit after tax was 13.2 MNOK, u
Slide 14: Capital adequacy
Capital adequacy Developments in capital adequacy ratios Key comments 23,6 % 23,5 % 23,3 % 22,1 % 22,2 % 1,6 % 1,5 % 2,0 % • Common equity Tier 1 Capital ratio was 18.8 % and the total capital 1,0 % 1,5 % 2,0 % 1,5 % 1,9 % 1,4 % 1,4 % ratio was 22.2 % at the end of Q3-20, 1.9 % points above the tota
Slide 15: From startup to economies of scale
From startup to economies of scale ECONOMIES OF START UP EXPANSION SCALE 2016 | 2017 2018 | 2020 2021 | 2023 Establish core capabilities Build and develop Ensure profitability Capitalize on strategic and capabilities to enable Focus on loans and operational platform; product- and deposits Economies
Slide 16: Instabank strategy chart
Instabank strategy chart Our promises Vision Our personality We create valuable services CREATIVE We are pay-tech experts enabling We always search for development of high-value services smarter solutions Strategic position We work with our partners to TRANSPARENT strengthen their digital transforma
Slide 17: Markets and products
Markets and products Target growth in markets with highest ROE at any given time Unsecured Mortgage Deposits Retail Online Cards Q3-2016 Q2-2020 Q3-2016 Q4-2017 Q4-2018 Q2-2019 Q4-2017 Tbd Q3-2018 Q2-2020 Q2-2020 Tbd Q4-2018 Tbd Q1-2019 Tbd Tbd Tbd na na Q3-2020 na na na Our target is to achieve a m
Slide 18: Instabank's distribution model
Instabank`s distribution model Multi-brand strategy will be continued. Growth supported by Instapay (POS) ▪ Core products instapay instabank Loans, POS/Sales financing, Credit cards, Savings CUSTOMER DISTRIBUTION CUSTOMER DISTRIBUTION ▪ Instapay (POS) NEEDS NEEDS Easy to use Retail Mortgage loans Di
Slide 19: Financials
Financials Outlook Strategic ambitions ROE >10 % 15-20 % Strong improvement in profits Heading in the right direction Proof of success Net loans 3.5 Bn. ~ 6.0 Bn. Growth is necessary to improve profits Growth shows direction Proof of growth capacity Cost to income < 40 % ~30 % Economies of scale red
Slide 20: Financial summary
Financial summary P&L (NOK ‘000) Balance sheet (NOK ‘000) Q3-20 Q2-20 Q1-20 FY 2019 Q4-19 Q3-19 Q3-20 Q2-20 Q1-20 Q4-19 Q3-19 Total income: Assets Interest Income using the effective interest method 82 478 79 854 83 102 305 752 79 957 77 950 Loans and deposits with credit institutions 222 177 165 81
Slide 21: Share price and ownership
Share price and ownership Top 20 shareholders as of 27.10.2020 Share price development last year # Shareholders # of shares % Share price (NOK) 1 KISTEFOS AS 83 126 568 24,99% 2 HODNE INVEST AS 30 588 311 9,20% 3 VELDE HOLDING AS 23 775 000 7,15% 4 BIRKELUNDEN INVESTERINGSSELSKAP AS 18 305 911 5,50%
Slide 22: Thank You
Thank You instabank.no www.instabank.no