Morrow Bank AB · OMXSTO:MORROW
Morrow Bank AB — Komplett Bank — Q2 2022 Earnings Presentation
24 slides from Morrow Bank AB's earnings presentation, Aug 11, 2022
Slide 1: Second quarter 2022
@ KOMPLETT’bank Second quarter 2022
Slide 2: Highlights of the quarter
Highlights of the quarter Repositioning for growth well underway NOK million Q2 2022 Q-o-Q Y-o-Y • All-time-high new sales in June-July with positive trend continuing into Q3 • Conversion rates increased in all markets following multiple improvements Net loans 7,323 +1.9% N/M • First initiatives to
Slide 3: Strategic and operational review
Strategic and operational review 3
Slide 4: Attractive NOK 600 billion consumer financing market with continued high demand
Attractive NOK 600 billion consumer financing market with continued high demand Opportunities • Significant room to increase market share across markets • Solid macroeconomic outlook for region maintained • High demand and inflow of loan applications continued in Q2 and into Q3 • Credit card usage i
Slide 5: Repositioning for accelerated growth – with focus on existing markets & products
Repositioning for accelerated growth – with focus on existing markets & products Solid base Defined initiatives Clear goals Run-rate 2024 ambitions Loan balance increase • NOK 7.0 bn net loan book Product performance • Profitable operation > 50% • Well capitalized • Clean balance sheet Cost/income •
Slide 6: Defined initiatives well underway – yielding encouraging initial results
Defined initiatives well underway – yielding encouraging initial results Defined 2022 initiatives Q2 progress Q1 - Q2 Balance sheet clean-up Product • Multiple process improvements; Q2 win-rate increased in all markets vs Q1 New management team & Q1 • All-time-high new sales in June-July, up more th
Slide 7: Balance sheet clean up completed in May 2022 – significantly reducing risk
Balance sheet clean up completed in May 2022 – significantly reducing risk 23% 22% • In October 2021, the bank sold NPL (non-performing loans) portfolios totalling NOK 1.4bn, reducing the NPL ratio to < 10% • Following the NOK 0.7 billion NPL portfolio sale announced in April, NPL ratio is reduced f
Slide 8: Second quarter Financial review
Second quarter Financial review 8
Slide 9: Profitability trend stabilised and set to improve
Profitability trend stabilised and set to improve Profit after tax (NOK million) Return on equity (%, annualised) 50 11.0% 9.3% 36 8.6% 34 35 8.1% 9.3% 7.1% 7.2% 7.2% 21Q2 21Q3 21Q4 22Q1 22Q2 21Q2 21Q3 21Q4 22Q1 22Q2 ROE ROE given 18% CET1 -356 • Profitability inching upwards compared to previous qu
Slide 10: Underlying growth across markets, adjusted net loans +1.9% (Q-o-Q)
Underlying growth across markets, adjusted net loans +1.9% (Q-o-Q) Reduction Reductionduedue to one- to Norway one-off off Total net loans (NOK million) portfolio sales • Net loan decrease driven by NPL sales 8,354 8,029 • Underlying loan growth: NOK 102 million in Q2 7,398 7,185 7,022 Finland • Pos
Slide 11: Stable yield across geographical markets
Stable yield across geographical markets Some near-term yield pressure expected amid increasing deposit rates Yield maintained in Norway, Finland & Sweden Yield, performing loans and deposits • Long-term trend of reducing yields flattening out 20.00% 16.9 % • Slight yield increase for loans across g
Slide 12: Slight cost decrease in the quarter
Slight cost decrease in the quarter Defined initiatives to reduce cost base by a further 15+% Operational expenses (NOK million) and cost ratios (%) • OPEX of NOK 104 million, down 2.2% compared to Q1 2022 120 70% • NOK 3 million increase in direct marketing expenses in the quarter, reflecting highe
Slide 13: Stable loan losses and coverage ratios
Stable loan losses and coverage ratios Performance Loan loss ratio (LLR), adjusted for one-offs (%) • Loan loss rate continuing at low, stable levels • Post portfolio sales in 2021 in 2022, overall NPL ratio 2.8 % 2.6 % down from 23% to 3%* 2.6 % 2.1 % 2.2 % • High coverage ratios; reducing risk in
Slide 14: Balance sheet de-risking and increasingly solid capital position broadening opportunities
Balance sheet de-risking and increasingly solid capital position broadening opportunities Regulatory capital structure (%) Q-o-Q 27.9% 25.4% 0.9% 0.9% 2.7% 2.7% • Capital ratio increase driven by earnings for the quarter and 18.2% CET1 target 17.2% CET1 reqm’t. cleaner balance sheet after significan
Slide 15: Summary
Summary 15
Slide 16: Summary Q2
Summary Q2 ✓ Attractive Nordic consumer financing market with significant room to grow ✓ Strong capital adequacy, low NPL ratio and limited credit risk ✓ Clearly defined strategy, deploying initiatives focused on improving efficiency and throughput ✓ Continued solid loan application base; all-time-h
Slide 17: Q&A
Q&A
Slide 18: @ KOMPLETT’ bank
@ KOMPLETT’ bank 18
Slide 19: Appendix
APPENDIX 19
Slide 20: Profit and loss
Profit and loss Amounts in NOK million Q2 2022 Q2 2021 2021 Net interest margin* (%) 10.0 % 10.1 % 9.4 % Interest income 209.3 264.0 965.5 9.6 % 9.1 % Interest expenses -22.1 -23.1 -81.8 Net interest income 187.2 241.0 883.7 7.1 % Commission income and fees 16.9 13.7 51.6 Commission expenses and fee
Slide 21: Balance sheet
Balance sheet Amounts in NOK million 30.06.2022 31.12.2021 Liquidity and funding 888% Assets Loans and deposits with credit institutions 724.4 1,301.8 Net loans to customers 7,022.0 7,397.8 517% Certificates and bonds 882.6 882.2 386% 408% 380% Other intangible assets 134.7 153.5 Deferred tax assets
Slide 22: 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 17,493 9.3% CFO Eirik Holtedahl 961 110 3 DNB
Slide 23: A Nordic specialised consumer finance company
A Nordic specialised consumer finance company • Offering flexible consumer financing solutions to customers across the Nordics • ~325,000 customers across four product areas in Norway, Sweden, Finland and Germany • Strategic partnership with Komplett Group, largest e-commerce company in the Nordics
Slide 24: @ KOMPLETT’ bank
@ KOMPLETT’ bank 24