Interim Presentation | 1th quarter 2018 | 18 April 2018
2
Table of contentsOverview
1st quarter1
Improved profitability2
3 Outlook and priorities
3
MonobankQ1 Highlights
• Strongest loan growth to date NOK 523
mill
• Net profit NOK 10.1 mill
• Credit card platform ready to launch
• Deposit funding agreement with Raisin
operative in Germany and Austria
• Forward Flow agreement with Axactor
concluded, loans past due 90 days will
be irrevocably sold
NOK (million)
Growth in net loans
Profit after tax
-6.5-3.9
0.5 1.7 1.8 3.05.7
7.410.1
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2016 2017 '18
NOK (million)
223
186
179 21
6
322
284
421 48
5 523
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2016 2017 '18
4
Overview financial figures
• Total income increased with 21%
• Positive impact by Finnish operation
• Solid quarter in the Norwegian
operation
• Cost control
• Staff costs unchanged
• Increased marketing expenses
FINANCIAL STATEMENT 2018
In NOK thousands Q1 Q4 Q3 Q2
Net interest income 68 761 55 910 44 582 37 108
- Norway 54 905
- Finland 13 856
Net comission and fees -4 503 -2 689 -3 125 -2 603
Total income 64 259 53 220 41 457 34 505
Income/(loss) from trading activities 2 136 -459 -279 -246
Staff costs 7 793 7 965 6 862 6 162
Other administrative expenses 24 234 19 882 13 806 14 284
- of which marketing expense 14 598 11 311 7 705 7 992
Depreciation and amortisation 2 131 1 379 1 999 1 500
Total operating costs 34 158 29 227 22 666 21 946
Profit / (loss) before impairment losses 32 237 23 536 18 511 12 313
Impairment releases/(losses) -19 057 -13 834 -10 946 -8 277
Operating profit / (loss) before tax 13 180 9 702 7 565 4 036
Tax charge -3 122 -2 306 -1 857 -1 009
Profit / (Loss) for the period 10 058 7 396 5 708 3 027
2017
5
Solid growth
Net loans
259
445
624
840
1,16
2
1,44
6
1,86
7
2,35
2
2,87
6
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2016 2017 '18
• Increased net loans with 22%
• 20% of net loans from Finland
6
Table of contentsOverview
1st quarter1
Improved profitability2
3 Outlook and priorities
7
Improved profitabilityNet interest margin
• High growth and increased margins
• Improved risk models – better customer
selection
• Margins in Finland are on the same level
as in Norway
• Lower funding costs in Finland
• Lower customer acquisition costs
15.7 %15.2 % 14.9 % 14.8 % 14.6 % 14.3 % 14.2 % 14.3 % 14.4 %
12.3 %12.7 % 12.7 % 12.8 %
n.a.
8.5 %8.1 %
8.8 % 8.7 % 8.7 %8.0 %
7.7 % 7.8 %
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2016 2017 '18
Annualized loan yield (Norway) * Annualized loan yield (Finland) *
Annualized NIM ***
Yields and margins
Note(*): yield = weighted average effective annual yield || Note(**): actual end of quarter annual rate
8
Improved profitabilityScalability
• Solid cost control
• Optimising marketing activities in different
channels
• Highly automatised processes
per cent (%)
Cost / Income ratio *
72%
64%
55% 55%53%
43%40%
36%34%
30%
Q1 Q2 Q3 Q4 Q1
2017 '18
Cost / Income Ratio Cost (excl. marketing) / Income Ratio
9
Improved profitabilityNon performing loans
Note(*): non-performing loan ratio = >PD90 / gross loans
• Development according to plan
• Forward Flow agreement with Axactor will
enhance further predictability on future loan
losses
• Confirms Monobanks provision levels
Non-performing loan ratio *
n.a.n.a.
3.7 %
4.8 % 4.9 %
6.4 %
7.1 %
7.9 %
8.5 %
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2016 2017 '18
10
Table of contentsOverview
1st quarter1
Improved profitability2
3 Outlook and priorities
11
Scalable and adaptable business model
12
Preparing for tomorrows technologyAgile and adaptable – key for survival
13
The Monobank card platformGenerating value for customers
Digital and
connected with
the customer
Hyper
customized to
the customer
Instant
14
Cooperation with European deposit distribution partner A strong partner with large potential – first step into the European Fin Tech space
• Leading deposit provider to privat individuals in the
European Economic Area
• Operating in more than 30 countries
• More than 100,000 customers, mainly in Germany, France,
Austria and Spain
• Allow to introduce Monobank to the European market and
raise funding in other currencies
• Provide first experience with European market and fin tech
projects
Main markets
15
Strategy going forwardContinue to execute underlying business plan and pursue strategic add-ons
Profitable
organic growth
Multi-country
operation
Credit card platform
• High demand and attractive margins in Norway and Finland enables high organic growth
• Consumer loans year-end 2018 of approximately NOK 4.1 bn
• Forward flow agreement operative in Q2
• Efficient and scalable operation
• Operationalize and fine-tune the Finnish consumer loan portfolio
• Expand eurofunding through Rasin to Spain and France
• Further investigate other potential markets
• Launch of Monobank brand in May
• Launch of joint credit card with Widerøe and Eurobonus in September
• Further investigation of other strategic partners
16
Appendix
17
1,27
0
2,06
3
2,80
8
3,80
7
5,24
4
6,66
7 8,95
5 11,4
84 14,3
56
Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1
2 0 1 6 2 0 1 7 ' 1 8
High and profitable organic growth
Note(*): ROE = 4x profit after tax in quarter / average total equity in quarter
Net loans
NOK (million) NOK (million)
Confirms business model
Number of loan customers
number (#)
Profit after tax
Annualized return on equity *
per cent (%)
Growth in net loansGrowth in number of loan customers
NOK (million)number (#)
1,11
3
793
745 99
9
1,43
7
1,42
3
2,28
8
2,52
9 2,87
2
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2016 2017 '18
259 44
5 624 84
0 1,16
2
1,44
6 1,86
7 2,35
2 2,87
6
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2016 2017 '1822
3
186
179 21
6
322
284
421 48
5 523
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2016 2017 '18
-6.5-3.9
0.5 1.7 1.8 3.05.7
7.410.1
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2016 2017 '18
n.a.
-9.9 %
1.3 %2.7 % 2.2 %
3.6 %
6.7 % 6.8 % 7.6 %
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2016 2017 '18
18
Increasing top-lineSatisfying yields and margins – stabilizing yields in Norway
Note(*): yield = weighted average effective annual yield || Note(**): actual end of quarter annual rate || Note(***): NIM = 4x NII in quarter / average total assets in quarter
Total incomeKey yields and margins
NOK (million)per cent (%)
0.5 -0.6 -0.8 -1.0 -1.7 -2.6 -3.1 -2.7 -4.5
4.7
11.7 15.2
22.7
29.9
37.1
44.6
55.9
68.8
5.3
11.1
14.5
21.7
28.2
34.5
41.5
53.2
64.3
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2016 2017 '18
Net comission and fee income Net interest income
15.7 %15.2 % 14.9 % 14.8 % 14.6 % 14.3 % 14.2 % 14.3 % 14.4 %
12.3 %12.7 % 12.7 % 12.8 %
2.0 % 1.8 % 1.8 % 1.9 % 1.9 % 2.0 % 2.1 % 2.0 % 1.9 %
1.3 % 1.1 % 1.2 % 0.9 % 0.8 % 0.7 % 0.8 % 0.8 % 0.9 %
n.a.
8.5 %8.1 %
8.8 % 8.7 % 8.7 %8.0 %
7.7 % 7.8 %
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2016 2017 '18
Annualized loan yield (Norway) * Annualized loan yield (Finland) *
Annual deposit rate ** Annualized liquidity yield *
Annualized NIM ***
19
Efficient and scalable operations – short time to market
Note(*): cost / income ratio = operating expenses (incl. or excl. marketing) / total income
per cent (%)
Operational expenses
NOK (million)
Cost / Income ratio *
3.5 3.62.2
6.5 5.5 6.2 6.9 8.0 8.03.6 4.5
3.4
4.3 5.66.3
6.1
8.6 9.6
4.24.2
3.6
4.6
8.18.0 7.7
11.3
14.6
0.6 0.6
0.5
0.3
1.1
1.5 2.0
1.4
2.1
12.0 12.9
9.7
15.8
20.3
21.922.7
29.2
34.2
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2016 2017 '18
Staff costs Other administrative expenses
Marketing expenses Depreciation and amortisation
n.a.
116%
67%
73% 72%64%
55% 55% 53%
n.a.
78%
42%51%
43% 40% 36% 34% 30%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2016 2017 '18
Cost / Income Ratio Cost (excl. marketing) / Income Ratio
20
Customer segmentationContinuous development and tuning of scorecards to navigate the portfolio
3%
32%
65%
Primary school
Secondary school
Higher education
26%
27%29%
15%3%
<= 34 years 35-44 years
45-54 years 55-64 years
>= 65 years
69%
31%
Home owner
Tenant
43 years4%
22%
36%
38%
NOK 250k-349k
NOK 350k-499k
NOK 500k-749k
>= NOK 750k
Age Income Education Housing Average customer
No
rway
Fin
lan
d
NOK 630k
Higher education
Home owner
44 years
NOK 465k
Higher education
Home owner
20%
29%31%
16%
4%
<= 34 years 35-44 years
45-54 years 55-64 years
>= 65 years
25%
31%
30%
14%
NOK 250k-349k
NOK 350k-499k
NOK 500k-749k
>= NOK 750k
12%
8%
80%
Primary school
Secondary school
Higher education
75%
25%
Home owner
Tenant
21
Satisfactory loan losses and credit qualityPortfolio risk under control through diligent credit risk management and fine-tuning of scorecards
Note(*): loan loss ratio = LTM loan losses / average LTM net loans / 2) || Note(**): non-performing loan ratio = >PD90 / gross loans || Note(***): provision ratio = total provisions / >PD90
Gross loans past due (# of days)
NOK (million)NOK (million)
ProvisionsLoan losses
NOK (million)
Total provision ratio ***Loan loss ratio * Non-performing loan ratio **
per cent (%)per cent (%)per cent (%)
n.a. n.a. n.a.
2.94%
2.24%2.23%
2.23%2.38%
2.58%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2016 2017 '18
23.5
40.7 58
.7
94.7
135.
7 189.
1
251.
7
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2016 2017 '18
31-60 PD 61-90 PD > 90 PD
n.a. n.a.
3.7 %
4.8 % 4.9 %
6.4 %7.1 %
7.9 % 8.5 %
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2016 2017 '18
2.65.7
9.913.5
18.4
26.3
37.3
50.7
69.5
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2016 2017 '18
n.a. n.a. n.a.
33.2 % 31.4 %
27.8 %
27.5 %
26.8 %
27.6 %
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2016 2017 '18
1.93.1
4.2 3.74.9
8.3
10.9
13.8
19.1
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2016 2017 '18
22
20.7
%
17.8
%
31.8
%
20.5
%
17.7
%
27.8
%
21.5
%
21.6
%
20.0
% 24.2
%
21.3
%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2016 2017 '18
CET1 T1 * T2 *
Robust regulatory capital structureImportant to plan ahead to position the company for continued profitable organic growth
Note(*): Q1 2018 NOK 41m Tier 1 (1.5% of RWA) and NOK 50m Tier 2 (2.0% of RWA) capital counts towards MONO’s capital adequacy ratios || Note(**): capital requirements (Pillar I) are weighted between Norway and Finland
Risk-weighted assetsRegulatory capital Reported capital adequacy **
CET1 Capital
Req. = 13.6%
Total Capital
Req. = 17.1 %
per cent (%)NOK (million) NOK (million)
483 492
3541
4750
144 140 139
309 306 302
363
564583
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2016 2017 '18
CET1 T1 * T2 *
453
683785
1,107
1,423 1,401
1,819
2,333
2,765
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2016 2017 '18
75% loans 100% loans Other RWA
23
159
156
157 33
1
335
339
345 52
2
534
98 98
524
638
903 1,13
8 1,55
6
2,04
3
2,65
2 3,05
7
405
680794
1,235
1,472
1,895
2,487
3,272
3,689
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2016 2017 '18
Equity Subordinated loan Deposits by customers
Stable funding and adequate liquidity
Note(*): deposit ratio = deposits / net loans
Easy access to low-cost NOK deposit funding – Surplus liquidity invested in low-risk assets
LiquidityFunding
NOK (million)
Key ratios
101 15
8
110
301
220
325
489
758
625
28
49
28
51
35
52
64
56
65
129
208
138
352
255
377
552
814
691
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2016 2017 '18
Debt securities Loans and advances to banks
NOK (million)
n.a.
118%102%
108%
98%
108% 109%113%
106%
n.a. 169%
159%
168%
153%
158%153%
167%160%
n.a.147%
135%
152%
n.a.
172%
133%
242%
206%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2016 2017 '18
Deposit ratio * NSFR LCR
24
Detailed financial figuresQuarterly income statement and balance sheet
Balance SheetIncome Statement
25
Important InformationDisclaimer
25
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