Company Presentation | 2nd quarter | 16 August 2017 Arranged by: Solely for review in connection with the proposed bond 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 THE U.S., CANADA, AUSTRALIA OR JAPAN OR TO ANY AMERICAN CITIZEN EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT OF 1933. ANY FAILURE TO COMPLY WITH THESE RESTRICTIONS MAY CONSTITUTE A VIOLATION OF APPLICABLE SECURITIES LEGISLATION
Important Information Disclaimer This presentation (the “Presentation”) has been produced by Monobank ASA (the “Company”, “MONOBANK” or “MONO”), 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 person. To the best of the knowledge of the Company and its board of directors, the information contained in this Presentation is in all material respect in accordance with the facts as of the date hereof, and contains no material omissions likely to affect its import. This Presentation contains information obtained from third parties. Such information has been accurately reproduced and, as far as the Company is aware and able to ascertain from the information published by that third party, no facts have been omitted that would render the reproduced information to be inaccurate or misleading. This Presentation contains certain forward-looking statements relating to the business, financial performance and results of the Company and/or the industry in which it operates. Forward-looking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words “believes”, expects”, “predicts”, “intends”, “pro jec ts”, “plans”, “estimates”, “aims”, “foresees”, “anticipates”, “targets”, and similar expressions. The forward-looking statements contained in this Presentation, including assumptions, opinions and views of the Company or cited from third party sources are solely opinions and forecasts which are subject to risks, uncertainties and other factors that may cause actual events to differ materially from any anticipated development. None of the Company or any of their parent or subsidiary undertakings or any such person’s officers or employees provides any assurance that the assumptions underlying such forward-looking statements are free from errors nor does any of them accept any responsibility for the future accuracy of the opinions expressed in this Presentation or the actual occurrence of the forecasted developments. The Company assumes no obligation, except as required by law, to update any forward-looking statements or to conform these forward-looking statements to our actual results. AN INVESTMENT IN THE COMPANY INVOLVES RISK, AND SEVERAL FACTORS COULD CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS THAT MAY BE EXPRESSED OR IMPLIED BY STATEMENTS AND INFORMATION IN THIS PRESENTATION, INCLUDING, AMONG OTHERS, RISKS OR UNCERTAINTIES ASSOCIATED WITH THE COMPANY’S BUSINESS, SEGMENTS, DEVELOPMENT, GROWTH MANAGEMENT, FINANCING, MARKET ACCEPTANCE AND RELATIONS WITH CUSTOMERS, AND, MORE GENERALLY, GENERAL ECONOMIC AND BUSINESS CONDITIONS, CHANGES IN DOMESTIC AND FOREIGN LAWSAND REGULATIONS, TAXES, CHANGES IN COMPETITION AND PRICING ENVIRONMENTS, FLUCTUATIONS IN CURRENCY EXCHANGE RATES AND INTEREST RATES AND OTHER FACTORS. SHOULD ONE OR MORE OF THESE RISKS OR UNCERTAINTIES MATERIALISE, OR SHOULD UNDERLYING ASSUMPTIONS PROVE INCORRECT, ACTUAL RESULTS MAY VARY MATERIALLY FROM THOSE DESCRIBED IN THIS PRESENTATION. THE COMPANY DOES NOT INTEND, AND DOES NOT ASSUME ANY OBLIGATION, TO UPDATE OR CORRECT THE INFORMATION INCLUDED IN THIS PRESENTATION. No representation or warranty (express or implied) is made as to, and no reliance should be placed on, any information, including projections, estimates, targets and opinions, contained herein, and no liability whatsoever is accepted as to any errors, omissions or misstatements contained herein, and, accordingly, none of the Company or any of their parent or subsidiary undertakings or any such person’s officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this document. By attending or receiving this Presentation you acknowledge that you will be solely responsible for your own assessment of the market and the market position of the Company and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the Company’s business. This Presentation speaks as of 16 August 2017. Neither the delivery of this Presentation nor any further discussions of the Company with any of the recipients shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since such date. 2 2
Table of contents Overview 1 Highlights 2 About Monobank 3 2nd quarter 2017 3
Highlights 2nd quarter 2017 Overview 1 Successful launch in Finland – executing on cross-border expansion strategy Continued high demand and attractive growth opportunities within unsecured consumer credit 2 Solid loan growth of NOK 284 million resulting in a net loan balance of NOK 1 446 million 3 Total income of NOK 34.5 million, an increase of 22 per cent 4 5 Operating expenses and loan losses developing in line with expectations 4
Table of contents Overview 1 Highlights 2 About Monobank 3 2nd quarter 2017 5
Monobank at a glance Overview Key comments Net loans to customers (NOKm) Key milestones since inception Independent and transparent niche bank, • 1,446 OCT. 2014 Initiated under the project name Zammut Prosjekt AS currently operating in Norway and Finland, 1,162 focusing on consumer finance Zammut Prosjekt attracted NOK 20m in seed FIRST YEAR equity funding over several rounds • Current product offering consists of unsecured 840 consumer loans of up to NOK 500k, payment Zammut Prosjekt completed a NOK 165m 624 OCT. 2015 insurance, as well as deposit accounts Private Placement of Equity Capital 445 • Products are at the moment distributed either 259 The Norwegian FSA granted Zammut Prosjekt a banking NOV. 2015 directly through the MONOBANK brand or license and the name was changed to Monobank ASA 36 indirectly through third-party loan agents NOV. 2015 Officially commenced regular banking operations Q4 Q1 Q2 Q3 Q4 Q1 Q2 • The business model is characterized by 2015 2016 2017 attractive interest margins, cost efficient FEB. 2016 Registered on the Norwegian OTC list operations and moderate credit losses Profit after tax (NOKm) Highly flexible and scalable operational model • Q3 2016 First profitable quarter after only 3 quarters of operation 3.0 1.8 • The organization has a lean setup – consists 1.7 0.5 Entered into a credit card cooperation agreement with of 31 experienced full-time employees OCT. 2016 Widerøe AS and SAS Eurobonus (launch ~ Q1 2018) Banking license granted by the Financial • Completed a NOK 175m Private Placement of Equity Capital Supervisory Authority of Norway – the license -3.9 OCT. 2016 in order to ensure capital adequacy due to strong growth can be passported throughout the European -6.5 Economic Area (EEA) FEB. 2017 Listed on Oslo Stock Exchange’s Merkur Market • Shares listed on the Merkur Market * Initiation of operations in Finland (ticker: MONO-ME) with a MCAP of ~NOK 800m Q2 2017 -16.5 – first step in planned cross-border expansion • Well positioned for continued Q4 Q1 Q2 Q3 Q4 Q1 Q2 H2 2017 Potential issue of Tier 1 and Tier 2 Capital strong growth and increasing returns 2015 2016 2017 Note(*): multilateral trading facility operated by the Oslo Stock Exchange 6
Product portfolio (I) Diverse product portfolio launched in three phases PHASE 1 PHASE 2 PHASE 3 * 1 Unsecured consumer loans || Deposit & saving accounts || Payment protection insurances 2 Credit cards Payment solutions || P2P || APP development 3 UNSECURED CONSUMER LOANS • NOK 25k - NOK 500K (higher amounts for VIP) • Automated risk-based pricing, from 7.9% -19.9% CREDIT CARDS • Annuities up to 15 years • Adjustable credit limit (given inherent customer risk) • Unlimited interest-only payments first 5 years • Flexible credit line (revolving) • Revolving credit and flexible repayment PAYMENT SOLUTIONS • Loyalty programs: • Monthly capitalization • Payment of bills by credit facility through MONO - Travel bonus • Mobile & web based user interface - Travel insurance DEPOSIT & SAVING ACCOUNTS • Easy, intuitive and instant - Online portal with special / limited offers NOK 50k - 2,000k (secured by Guarantee Fund) • • MONOBANK branding as well as co-branding Attractive interest rates • • Both direct and external distribution P2P SOLUTIONS Unlimited transactions • • Visa or Mastercard Savings visible for customer via online bank • • Online account statements Monthly capitalization • • Facilitate both contactless and mobile payment APP DEVELOPMENT PAYMENT PROTECTION INSURANCES • Protection against unemployment / accident / illness • Typical 20% of customers buys the insurance • Market price is 5-8% of outstanding balance Note(*): timeframe not yet established regarding the execution of phase 3 7
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