Interim Presentation | 1 th quarter 2018 | 18 April 2018 Table - PowerPoint PPT Presentation

Interim Presentation | 1 th quarter 2018 | 18 April 2018

Table of contents Overview 1 1st quarter 2 Improved profitability 3 Outlook and priorities 2

Monobank Q1 Highlights Growth in net loans • Strongest loan growth to date NOK 523 NOK (million) 523 mill 485 421 322 • Net profit NOK 10.1 mill 284 223 216 186 179 • Credit card platform ready to launch • Deposit funding agreement with Raisin Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 '18 operative in Germany and Austria Profit after tax • Forward Flow agreement with Axactor NOK (million) 10.1 7.4 5.7 concluded, loans past due 90 days will 3.0 1.8 1.7 0.5 be irrevocably sold -3.9 -6.5 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 '18 3

Overview financial figures • Total income increased with 21% FINANCIAL STATEMENT 2018 2017 In NOK thousands Q1 Q4 Q3 Q2 Net interest income 68 761 55 910 44 582 37 108 • Positive impact by Finnish operation - Norway 54 905 - Finland 13 856 Net comission and fees -4 503 -2 689 -3 125 -2 603 • Solid quarter in the Norwegian Total income 64 259 53 220 41 457 34 505 operation 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 • Cost control - of which marketing expense 14 598 11 311 7 705 7 992 • Staff costs unchanged Depreciation and amortisation 2 131 1 379 1 999 1 500 Total operating costs 34 158 29 227 22 666 21 946 • Increased marketing expenses 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 4

Solid growth Net loans • Increased net loans with 22% • 20% of net loans from Finland 2,876 2,352 1,867 1,446 1,162 840 624 445 259 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 '18 5

Table of contents Overview 1 1st quarter 2 Improved profitability 3 Outlook and priorities 6

Improved profitability Net interest margin Yields and margins 15.7 % 15.2 % • High growth and increased margins 14.9 % 14.8 % 14.6 % 14.3 % 14.4 % 14.3 % 14.2 % • Improved risk models – better customer 12.8 % 12.7 % 12.7 % 12.3 % selection 8.8 % 8.7 % 8.7 % 8.5 % 8.1 % 8.0 % 7.8 % 7.7 % • Margins in Finland are on the same level n.a. as in Norway • Lower funding costs in Finland • Lower customer acquisition costs Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 '18 Annualized loan yield (Norway) * Annualized loan yield (Finland) * Annualized NIM *** Note(*): yield = weighted average effective annual yield || Note(**): actual end of quarter annual rate 7

Improved profitability Scalability Cost / Income ratio * per cent (%) 72% • Solid cost control 64% • Optimising marketing activities in different 55% 55% 53% channels • Highly automatised processes 43% 40% 36% 34% 30% Q1 Q2 Q3 Q4 Q1 2017 '18 Cost / Income Ratio Cost (excl. marketing) / Income Ratio 8

Improved profitability Non performing loans Non-performing loan ratio * • Development according to plan 8.5 % 7.9 % • Forward Flow agreement with Axactor will 7.1 % 6.4 % enhance further predictability on future loan losses 4.9 % 4.8 % • Confirms Monobanks provision levels 3.7 % n.a. n.a. Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 '18 Note(*): non-performing loan ratio = >PD90 / gross loans 9

Table of contents Overview 1 1st quarter 2 Improved profitability 3 Outlook and priorities 10

Scalable and adaptable business model 11

Preparing for tomorrows technology Agile and adaptable – key for survival 12

The Monobank card platform Generating value for customers Digital and Hyper connected with Instant customized to the customer the customer 13

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 14

Strategy going forward Continue to execute underlying business plan and pursue strategic add-ons • High demand and attractive margins in Norway and Finland enables high organic growth • Consumer loans year-end 2018 of approximately NOK 4.1 bn Profitable organic growth • Forward flow agreement operative in Q2 • Efficient and scalable operation • Operationalize and fine-tune the Finnish consumer loan portfolio Multi-country • Expand eurofunding through Rasin to Spain and France operation • Further investigate other potential markets • Launch of Monobank brand in May Credit card platform • Launch of joint credit card with Widerøe and Eurobonus in September • Further investigation of other strategic partners 15

Appendix 16

High and profitable organic growth Confirms business model Number of loan customers Net loans Profit after tax 2,876 number (#) NOK (million) NOK (million) 10.1 14,356 7.4 2,352 5.7 11,484 3.0 1.7 1.8 1,867 0.5 8,955 1,446 6,667 1,162 5,244 -3.9 840 3,807 -6.5 2,808 624 2,063 445 1,270 259 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 '18 2016 2017 '18 2016 2017 '18 Growth in number of loan customers Growth in net loans Annualized return on equity * 6.7 % 6.8 % 7.6 % number (#) NOK (million) per cent (%) 2,872 523 3.6 % 2.7 % 2.2 % 485 2,529 2,288 1.3 % 421 322 284 1,437 1,423 1,113 223 216 186 179 999 -9.9 % 793 745 n.a. Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 '18 2016 2017 '18 2016 2017 '18 Note(*): ROE = 4x profit after tax in quarter / average total equity in quarter 17

Increasing top-line Satisfying yields and margins – stabilizing yields in Norway Key yields and margins Total income 64.3 NOK (million) per cent (%) 15.7 % 15.2 % 53.2 14.9 % 14.8 % 14.6 % 14.4 % 14.3 % 14.2 % 14.3 % 41.5 12.8 % 12.7 % 12.7 % 12.3 % 34.5 8.8 % 8.7 % 8.7 % 8.5 % 8.1 % 8.0 % 7.8 % 68.8 7.7 % 28.2 n.a. 55.9 21.7 44.6 37.1 14.5 29.9 2.1 % 2.0 % 2.0 % 2.0 % 11.1 1.9 % 1.9 % 1.9 % 1.8 % 1.8 % 22.7 5.3 15.2 11.7 1.3 % 1.2 % 1.1 % 0.9 % 0.9 % 0.8 % 0.8 % 0.8 % 0.7 % 4.7 0.5 -0.6 -0.8 -1.0 -1.7 -2.6 -2.7 -3.1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 -4.5 2016 2017 '18 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 * Net comission and fee income Net interest income Annualized NIM *** 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 18

Efficient and scalable operations – short time to market Cost / Income ratio * Operational expenses 34.2 per cent (%) NOK (million) 2.1 29.2 n.a. 1.4 14.6 22.7 21.9 11.3 20.3 2.0 1.5 1.1 15.8 n.a. 7.7 8.0 0.3 8.1 116% 12.9 12.0 4.6 9.6 0.6 0.6 8.6 73% 9.7 72% 4.2 6.1 64% 67% 0.5 6.3 4.2 55% 55% 4.3 53% 5.6 78% 3.6 4.5 3.6 51% 43% 8.0 8.0 3.4 42% 40% 6.9 6.5 36% 6.2 34% 5.5 30% 3.5 3.6 2.2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 '18 2016 2017 '18 Staff costs Other administrative expenses Cost / Income Ratio Cost (excl. marketing) / Income Ratio Marketing expenses Depreciation and amortisation Note(*): cost / income ratio = operating expenses (incl. or excl. marketing) / total income 19

Customer segmentation Continuous development and tuning of scorecards to navigate the portfolio Age Income Education Housing Average customer 3% 43 years 4% 3% 15% 26% 31% 22% 38% 32% NOK 630k 29% 65% 69% Norway 27% 36% Higher education NOK 250k-349k <= 34 years 35-44 years Primary school Home owner NOK 350k-499k 45-54 years 55-64 years Secondary school NOK 500k-749k Tenant Home owner >= 65 years Higher education >= NOK 750k 4% 44 years 12% 14% 20% 16% 25% 25% 8% NOK 465k 30% 29% 31% Finland 75% 80% 31% Higher education NOK 250k-349k <= 34 years 35-44 years Primary school Home owner NOK 350k-499k 45-54 years 55-64 years Secondary school NOK 500k-749k Tenant Home owner >= 65 years Higher education >= NOK 750k 20