Interim Presentation | 3 rd quarter 2017 | 18 October 2017 - PowerPoint PPT Presentation

Interim Presentation | 3 rd quarter 2017 | 18 October 2017

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 18 October 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

Key highlights and developments Q3 2017 Overview  1 Record-high loan growth of NOK 421 million – net loan balance of NOK 1,867 million  2 Successful start of the consumer loan business in Finland with outstanding net loans of NOK 186 million  3 Planned equity issue of NOK 175 to 225 million to fund further profitable growth  4 Net interest income of NOK 44.6 million – up from NOK 37.1 million in the previous quarter  5 Net profit after tax reached NOK 5.7 million – up from NOK 3.0 million in the previous quarter  6 Credit quality develops in line with projections after introducing internally developed scorecard  7 Successful placement of NOK 50 million hybrid Tier 1 and NOK 50 million subordinated Tier 2 capital 3

Key figures Q3 2017 Stable underlying performance Growth in net loans of NOK 421 million – total outstanding net loans of NOK 1,867 million 1 NET LOANS Net loan yield of 14.0 % * vs. deposit interest rate of 2.1 % 2 MARGINS AND YIELDS 3 Cost / income ratio of 55 % ( 36 % excluding marketing) – gradually gaining economies of scale COST LEVEL 4 Annualized loan losses of 2.2 % – stable credit quality in line with underlying credit strategy LOAN LOSSES 5 Annualized ROE of 6.7 % – profitable operations after only 3 quarters of operation RETURN ON EQUITY 6 CET1 ratio of 16.5 % and total capital ratio of 20.0 % – well within capital requirements CAPITAL ADEQUACY Deposit ratio of 109 % – NOK deposits represent the Bank’s main source of funding 7 DEPOSITS LCR of 133 % (total) – NFSR of 153 % – satisfactory liquidity 8 LIQUIDITY Non-performing loans of NOK 135.7 million – 7.1 % of gross outstanding loans 9 NON-PERFORMING LOANS (>90PD) 27.5 % of non-performing loans are covered by provisions 10 TOTAL PROVISIONS Note(*): Extension of credit in Finland has been restricted to low risk customers until local business volume allowed MONO access to the Finnish debt registry (achieved in September). This has temporarily affected the total loan yield negatively. 4

High and profitable organic growth Confirms business model Net loans Number of loan customers Profit after tax NOK (million) number (#) NOK (million) 7,529 5.7 1,867 3.0 1.8 1.7 6,349 0.5 1,446 5,244 1,162 3,807 -3.9 840 -6.5 2,808 624 2,063 445 1,270 259 157 -16.5 36 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 '15 2016 2017 '15 2016 2017 '15 2016 2017 Growth in net loans Growth in number of loan customers Annualized return on equity NOK (million) number (#) per cent (%) 1,437 421 6.7 % 3.6 % 1,105 1,180 2.7 % 2.2 % 1,113 322 1.3 % 999 284 793 223 745 216 186 179 -9.9 % n.a. 157 36 -16.1 % Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 '15 2016 2017 '15 2016 2017 '15 2016 2017 5

Initiation of cross-border expansion First step Finland Cross-border expansion Current market exposure Q3 2017 distribution of net loans • Solid multi-country operational platform per cent (%) already established Fast and agile roll-out process with very 10% • efficient time to market • Continuous and ongoing exploration of potential foreign markets to enter Norway • The cross-border launches are expected to Finland achieve considerable operational synergies, further strengthen the growth platform and contribute to diversify the business model 90% Successful launch in Finland Q3 2017 distribution of growth in net loans Unsecured consumer finance loans • rolled out in Finland on 29 May 2017 per cent (%) • Positive first reaction – lending volume NOK 186m since initiation in Finland • Extension of credit in Finland has been 35% restricted to low risk customers until local business volume allowed access to the local Norway debt registry (achieved in Sept. 2017). Finland • Operational team based in Bergen – 65% no feet on the ground in Finland Deposit accounts, credit cards and • other opportunities will be considered 6