Interim Presentation | 4rd quarter 2018 | 8 February 2019 - PowerPoint PPT Presentation

Interim Presentation | 4rd quarter 2018 | 8 February 2019

Monobank Q4 2018 highlights Net loans Growth driven by a more conservative approach in Norway NOK million 3,706 • Net loan balance up 7.4% to NOK 3 706 million 2,352 Net interest income of NOK 95 million, up 10 % vs Q3’18 and • 70 % vs Q4’17 840 • Growth level reflects reduced marketing spending • More conservative approach in Norway due to regulatory Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 environment 2017 2018 Forward flow Profitability negatively affected by NOK 66 million in loan loss provisions due to: Profit after tax • Increased data and portfolio insight NOK million 13.8 15.5 10.1 • Reserve strengthening in Finland 7.4 5.7 3.0 1.7 1.8 One-off of NOK 11 million related to identified error in existing • model -8.8 • Adjusted model will additionally contribute to somewhat higher Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 loan loss provisions going forward 2017 2018 2

Financials 3

Continued high and stable margins Total income impacted by loan loss provisions and conservative approach in Norway Income and profit after tax Key yields and margins Per cent (%) NOK (million) 95 86 14.8 % 14.6 % 14.4 % 14.4 % 14.4 % 82 14.3 % 14.3 % 81 14.2 % 14.3 % 76 75 69 64 12.8 % 12.8 % 12.8 % 12.7 % 12.7 % 12.6 % 12.3 % 56 53 45 41 8.8 % 8.7 % 8.7 % 37 8.3 % 35 8.0 % 7.8 % 7.7 % 7.7 % 7.6 % 30 28 23 22 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Net interest income Total income Net profit after tax Annualized loan yield (Norway) * Annualized loan yield (Finland) * 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 4

Efficient operations with economies of scale Reduced marketing expenses due to regulatory uncertainty Operational expenses Cost / Income ratio * Per cent (%) NOK (million) 36.7 120% 34.2 2.4 31.9 2.1 30.9 29.2 3.8 100% 2.5 1.4 12.0 4.8 14.6 22.7 80% 21.9 9.9 20.3 11.3 2.0 1.5 73% 1.1 72% 60% 15.8 9.6 11.9 64% 7.7 8.0 0.3 8.1 55% 7.9 55% 53% 51% 4.6 49% 9.6 8.6 40% 43% 40% 40% 39% 6.1 6.3 36% 4.3 34% 5.6 33% 33% 30% 27% 12.7 20% 11.4 10.6 8.0 8.0 6.9 6.5 6.2 5.5 0% Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 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 5

Loan losses and credit quality Negatively affected by one-offs and increased data and portfolio insight Loan losses Gross loans past due (# of days) Provisions NOK (million) NOK (million) NOK (million) 138.5 66 436.1 86.4 91.9 356.6 251.7 332.5 69.5 50.7 25 189.1 58.7 19 19 37.3 135.7 40.7 14 94.7 13.5 18.4 26.3 11 8 5 4 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 31-60 PD 61-90 PD > 90 PD Loan loss ratio * Non-performing loan ratio ** Total provision ratio *** 11.3 % Per cent (%) Per cent (%) Per cent (%) 10.1 % 10.1 % 8.5 % 4.2 % 7.9 % 7.1 % 33% 32% 6.4 % 31% 28% 27% 28% 27% 26% 26% 2.9 % 4.8 % 4.9 % 2.9 % 2.6 % 2.7 % 2.2 % 2.2 % 2.4 % 2.2 % Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 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 6 Note(*): loan loss ratio = LTM loan losses / average net loans ) || Note(**): non-performing loan ratio = >PD90 / gross loans || Note(***): provision ratio = total provisions / >PD90

Easy access to low-cost deposit funding Funding Liquidity Key ratios 1,313 NOK (million) NOK (million) 84 4,901 4,833 717% 701% 563 609 961 4,081 3,689 109 548 813 3,272 534 737 56 691 50 522 65 2,487 1,229 552 345 64 4,239 1,895 4,125 377 852 3,434 352 339 1,472 242% 3,057 757 1,235 214% 52 687 206% 2,652 51 335 255 625 172% 168% 2,043 331 489 152% 35 133% 1,556 168% 153% 158% 153% 167% 160% 163% 181% 172% 325 1,138 301 903 220 108% 98% 108% 109% 113% 106% 107% 123% 111% Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2017 2018 2017 2018 2017 2018 Deposits by customers Subordinated loan Equity Debt securities Loans and advances to banks Deposit ratio * NSFR LCR Note(*): deposit ratio = deposits / net loans 7

Regulatory capital structure Pro forma Q4 2018 CET1 ratio of ~25% - fully financed to reach NOK 10bn after merger Risk-weighted assets Reported capital adequacy ** Regulatory capital 3,356 per cent (%) 641 NOK (million) NOK (million) 583 592 604 615 3,088 2,940 600 2,765 500 2,333 401 400 1,819 27.8 % 25.0 % 309 306 302 1,423 1,401 22.0 % 21.5 % 21.6 % 21.4 % 300 20.6 % 19.9 % 19.1 % 1,107 Total Capital Req. = 16.9 % 200 785 16.1 % CET1 Capital 100 Req. = 13.4% - Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2017 2018 2016 2017 2018 2017 2018 CET1 T1 * T2 * 75% loans 100% loans Other RWA CET1 T1 * T2 * Note(*): As of Q3 2018 NOK 46m Tier 1 (1.5% of RWA) and NOK 50m Tier 2 (2.0% of RWA) capital counts towards MONO’s capital ad equacy ratios || Note(**): capital requirements (Pillar I) are weighted between Norway and Finland Note(*): As of Q4 2018 NOK 50m Tier 1 (1.5% of RWA) and NOK 50m Tier 2 (2.0% of RWA) capital counts towards MONO’s capital ad equacy ratios || Note(**): capital requirements (Pillar I) are weighted between Norway and Finland 8

Strategy and operations 9

Multichannel distribution – Replicating Norwegian formula abroad from head quarter in Norway…. Monobank brand Third party agents Co-branding partners www.monobank.no Monobank call center + potential new partners Co-branding Brand Agent 24% 76% Not yet distribution distribution distribution applicable volume * volume ** volume * Note(*): current loan portfolio | Note(**): no live relationships with co-branding partners since inception 10

Attractive co-branding partner offering Monobank offering Teaming up for increased value enhancing solutions TYPICAL POTENTIAL MONOBANK MONO PAY PARTNERS Credit card combined platform • Travel agencies CUSTOMER VALUE PARTNER BRANDED Ability to offer relevant FRONT-END customer value towards the customer INSURANCE PROGRAM CO-OPERATION Legehjelp 24 – Qualified nurses Potential to increase and doctors available 24/7 co-operation (credit card Travel insurance and POS finance) 11

Appendix 12

Customer segmentation Continuous development and tuning of scorecards to navigate the portfolio Age Income Education Housing Average customer 3% 43 years 4% 3% 15% 25% 21% 32% 31% 40% NOK 643k 29% 66% 68% Norway 28% 35% 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 3% 43 years 12% 16% 15% 20% 23% 29% 9% NOK 475k 29% 29% 71% Finland 35% 30% 79% 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 13