Q2 2019 PRESENTATION
Q2 2019 PRESENTATION STRONG BUSINESS MODEL CONTINUES TO DELIVER GROWTH Increased net income Highlights Strong lending − Continued strong +8% +14% development in Payment Solutions SEKm SEKm − 350 Margin pressure in 35 000 313 30 323 289 Consumer Loans mainly 300 30 000 26 626 impacted by the 250 25 000 conditions in the 200 Norwegian Consumer 20 000 Loans market 150 15 000 100 − 10 000 Continued improvement in cost/income ratio 50 5 000 0 0 Q2 2018 Q2 2019 Q2 2018 Q2 2019 2
PAYMENT SOLUTIONS STRONG GROWTH AND CONTINUED STRATEGIC PARTNERSHIPS Highlights Digital application Strong lending growth +11% Continued focus on developing – existing partnerships driving strong growth 20% SEKm During Q2 more than 30 per cent of – Resurs’s retail finance sales came from 11 146 e-commerce 12 000 10 045 Our two leading retail finance-partners – 80% 10 000 Mio and Bauhaus chose to continue and further develop their strategic 8 000 partnerships with Resurs during the quarter 6 000 > 80 per cent used digital application The push function is now a natural part in Sweden in Q2 2019 and we see a – 4 000 of Resurs's offering and has been met continuous increase in all of our with great interest from both existing markets. 2 000 retail finance partners and the market as a whole 0 Q2 18 Q2 19 3
CONSUMER LOANS POSITIVE DEVELOPMENT DESPITE NORWEGIAN CHALLENGES Highlights Utilising the database Strong lending growth +16% Continued healthy growth in all – markets with strongest performance in absolute numbers 20% in Sweden and strongest relative SEKm growth in Finland 19 176 20 000 The Norwegian market remained – 16 581 challenging during the quarter. As 16 000 planned Resurs carried out a 80% number of measures in the form of interest rate increases, cost 12 000 efficiency improvements but also a number of organisational changes > 80 per cent of sales in Q2 to existing 8 000 customers in our database. Since most After the law came into force in – of our sales are to customers who are mid-May, we believe the 4 000 already known in our database, we can Norwegian Consumer Loan market achieve higher margins because this is now to a much greater extent 0 knowledge has a positive impact on characterised by competition on Q2 18 Q2 19 acquisition costs and credit risk. equal terms 4
INSURANCE STABLE DEVELOPMENT AND LAUNCH OF NEW COLLABORATIONS Highlights Premium earned net Technical result Premium earned net up 7 per cent – +7% +14% compared with last year and technical result up 14 per cent compared with last year SEKm SEKm Continued focus on developing – 250 25 existing partnerships to increase 219 22 205 conversion rates 19 200 20 During the quarter, the segment – acquired a company that previously 150 15 provided Insurance with car guarantee products. The acquisition 100 provides more opportunities to 10 further develop business in the Motor business area 50 5 Another external partner was signed – 0 0 in the business area Security Q2 18 Q2 19 Q2 18 Q2 19 5
Q2 IN FIGURES
Q2 2019 PRESENTATION CONTINUED PROFITABLE GROWTH Net income Net income Strong lending +8% +14% SEKm SEKm SEKm 350 35 000 350 313 313 30 323 306 289 294 289 284 300 30 000 300 26 626 250 25 000 250 200 20 000 200 150 15 000 150 100 100 10 000 50 50 5 000 0 0 0 Q2 2018 Q2 2019 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q2 2018 Q2 2019 7
LOAN BOOK EVOLUTION STRONG GROWTH IN BOTH SEGMENTS Consumer Loans Payment Solutions Total +11% +14% +16% SEKbn SEKbn SEKbn 19.2 25 12 20 11.1 18.5 10.7 10.5 17.4 17.3 10.2 10.0 16.6 30.3 10 20 29.2 16 27.5 28.0 26.6 8 15 12 6 10 8 4 5 4 2 0 0 0 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 8
MARGIN EVOLUTION STABLE INCREASE IN OPERATING INCOME -1.1% -1.0% Operating income Highlights +5% +8% NBI margin* pts pts – Stable increase in Q2 YTD Q2 YTD operating income – The NBI margin % SEKm decreased compared with Q2-18 and was negatively impacted 1 200 2000 1 809 14% 12.7% 12.6% mainly by the conditions 1 673 11.6% 11.6% 1 000 913 in the Norwegian 12% 868 1600 Consumer Loans market 10% 800 1200 – The NBI margin was 8% 600 stable compared with 6% 800 Q1-19 400 4% 400 200 2% 0% 0 0 Q2 18 Q2 19 YTD 18 YTD 19 Q2 18 Q2 19 YTD 18 YTD 19 9 * NBI for bank calculated as Group operating income less reported insurance segment operating income
EVOLUTION OF OPERATING EXPENSES STRONG IMPROVEMENT IN COST INCOME RATIO -2.6% -1.6% Operating Expenses Highlights -2% +4% Cost Income pts pts Ratio, bank – OPEX was lower than Q2 YTD Q2 YTD Q2-18 mainly following strict cost control in Norway to compensate % SEKm for lower NBI-margin – The cost/income ratio 500 800 724 41.6% 699 41.2% 44% 39.6% continues to improve 39.0% based on scalable 366 400 361 600 business model 33% 300 400 22% 200 200 11% 100 0% 0 0 Q2 18 Q2 19 YTD 18 YTD 19 Q2 18 Q2 19 YTD 18 YTD 19 10
EVOLUTION OF COST OF RISK STABLE COST OF RISK 0.0% +0.1% Credit Losses, Net Highlights +16% +18% Cost of Risk pts pts – Credit losses increased Q2 YTD Q2 YTD mainly following growth of the loan book % SEKm – Stable cost of risk with somewhat higher debt collection transfers in 250 350 3% 302 Consumer Loans Norway 2.1% 300 2.0% 2.0% 2.0% while lower credit losses 256 200 2% in Payment Solutions 250 148 150 128 200 2% 150 100 1% 100 50 1% 50 0% 0 0 Q2 18 Q2 19 YTD 18 YTD 19 Q2 18 Q2 19 YTD 18 YTD 19 11
MARGIN EVOLUTION STABLE DEVELOPMENT IN RISK ADJUSTED NBI -1.1% -1.0% Risk adjusted NBI* Highlights +3% +5% Risk adjusted pts pts NBI margin* – Stable increase in risk Q2 YTD Q2 YTD adjusted NBI – The risk adjusted NBI % SEKm margin was negatively impacted mainly by the conditions in the 1 394 1500 1 327 12% 1 200 Norwegian market 10.7% 10.6% 9.6% 9.6% 1200 10% 1 000 – The risk adjusted NBI margin was stable 8% 712 800 692 900 compared with Q1-19 6% 600 600 4% 400 300 2% 200 0% 0 0 Q2 18 Q2 19 YTD 18 YTD 19 Q2 18 Q2 19 YTD 18 YTD 19 12 * NBI for bank calculated as Group operating income less reported insurance segment operating income
PAYMENT SOLUTIONS +11% -0.4% Loan Book NBI margin Highlights pts SEKm % – Strong lending growth 11 146 14.5% 14.3% mainly driven by existing 12 000 13.9% 13.9% 15% 10 045 retail partners 10 000 12% – Lower NBI margin 8 000 9% following strong growth 6 000 by retailers with lower 6% 4 000 margins 3% 2 000 – Improved CoR compared 0% 0 with same quarter last Q2 18 Q2 19 YTD 18 YTD 19 Q2 18 Q2 19 year following better underlying credit quality -0.6% +0.2% Cost of Risk Risk Adjusted NBI margin – Overall higher risk pts pts % % adjusted NBI margin 15% 2,5% 2.2% 12.5% 12.5% 12.3% 12.1% 2.0% 12% 2,0% 1.6% 1.4% 9% 1,5% 6% 1,0% 3% 0,5% 0% 0,0% Q2 18 Q2 19 YTD 18 YTD 19 Q2 18 Q2 19 YTD 18 YTD 19 13
CONSUMER LOANS +16% -1.3% Loan Book NBI margin Highlights pts – Continued healthy growth SEKm % in all markets with 15% strongest performance in 19 176 20 000 11.8% 11.7% 16 581 absolute numbers in 12% 10.3% 10.4% Sweden and strongest 15 000 9% relative growth in Finland 10 000 6% – The NBI margin decreased and was 5 000 3% mainly negatively 0% 0 impacted by the Q2 18 Q2 19 YTD 18 YTD 19 Q2 18 Q2 19 conditions in the Norwegian Consumer +0.4% -1.7% Cost of Risk Risk Adjusted NBI margin Loans market pts pts % % – The CoR increased compared with Q2-18 15% 2.3% 2.3% 2,5% following higher debt 1.9% 1.9% 12% 2,0% collection transfers in the 9.8% 9.8% Norwegian market, and 8.1% 8.0% 9% 1,5% was stable compared 6% 1,0% with Q1-19 3% 0,5% – Overall lower risk adjusted NBI margin 0% 0,0% Q2 18 Q2 19 YTD 18 YTD 19 Q2 18 Q2 19 YTD 18 YTD 19 14
INSURANCE +7% +11% Premium Earned, net Technical Result Highlights SEKm SEKm – Premium earned, net up 7 per cent compared with 30 50 350 500 45 434 last year 405 40 300 25 22 40 400 19 250 219 – Strong increase in 205 20 30 300 200 technical result up 15 150 11 per cent compared 20 200 10 with last year 100 10 100 5 50 – Improved combined ratio 0 0 0 0 Q2 18 Q2 19 YTD 18 YTD 19 Q2 18 Q2 19 YTD 18 YTD 19 -0.4% Combined ratio pts % 100% 91.3% 90.6% 90.8% 90.4% 80% 60% 40% 20% 0% Q2 18 Q2 19 YTD 18 YTD 19 15
CAPITAL POSITION STRONG CAPITAL POSITION Highlights 15.0% 16% – Strong CET1 and total 14.7% capital ratios well above 13.0% 14% 1.3% 1.9% requirement and targets 12% 2.2% 10% 1.6% 8% 13.4% 13.1% 6% 9.2% 4% 2% 0% Capital requirements 31 Dec 2018 30 Jun 2019 Tier 2 Capital AT 1 CET 1 16
FUNDING EVOLUTION CONTINUED DIVERSIFICATION Funding total ex. equity Funding mix Highlights – Further diversification of funding in SEKm the last twelve months with SEK 100% 35 000 1 300 million issued under the MTN 15% 30 756 16% 16% 30 591 17% 18% programme 28 410 30 000 27 985 26 915 10% 10% 11% 10% 10% 25 000 20 000 50% 15 000 75% 73% 73% 74% 72% 10 000 5 000 0 0% Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Deposit ABS MTN 17
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