Q3 2019 PRESENTATION Q3 2019 PRESENTATION TODAYS PRESENTERS - PowerPoint PPT Presentation

Q3 2019 PRESENTATION

Q3 2019 PRESENTATION TODAY’S PRESENTERS Kenneth Nilsson Peter Rosén Chief Executive Officer Chief Financial Officer

Q3 2019 PRESENTATION STRONG BUSINESS MODEL CONTINUES TO DELIVER Increased net income Slightly improved CoR Strong lending -0.1% +5% +13% pts SEKm SEKm % 350 35 000 320 2,5% 31 125 306 2.1% 2.0% 300 30 000 27 470 2,0% 250 25 000 1,5% 200 20 000 150 15 000 1,0% 100 10 000 0,5% 50 5 000 0 0 0,0% Q3 2018 Q3 2019 Q3 2018 Q3 2019 Q3 2018 Q3 2019 3

Lending to the public Q3–19 OUR BUSINESS MODEL THE STRENGTH OF OUR BUSINESS MODEL Three segments – four markets – Presence in the Nordic market for almost 20 years 12% and we have driven the development of the various markets for decades. – Head office in Helsingborg, Sweden and full service Finland offices in all of the Nordic countries. – The Nordic countries differ in terms of dynamics and 30% Norway 45% competition. We are able to handle and adapt to new regulations and situations that arise in the various Sweden markets from time to time. Provid idin ing a alternativ ive fina nanc ncing ng s soluti utions ns drives c con onversion on of of vis isit itors in into payin ing HQ customer mers Denmark 13% 4

PAYMENT SOLUTIONS CONTINUED STRONG PROFITABLE GROWTH Highlights Digital application Strong lending growth +12% – Continued focus on developing existing partnerships driving strong growth. 20% SEKm – In Q3 more than 30 per cent of Resurs’s retail finance sales came from 11 408 e-commerce. 12 000 10 185 – Launched Merchant Portal during the 80% 10 000 quarter. It is a new service that, among other things, allows the partner to 8 000 quickly and easily capture all sales statistics in real time, regardless of 6 000 > 80 per cent used digital application channel. in Sweden in Q3 2019 and we see a 4 000 – Svensk Handel and a number of major continuous increase in all of our players in the aftermarket for car markets. 2 000 dealerships chose Resurs as new strategic partner during the quarter, 0 mainly because of our omni channel Q3 18 Q3 19 solution: Resurs Checkout. 5

PAYMENT SOLUTIONS THE RETAIL INDUSTRY IS CHANGING – SO ARE WE Merchant Portal Resurs Checkout – Flexibility Mobile Point of – Regardless of channel Sale (POS) – Simple administration Terminal – One technical solution, one API Push function Resurs Checkout 6

CONSUMER LOANS STABLE DEVELOPMENT DURING THE QUARTER Highlights Utilising the database Strong lending growth +14% – Continued stable loan book growth, strongest performance in absolute numbers in Sweden and strongest 20% relative growth in Finland. SEKm – The Norwegian market remained 19 717 20 000 challenging during the quarter. For us it 17 285 is a matter of designing an offering in 16 000 pace with the emerging market 80% conditions that meets both the new rules of play, and delivers customer 12 000 and business value. The fundamental and governing factor for all of our > 80 per cent of sales in Q3 to existing 8 000 decisions is always to prioritise a high customers in our database. Since most credit rating over volume. of our sales are to customers who are 4 000 already known in our database, we can – Ticket size on average loan book achieve higher margins because this increased by 15 per cent to kSEK 100 0 knowledge has a positive impact on compared with Q3-18, mainly driven by Q3 18 Q3 19 acquisition costs and credit risk. implementation of credit engine. This affects the NBI margin negatively. 7

INSURANCE CONTINUED GROWTH IN PREMIUMS EARNED AND TECHNICAL RESULT Highlights Premium earned net Technical result – Premium earned net up 10 per cent +10% +14% compared with last year with growth within all lines of business. – Technical result up 14 per cent SEKm SEKm compared with last year. 232 250 30 – Improved profitability with a 210 24 Combined ratio of 90,2 % compared 25 200 21 with 90,6 % last year. 20 150 – The segment prepared launches of the two new external partners within 15 the business area Personal safety, 100 that was signed in 2019. 10 50 – The segment continued to develop 5 opportunities provided by the acquisition within car warranties 0 0 made during Q2. Q3 18 Q3 19 Q3 18 Q3 19 8

DIGITISATION CONTINUED DIGITISATION Further development of AI/Machine Learning • Over the last quarters we have strengthen sales in Supreme Card through preventing churn using machine learning. Using machine learning has proven to be 3 to 5 times more accurate than previous work processes. • A machine learning model based on recent internal customer data has been developed in 2019 for advanced customer segmentation. This customer segmentation model gives unique and valuable insights into the behaviours of our current and future customers and it will be applied to other current machine learning models to further enhance them. • Next step in using machine learning is the development of a price model for Consumer Loans. 9

Q3 IN FIGURES

Q3 2019 PRESENTATION CONTINUED PROFITABLE GROWTH Net income Net income Strong lending +5% +13% SEKm SEKm SEKm 350 35 000 320 350 320 31 125 306 313 306 294 284 300 30 000 27 470 300 250 25 000 250 200 20 000 200 150 15 000 150 100 100 10 000 50 50 5 000 0 0 0 Q3 2018 Q3 2019 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q3 2018 Q3 2019 11

LOAN BOOK EVOLUTION STRONG GROWTH IN BOTH SEGMENTS Consumer Loans Payment Solutions Total +12% +13% +14% SEKbn SEKbn SEKbn 19.7 19.2 11.4 35 12 20 11.1 18.5 10.7 31.1 10.5 17.4 30.3 17.3 10.2 29.2 30 28.0 27.5 10 16 25 8 12 20 6 15 8 4 10 4 2 5 0 0 0 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 12

MARGIN EVOLUTION STABLE INCREASE IN OPERATING INCOME -0.9% -1.0% Operating income Highlights +5% +7% NBI margin* pts pts – Stable increase in Q3 YTD Q3 YTD operating income. – The NBI margin % SEKm decreased compared with last year and was negatively impacted 1 200 3200 14% 2 734 12.6% mainly by the conditions 12.3% 2 554 2800 11.6% 925 11.4% 1 000 in the Norwegian 881 12% 2400 Consumer Loans market 10% 800 2000 but also increased ticket 8% size and some margin 600 1600 pressure. 6% 1200 400 4% 800 200 2% 400 0% 0 0 Q3 18 Q3 19 YTD 18 YTD 19 Q3 18 Q3 19 YTD 18 YTD 19 13 * NBI for bank calculated as Group operating income less reported insurance segment operating income

EVOLUTION OF OPERATING EXPENSES STRONG IMPROVEMENT IN COST INCOME RATIO -1.6% -1.6% Operating Expenses Highlights 1% +3% Cost Income pts pts Ratio, bank – OPEX increased slightly Q3 YTD Q3 YTD but with strict cost control, mainly in Norway to compensate for the % SEKm lower NBI margin. – The cost/income ratio 500 1200 1 077 1 047 44% 40.5% continued to improve 39.2% 38.9% 37.6% 1000 based on scalable 400 353 348 business model. 33% 800 300 600 22% 200 400 11% 100 200 0% 0 0 Q3 18 Q3 19 YTD 18 YTD 19 Q3 18 Q3 19 YTD 18 YTD 19 14

EVOLUTION OF COST OF RISK STABLE COST OF RISK -0.1% +0.0% Credit Losses, Net Highlights +13% +16% Cost of Risk pts pts – Credit losses increased Q3 YTD Q3 YTD mainly following growth of the loan book. % SEKm – Stable cost of risk development. 250 500 459 3% 2.1% 395 2.1% 2.1% 2.0% 200 400 2% 157 139 150 300 2% 100 200 1% 50 100 1% 0% 0 0 Q3 18 Q3 19 YTD 18 YTD 19 Q3 18 Q3 19 YTD 18 YTD 19 15

MARGIN EVOLUTION STABLE DEVELOPMENT IN RISK ADJUSTED NBI -0.9% -1.0% Risk adjusted NBI* Highlights +4% +5% Risk adjusted pts pts NBI margin* – Stable increase in risk Q3 YTD Q3 YTD adjusted NBI. – The risk adjusted NBI % SEKm margin was negatively impacted mainly by the conditions in the 2500 12% 1 200 2 111 Norwegian market but 10.5% 2 019 10.2% 9.5% also increased ticket size 9.3% 2000 10% 1 000 and some margin 8% pressure. 716 800 692 1500 6% 600 1000 4% 400 500 2% 200 0% 0 0 Q3 18 Q3 19 YTD 18 YTD 19 Q3 18 Q3 19 YTD 18 YTD 19 16 * NBI for bank calculated as Group operating income less reported insurance segment operating income

PAYMENT SOLUTIONS +12% -0.6% Loan Book NBI margin Highlights pts SEKm % – Strong lending growth 11 408 14.3% 14.4% mainly driven by existing 12 000 13.8% 15% 13.5% 10 185 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 YTD last year Q3 18 Q3 19 YTD 18 YTD 19 Q3 18 Q3 19 following better underlying credit quality. -0.4% -0.2% Cost of Risk Risk Adjusted NBI margin – Overall somewhat lower pts pts % % risk adjusted NBI margin. 1.9% 15% 2,0% 13.1% 12.5% 12.3% 12.3% 1.5% 12% 1,5% 1.2% 1.2% 9% 1,0% 6% 0,5% 3% 0% 0,0% Q3 18 Q3 19 YTD 18 YTD 19 Q3 18 Q3 19 YTD 18 YTD 19 17