COMPANY PRESENTATION F INANCIAL ADVISORS TO P ERX
Improvement through disruption - in everyone’s best interest It’s fair to say that parts of the banking and finance industries have failed to understand the need for innovation and disruption. In the recent years we have seen an explosive growth in Our model is based on the sharing economy. People with the market for unsecured lending – credit cards and money are being connected with people in need of Morten Grusd consumer loans - with many new niche banks fighting for money. We eliminate the main problem, the bank as an CEO market shares. The aggressive marketing and lending intermediary. The lenders are offered a higher interest practices by the banks have resulted in significant rate on their savings, and the borrowers can refinance financial and social challenges for thousands of their credit cards or consumer loans and shave off 50% individuals and their families in Norway. The owners of of their interest costs. the banks, on the other hand, have seen their share values increase in line with the banks’ soaring profits. In order to keep a low risk level on the lending platform, This is all made possible, of course, by charging the Perx targets the most solvent part of the refinancing borrower an interest rate of 15 -20 %, while admitting market. Low risk is essential for the lenders on the only a 1 - 2 % interest rate to deposit customers. At Perx, platform, especially these days. In addition, the practice we believe this kind of business conduct is immoral, of banks and credit card companies, of offering high hostile to society and unnecessary. There is time for a interest rates to all customers, regardless of credit rating, change. is perceived particularly unfair by the more affluent consumers. The Perx business model is fair, moral and in line with consumer expectations. The model has enjoyed tremendous success in countries such as Sweden, England and the United States. We will never contribute to, or encourage, increased consumption. We do not want to be a part of the problem, but a part of the solution. Welcome to Perx.
Executive summary Perx – A new way of looking at the market for refinancing of unsecured debt Perx is a crowdlending platform focused on refinancing of unsecured consumer lending • Highly disruptive pricing (4.5% - 7.9%), combined with strict credit policy, attracts low risk customers looking to refinance existing credit card debt or consumer loans Attractive market • Represents a new asset class for investors that want higher returns than on a savings account and an alternative uncorrelated to stocks opportunity • New debt register in Norway lowers risk further for lenders that are looking for attractive returns on their assets • Strong political support of crowd funding as expressed in the government platform • Initial phase focus on the “high end” of the refinancing market with premium credit score Platform with product • Registered with Norwegian Financial Supervisory Authority (FSA) expansion potential • Possibility for international expansion and product expansion using existing platform and system set-up • A scalable business model with modest capital requirements Scalable and efficient • Low operational and distribution costs • Digital processes and user friendly solutions • CEO with extensive executive and operational experience from BRAbank (co founder), Ikano Bank and SEB Kort Highly competent management team • Highly qualified CFO, also from BRAbank, and COO from DNB, both having highly relevant work experience and BoD • Experienced BoD with substantial knowledge within banking and IT • Perx has developed a strong platform and secured the right management team, and is now ready to intensify marketing and scale-up rapidly Ready for scale-up • Agreement with Storebrand Bank expands the target group and enables ambitious growth plans Perx is ready to disrupt the refinancing market for consumer debt in Norway Page 2
Introduction | Opportunities both in the short and long run About time…! Disruption is finally happening to consumer lending in Norway Numerous industries have already been disrupted by innovative technology driven start-up companies. Airbnb, Über, Netflix and Spotify are examples of companies that have changed consumer behaviour – and lives Crowdfunding in general, and crowd lending in particular, is disrupting a conservative banking industry in line with the ideas of the sharing economy New regulations and recent macro-economic developments caused by the Corona crises make up a perfect back- drop for offering innovative consumer lending solutions, presenting consumers with a real refinancing alternative Perx is ready to offer individuals with consumer debt a better solution “Crowdfunding is, in my opinion, one of the most exciting fields in fintech, and «Crowdlending for consumer loans is a head-on attack on one of the most even though the field has had a slow start in Norway compared to other profitable products in banking. With little to no legacy, crowdlending platforms countries, the segment is now blooming … Whether you as a bank is actively may provide cost-efficient loan origination where both investors receive premium returns as well as providing loans at a lower interest rate to involved or remain on the fence, this area is moving at a pace where it is wise borrowers» to pay attention” Chief Digital Officer, Sbanken Christoffer Hernæs Hernaes.com: State of the nation for crowdfunding in Norway, May 6, 2019 Page 3
Introduction | Opportunities both in the short and long run The corona crises reinforces the need for change in a conservative industry The effects of the corona crises create great growth opportunities for crowd lending Effects of the corona crises Consequences and opportunities Norwegian consumer banks are facing growth Very few customers are granted new loans or challenges as portfolios abroad grow as a result of 1 refinancing regardless of credit rating recent NOK depreciation. Increased financial uncertainty motivates consumers to Perx offers refinancing from 4,5% to 7,9% compared to refinance expensive credit card debt and consumer average consumer loans at 14,98% and credit cards at 2 loans 18,19% 1 Lenders are assumed to be less willing to finance Agreement with Storebrand Bank expands growth loans to private individuals in the short-run. Gradual potential significantly as the bank will handle return to normal activity level, i.e loans on the platform 3 approximately 65% of all applications received for are fully financed within 2-4 days expected by end scoring 2 June. Storebrand expected to handle 80% of all applications Business case adapted to current market conditions 4 in a transition period and temporary weak lender interest Note: 1) Gjeldsregisteret, Feb 29, 2020 2) Data received from Experian Page 4
Introduction | Opportunities both in the short and long run Agreement with Storebrand Bank is a game changer for Perx Stable source of funding, increased market reach and reduced risk for platform lenders With an intention to boost profitability of a 50 BNOK portfolio, mainly made up by mortgages, Storebrand wants • to grow in the area of unsecured lending As a bank, Storebrand Bank has a somewhat higher risk acceptance than Perx. A wider customer segment can • be served through this channel. Applications going to Perx are from customers representing the lowest risk. Expressed as probability of default • between 0,10% - 1,45% Storebrand Bank’s nominal interest rates of 7,90% - 12,90% are «best in class» compared to other banks in the • same risk segments. Distribution of customers between Perx and Storebrand Perx Storebrand Risk category A B C D Interest rate 4.50% 6.50% 7.90% 7.9% - 12.9% Probability of default 0.24% 0.67% 1.45% 1.45% - 9.60% Page 5
Introduction | Opportunities both in the short and long run Forceful and distinct market positioning Perx aims to attack the consumer banks’ practice head on through honest and direct communication Attacking the consumer banks’ practice of high interest rates taking undue advantage of borrowers Main message - Refinancing of existing debt Transparent fee structure of 3% start-up fee combined with interest rates from 4,5% to 7,9% Enables borrowers to significantly cut monthly costs Page 6
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