Interim Presentation | 1 th quarter 2018 | 18 April 2018 Table - - PowerPoint PPT Presentation

Interim Presentation | 1th quarter 2018 | 18 April 2018

2

Table of contents

Overview

1st quarter

1

Improved profitability

2 3

Outlook and priorities

3

Monobank

Q1 Highlights

• Strongest loan growth to date NOK 523

mill

• Net profit NOK 10.1 mill
• Credit card platform ready to launch
• Deposit funding agreement with Raisin
• perative in Germany and Austria
• Forward Flow agreement with Axactor

concluded, loans past due 90 days will be irrevocably sold

NOK (million)

Growth in net loans Profit after tax

• 6.5
• 3.9

0.5 1.7 1.8 3.0 5.7 7.4 10.1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 '18 NOK (million) 223 186 179 216 322 284 421 485 523 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 '18

4

Overview financial figures

• Total income increased with 21%
• Positive impact by Finnish operation
• Solid quarter in the Norwegian
• peration
• Cost control
• Staff costs unchanged
• Increased marketing expenses

FINANCIAL STATEMENT 2018 In NOK thousands Q1 Q4 Q3 Q2 Net interest income 68 761 55 910 44 582 37 108

• Norway

54 905

• Finland

13 856 Net comission and fees

• 4 503
• 2 689
• 3 125
• 2 603

Total income 64 259 53 220 41 457 34 505 Income/(loss) from trading activities 2 136

• 459
• 279
• 246

Staff costs 7 793 7 965 6 862 6 162 Other administrative expenses 24 234 19 882 13 806 14 284

• of which marketing expense

14 598 11 311 7 705 7 992 Depreciation and amortisation 2 131 1 379 1 999 1 500 Total operating costs 34 158 29 227 22 666 21 946 Profit / (loss) before impairment losses 32 237 23 536 18 511 12 313 Impairment releases/(losses)

• 19 057
• 13 834
• 10 946
• 8 277

Operating profit / (loss) before tax 13 180 9 702 7 565 4 036 Tax charge

• 3 122
• 2 306
• 1 857
• 1 009

Profit / (Loss) for the period 10 058 7 396 5 708 3 027 2017

5

Solid growth

Net loans

259 445 624 840 1,162 1,446 1,867 2,352 2,876 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 '18

• Increased net loans with 22%
• 20% of net loans from Finland

6

Table of contents

Overview

1st quarter

1

Improved profitability

2 3

Outlook and priorities

7

Improved profitability

Net interest margin

• High growth and increased margins
• Improved risk models – better customer

selection

• Margins in Finland are on the same level

as in Norway

• Lower funding costs in Finland
• Lower customer acquisition costs

15.7 % 15.2 % 14.9 % 14.8 % 14.6 % 14.3 % 14.2 % 14.3 % 14.4 % 12.3 % 12.7 % 12.7 % 12.8 % n.a. 8.5 % 8.1 % 8.8 % 8.7 % 8.7 % 8.0 % 7.7 % 7.8 % Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 '18 Annualized loan yield (Norway) * Annualized loan yield (Finland) * Annualized NIM ***

Yields and margins

Note(*): yield = weighted average effective annual yield || Note(**): actual end of quarter annual rate

8

Improved profitability

Scalability

• Solid cost control
• Optimising marketing activities in different

channels

• Highly automatised processes

per cent (%)

Cost / Income ratio *

72% 64% 55% 55% 53% 43% 40% 36% 34% 30% Q1 Q2 Q3 Q4 Q1 2017 '18 Cost / Income Ratio Cost (excl. marketing) / Income Ratio

9

Improved profitability

Non performing loans

Note(*): non-performing loan ratio = >PD90 / gross loans

• Development according to plan
• Forward Flow agreement with Axactor will

enhance further predictability on future loan losses

• Confirms Monobanks provision levels

Non-performing loan ratio *

n.a. n.a. 3.7 % 4.8 % 4.9 % 6.4 % 7.1 % 7.9 % 8.5 % Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 '18

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Table of contents

Overview

1st quarter

1

Improved profitability

2 3

Outlook and priorities

11

Scalable and adaptable business model

12

Preparing for tomorrows technology

Agile and adaptable – key for survival

13

The Monobank card platform

Generating value for customers

Digital and connected with the customer Hyper customized to the customer Instant

14

Cooperation with European deposit distribution partner

A strong partner with large potential – first step into the European Fin Tech space

• Leading deposit provider to privat individuals in the

European Economic Area

• Operating in more than 30 countries
• More than 100,000 customers, mainly in Germany, France,

Austria and Spain

• Allow to introduce Monobank to the European market and

raise funding in other currencies

• Provide first experience with European market and fin tech

projects

Main markets

15

Strategy going forward

Continue to execute underlying business plan and pursue strategic add-ons

Profitable

• rganic growth

Multi-country

• peration

Credit card platform

• High demand and attractive margins in Norway and Finland enables high organic growth
• Consumer loans year-end 2018 of approximately NOK 4.1 bn
• Forward flow agreement operative in Q2
• Efficient and scalable operation
• Operationalize and fine-tune the Finnish consumer loan portfolio
• Expand eurofunding through Rasin to Spain and France
• Further investigate other potential markets
• Launch of Monobank brand in May
• Launch of joint credit card with Widerøe and Eurobonus in September
• Further investigation of other strategic partners

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Appendix

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1,270 2,063 2,808 3,807 5,244 6,667 8,955 11,484 14,356 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 '18

High and profitable organic growth

Note(*): ROE = 4x profit after tax in quarter / average total equity in quarter

Net loans

NOK (million) NOK (million)

Confirms business model

Number of loan customers

number (#)

Profit after tax Annualized return on equity *

per cent (%)

Growth in net loans Growth in number of loan customers

NOK (million) number (#) 1,113 793 745 999 1,437 1,423 2,288 2,529 2,872 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 '18 259 445 624 840 1,162 1,446 1,867 2,352 2,876 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 '18 223 186 179 216 322 284 421 485 523 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 '18

• 6.5
• 3.9

0.5 1.7 1.8 3.0 5.7 7.4 10.1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 '18 n.a.

• 9.9 %

1.3 % 2.7 % 2.2 % 3.6 % 6.7 % 6.8 % 7.6 % Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 '18

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Increasing top-line

Satisfying yields and margins – stabilizing yields in Norway

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

Total income Key yields and margins

NOK (million) per cent (%) 0.5

• 0.6
• 0.8
• 1.0
• 1.7
• 2.6
• 3.1
• 2.7
• 4.5

4.7 11.7 15.2 22.7 29.9 37.1 44.6 55.9 68.8 5.3 11.1 14.5 21.7 28.2 34.5 41.5 53.2 64.3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 '18 Net comission and fee income Net interest income 15.7 % 15.2 % 14.9 % 14.8 % 14.6 % 14.3 % 14.2 % 14.3 % 14.4 % 12.3 % 12.7 % 12.7 % 12.8 % 2.0 % 1.8 % 1.8 % 1.9 % 1.9 % 2.0 % 2.1 % 2.0 % 1.9 % 1.3 % 1.1 % 1.2 % 0.9 % 0.8 % 0.7 % 0.8 % 0.8 % 0.9 % n.a. 8.5 % 8.1 % 8.8 % 8.7 % 8.7 % 8.0 % 7.7 % 7.8 % Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 '18 Annualized loan yield (Norway) * Annualized loan yield (Finland) * Annual deposit rate ** Annualized liquidity yield * Annualized NIM ***

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Efficient and scalable operations – short time to market

Note(*): cost / income ratio = operating expenses (incl. or excl. marketing) / total income

per cent (%)

Operational expenses

NOK (million)

Cost / Income ratio *

3.5 3.6 2.2 6.5 5.5 6.2 6.9 8.0 8.0 3.6 4.5 3.4 4.3 5.6 6.3 6.1 8.6 9.6 4.2 4.2 3.6 4.6 8.1 8.0 7.7 11.3 14.6 0.6 0.6 0.5 0.3 1.1 1.5 2.0 1.4 2.1 12.0 12.9 9.7 15.8 20.3 21.9 22.7 29.2 34.2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 '18 Staff costs Other administrative expenses Marketing expenses Depreciation and amortisation n.a. 116% 67% 73% 72% 64% 55% 55% 53% n.a. 78% 42% 51% 43% 40% 36% 34% 30% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 '18 Cost / Income Ratio Cost (excl. marketing) / Income Ratio

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Customer segmentation

Continuous development and tuning of scorecards to navigate the portfolio

3% 32% 65% Primary school Secondary school Higher education 26% 27% 29% 15% 3% <= 34 years 35-44 years 45-54 years 55-64 years >= 65 years 69% 31% Home owner Tenant

43 years

4% 22% 36% 38% NOK 250k-349k NOK 350k-499k NOK 500k-749k >= NOK 750k Age Income Education Housing Average customer Norway Finland

NOK 630k Higher education Home owner 44 years NOK 465k Higher education Home owner

20% 29% 31% 16% 4% <= 34 years 35-44 years 45-54 years 55-64 years >= 65 years 25% 31% 30% 14% NOK 250k-349k NOK 350k-499k NOK 500k-749k >= NOK 750k 12% 8% 80% Primary school Secondary school Higher education 75% 25% Home owner Tenant

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Satisfactory loan losses and credit quality

Portfolio risk under control through diligent credit risk management and fine-tuning of scorecards

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

Gross loans past due (# of days)

NOK (million) NOK (million)

Provisions Loan losses

NOK (million)

Total provision ratio *** Loan loss ratio * Non-performing loan ratio **

per cent (%) per cent (%) per cent (%) n.a. n.a. n.a. 2.94% 2.24% 2.23% 2.23% 2.38% 2.58% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 '18 23.5 40.7 58.7 94.7 135.7 189.1 251.7 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 '18 31-60 PD 61-90 PD > 90 PD n.a. n.a. 3.7 % 4.8 % 4.9 % 6.4 % 7.1 % 7.9 % 8.5 % Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 '18 2.6 5.7 9.9 13.5 18.4 26.3 37.3 50.7 69.5 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 '18 n.a. n.a. n.a. 33.2 % 31.4 % 27.8 % 27.5 % 26.8 % 27.6 % Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 '18 1.9 3.1 4.2 3.7 4.9 8.3 10.9 13.8 19.1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 '18

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20.7 % 17.8 % 31.8 % 20.5 % 17.7 % 27.8 % 21.5 % 21.6 % 20.0 % 24.2 % 21.3 % Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 '18 CET1 T1 * T2 *

Robust regulatory capital structure

Important to plan ahead to position the company for continued profitable organic growth

Note(*): Q1 2018 NOK 41m Tier 1 (1.5% of RWA) and NOK 50m Tier 2 (2.0% of RWA) capital counts towards MONO’s capital adequacy ratios || Note(**): capital requirements (Pillar I) are weighted between Norway and Finland

Risk-weighted assets Regulatory capital Reported capital adequacy **

CET1 Capital

• Req. = 13.6%

Total Capital

• Req. = 17.1 %

per cent (%) NOK (million) NOK (million) 483 492 35 41 47 50 144 140 139 309 306 302 363 564 583 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 '18 CET1 T1 * T2 * 453 683 785 1,107 1,423 1,401 1,819 2,333 2,765 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 '18 75% loans 100% loans Other RWA

23

159 156 157 331 335 339 345 522 534 98 98 524 638 903 1,138 1,556 2,043 2,652 3,057 405 680 794 1,235 1,472 1,895 2,487 3,272 3,689 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 '18 Equity Subordinated loan Deposits by customers

Stable funding and adequate liquidity

Note(*): deposit ratio = deposits / net loans

Easy access to low-cost NOK deposit funding – Surplus liquidity invested in low-risk assets

Liquidity Funding

NOK (million)

Key ratios

101 158 110 301 220 325 489 758 625 28 49 28 51 35 52 64 56 65 129 208 138 352 255 377 552 814 691 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 '18 Debt securities Loans and advances to banks NOK (million) n.a. 118% 102% 108% 98% 108% 109% 113% 106% n.a. 169% 159% 168% 153% 158% 153% 167% 160% n.a. 147% 135% 152% n.a. 172% 133% 242% 206% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 '18 Deposit ratio * NSFR LCR

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Detailed financial figures

Quarterly income statement and balance sheet

Balance Sheet Income Statement

25

Important Information

Disclaimer

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This presentation (the “Presentation”) has been produced by Monobank ASA (the “Company”, the “Bank”, “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”, “projects”, “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

• r 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 LAWS AND 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 (expressed 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 17 April 2018. 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.