Q1 2019 PRESENTATION
Q1 2019 PRESENTATION STRONG BUSINESS MODEL CONTINUES TO DELIVER Increased net income Highlights Strong lending − Continued strong +11% +16% development in Payment Solutions SEKm SEKm − 350 Increased competition 35 000 294 29 182 and margin pressure in 300 30 000 265 25 134 Consumer Loans 250 25 000 Norway 200 20 000 − Continued 150 15 000 improvement in 100 10 000 cost/income ratio 50 5 000 0 0 Q1 2018 Q1 2019 Q1 2018 Q1 2019 2
PAYMENT SOLUTIONS STABLE START OF THE YEAR WITH CONTINUED STRONG GROWTH Highlights Digital application Strong lending growth +13% Continued focus on developing – existing partnerships which is driving strong growth 20% SEKm During Q1 more than 30 per cent of – Resurs’s retail finance sales came from 12 000 10 707 e-commerce 9 511 10 000 Launch of new push function for – 80% Resurs Checkout - meets new 8 000 consumption trends, makes the customer journey easier and drives 6 000 conversion > 80 per cent used digital application Invested in Dicopay and will also be in Sweden in Q1 2019 and we see a 4 000 – the checkout solution provider for continuous increase in all of our Dicopay’s mobile platform. With this markets. 2 000 partnership Resurs is entering into a new customer segment 0 Q1 18 Q1 19 3
CONSUMER LOANS CREDIT ENGINE ENABLES STRONG GROWTH IN ALL MARKETS Highlights Digital application Strong lending growth +18% Continued strong growth in all – markets with strongest performance in absolute numbers 20% in Sweden and strongest relative SEKm growth in Finland 18 475 20 000 Increased competition and margin – pressure in Consumer Loans 15 623 16 000 Norway 80% The credit engine delivered strong – 12 000 growth and was launched in Denmark during the quarter >80% of sales in Q1 to existing 8 000 customers in our database. Since most of our sales are to customers who are 4 000 already known in our database, we can achieve higher margins because this 0 knowledge has a positive impact on Q1 18 Q1 19 acquisition costs and credit risk. 4
INSURANCE STABLE DEVELOPMENT AND LAUNCH OF NEW COLLABORATIONS Highlights Premium earned net Technical result Premium earned net up 7 per cent – +7% +8% compared with last year and technical result up 8 per cent compared with last year SEKm SEKm Continued focus on developing – 250 25 23 existing partnerships to increase 215 21 conversion rates 200 200 20 During the quarter, the segment – launched four new partnerships in 150 15 Sweden, Norway and Finland within the business areas Product, Motor 100 and Travel business areas 10 The segment also signed a new – 50 5 strategically important partner in the Security business area, which is 0 0 important for the continued Q1 18 Q1 19 Q1 18 Q1 19 development of that business area 5
Q1 IN FIGURES
Q1 2019 PRESENTATION CONTINUED PROFITABLE GROWTH Increased net income Strong lending +11% +16% SEKm SEKm 350 35 000 294 29 182 300 30 000 265 25 134 250 25 000 200 20 000 150 15 000 100 10 000 50 5 000 0 0 Q1 2018 Q1 2019 Q1 2018 Q1 2019 7
LOAN BOOK EVOLUTION STRONG GROWTH IN BOTH SEGMENTS Consumer Loans Payment Solutions Total +13% +16% +18% SEKbn SEKbn SEKbn 35 12 20 18.5 10.7 10.5 17.4 17.3 10.2 29.2 10.0 16.6 30 28.0 9.5 27.5 15.6 10 26.6 16 25.1 25 8 12 20 6 15 8 4 10 4 2 5 0 0 0 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 8
MARGIN EVOLUTION STRONG INCREASE IN OPERATING INCOME Operating income Highlights NBI margin* – Strong increase in operating income +11% -0.8% – The NBI margin was pts % SEKm negatively impacted by the new conditions in the 1 000 Norwegian market 896 14% 900 12.5% 806 11.7% 800 12% 700 10% 600 8% 500 400 6% 300 4% 200 2% 100 0 0% Q1 18 Q1 19 Q1 18 Q1 19 9 * NBI for bank calculated as Group operating income less reported insurance segment operating income
EVOLUTION ON OPERATING EXPENSES IMPROVEMENTS IN COST INCOME RATIO Operating Expenses Highlights Cost Income Ratio, bank – OPEX increased compared with last year +9% -0.6% mainly driven by marketing initiatives and pts % SEKm IT 400 – The cost/income ratio 363 50% 333 continues to improve 350 40.7% 40.1% year on year based on 300 40% scalable business model 250 30% 200 150 20% 100 10% 50 0 0% Q1 18 Q1 19 Q1 18 Q1 19 10
EVOLUTION ON COST OF RISK SLIGHTLY INCREASED COST OF RISK Credit Losses, Net Highlights Cost of Risk – Credit losses increased mainly following growth +21% +0.1% of the loan book pts % SEKm – The CoR increased slightly following higher 180 debt collection transfers 3% 155 160 2.2% in Consumer Loans 2.1% Norway 140 128 2% 120 100 2% 80 1% 60 40 1% 20 0 0% Q1 18 Q1 19 Q1 18 Q1 19 11
MARGIN EVOLUTION SOLID INCREASE IN RISK ADJUSTED NBI Risk adjusted NBI* Highlights Risk adjusted NBI margin* – Solid increase in risk adjusted NBI +8% -0.8% – Risk adjusted NBI margin pts % SEKm was negatively impacted by the new conditions in 800 the Norwegian market 12% 683 700 10.4% 635 9.6% 10% 600 500 8% 400 6% 300 4% 200 2% 100 0 0% Q1 18 Q1 19 Q1 18 Q1 19 12 * Risk adjusted NBI for bank calculated as Group operating income less reported insurance segment operating income and less credit losses, net
PAYMENT SOLUTIONS +13% -0.2% Loan Book NBI margin Highlights pts SEKm % – Strong lending growth mainly driven by existing 12 000 16% 10 707 14.3% 14.1% retail partners 9 511 14% 10 000 12% – Slightly lower NBI margin 8 000 10% 6 000 8% – Improved CoR compared 6% with same quarter last 4 000 4% year 2 000 2% – Overall higher risk 0 0% Q1 18 Q1 19 Q1 18 Q1 19 adjusted NBI margin -0.6% +0.3% Cost of Risk Risk Adjusted NBI margin pts pts % % 3,0% 14% 12.2% 11.9% 2.4% 12% 2,5% 10% 1.8% 2,0% 8% 1,5% 6% 1,0% 4% 0,5% 2% 0,0% 0% Q1 18 Q1 19 Q1 18 Q1 19 13
CONSUMER LOANS +18% -1.1% Loan Book NBI margin Highlights SEKm % – Strong growth in lending 18 475 with contributions from 20 000 14% 11.6% all markets 15 623 12% 10.5% 15 000 10% – The NBI margin was 8% negatively impacted by 10 000 6% the new conditions in the 4% Norwegian market 5 000 2% – The CoR increased 0 0% following higher debt Q1 18 Q1 19 Q1 18 Q1 19 collection transfers in the Norwegian market +0.5% -1.6% Cost of Risk Risk Adjusted NBI margin – Lower risk adjusted NBI pts pts % % margin driven by lower 3,0% 12% NBI margin and higher 9.7% 2.4% CoR 2,5% 10% 8.1% 1.9% 2,0% 8% 1,5% 6% 1,0% 4% 0,5% 2% 0,0% 0% Q1 18 Q1 19 Q1 18 Q1 19 14
INSURANCE +7% +8% Premium Earned, net Technical Result Highlights SEKm SEKm – Premium earned, net up 7 per cent compared with 250 27 215 23 200 last year 21 200 20 – Strong increase in 150 technical result up 8 per 13 cent compared with last 100 year 7 50 – Improved combined ratio 0 0 Q1 18 Q1 19 Q1 18 Q1 19 -0.2% Combined ratio pts % 100% 90.3% 90.1% 80% 60% 40% 20% 0% Q1 18 Q1 19 15
CAPITAL POSITION STRONG CAPITAL POSITION Highlights 15.1% 16% – Strong CET1 and total 14.7% capital ratios well above 13.0% 14% 1.3% 1.9% requirement and targets – SEK 300 million of 12% 2.2% subordinated Tier 2 bonds were issued during 10% 1.6% the quarter 8% 13.4% 13.1% 6% 9.2% 4% 2% 0% Capital requirements 31 Dec 2018 31 Mar 2019 Tier 2 Capital AT 1 CET 1 16
FUNDING EVOLUTION CONTINUED DIVERSIFICATION Funding total ex. equity Funding mix Highlights – During last twelve months further SEKm diversification of funding with SEK 100% 35 000 1 200 million issued under the MTN 30 756 16% 16% 16% 17% 18% programme 28 410 30 000 27 985 26 915 10% 11% 11% 10% 10% 25 186 25 000 20 000 50% 15 000 73% 73% 73% 74% 72% 10 000 5 000 0 0% Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Deposit ABS MTN 17
MEDIUM TERM FINANCIAL TARGETS FINANCIAL TARGET PERFORMANCE Metric Target Jan-Mar 2019 Annual lending growth > 10% p.a. 16% In line with recent performance Risk adjusted NBI margin 9.6% (c. 10% – 12%) C/I before credit losses excl. < 40% in the Insurance and adjusted for 40.1% medium term nonrecurring costs Return on equity (RoTE) adjusted for ~ 30% in the medium term 33.5% nonrecurring costs* Payout ratio** > 50% n/a Common Equity Tier 1 ratio/ >11.5% CET1 13.1% CET1 Total Capital Ratio 14.0% Total Capital 15.1% Total Capital *Based on Capital Employed at the boards target CET1 Ratio ** SEK180m provisioned as dividend in CET1 calculation 18
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