Q2 2019 PRESENTATION Q2 2019 PRESENTATION STRONG BUSINESS MODEL - - PowerPoint PPT Presentation

Q2 2019 PRESENTATION

STRONG BUSINESS MODEL CONTINUES TO DELIVER GROWTH

Strong lending Increased net income

+8%

SEKm

289 313

50 100 150 200 250 300 350 Q2 2018 Q2 2019

+14%

SEKm

26 626 30 323

5 000 10 000 15 000 20 000 25 000 30 000 35 000 Q2 2018 Q2 2019 Q2 2019 PRESENTATION

Highlights

− Continued strong development in Payment Solutions − Margin pressure in Consumer Loans mainly impacted by the conditions in the Norwegian Consumer Loans market − Continued improvement in cost/income ratio

2

STRONG GROWTH AND CONTINUED STRATEGIC PARTNERSHIPS

Highlights

– Continued focus on developing existing partnerships driving strong growth – During Q2 more than 30 per cent of Resurs’s retail finance sales came from e-commerce – Our two leading retail finance-partners Mio and Bauhaus chose to continue and further develop their strategic partnerships with Resurs during the quarter – The push function is now a natural part

• f Resurs's offering and has been met

with great interest from both existing retail finance partners and the market as a whole

Strong lending growth

SEKm

+11%

10 045 11 146

2 000 4 000 6 000 8 000 10 000 12 000 Q2 18 Q2 19

Digital application

80% 20%

> 80 per cent used digital application in Sweden in Q2 2019 and we see a continuous increase in all of our markets.

PAYMENT SOLUTIONS 3

POSITIVE DEVELOPMENT DESPITE NORWEGIAN CHALLENGES

Highlights

– Continued healthy growth in all markets with strongest performance in absolute numbers in Sweden and strongest relative growth in Finland – The Norwegian market remained challenging during the quarter. As planned Resurs carried out a number of measures in the form of interest rate increases, cost efficiency improvements but also a number of organisational changes – After the law came into force in mid-May, we believe the Norwegian Consumer Loan market is now to a much greater extent characterised by competition on equal terms

Strong lending growth

SEKm

+16%

16 581 19 176

4 000 8 000 12 000 16 000 20 000 Q2 18 Q2 19

Utilising the database

80% 20%

> 80 per cent of sales in Q2 to existing customers in our database. Since most

• f our sales are to customers who are

already known in our database, we can achieve higher margins because this knowledge has a positive impact on acquisition costs and credit risk.

CONSUMER LOANS 4

STABLE DEVELOPMENT AND LAUNCH OF NEW COLLABORATIONS

Highlights

– Premium earned net up 7 per cent compared with last year and technical result up 14 per cent compared with last year – Continued focus on developing existing partnerships to increase conversion rates – During the quarter, the segment acquired a company that previously provided Insurance with car guarantee products. The acquisition provides more opportunities to further develop business in the Motor business area – Another external partner was signed in the business area Security

Technical result Premium earned net

+7%

SEKm

205 219

50 100 150 200 250 Q2 18 Q2 19

+14%

SEKm

19 22

5 10 15 20 25 Q2 18 Q2 19 INSURANCE 5

Q2 IN FIGURES

CONTINUED PROFITABLE GROWTH

Strong lending Net income

+8%

SEKm

289 313

50 100 150 200 250 300 350 Q2 2018 Q2 2019

+14%

SEKm

26 626 30 323

5 000 10 000 15 000 20 000 25 000 30 000 35 000 Q2 2018 Q2 2019 Q2 2019 PRESENTATION 289 306 284 294 313 50 100 150 200 250 300 350 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19

Net income

SEKm 7

STRONG GROWTH IN BOTH SEGMENTS

Total Payment Solutions

+11%

SEKbn

+14%

SEKbn LOAN BOOK EVOLUTION

26.6 27.5 28.0 29.2 30.3

5 10 15 20 25 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19

10.0 10.2 10.5 10.7 11.1

2 4 6 8 10 12 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19

16.6 17.3 17.4 18.5 19.2

4 8 12 16 20 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19

+16%

Consumer Loans

SEKbn 8

STABLE INCREASE IN OPERATING INCOME

SEKm

Operating income

* NBI for bank calculated as Group operating income less reported insurance segment operating income

%

NBI margin* Highlights

– Stable increase in

• perating income

– The NBI margin decreased compared with Q2-18 and was negatively impacted mainly by the conditions in the Norwegian Consumer Loans market – The NBI margin was stable compared with Q1-19

MARGIN EVOLUTION 868 913 1 673 1 809 400 800 1200 1600 2000 200 400 600 800 1 000 1 200 Q2 18 Q2 19 YTD 18 YTD 19 12.7% 11.6% 12.6% 11.6% 0% 2% 4% 6% 8% 10% 12% 14% Q2 18 Q2 19 YTD 18 YTD 19

Q2

+5%

YTD

+8%

Q2 YTD

• 1.1%

pts

• 1.0%

pts

9

SEKm %

Highlights

– OPEX was lower than Q2-18 mainly following strict cost control in Norway to compensate for lower NBI-margin – The cost/income ratio continues to improve based on scalable business model

366 361 699 724 200 400 600 800 100 200 300 400 500 Q2 18 Q2 19 YTD 18 YTD 19 41.6% 39.0% 41.2% 39.6% 0% 11% 22% 33% 44% Q2 18 Q2 19 YTD 18 YTD 19

Q2

• 2%

YTD

+4%

Q2 YTD

• 2.6%

pts

• 1.6%

pts

STRONG IMPROVEMENT IN COST INCOME RATIO

Operating Expenses Cost Income Ratio, bank

EVOLUTION OF OPERATING EXPENSES 10

SEKm %

Highlights

– Credit losses increased mainly following growth

• f the loan book

– Stable cost of risk with somewhat higher debt collection transfers in Consumer Loans Norway while lower credit losses in Payment Solutions

128 148 256 302 50 100 150 200 250 300 350 50 100 150 200 250 Q2 18 Q2 19 YTD 18 YTD 19 2.0% 2.0% 2.0% 2.1% 0% 1% 1% 2% 2% 3% Q2 18 Q2 19 YTD 18 YTD 19

Q2

+16%

YTD

+18%

Q2 YTD

0.0%

pts

+0.1%

pts

STABLE COST OF RISK

Credit Losses, Net Cost of Risk

EVOLUTION OF COST OF RISK 11

SEKm

* NBI for bank calculated as Group operating income less reported insurance segment operating income

%

Highlights

– Stable increase in risk adjusted NBI – The risk adjusted NBI margin was negatively impacted mainly by the conditions in the Norwegian market – The risk adjusted NBI margin was stable compared with Q1-19

692 712 1 327 1 394 300 600 900 1200 1500 200 400 600 800 1 000 1 200 Q2 18 Q2 19 YTD 18 YTD 19 10.7% 9.6% 10.6% 9.6% 0% 2% 4% 6% 8% 10% 12% Q2 18 Q2 19 YTD 18 YTD 19

Q2

+3%

YTD

+5%

Q2 YTD

• 1.1%

pts

• 1.0%

pts

STABLE DEVELOPMENT IN RISK ADJUSTED NBI

Risk adjusted NBI* Risk adjusted NBI margin*

MARGIN EVOLUTION 12

SEKm

Loan Book

%

NBI margin

10 045 11 146 2 000 4 000 6 000 8 000 10 000 12 000 Q2 18 Q2 19

Highlights

– Strong lending growth mainly driven by existing retail partners – Lower NBI margin following strong growth by retailers with lower margins – Improved CoR compared with same quarter last year following better underlying credit quality – Overall higher risk adjusted NBI margin

PAYMENT SOLUTIONS

+11%

• 0.4%

pts

%

Risk Adjusted NBI margin

+0.2%

pts

%

Cost of Risk

• 0.6%

pts

14.5% 13.9% 14.3% 13.9% 0% 3% 6% 9% 12% 15% Q2 18 Q2 19 YTD 18 YTD 19 2.0% 1.4% 2.2% 1.6% 0,0% 0,5% 1,0% 1,5% 2,0% 2,5% Q2 18 Q2 19 YTD 18 YTD 19 12.5% 12.5% 12.1% 12.3% 0% 3% 6% 9% 12% 15% Q2 18 Q2 19 YTD 18 YTD 19

13

SEKm

Loan Book

%

NBI margin

16 581 19 176 5 000 10 000 15 000 20 000 Q2 18 Q2 19

Highlights

– Continued healthy growth in all markets with strongest performance in absolute numbers in Sweden and strongest relative growth in Finland – The NBI margin decreased and was mainly negatively impacted by the conditions in the Norwegian Consumer Loans market – The CoR increased compared with Q2-18 following higher debt collection transfers in the Norwegian market, and was stable compared with Q1-19 – Overall lower risk adjusted NBI margin

CONSUMER LOANS

+16%

• 1.3%

pts

%

Risk Adjusted NBI margin

• 1.7%

pts

%

Cost of Risk

+0.4%

pts

11.8% 10.3% 11.7% 10.4% 0% 3% 6% 9% 12% 15% Q2 18 Q2 19 YTD 18 YTD 19 1.9% 2.3% 1.9% 2.3% 0,0% 0,5% 1,0% 1,5% 2,0% 2,5% Q2 18 Q2 19 YTD 18 YTD 19 9.8% 8.0% 9.8% 8.1% 0% 3% 6% 9% 12% 15% Q2 18 Q2 19 YTD 18 YTD 19

14

SEKm

Premium Earned, net

SEKm

Technical Result Highlights

– Premium earned, net up 7 per cent compared with last year – Strong increase in technical result up 11 per cent compared with last year – Improved combined ratio

INSURANCE

+7%

%

Combined ratio

• 0.4%

pts

+11%

205 219 405 434 100 200 300 400 500 50 100 150 200 250 300 350 Q2 18 Q2 19 YTD 18 YTD 19 19 22 40 45 10 20 30 40 50 5 10 15 20 25 30 Q2 18 Q2 19 YTD 18 YTD 19 91.3% 90.6% 90.8% 90.4% 0% 20% 40% 60% 80% 100% Q2 18 Q2 19 YTD 18 YTD 19

15

STRONG CAPITAL POSITION

9.2% 13.4% 13.1% 1.6% 2.2% 1.3% 1.9% 0% 2% 4% 6% 8% 10% 12% 14% 16%

Capital requirements 31 Dec 2018 30 Jun 2019

Tier 2 Capital AT 1 CET 1

13.0% 14.7% 15.0%

Highlights

– Strong CET1 and total capital ratios well above requirement and targets

CAPITAL POSITION 16

CONTINUED DIVERSIFICATION

SEKm

Funding total ex. equity Funding mix Highlights

– Further diversification of funding in the last twelve months with SEK 1 300 million issued under the MTN programme

26 915 27 985 28 410 30 756 30 591

5 000 10 000 15 000 20 000 25 000 30 000 35 000 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 73% 72% 73% 74% 75% 11% 10% 10% 10% 10% 16% 18% 17% 16% 15% 0% 50% 100% Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Deposit ABS MTN FUNDING EVOLUTION 17

FINANCIAL TARGET PERFORMANCE

18

*Based on Capital Employed at the boards target CET1 Ratio ** SEK360m provisioned as dividend in CET1 calculation

MEDIUM TERM FINANCIAL TARGETS

Metric Target Jan-Jun 2019

Annual lending growth > 10% p.a. 14% Risk adjusted NBI margin In line with recent performance (c. 10% – 12%) 9.6% C/I before credit losses excl. Insurance and adjusted for nonrecurring costs < 40% in the medium term 39.6% Return on equity (RoTE) adjusted for nonrecurring costs* ~ 30% in the medium term 34.1% Payout ratio** > 50% n/a Common Equity Tier 1 ratio/ Total Capital Ratio >11.5% CET1 >14.0% Total Capital 13.1% CET1 15.0% Total Capital

THANK YOU!