Interim Presentation | 4rd quarter 2018 | 8 February 2019 · Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2...
Transcript of Interim Presentation | 4rd quarter 2018 | 8 February 2019 · Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2...
Interim Presentation | 4rd quarter 2018 | 8 February 2019
2
Profit after tax
840
2,352
3,706
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2017 2018
Monobank
Q4 2018 highlights
NOK million
Net loans
1.7 1.8 3.05.7 7.4
10.113.8 15.5
-8.8
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2017 2018
NOK million
Forward flow
Growth driven by a more conservative approach in Norway
• Net loan balance up 7.4% to NOK 3 706 million
• Net interest income of NOK 95 million, up 10 % vs Q3’18 and
70 % vs Q4’17
• Growth level reflects reduced marketing spending
• More conservative approach in Norway due to regulatory
environment
Profitability negatively affected by NOK 66 million in loan loss
provisions due to:
• Increased data and portfolio insight
• Reserve strengthening in Finland
• One-off of NOK 11 million related to identified error in existing
model
• Adjusted model will additionally contribute to somewhat higher
loan loss provisions going forward
3
Financials
4
Key yields and margins
23
30
37
45
56
69
8286
95
22
28
35
41
53
64
75 76
81
Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18
Net interest income Total income Net profit after tax
14.8 % 14.6 % 14.3 % 14.2 % 14.3 % 14.4 % 14.4 % 14.4 % 14.3 %
12.3 %12.7 % 12.7 % 12.8 % 12.8 % 12.8 % 12.6 %
8.8 % 8.7 % 8.7 %8.0 %
7.7 % 7.8 %8.3 %
7.6 % 7.7 %
Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18
Annualized loan yield (Norway) * Annualized loan yield (Finland) *
Annualized NIM ***
Continued high and stable margins
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
Income and profit after tax
Per cent (%) NOK (million)
Total income impacted by loan loss provisions and conservative approach in Norway
5
6.5 5.5 6.2 6.9 8.0 8.0
12.710.6 11.4
4.3 5.66.3 6.1
8.6 9.6
9.6
7.9
11.9
4.6
8.18.0 7.7
11.3
14.6
12.0
9.9
4.8
0.3
1.11.5 2.0
1.4
2.1
2.4
2.5 3.8
15.8
20.3
21.922.7
29.2
34.2
36.7
30.931.9
Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18
Staff costs Other administrative expenses
Marketing expenses Depreciation and amortisation
73% 72%
64%
55% 55% 53%49%
40% 39%
51%
43%40%
36%34%
30%33%
27%
33%
0%
20%
40%
60%
80%
100%
120%
Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18
Cost / Income Ratio Cost (excl. marketing) / Income Ratio
Efficient operations with economies of scale
Note(*): cost / income ratio = operating expenses (incl. or excl. marketing) / total income
Operational expenses
NOK (million)
Cost / Income ratio *
Reduced marketing expenses due to regulatory uncertainty
Per cent (%)
6
Loan losses and credit quality
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) ProvisionsLoan losses
NOK (million)
Total provision ratio ***Loan loss ratio * Non-performing loan ratio **
Per cent (%)
2.9 %
2.2 %
2.2 % 2.2 % 2.4 %2.6 % 2.7 %
2.9 %
4.2 %
Q4'16
Q1'17
Q2'17
Q3'17
Q4'17
Q1'18
Q2'18
Q3'18
Q4'18
40.7 58
.7
94.7
135.
7 189.
1 251.
7
332.
5
356.
6 436.
1
Q4'16
Q1'17
Q2'17
Q3'17
Q4'17
Q1'18
Q2'18
Q3'18
Q4'18
31-60 PD 61-90 PD > 90 PD
4.8 % 4.9 %
6.4 %7.1 %
7.9 %8.5 %
10.1 % 10.1 %11.3 %
Q4'16
Q1'17
Q2'17
Q3'17
Q4'17
Q1'18
Q2'18
Q3'18
Q4'18
13.5 18.426.3
37.350.7
69.5
86.4 91.9
138.5
Q4'16
Q1'17
Q2'17
Q3'17
Q4'17
Q1'18
Q2'18
Q3'18
Q4'18
4 58 11 14
19 1925
66
Q4'16
Q1'17
Q2'17
Q3'17
Q4'17
Q1'18
Q2'18
Q3'18
Q4'18
33% 31%28% 27% 27% 28% 26% 26%
32%
Q4 16
Q1 17
Q2 17
Q3 17
Q4 17
Q1 18
Q2 18
Q3 18
Q4 18
NOK (million) NOK (million)
Per cent (%) Per cent (%)
Note(*): loan loss ratio = LTM loan losses / average net loans ) || Note(**): non-performing loan ratio = >PD90 / gross loans || Note(***): provision ratio = total provisions / >PD90
Negatively affected by one-offs and increased data and portfolio insight
7
903
1,13
8
1,55
6 2,04
3 2,65
2
3,05
7
3,43
4 4,23
9
4,12
5
331 33
5
339
345
522
534
548
563
609
1,2351,472
1,895
2,487
3,272
3,689
4,081
4,901 4,833
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2017 2018
Deposits by customers Subordinated loan Equity
Easy access to low-cost deposit funding
Note(*): deposit ratio = deposits / net loans
LiquidityFunding
NOK (million)
Key ratios
301
220 32
5
489
757
625 68
7
1,22
9
852
51
35
52
64
56
6550
84
109
352
255
377
552
813
691737
1,313
961
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2017 2018
Debt securities Loans and advances to banks
NOK (million)
108% 98% 108% 109% 113% 106% 107%123% 111%
168%153% 158% 153%
167% 160% 163%181% 172%
152%168% 172%
133%
242%
206% 214%
701%717%
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2017 2018
Deposit ratio * NSFR LCR
8
16.1
%
27.8
%
21.5
%
21.6
%
22.0
% 25.0
%
21.4
%
20.6
%
19.9
%
19.1
%
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2017 2018
CET1 T1 * T2 *
Regulatory capital structure
Note(*): As of Q3 2018 NOK 46m 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 assetsRegulatory capital Reported capital adequacy **
CET1 Capital
Req. = 13.4%
Total Capital
Req. = 16.9 %
per cent (%)NOK (million) NOK (million)
309 306 302
401
583 592604
615641
-
100
200
300
400
500
600
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2017 2018
CET1 T1 * T2 *
785
1,10
7
1,42
3
1,40
1
1,81
9
2,33
3
2,76
5 2,94
0 3,08
8 3,35
6
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2016 2017 2018
75% loans 100% loans Other RWA
Note(*): As of Q4 2018 NOK 50m 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
Pro forma Q4 2018 CET1 ratio of ~25% - fully financed to reach NOK 10bn after merger
9
Strategy and
operations
10
Multichannel distribution – Replicating Norwegian formula abroad from head
quarter in Norway….
Note(*): current loan portfolio | Note(**): no live relationships with co-branding partners since inception
Monobank call center
www.monobank.no
+ potential new partners
Monobank brand Third party agents Co-branding partners
Brand
distribution
volume *24%
Co-branding
distribution
volume **
Not yet
applicable
Agent
distribution
volume *76%
11
Attractive co-branding partner offering
Monobank offering Teaming up for increased value enhancing solutions
MONOBANK MONO PAY
Credit card combined platform
PARTNER BRANDED
FRONT-END
INSURANCE PROGRAM
Legehjelp 24 – Qualified nurses
and doctors available 24/7
Travel insurance
TYPICAL POTENTIAL
PARTNERS
• Travel agencies
CUSTOMER VALUE
Ability to offer relevant
customer value towards
the customer
CO-OPERATION
Potential to increase
co-operation (credit card
and POS finance)
12
Appendix
13
Customer segmentationContinuous development and tuning of scorecards to navigate the portfolio
3%
31%
66%
Primary school
Secondary school
Higher education
25%
28%29%
15%3%
<= 34 years 35-44 years
45-54 years 55-64 years
>= 65 years
68%
32%
Home owner
Tenant
43 years4%
21%
35%
40%
NOK 250k-349k
NOK 350k-499k
NOK 500k-749k
>= NOK 750k
Age Income Education Housing Average customer
No
rway
Fin
lan
d
NOK 643k
Higher education
Home owner
43 years
NOK 475k
Higher education
Home owner
23%
30%29%
15%3%
<= 34 years 35-44 years
45-54 years 55-64 years
>= 65 years
20%
35%29%
16%
NOK 250k-349k
NOK 350k-499k
NOK 500k-749k
>= NOK 750k
12%
9%
79%
Primary school
Secondary school
Higher education
71%
29%
Home owner
Tenant
14
Detailed financial figuresQuarterly income statement and balance sheet
Balance SheetIncome Statement
Total Q4 Q3 Q2 Q1
In NOK thousands
Interest income 403,642 115,206 105,680 98,055 84,702
Interest expenses 71,996 20,149 19,549 16,358 15,940
Net interest income 331,646 95,057 86,131 81,697 68,761
Income comissions and fees 25,970 6,255 6,975 6,255 6,485
Expenses comissions and fees 60,456 19,875 16,706 12,888 10,988
Total income 297,161 81,438 76,400 75,064 64,259
Income/(loss) from trading activities and currency 4,136 3,530 -348 -1,182 2,136
Staff costs 42,423 11,354 10,602 12,675 7,793
Other administrative expenses 80,361 16,711 17,753 21,663 24,234
- of which marketing expense 41,393 4,819 9,958 12,018 14,598
Depreciation and amortisation 10,855 3,847 2,513 2,364 2,131
Total operating costs 133,640 31,912 30,868 36,702 34,158
Profit / (loss) before impairment losses 167,658 53,056 45,184 37,181 32,237
Impairment releases/(losses) -128,435 -66,029 -24,524 -18,825 -19,057
Operating profit / (loss) before tax 39,223 -12,973 20,660 18,356 13,180
Tax charge -8,655 4,198 -5,168 -4,563 -3,122
Profit / (Loss) for the period 30,567 -8,776 15,492 13,793 10,058
2018
Total Q4 Q3 Q2 Q1
In NOK thousands
Assets
Loans and advances to banks 108,790 108,790 83,630 49,906 65,439
Loans and advances to customers 3,844,229 3,844,229 3,540,868 3,298,138 2,945,025
Provision for impairment losses 138,493 138,493 91,882 86,419 69,470
Net loans and advances to customers 3,705,736 3,705,736 3,448,985 3,211,719 2,875,555
Debt securities 851,879 851,879 1,228,593 686,825 625,089
Deferred tax asset 2,791 2,791 0 907 5,470
Other intangible assets 67,064 67,064 62,119 55,669 47,157
Property, plant and equipment 2,681 2,681 2,104 2,072 2,094
Financial derivatives 6,644 6,644 2,150 0 0
Prepayments, accrued income and other assets 130,341 130,341 120,552 113,827 103,108
- of which accrued commission to agents 121,249 121,249 113,837 107,773 97,586
Total assets 4,875,927 4,875,927 4,948,135 4,120,925 3,723,911
Liabilities
Deposits by customers 4,125,245 4,125,245 4,238,973 3,433,627 3,057,120
Provisions, accruals and other liabilities 40,668 40,668 43,154 38,458 30,014
Financial derivatives 0 0 0 2,670 4,489
Subordinated loan 98,739 98,739 98,654 98,568 98,483
Tax payable 2,105 2,105 4,261 0 0
Total liabilities 4,266,756 4,266,756 4,385,042 3,573,323 3,190,106
Equity
Share capital 274,023 274,023 249,196 249,196 249,196
Surplus capital 286,621 286,621 256,595 256,595 256,591
Retained Earnings 48,527 48,527 57,301 41,810 28,018
Not registered capital 0 0 0 0 0
Other paid in capital (options) 0 0 0 0 0
Total equity 609,171 609,171 563,093 547,602 533,805
Total liabilities and equity 4,875,927 4,875,927 4,948,135 4,120,925 3,723,911
2018
15
Important InformationDisclaimer
15
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