Norwegian Finans Holding ASA DNB Small & Medium Enterprises Conference 2019 4. april 2019 Tine Wollebekk, CEO
Leading digital consumer bank in the Nordics Fully digital bank with a focused product portfolio and an attractive growth profile Total income, BNOK Consumer loans Credit cards 2.7 2016 3.9 2017 5.0 2018 1.5 million customers 50 BNOK total assets 18.9% CET1 S&P BBB/neg rating Savings Insurance Key products, BNOK 6.3 19.1 24.4 9.2 24.4 33.7 11.9 27.6 39.1 2016 2017 2018 Credit cards Loans Deposits 2
Fourth quarter 2018 highlights Strong profitability Earnings MNOK 469 in Q4 and MNOK 1,797 full year 2018 Stable net interest margin and cost income ratio Marginal effect of NPL sale Earnings, MNOK 443 411 483 Portfolio sale adjustment 469 434 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Resilient balance sheet Strong loan growth BNOK 2.5 in Q4 and BNOK 7.4 full year 2018 Strong internal capital generation CET1 18.9% bank and 19.4% consolidated Loan growth, MNOK Portfolio sale adjustment 2,533 2,508 1,465 1,831 1,574 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Events Agreement for geographical expansion Planned share buy back in 2019 New agreement for credit card processing services yielding substantial cost savings Profitability Bank Norwegian AS 4.2% 3.7% 36.4% 31.1% 4.2% 33.8% ROA 3.6% 28.7% ROE 3.7% 29.0% Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 3
275,000 new customers in 2018 App usage, thousand Customers, thousand* Customers, thousand 3,462 4,340 4,935 1,233 166 170 1,316 178 179 1,393 187 187 1,464 1,508 198 206 195 191 Norway 563 727 96 68 Sweden 349 443 51 43 1,945 2,555 896 959 1,018 1,071 1,111 Denmark 75 122 15 32 Finland 124 216 44 48 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 App logins Credit card Instalment loan Deposit * Number of customers reduced by approximately 18,000 from NPL portfolio sale in Finland 4
Future proof, highly scalable business model X CAGR Customers served per FTE has increased cost per customer served has declined resulting in a declining cost/income ratio +27% (NOK) -4% 0.47 20 100 1 000 800 0.26 4 900 2012 2018 2012 2018 2012 2018 5
Deep analytics driving sustainable growth Sales Portfolio risk Conversion rate Behavior Continuous optimization of customer journeys Risk selection criteria and overall risk apetite We turn down Increasing customer value and relevance Continuous modeling Seamless and rapid experience Loan size and interest rate Turn us down Insights drive early actions for potential non-performers 6
Excellent customer journey is an attractive platform for a future position Attractive current position Highly attractive PSD 2 potential Best in class customer journeys Strong customer engagement Webpage ranked #1 on Google EMEA survey Significant customer base with strong engagement Digitally native customers Good fit for Bank Norwegian s focused product portfolio Capitalize on processes, customer insight and trust to become a hub 7
Core business expansion Significant room for growth in key Nordic markets Potential for further expansion in Europe Bank Norwegian market share 16.9% 4.4% 6.5% 9.2% Norway Sweden Denmark Finland Market size Market growth 18 113 BNOK 162 BSEK 70 BDKK 9.5 BEUR 10% 8% 0% 7% 8
Dividend program Overall structure Ambition to offer an attractive dividend program Planned distribution of capital in excess of applicable requirements Combination of share buy back and cash dividend 2019 plan Planned MNOK 160 share buy back based on regulatory approval for 2018 Significant dividend capacity based on 2019 accounts Long term ambitions Annual distribution Targeting a minimum 40% payout ratio subject to growth, earnings and capital requirements 9
Liquidity and funding position Bond issues Extensive bond issuing planned to diversify funding and prepare for MREL Issued 1,000 MNOK/550 MSEK unsecured bonds in Q1 19 EMTN program in place Deposits High deposit cover Target deposit cover of 80% Liquidity profile Strong liquidity ratios LCR exceeding 200% NFSR at 150% 10
Outlook Macro Credit quality Growth Stable unemployment Low interest rate environment Stable GDP growth Credit quality developing as expected Advanced credit models and risk selection Strong risk absorbtion capacity Potential for continued profitable growth Diversifying through markets and products 11