Komplett Bank has entered into an agreement with Modhi Finance to sell all its non-performing loans (NPL) in Sweden and Finland, and with Lowell to sell NPLs in Norway, for a total gross carrying amount of NOK 1.4 billion. Furthermore, the Bank has entered into forward flow agreements for its loan portfolios in Sweden and Finland with Modhi Finance.
“These transactions represent a significant reduction in balance sheet risk which is the key rationale behind the portfolio sales and the forward flow agreements. Further, the capital position remains solid, and the impact on growth and dividend capacity will be limited,” comments Komplett Bank’s CEO Øyvind Oanes.
Expected negative 2021 result
The sale of non-performing loans and the additional loan loss reserves are estimated to have a negative net impact on Q3 2021 earnings of NOK 410 million after tax, and, due to the expected loss for the full year, Komplett Bank expects no cash dividend payout based on the 2021 results. The Bank maintains its proposal to distribute the remaining dividend based on the 2019/2020 earnings of NOK 0.28 per share, amounting to NOK 52 million in total, with an expected distribution in December 2021.
Unaudited profit after tax was NOK 54 million in Q3 2021, compared to a result of NOK 50 million in Q2 2021. Including the effects of portfolio sales and additional loan loss provisions, profit after tax is negative by NOK 356 million in the quarter.
“Profitability is obviously far from where it needs to be for us to deliver adequate returns over the cycle. We clearly need to focus on improving our top line as well as the operational efficiency going forward. Nevertheless, I’m encouraged to see continued loan growth and steady improvements in underlying credit quality in the quarter as we gradually return to normality following the Covid-19 pandemic,” comments Oanes.
See the announcement on Oslo Børs here.