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Q1 2020 results

lower loan losses and improved profitability

- Net loans grew by NOK 326 million in Q1 2020, but decreased by NOK 189 million adjusted for currency effects
- Losses on loans were NOK 132.2 million, including NOK 50 million in an additional loan loss provision due to macroeconomic uncertainty related to Covid-19
- Adjusted for additional loan loss provisions, loan loss ratio decreased to 3.8% from 5.6% in Q4 2019
- Profit after tax was NOK 45.9 million, up from NOK -15.4 million in Q4 2019
- Return on equity was 10.1% and 18.1% adjusted for additional loan loss provisions related to Covid-19, up from 13.6% adjusted for additional loan loss provisions in Q4 2019  
- Komplett Bank’s CET1 ratio was 20.9%, above the 18.0% financial target which includes a 1.0%-point management buffer

Financial review
Net loans grew by NOK 326 million in Q1 2020, driven by appreciation of SEK and EUR to NOK. Adjusted for currency effects, net loans decreased by NOK 189 million as new lending was reduced to mitigate macroeconomic risks related to the Covid-19 outbreak.

Net interest income amounted to NOK 285.9 million, down from NOK 293.8 million in Q4 2019. Net commissions and fees amounted to NOK 4.5 million in Q1 2020, down from 6.8 million in the previous quarter as POS activity declined and expenses are lagging income.

Operating expenses were NOK 97.0 million, down from NOK 99.5 million in Q4 2019. Direct marketing expenses amounted to NOK 4.3 million, down from NOK 10.9 million in Q4 2019. 

Losses on loans amounted to NOK 132.2 million, including an additional loan loss provision of NOK 50 million due to macroeconomic uncertainty related to Covid-19, down from NOK 221.7 million in Q4 2019. The loan loss ratio adjusted for the additional loan loss provision was 3.8%, down from 5.6% in Q4 2019, as underlying credit performance improved in Norway and Sweden.

Commenting on the results, CEO Jan Haglund, said: 

“In the first quarter of 2020, the outbreak of Covid-19 quickly led to a shift in priorities to safeguarding the health of our employees and their families, and to assist our customers overcoming short-term challenges in servicing their loans. I am proud of how our dedicated employees were able to adjust to the new situation, which contributed to limit the operational and financial impact in the first quarter.
Over the past 18 months, Komplett Bank has systematically implemented measures to improve credit quality. I am pleased to see that our efforts resulted in material improvements to underlying loan losses in the quarter, which once again are back at historical levels. To account for increased macroeconomic uncertainty due to Covid-19, we made an additional loan loss provision of NOK 50 million. Nevertheless, profitability improved in the quarter and we maintained a robust capital position.

At Komplett Bank, we have an efficient and robust business model and the necessary profitability, solidity and flexibility to weather the effects of Covid-19. I expect us to remain prudent in terms of growth in the short term. By maintaining focus on serving our customers and executing on our strategic priorities, we expect to continue to strengthen our competitive position going forward.”

The quarterly report and presentation are available here

CEO Jan Haglund and CFO Henning Fagerbakke will present the Bank's results at 08:30 CEST. The presentation and Q&A will be conducted via conference call and webcast.

The webcast can be followed at:  

Conference call dial in numbers:
NO: +47 23963688
SE: +46 856642705
FI: +35 8981710522
DK: +45 78150110
UK: +44 3333009268
US: +16 467224903
GE: +49 6913803452
CA: +16 474848337

For further information, contact: 

Henning Fagerbakke, CFO
+47 95 46 37 20

Jan Haglund, CEO 
+46 70 600 2061