Q4 Results 2022
Strong growth and further reduction of cost base.
Increased market interest rates absorbed
• Record sales in the quarter: close to NOK 10 billion loan balance – up 14% vs. Q3 2022
• Loan book interest rates successfully increased
• Total income growth of 17% vs. Q3 2022
Delivering initiatives to improve performance and reduce cost base
• Number of full-time employees (FTEs) reduced by ~40% year-on-year
• Write-down and restructuring costs of MNOK 105 mainly driven by IT platform optimisation
• Adjusted cost/income ratio of 44% vs. 50% in Q3 2022
• Further cost base reductions initiated: exiting underperforming POS Finance, terminating brand royalty license (“Komplett”), and reducing office space.
Komplett Bank to launch under new name in May 2023
Q4 profitability impacted by growth-incurred loan loss provisions and restructuring
• Adjusted loan loss ratio increased to 5.4% vs. 3.5% in Q3 2022 with high growth prompting provision increase
• Profit after tax was NOK -88.7 million, down from NOK 18.0 million in the previous quarter as higher total income was more than offset by the write-down, restructuring costs and higher loan losses Ahead of schedule for delivering on 2024 growth and efficiency ambitions
• New Q4 2023 targets (previous run-rate 2024 ambitions in brackets): Gross loan balance increase vs Q2 2022 of 60% (>50%), cost/income ratio ~30% (<35%) and return on target equity of ~10% (12-15%)
Commenting on the results, CEO Øyvind Oanes, said:
“Komplett Bank continued to experience strong inflow of loan applications and we ended the quarter with a well-diversified loan book of almost NOK 10 billion amid a growing and resilient Nordic consumer financing market. The underlying credit quality was stable, the NPL ratio remained below 3% and most new non-performing loans (NPLs) were sold on forward flow agreements which limits risk in the balance sheet.
Since the beginning of 2022, our focus has been on re-starting growth and reducing the cost base, both critical for achieving attractive returns in the medium term. Following successful implementation of a set of strategic initiatives, Komplett Bank’s sales throughput has gradually increased reaching 4x the level of January 2022 in Q4. This enabled a 14% gross loan growth for the second quarter in a row. While initiatives to reduce costs have required some upfront investments, we have intensified our efficiency measures and now have clear line of sight to a cost/income ratio of 30% at year-end 2023 which is considered highly competitive in the consumer financing landscape. With the progress made on throughput and cost reductions during 2022, we are now in the position to accelerate our run-rate 2024 ambitions for loan balance growth and efficiency.”