AMBITIOUS TARGET REACHED, POSITIVE LOAN GROWTH, P&L IMPACTED BY NON-RECURRING ITEMS
At the end of October and beginning of November the Bank Norwegian Group (BN Group) launched operations in Spain and Germany with the Bank’s product mix; instalment loans, credit card and saving accounts, simultaneously. The expansion follows the same operating model as in BN Group’s Nordic countries with cross border operations from the BN Group’s headquarters in Norway. The launch has been conducted in accordance with plans and expectations, and in line with the principle of reuse of large part of the infrastructure while inventing new solutions where relevant on euro-payments and customer identification.
The acquisition of Bank Norwegian ASA by Nordax Bank AB (publ) was executed on November 2, 2021. A new Board of Directors was elected on November 8, 2021 in an Extraordinary General Meeting. Following the completion of the transaction, the BN Group applied for a delisting of Bank Norwegian from the Oslo Stock Exchange and the shares were delisted from November 15, 2021.
The BN Group reported profit after tax in the fourth quarter of NOK 159.7 million compared with NOK 276.1 million in the third quarter and down from NOK 436.2 million in the same quarter last year. The large reduction from the previous quarter is due to high non-recurring administrative expenses from financial advisors’ fees in connection with the offer from Nordax, of approximately NOK 174 million in the fourth quarter and lower interest income due to portfolio sales both in the previous and current quarter. The decrease was partly offset by increased net commission income in the quarter. Excluding the non-recurring advisors’ fee related to the Nordax offer in both the third and fourth quarter, the return on equity was 11.3% and 10.5%, respectively.
Adjusted for the portfolio sale in Sweden in this quarter, the currency adjusted loan growth was positive with NOK 498.7 million. Broken down by product the currency adjusted loan growth for instalment loans was NOK 406.2 million, adjusted for portfolio sales in Sweden, compared with NOK 21.4 million in the previous quarter, adjusted for portfolio sales in Norway and Denmark. The growth was mainly derived from increased new sales, particularly in Finland. The currency adjusted loan growth for credit cards was NOK 92.5 million, compared with NOK 256.0 million in the previous quarter, adjusted for the portfolio sale in Norway in that quarter. Instalment loans amounted to NOK 26 755 million and credit card loans amounted to NOK 10 191 million as of December 31, 2021.
Stage 3 loans were NOK 7 261 million at year-end, compared with NOK 7 907 million at the end of the third quarter and NOK 10 146 as of end of December 2020. The development during 2021 was as expected and the reduction is due to the five non-performing portfolio loan sales during the year, with a total effect of stage 3 loan gross reduction of approximately NOK 4 435 million. Stage 3 loans accounted for 19.7% of gross loans, compared with 21.0% as of September 30, 2021, and down from 23.7% at end of December 2020.
Customer deposits was NOK 36 394 million at the end of the fourth quarter. Currency adjusted deposit growth was NOK -1 375 million compared with NOK -870.0 million in the previous quarter. As in the previous quarters, Norway continues to be the main source of the decrease in deposits, with a reduction of NOK 1 095 million in the quarter.
The total capital ratio was 28.6%, the core capital ratio was 26.6% and the CET1 ratio was 25.5%, including set aside 59.9% of net result to dividend for 2021, well above our internal CET1 target (including Pillar 2 guidance and management buffer) of 17.7% at 31.12.2021. In the fourth quarter a dividend of NOK 1 per share has been paid, totaling NOK 187 million, as approved by AGM in April 2021 related to the 2020 net profits.
Based on the strong capital and financial position, the Board of Directors of Bank Norwegian ASA propose a dividend of NOK 3.85 per share, total NOK 719.6 million, and NOK 513.9 million is added to retained earnings.
“Bank Norwegian had two strategic goals for the year 2021, as communicated in the Capital Markets Day in March 2021. The first one was to enter one or two new countries during late 2021, and we have successfully entered both Spain and Germany during 2021. The second strategic goal for the year was to strengthen our position as Nordic Champion, which we are continuously working on, now also improving our position in Sweden together with Nordax. We have sold five non-performing loan portfolios in the Nordics, totaling NOK 4 435 million, improving the credit quality and key metrics of the remaining balances significantly”, says CEO and CFO Klara-Lise Aasen.
For further information, see the full reporting material for the quarter at: https://www.banknorwegian.no/OmOss/InvestorRelations
For any questions please contact:
CEO and CFO, Klara-Lise Aasen; phone: +47 47635583; e-mail: kaa@banknorwegian.no
Head of Treasury, Mats Benserud; phone: +47 95891539; e-mail: mbe@banknorwegian.no
Press contact; Head of Communication and Sustainability, Melita Ringvold; phone +47 95121983; e-mail: mri@banknorwegian.no
This information is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act
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