Lea Bank ASA

Investor Presentation • Apr 25, 2024

1 st quarter 2024 results presentation

Disclaimer

This Presentation from Lea bank ASA ("Lea bank" or the "Company") includes among other things forward-looking statements. Certain such forward-looking statements can be identified by the use of forward-looking terminology such as "believe", "may", "will", "should", "would be", "expect" or "anticipate" or similar expressions, or the negative thereof, or other variations thereof, or comparable terminology, or by discussions of strategy, plans or intentions. The forward-looking statements contained in this Presentation, including assumptions, opinions and views of the Company or cited from third party sources, reflect the current views with respect to future events and are subject to material risks, uncertainties and other factors that may cause actual events to differ materially from any anticipated development. Neither Lea bank nor any of its officers or employees provides any assurance as to the correctness of such forward-looking information and statements. The Company does not intend, and assumes no obligation, except as required by law, to update any forwardlooking statements or to conform these forward-looking statements to its actual results.

By attending or receiving this Presentation you acknowledge that you will be solely responsible for your own assessment of the market and the market position of Lea bank and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of Lea bank's business and the securities issued by Lea bank.

This Presentation speaks as of the date of the presentation. Neither the delivery of this Presentation nor any further discussions of Lea bank with any of the recipients shall, under any circumstances, create any implication that there has been no change in the affairs of Lea bank since such date.

Table of contents

Highlights and development Q1

2 Financial results Q1

3 Outlook

1

Lea bank ASA at a glance

Digital niche bank with an international footprint

Consumer finance bank with a strong presence in the Nordic market…

• Lea bank has a fully digital bank offering focusing on unsecured loans and deposits
• Focus on creating shareholder value through continuous profit generation, optimizing capital allocation and evaluation of growth versus dividends
• Listed on Euronext Growth at Oslo Børs, ~1,250 shareholders. Braganza largest shareholder. Other large shareholders include Alfred Berg Norge/Aktiv, Hjellegjerde Invest, Skagerrak Sparebank and Fondsavanse

…leveraged by a scalable digital platform

• Scalable operation model on the back of leading technological solutions, crossborder operations and industry leading cost efficiency
• Proven value chain with inhouse credit analysis and operations, and broad distribution network
• Focus on core markets in the Nordics and Spain utilize our digital advantage in other European markets in the future

Gross loans 7,264 MNOK – geographical mix Q1 2024

Product portfolio

Q1 2024 highlights Over 7 billion NOK in gross loans

Key financial figures, MNOK

	Q1-24	Q1-23	2023
Interest income	199.9	160.7	712.3
PBT	31.4	36.4	140.1
- Dividend			52.4
ROE, Annualized	7.0%	8.4%	8.0%
ROE adj.1 , annualized	8.4%	9.2%	9.8%
EPS, annualized	1.00	1.16	1.12
EPS pre tax, annu.	1.32	1.53	1.47
C / I	29.4%	30.3%	28.9%
Gross loans	7,264	6,677	6,913
Equity2	# of shares		BVPS
1,372		95,219,132	14.41

Redomiciliation & M&A

Q1 financials

Regulatory

• Dialogue with Swedish FSA regarding banking license application

• Implementation of Finnish positive credit register

• Profit before tax 31.4 MNOK (profit after tax 23.9 MNOK)

• Dividend payment approved by the General Meeting – 0.55

• The bank has received regulatory approvals regarding the acquisition of Captum Group AB - expected closing by end of April

• License requirements for Norwegian loan brokers expected to improve consumer protection and responsible lending

Note on key figures: PBT: Profit before tax, ROE: Annualized Return On Equity (excluding tier-1 capital), EPS: Annualized Earnings per share, C/I: Cost to income

NOK per share

1) ROE adjusted subtracts excess capital from the calculation

2) Equity excluding tier 1 capital and reduced by proposed dividend

Table of contents

1 Highlights and development Q1

2 Financial results Q1

3 Outlook

| 6

Solid capitalization and continued profit generation

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Well above CET1 requirement

Equity (MNOK) and CET1 ratio1, 2 Profit after tax (MNOK) and Return on Equity

1) CET1 ratios for Q1, Q2 and Q3 include YTD unaudited profit

2) Equity reduced by annual dividend accrual in Q4-2023

1000

1100

1200

1300

1400

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3) ROE adjusted subtracts excess capital from the calculation

International consumer finance bank

65% of volumes outside Norway – growth in all markets

Gross lending, MNOK

Geographical mix, gross loans

Comments

• 351 MNOK increase in gross loans
• Four fully operating markets enable distribution flexibility and growth opportunities
• Focus on margins to absorb increased funding cost and credit risk on new volumes
• Volumes outside of Norway represent 64.5% in accordance with strategic focus on international markets
  • Norway represented 67% of total portfolio in Q4 2020, now down to 35.5%
• Focus on building portfolio in Spain with a step-by-step approach with prudent credit risk management

Margin development

Increased funding cost not fully offset by lending yield

1) All figures are end of quarter and nominal

Credit quality overview

Stage allocation

Provisions, MNOK

Loan loss ratio¹

Loan losses, MNOK

Non-performing loans² , MNOK

Total provision ratio³

1) Loan loss ratio = monthly loan losses p.a / monthly avg. gross loans

2) Non-performing loan ratio = stage 3 ratio

3) Total = Total provision / Gross loans

Income statement

NGAAP
Income Statement (Amounts in thousands)	Q1-2024	Q1-2023	2023
Interest income	199,929	160,705	712,253
Interest expense	-64,092	-29,193	-175,625
Net interest income	135,838	131,512	536,628
Commission and fee income	10,917	8,726	33,791
Commission and fee expenses	-1,243	-1,080	-4,628
Net change in value on securities and currency	8,633	-763	29,302
Other income	2,163	12	796
Net other income	20,470	6,894	59,261
Total income	156,308	138,406	595,889
Salary and other personnel expenses	-18,259	-14,934	-63,841
Other administrative expenses	-21,226	-20,421	-82,507
- of which marketing expenses	-2,736	-912	-6,866
Depreciation	-3,907	-3,465	-14,786
Other expenses	-2,561	-3,131	-11,170
Total operating expenses	-45,953	-41,952	-172,303
Profit before loan losses	110,355	96,454	423,586
Loan losses	-78,948	-60,073	-283,505
Profit before tax	31,407	36,381	140,081
Tax	-7,503	-8,819	-33,835
Profit after tax	23,904	27,563	106,245

	Comments on income statement
•	Profit before tax Q1-24 of 31.4 MNOK, compared to 36.4 MNOK last year
•	Interest income in Q1-24 of 199.9 MNOK, compared to 160.7 MNOK last year – driven by higher volumes and interest rate
•	Interest expense in Q1-24 of 64.1 MNOK, compared to 29.2 MNOK last year – driven by higher funding cost and volumes
•	Net other income in Q1-24 of 8,6 MNOK, compared to -0.8 MNOK last year – driven by strong yield on liquidity balance
•	OPEX in Q1-24 of 46.0 MNOK, compared to 42.0 MNOK last year – increase due to expansion of operational model – still demonstrating strong focus on cost control
•	C/I in Q1-24 of 29.4% compared to last year of 30.3%.
•	Loan losses in Q1-24 of 78.9 MNOK compared to 60.1 MNOK last year, reflecting annualized loss ratio of 4.5% compared to 3.7%

Q1-23

Balance sheet

NGAAP
Balance sheet (Amounts in thousands)	31.03.2024	31.03.2023	31.12.2023
Assets
Cash and deposits with the central bank	52,426	50,685	51,931
Loans and deposits with credit institutions	643,211	496,705	350,786
Gross loans to customers	7,263,963	6,676,559	6,913,256
Loan loss provisions	-465,382	-445,922	-427,542
Certificates, bonds and other securities	900,397	989,545	839,681
Deferred tax asset	50,417	82,937	57,920
Other intangible assets	45,323	28,730	41,219
Fixed assets	13,142	8,051	5,133
Other assets	57,604	32,270	21,258
Total assets	8,561,100	7,919,560	7,853,642
Equity and liabilities
Loan from central bank	0	0	0
Deposits from customers	6,903,540	6,325,948	6,239,373
Other liabilities	148,936	130,473	128,307
Tier 2 capital	82,168	81,830	82,084
Total liabilities	7,134,644	6,538,251	6,449,764
Share capital	190,438	190,348	190,438
Share premium reserve	662,638	662,360	662,638
Tier 1 capital	54,373	54,165	54,321
Other paid-in equity	14,841	13,750	14,556
Other equity	504,167	460,684	481,925
Total equity	1,426,456	1,381,309	1,403,878
Total equity and liabilities	8,561,100	7,919,560	7,853,642

Comments on balance sheet

• Gross loans of 7,264 MNOK 31.01.2024 compared to 6,677 MNOK 31.03.2023 and 6,913 MNOK 31.12.2023 driven by underlying growth and currency effects
• Liquidity balance of 1,596 MNOK 31.03.2024 compared to 1,537 MNOK 31.03.2023, and 1,242 MNOK 31.12.2023
• Deferred tax assets of 50.4 MNOK (originated from tax losses carried forward prior to the merger in Q4 2020)
• Solid capital base CET1 of 19.4 % (incl. 2024 profit and 2023 dividend accrual), compared to 31.03.2023 of 20.6 %

• Total equity of 1,426 MNOK, BVPS (ex. T1 capital) of 14.41 NOK. Equity as of 31.03.24 has been reduced by dividend accrual of 52.4 MNOK to be paid to shareholders on April 29th 2024

Table of contents

1 Highlights and development Q1

2 Financial results Q1

Lea bank ASA

	Focus areas	Summary of the quarter
1 Credit risk & margins	• Navigate through an uncertain macroeconomic environment • Close monitoring of customer behaviour and support customers through temporary challenges	✓ Continuous profit generation despite challenging macro conditions ✓ Industry leading cost / income of 29.4% ✓ Well capitalized – CET1 including YTD
2 Market	• Competitors have exited the market, expected to decrease margin pressure • Signs of increased profitability focus in the consumer finance market	profits of 19.4%
3		Key figures, Q1 2024
M&A & redomicilation	• Integration of Captum Group • Awaiting decision regarding banking license application from the Swedish FSA within 31.07.24	Interest Profit before Equity income tax
		199.9 MNOK 31.4 MNOK 1,426 MNOK

Financial overview Figures in MNOK

Gross lending

Profit after tax and ROE¹

Net income and net interest margin

Loan losses

Opex and Cost / Income

Equity and CET1 ratio²

1000

1100

1200

1300

1400

1500

1) ROE adjusted subtracts excess capital from the calculation 2) CET1 ratio includes YTD unaudited profit

Balance sheet structure

Strong funding and liquidity position

• Deposit ratio: 102%
• Liquidity coverage ratio: 562% total (1,622% NOK, 192% EUR, 122% SEK)
• Net stable funding ratio: 152% total

Total assets, MNOK Equity and liabilities, MNOK

| 17

Lea bank ASA shareholders

Top 20 shareholder list as of April 19th 2024 Comments

	Investor	Shares	Ownership
1	Braganza AB	10,383,899	10.9 %
2	DNB Bank ASA1	9,521,383	10.0 %
3	Hjellegjerde Invest AS	7,600,000	8.0 %
4	Skagerrak Sparebank	4,409,380	4.6 %
5	Fondsavanse AS	3,371,048	3.5 %
6	Verdipapirfondet Alfred Berg Norge	3,088,045	3.2 %
7	Verdipapirfondet Alfred Berg Aktiv	2,719,589	2.9 %
8	Vida AS	2,581,654	2.7 %
9	Shelter AS	1,945,486	2.0 %
10	Jenssen & Co AS	1,845,879	1.9 %
11	Lindbank AS	1,838,007	1.9 %
12	Jolly Roger AS	1,786,729	1.9 %
13	Verdipapirfondet Alfred Berg Norge	1,700,000	1.8 %
14	MP Pensjon PK	1,637,767	1.7 %
15	Umico - Gruppen AS	1,565,228	1.6 %
16	Varde Norge AS	1,239,407	1.3 %
17	Krogsrud Invest AS	1,125,000	1.2 %
18	Sober Kapital AS	1,101,922	1.2 %
19	Thon Holding AS	1,081,211	1.1 %
20	Bara Eiendom AS	883,179	0.9 %
	Total top 20 shareholders	61,424,813	64.5 %
	Other shareholders	33,794,319	35.5 %
	Total number of shares	95,219,132	100.0 %

• ~1,250 shareholders as of April 19th 2024
• The Lea bank share (ticker LEA) is listed on Oslo Børs Euronext Growth
• Management holds a total of 1,185,414 shares, corresponding to 1.2% of shares
• Members of the board holds a total of 102,039 shares, corresponding to 0.1%
• Current market capitalization of ~770 MNOK, post dividend

1) Nominee account

Lea bank ASA