Lea Bank ASA

Investor Presentation • Feb 15, 2024

4 th quarter 2023 results presentation

Lea bank ASA

February 15th 2024

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 Q4

2 Financial results Q4

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 6,913 MNOK – geographical mix Q4 2023

Product portfolio

Q4 2023 highlights

Third consecutive dividend proposal – 52.4 MNOK

Q4 financials	• Profit before tax 40.6 MNOK (profit after tax 30.7 MNOK) • Increased funding cost almost fully offset by increased interest rates • Industry leading cost / income of 28.6%	Interest
Dividend	• Third consecutive year of dividend payments • Dividend proposal of 0.55 NOK per share, 52.4 MNOK	ROE,
Preliminary SREP	• Preliminary SREP (Supervisory Review and Evaluation Process) received from Norwegian FSA with no significant changes compared to current requirement • Lea bank to file response to the Norwegian FSA by 16.02.24	EPS, EPS pre tax, annu.
Redomiciliation & M&A	• Submitted banking license application to the Swedish FSA • Entered strategic partnership with Stena Group and acquisition of its consumer credit company Captum Group	Gross

Key financial figures, MNOK

	Q4-23	2023	2022
Interest income	193.4	712.3	554.3
PBT	40.6	140.1	186.4
- Dividend		52.4	70.2
ROE, Annualized	9.0%	8.0%	11.1%
ROE adj.1 , annualized	11.0%	9.8%	13.9%
EPS, annualized	1.29	1.12	1.48
EPS pre tax, annu.	1.71	1.47	1.96
C / I	28.6%	28.9%	30.7%
Gross loans	6,913	6,913	6,287
Equity2		# of shares3	BVPS
1,350		95,219,132	14.17

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

1) ROE adjusted subtracts excess capital from the calculation

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

Strong financial track record since inception in 2016

Solid profit generation last years with competitive cost / income ratio

Profit before tax, MNOK – unbroken track record since 20171, 2 Industry leading cost / income¹

1) 2020 adjusted for one-offs related to merger between Easybank and BRAbank. Easybank figures up to Q3 2020, combined from Q4

Table of contents

1 Highlights and development Q4

2 Financial results Q4

3 Outlook

| 7

Solid capitalization and continued profit generation

0

0

0

0

0

0

0

0

0

0

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

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

• 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 64.9% in accordance with strategic focus on international markets
  • Norway represented 67% of total portfolio in Q4 2020, now down to 35.1%
• Focus on building portfolio in Spain with a step-by-step approach with prudent credit risk management

Margin development

Net interest income and net interest margin of total assets

Increased funding cost offset by increased interest rates

151 138 149 150 158 132 132 137 130 138 7,3 % 6,9 % 6,9 % 6,7 % 7,1 % Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Total Income Net interest income Net interest margin MNOK / % of total assets

Yields end of quarter¹ 11,7 % 12,0 % 12,7 % 13,0 % 13,3 % 1,4 % 1,8 % 2,6 % 3,0 % 3,3 % Q4-22 Q1-23 Q2-23 Q3-23 Q4-23

Nom. rate consumer loans Nom. deposit rate

1) All figures are end of quarter and nominal

Credit quality overview

Stage allocation

Provisions, MNOK

Loan loss ratio¹

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)	Q4-2023	Q4-2022	2023	2022
Interest income	193,384	152,427	712,253	554,259
Interest expense	-55,572	-20,735	-175,625	-61,123
Net interest income	137,813	131,692	536,628	493,136
Commission and fee income	9,501	8,186	33,791	28,766
Commission and fee expenses	-1,324	-1,435	-4,628	-4,740
Net change in value on securities and currency	11,168	12,001	29,302	5,594
Other income	660	133	796	220
Net other income	20,005	18,884	59,261	29,841
Total income	157,817	150,576	595,889	522,977
Salary and other personnel expenses	-16,366	-15,661	-63,841	-62,600
Other administrative expenses	-21,406	-20,257	-82,507	-79,170
- of which marketing expenses	-2,336	-437	-6,866	-3,883
Depreciation	-3,947	-3,275	-14,786	-10,833
Other expenses	-3,416	-2,756	-11,170	-8,046
Total operating expenses	-45,135	-41,949	-172,303	-160,649
Profit before loan losses	112,682	108,627	423,586	362,327
Loan losses	-72,057	-37,012	-283,505	-175,968
Profit before tax	40,626	71,615	140,081	186,359
Tax	-9,957	-18,287	-33,835	-45,782
Profit after tax	30,669	53,328	106,245	140,577

Comments on income statement
•	Profit before tax Q4-23 of 40.6 MNOK, compared to 71.6 MNOK last year
•	Interest income in Q4-23 of 193.4 MNOK, compared to 152.4 MNOK last year – driven by higher volumes and interest rate
•	Interest expense in Q4-23 of 55.6 MNOK, compared to 20.7 MNOK last year – driven by higher funding cost and volumes
•	Net other income in Q3-23 of 20,0 MNOK, compared to 18.9 MNOK last year – driven by strong yield on liquidity balance
•	OPEX in Q4-23 of 45.1 MNOK, compared to 41.9 MNOK last year –increase due to expansion of operational model – still demonstrating strong focus on cost control
•	C/I in Q4-23 of 28.6% compared to last year of 27.9%. C/I in 2023 improved to 28,9% from 30,7% in 2022
•	Loan losses in Q4-23 of 72.1 MNOK compared to 37.0 MNOK last year, reflecting annualized loss ratio of 4.3% compared to 2.4% Q4-22

Balance sheet

NGAAP Balance sheet (Amounts in thousands)	31.12.2023	30.09.2023	31.12.2022
Assets
Cash and deposits with the central bank	51,931	51,448	50,402
Loans and deposits with credit institutions	350,786	302,452	322,201
Gross loans to customers	6,913,256	6,607,247	6,286,924
Loan loss provisions	-427,542	-362,552	-403,373
Certificates, bonds and other securities	839,681	987,251	961,163
Deferred tax asset	57,920	67,877	91,756
Other intangible assets	41,219	34,647	29,380
Fixed assets	5,133	5,559	8,775
Other assets	21,258	25,462	20,256
Total assets	7,853,642	7,719,392	7,367,484
Equity and liabilities
Loan from central bank	0	0	0
Deposits from customers	6,239,373	6,141,604	5,791,333
Other liabilities	128,307	68,829	142,315
Tier 2 capital	82,084	81,999	81,746
Total liabilities	6,449,764	6,292,432	6,015,394
Share capital	190,438	190,425	189,681
Share premium reserve	662,638	662,599	660,322
Tier 1 capital	54,321	54,269	54,114
Other paid-in equity	14,556	14,356	13,405
Other equity	481,925	505,311	434,568
Total equity	1,403,878	1,426,960	1,352,089
Total equity and liabilities	7,853,642	7,719,392	7,367,484

Comments on balance sheet

• Gross loans of 6,913 MNOK 31.12.2023 compared to 6,607 MNOK 30.09.2023 and 6,287 MNOK 31.12.2022 driven by underlying growth and currency effects
• Liquidity balance of 1,243 MNOK 31.12.2023 compared to 1,341 MNOK 30.09.2023, and 1,334 MNOK 31.12.2022
• Deferred tax assets of 52.9 MNOK (originated from tax losses carried forward prior to the merger in Q4 2020)
• Solid capital base CET1 of 20.2 % (incl. 2023 profit and dividend accrual), compared to 31.12.2022 of 21.6 %

• Total equity of 1,404 MNOK, BVPS (ex. T1 capital) of 14.17 NOK. Equity as of 31.12.23 has been reduced by dividend accrual of 52.4 MNOK

Table of contents

1 Highlights and development Q4

2 Financial results Q4

| 14

Benefits of a potential redomiciliation to Sweden

Four considerations supporting the decision

Tentative application process and migration plan Subject to approvals*

* Subject to approvals from Swedish and Norwegian FSAs, listing on Nasdaq Stockholm and delisting from Oslo Børs and General meeting in Lea bank ASA

Lea bank ASA

	Focus areas	Summary of the quarter
1 Credit risk	• 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 28.6% ✓ Well capitalized – CET1 including YTD
2 Margins	• Aim to maintain interest margins despite increasing funding costs • Utilize presence in four markets to optimize capital allocation and develop more diversified funding capabilities	profits of 20.2%
3		Key figures, Q4 2023
Swedish banking license application	• Swedish banking license application filed January 2024 • Decision from the Swedish FSA within 31.07.24	Interest Profit before Equity income tax
		193.4 MNOK 40.6 MNOK 1,404 MNOK

Financial overview Figures in MNOK

Gross lending

Net income and net interest margin

Loan losses

Opex and Cost / Income

Equity and CET1 ratio²

Profit after tax and ROE¹

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: 96%
• Liquidity coverage ratio: 488% total (488% NOK, 211% EUR, 139% SEK)
• Net stable funding ratio: 148% total

Total assets, MNOK Equity and liabilities, MNOK

Lea bank ASA shareholders

Top 20 shareholder list as of February 13th 2024 Comments

	Investor	Shares	Ownership
1	Braganza AB	10,383,899	10.9 %
2	DNB Bank ASA	9,175,667	9.6 %
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	1,813,793	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	1,234,399	1.3 %
17	Krogsrud Invest AS	1,125,000	1.2 %
18	Thon Holding AS	1,081,211	1.1 %
19	Sober Kapital AS	1,031,922	1.1 %
20	Bara Eiendom AS	883,179	0.9 %
	Total top 20 shareholders	61,031,153	64.1 %
	Other shareholders	34,187,979	35.9 %
	Total number of shares	95,219,132	100 %

• ~1,250 shareholders as of February 13th 2024
• The Lea bank share (ticker LEA) is listed on Oslo Børs Euronext Growth
• Management holds a total of 1,364,740 shares, corresponding to 1.4% of shares
• Members of the board holds a total of 102,039 shares, corresponding to 0.1%
• Current market capitalization of ~725 MNOK

Lea bank ASA

Holbergs gate 21

0166 Oslo

Norway

+47 22 99 14 00 ir@leabank.no