Lea Bank ASA

Investor Presentation • Oct 27, 2022

3rd quarter 2022 results presentation

Lea bank ASA

October 27th 2022

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 Q3

2 Financial results Q3

3 Outlook

1

Lea bank ASA at a glance

Digital niche bank with a Nordic footprint

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

• Lea bank has a fully digital bank offering focusing on consumer 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, ~1,400 shareholders. Braganza AB 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, cost efficient value chain and cross-border operations
• Proven value chain with inhouse credit analysis and operations, broad distribution network and forward flow agreements for defaulted loans
• Focus on core markets in the Nordics utilize our digital advantage in other European markets in the future

Gross loans 6,090 MNOK – geographical mix Q3 2022

Product portfolio

Q3 2022 highlights

Surpassing 6 billion in gross loans

• Profit before tax 37.0 MNOK (profit after tax 28.6 MNOK)

• Positive trend in gross loans growth of 252 MNOK
• CET1 Capital ratio 23.1% (incl. YTD profit)

Credit quality

Financials

• • Higher provisions to reflect increased uncertainty in macro conditions

• Downside risk mitigated by forward flow agreements in Norway and Finland

• Call of tier 1 & 2 capital in September totalling 44 MNOK

• Awaiting update on new Pilar 2 requirement from the FSA

Key financial figures, MNOK

	Q3-22	2022 YTD	2021
Interest income	140.3	401.8	531.2
PBT	37.0	114.7	170.1
ROE, annualized	8.8%	9.1%	10.7%
ROE adj.1 , annualized	11.0%	11.6%	13.2%
EPS, annualized	1.21	1.23	1.35
EPS pre tax, annu.	1.56	1.61	1.79
C / I	31.0%	31.9%	34.1%
Gross loans	6,090	6,090	5,489
Equity2		# of shares	BVPS
1,314		94,840,526	13.85 NOK

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 (capital req. + mgmt. buffer)

2) Equity excluding tier 1 capital

Capital

Table of contents

1 Highlights and development Q3

2 Financial results Q3

3 Outlook

| 6

Strong capital buffer and continuous profit generation Well above capital requirement

Equity and CET1 ratio¹

, MNOK Profit after tax and Return on Equity, MNOK

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

Stable yield development

Margin pressure in Norway offset by positive development in Finland

Net interest income and net interest margin of total assets 124 120 118 125 129 ^{118 117 114} 121 126 6,5 % 6,6 % 6,5 % 7,0 % 7,2 % Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Total Income Net interest income Net interest margin MNOK / % of total assets

Yields end of quarter¹ 11,5 % 11,4 % 11,1 % 11,1 % 11,2 % 0,5 % 0,5 % 0,5 % 0,6 % 0,7 % Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Nom. rate consumer loans Nom. deposit rate

1) All figures are end of quarter and nominal

Increased interest-bearing portfolio

Share of volumes outside of Norway continue to increase

Gross lending, MNOK

Geographical mix, gross loans

Comments

• Gross loans increased by 252 MNOK from last quarter, stage 1 portfolio increased by 237 MNOK
• Increasing gross loans in Finland and Sweden, stabilizing development in Norway
• Volumes outside of Norway represent 54.1% following strategic focus on international markets

Credit quality development

Increased uncertainty driven by macro conditions

Loan loss ratio

• Norway: Covered by the forward flow agreement with Kredinor since 2017 – selling late in the collection process
• Finland: Forward flow agreement in place selling early in the collection process
• Sweden: The stage 3 portfolio was sold February 2022

Comments on credit quality development

• Higher loan allowance in Finland as a result of increased uncertainty around macro conditions
• Forward flow in Norway and Finland contribute to keep the stage 3 ratio low
• Continuous de-risking of portfolio resulting in stage 3 ratio of 8.1% by end of Q3
• Since 2021 Lea bank has sold defaulted loans with outstanding claims of ~1,100 MNOK neutral P&L impact. This reduces uncertainty and confirms provisions levels

Credit quality overview

Provisions, MNOK

Loan loss ratio¹

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)	Q3-2022	Q2-2022	2022 YTD	Q3-2021	2021
Interest income	140,257	133,427	401,832	130,975	531,219
Interest expense	-13,932	-12,439	-40,388	-12,522	-60,382
Net interest income	126,325	120,988	361,444	118,453	470,837
Commission and fee income	7,896	7,097	20,580	7,186	28,803
Commission and fee expenses	-1,072	-1,361	-3,305	-2,059	-9,612
Net change in value on securities and currency	-4,082	-1,756	-6,407	223	-3,210
Other income	44	31	88	-83	678
Net other income	2,786	4,011	10,956	5,267	16,659
Total income	129,111	124,999	372,400	123,720	487,496
Salary and other personnel expenses	-15,700	-15,316	-46,939	-14,634	-62,907
Other administrative expenses	-19,831	-19,939	-58,913	-20,611	-84,671
- of which marketing expenses	-1,699	-923	-3,446	-1,173	-3,558
Depreciation	-2,600	-2,508	-7,559	-3,140	-12,366
Other expenses	-1,850	-1,565	-5,289	-996	-6,447
Total operating expenses	-39,982	-39,328	-118,700	-39,381	-166,391
Profit before loan losses	89,129	85,671	253,700	84,339	321,105
Loan losses	-52,123	-42,277	-138,956	-34,035	-151,001
Profit before tax	37,006	43,394	114,744	50,305	170,104
Tax	-8,393	-10,705	-27,495	-8,398	-42,030
Profit after tax	28,613	32,689	87,249	37,879	128,074

Comments on income statement

• Profit after tax Q3-22 of 28.6 MNOK, compared to 37.9 MNOK last year
• Interest income in Q3-22 of 140.3 MNOK, compared to 131.0 MNOK last year – driven by higher volumes
• Interest expense in Q3-22 of 13.9 MNOK, compared to 12.5 MNOK last year – driven by higher funding cost and volumes
• OPEX in Q3-22 of 40.0 MNOK, compared to 39.4 MNOK last year – continuous strong cost focus
• C/I improved from 31.8% to 31.0% compared to last year
• Loan losses in Q3-22 of 52.1 MNOK compared to 34.0 MNOK last year, reflecting annual loss ratio of 3.5% compared to 2.5% last year

Balance sheet

NGAAP
Balance sheet (Amounts in thousands)	30.09.2022	30.09.2021	31.12.2021
Assets
Cash and deposits with the central bank	50,154	49,991	49,980
Loans and deposits with credit institutions	190,562	169,229	351,774
Gross loans to customers	6,090,391	5,399,838	5,488,704
Loan loss provisions	-413,302	-454,084	-457,667
Certificates, bonds and other securities	985,827	1,644,786	1,514,166
Deferred tax asset	107,960	147,141	137,538
Other intangible assets	26,951	15,173	15,719
Fixed assets	7,613	11,825	10,204
Other assets	19,729	51,121	19,455
Total assets	7,065,885	7,035,020	7,129,873
Equity and liabilities
Loan from central bank	0	0	0
Deposits from customers	5,545,223	5,510,527	5,568,411
Other liabilities	70,396	77,035	149,419
Tier 2 capital	87,522	104,092	104,203
Total liabilities	5,703,141	5,691,655	5,822,033
Share capital	189,681	189,589	189,589
Share premium reserve	660,322	659,989	659,989
Tier 1 capital	49,012	75,732	75,805
Other paid-in equity	12,944	9,631	11,404
Other equity	450,786	408,424	371,053
Total equity	1,362,745	1,343,365	1,307,839
Total equity and liabilities	7,065,885	7,035,020	7,129,873

Comments on balance sheet
---------------------------	--	--	--

• Gross loans of 6,090 MNOK at 30.09.2022 compared to 5,400 MNOK 30.09.2021. Increase in stage 1 portfolio of 859 MNOK last 12 months
• Liquidity balance of 1,227 MNOK at 30.09.2022 compared to 1,864 at 30.09.2021, reduced according to plan
• Deferred tax assets of 108.0 MNOK driven by tax losses carried forward prior to the merger
• Solid capital base CET1 of 23.1 % (incl. 2022 profit), compared to 30.09.2021 of 25.4 %
• Total equity of 1,363 MNOK, BVPS of 13.85 NOK

Table of contents

1 Highlights and development Q3

2 Financial results Q3

| 14

Lea bank ASA

• Ready for launch in Spain • Focus on effective and controlled scaling International expansion Core markets Credit risk • Capitalize on increasing interest rates • Maintaining leading cost to income ratio • Focus on mitigating stage 3 risk through forward flow agreements • Continue to monitor the second-hand market for defaulted loans ✓ Strong growth - surpassing 6 billion in gross loans ✓ Continuous profit generation despite increased loan loss provisions ✓ Increased volatility in macro economic factors ✓ Well capitalized – CET1 of 23.1% ✓ Developed platform for international expansion Key figures, Q3 2022 Interest income Profit before tax Equity 140.3 MNOK 37.0 MNOK 1,363 MNOK Regulatory framework • Lea bank will initiate a redomiciliation project to explore strategic options to change domicile • Continue to capitalize on changing capital requirement regulations on volumes outside of Norway 1 2 3 4 Summary Outlook

Financial overview Figures in MNOK

Gross lending

Net income and margin of total 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 (capital req. + mgmt. buffer) 2) CET1 ratio includes YTD unaudited profit

Balance sheet structure

Strong funding and liquidity position

Total assets, MNOK Equity and liabilities, MNOK

• Deposit ratio: 98%
• Liquidity coverage ratio: 617% total (518% EUR, 141% SEK)
• Net stable funding ratio: 165% total

Lea bank ASA shareholders

Share price development

Top 20 shareholder list as of October 14 2022 Comments

	Investor	Shares	Ownership
1	Braganza AB	10,383,899	10.9 %
2	Hjellegjerde Invest AS	7,600,000	8.0 %
3	Skagerrak Sparebank	4,409,380	4.6 %
4	Fondsavanse AS	3,371,048	3.6 %
5	Verdipapirfondet Alfred Berg Norge	3,088,045	3.3 %
6	Altitude Capital AS	3,077,380	3.2 %
7	Verdipapirfondet Alfred Berg Aktiv	2,719,589	2.9 %
8	Vida AS	2,581,654	2.7 %
9	Umico - Gruppen AS	2,168,779	2.3 %
10	Enskilda Banken AB1 Skandinaviska	2,111,750	2.2 %
11	Shelter AS	1,945,486	2.1 %
12	Jenssen & Co AS	1,845,879	1.9 %
13	Lindbank AS	1,838,007	1.9 %
14	Verdipapirfondet Alfred Berg Norge	1,700,000	1.8 %
15	MP Pensjon PK	1,632,767	1.7 %
16	HSBC Bank Plc1	1,299,776	1.4 %
17	Krogsrud Invest AS	1,250,000	1.3 %
18	Jolly Roger AS	1,203,147	1.3 %
19	Thon Holding AS	1,081,211	1.1 %
20	DNB Bank ASA1	1,004,164	1.1 %
	Top 20 shareholders	56,311,961	59.4 %
	Other shareholders	38,528,565	40.6 %
	Total shares	94,840,526	100.0 %

• ~1,400 shareholders as of October 14 2022
• The Lea bank share (ticker LEA) was registered on Euronext Growth (former Merkur Market) on 2 October 2020
• Management holds a total of 978,079 shares, corresponding to 1.0% of shares outstanding
• Members of the board holds a total of 460,611 shares, corresponding to 0.5%
• Current market capitalization of ~800 MNOK

Share price development – OSEBX indexed to Lea bank @ 01.01.21

Lea bank ASA

Holbergs gate 21

0166 Oslo

Norway

+47 22 99 14 00 ir@leabank.no