Coop Pank — Investor Presentation 2021

Feb 11, 2021

Coop Pank Group 2020 Q4 and yearly unaudited results

2020 Q4 results

2020 results

Stock information

Growth strategy

Business volumes in quarterly comparison

Change relfects difference in net profit

Deposits

Results of Q4 2020 – compared to Q3 2020

Key indicators in quarterly comparison • Revenues +7%

• • Net interest increased +0.5m€ as loan portfolio grew by 71 m€
• Operating costs +12%
  • Payroll expenses (increased number of employees)
  • Marketing (numerous marketing campaigns)
• Impairment losses -37%
  • No one-off impairments due to corona pandemic in Q4, adjustments of loan provision rates in year end 2020
• Net profit +48%

	Q4	Q3	Quarterly
	2020	2020	change
Net operating income ('000 €)	8 519	7 988	+531	+7%
Interest	7 808	7 353	+455	+6%
Service fee and commissions	540	558	-18	-3%
Other	171	77	+94	+122%
Operating expenses	-5 272	-4 726	-546	+12%
Operating profit	3 247	3 262	-15	-0%
Impairment losses	-715	-1 139	+424	-37%
Profit before income tax	2 532	2 123	+409	+19%
Income tax	-108	-111	+3	-3%
Net profit	2 424	2 012	+412	+20%
Net loan portfolio (m€)	671	599	+71	+12%
Deposits and loans received	758	688	+70	+10%
Equity	98	94	+3	+4%
ROE	10.1%	8.6%	+1.5%
Net interest margin (NIM)	3.8%	4.0%	-0.1%
Cost of financing	0.8%	0.9%	-0.1%
Cost / income ratio (CIR)	62%	59%	+2.7%
Capital adequacy ratio	19.5%	18.9%	+0.6%

2020 Q4 results

2020 results

Stock information

Growth strategy

Business volumes in yearly comparison

Change reflects difference in net profit

Results of 2020 – compared to 2019

• • Net interest increased +7.7m€ as loan portfolio grew by 210m€
• Operating costs +16%
  • Payroll expenses increased by 1.2m€, number of Coop Pank full time employees increased by 16
  • IT costs and depreciation of intangible assets +1m€ due to continued investments into IT development
• Operating profit +65%
• Impairment losses +148%
  • One-off impairments due to corona pandemic totalled 1.1m€ in Q1 and Q2 2020
• Net profit +31%

Key indicators in year on year comparison					• Revenues +31%
	2020	2019	Year on Year change
Net operating income ('000 €) Interest Service fee and commissions Other Operating expenses Operating profit Impairment losses Profit before income tax Income tax	31 089 28 371 2 097 621 -18 796 12 293 -4 789 7 504 -245	23 719 20 689 2 372 658 -16 261 7 458 -1 931 5 527 0	+7 370 +7 682 -275 -37 -2 535 +4 835 -2 858 +1 977 -245	+31% +37% -12% -6% +16% +65% +148% +36% -
Net profit Net loan portfolio (m€)	7 259 671	5 527 460	+1 732 +210	+31% +46%
Deposits and loans received Equity	758 98	507 89	+251 +8	+50% +9%	Q1 and Q2 2020
ROE Net interest margin (NIM) Cost of financing Cost / income ratio (CIR)	7.8% 3.9% 0.9% 60%	9.8% 4.2% 1.0% 69%	-2.0% -0.3% -0.1% -8.1%		• Net profit +31%
Capital adequacy ratio	19.5%	24.3%	-4.9%

Increased loan portfolio in all business lines

• Net loan portfolio Yearly growth of loan portfolio +210m€ (+46%)
  • Business loans +101m€ (+64%)
  • Private mortgage loans +84m€ (+47%)
  • Leasing +19m€ (+30%)
  • Consumer loans +7m€ (+11%)
  • Gross interest of portfolio 6%
    • Decreased proportion of consumer loans portfolio in total group loans impacts interest margin (see next slide)

Loan portfolio interest by business lines

Quality of loan portfolio

• Highest amount of corona-related payment holidays in May 2020: 52m€ of portfolio, comparable amount was 8.5m€ in the end of year 2020
• In relation to coronavirus impact to economy, total of 1.1m€ of additional loss allowances were recognized in 6M of 2020
• Credit risk cost ratio 0.8% in 2020 (0.5% in 2019)

Total residual of loan principal amounts past due; loss allowances in balance sheet; share of overdue contracts in total (gross) portfolio

Loan portfolio quality by business lines

Total residual of loan principal amounts past due; loss allowances in balance sheet; share of overdue contracts in total (gross) portfolio

		Private consumer loans			Leasing
€ % mln , 10%	12%	9%	11%	mln € % ,
4 0	5 6	5 9	8 0 2 7	6%	7%
1 4 2 6	0 5	0 5	3 5	1 1	2 8
2 8 -	- 2 0	- 2 8	4 7 -	1 1	2 8
2017	2018	2019	2020	2017	2018

Amount of deposits increased, cost decreased

• Deposits Deposits grew by 251m€ (+50%)
  • Demand deposits +150m€ (+99%)
    • +108m€ from business clients
    • +42m€ from private clients
  • Term deposits +101m€ (+29%)
    • +62m€ from business clients
    • +17m€ from private clients
    • +34m€ through Raisin platform
    • • 12m€ deposits from financial institutions
  • Proportion of demand deposits in total deposits reached 40% by the end of 2020 (30% in the end of 2019)
  • Total cost of financing (0.9%) has decreased as proportion of demand deposits in total deposits has increased

We are growing client base and market share

• Market share and number of bank clients 23 000 new clients with bank account in 2020 (2019 +19 000)
  • +21 000 private clients
  • +2000 business clients
  • Banks market share changed in 2020
    • Market share in loan portfolio 2.4% => 3.4%
    • Market share in deposits 2.6% => 3.2%

Capital base supports growth plans

Performance indicators

• • +31% revenue growth vs +16% increase of costs
• Decreased ROE
  • +31m€ addition to shareholders equity in December 2019 via IPO

Brand awareness and preference as financial partner

Preference as financial partner

Coop Pank brand in Estonian banking market

• Corporate image of Coop Pank compared to other banks Replies to question: "In your opinion, which banks carry these attributes?"
  • Coop Pank scored highest among other Estonian banks:
    • National company
    • Cooperative
    • Dares to do things differently
    • Flexible
    • Great commercials

Summary: 2020 results

23 000 new clients 7.3 mln € profit

• Loan portfolio grew by 210m€ (+46% YoY)
• Deposits increased by 251m€ (+50% YoY)
• 23 000 new customers (+36% YoY) Bank has a total of 87 000 clients with bank account
• Net profit 7.3m€ (+31% YoY). Strong capital position
• Market share ca 3-3.5%. Our footprint in Estonian society is already visible

2020 Q4 results

2020 results

Stock information

Growth strategy

Shareholders

No of Coop Pank shareholders TOP shareholders

Share price

Share price (€) and trading volume (thousand shares)

2020 Q4 results 2020 results Stock information

Growth strategy

Target: increasing number of clients

Target: growth of loan portfolio

Target: reducing cost of financing

Target: decreasing cost/income ratio

Kerli Lõhmus Member of Board, CFO kerli.lohmus@cooppank.ee

https://www.cooppank.ee/en/for-investors

Margus Rink Chairman of Board, CEO margus.rink@cooppank.ee

Financial results 5 years

Financial results and key indicators
	2016	2017	2018	2019	2020
Net operating income ('000 €)	10 960	17 289	19 768	23 719	31 089
Interest	7 398	11 519	16 779	20 689	28 371
Service fee and commissions	2 737	2 170	2 302	2 372	2 097
Other	825	3 600	687	658	621
Operating expenses	-8 088	-11 518	-13 601	-16 261	-18 796
Operating profit	2 872	5 771	6 167	7 458	12 293
Impairment losses	-1 009	-1 313	-1 392	-1 931	-4 789
Profit before income tax	1 863	4 458	4 775	5 527	7 504
Income tax	-120	0	-22	0	-245
Net profit	1 743	4 458	4 753	5 527	7 259
Net loan portfolio (m€)	153	238	329	460	671
Deposits and loans received	254	316	385	507	758
Equity	29	45	49	89	98
ROE	5.3%	11.7%	10.1%	9.8%	7.8%
Net interest margin (NIM)	2.6%	3.7%	4.3%	4.2%	3.9%
Cost of financing	0.6%	0.6%	0.8%	1.0%	0.9%
Cost / income ratio (CIR)	74%	67%	69%	69%	60%
Capital adequacy ratio	21.2%	19.9%	18.1%	24.3%	19.5%