Alisa Bank PLC

Earnings Release • Aug 18, 2023

Alisa Bank Plc's Half-Year Financial Report January-June 2023

Alisa Bank Plc's Half-Year Financial Report January-June 2023

ALISA BANK PLC STOCK EXCHANGE RELEASE 18.8.2023 AT 09.00 EEST

Profitable result achieved

January-June 2023 in brief

• The profit before taxes for January-June was a total of EUR 0.4 million (
-7.4).

• Net interest income increased from last year and was EUR 7.4 million (2.5).
Net interest income increased mainly due to the increase in market interest
rates and the increase in the loan portfolio.

• Total operating income 8.4 million almost tripled in January-June compared to
the previous year.

• Realized and expected credit losses remained at a moderate level and were EUR
-2.2 million (-4.2).

• Total capital ratio was 15.5 percent.

• The loan portfolio before reducing expected credit losses increased to EUR
170.3 million (163.8) in the accounting period.

• The deposit base was EUR 241.7 million (246.8) at the end of reporting period.

• The company changed its name from Fellow Bank Plc to Alisa Bank Plc on April
21, 2023.

• The company invested heavily in the development of digital banking services.
The new services received a positive reception from customers, which was
reflected in the measured customer satisfaction (Net Promoter Score: 47).

GROUP'S KEY FIGURES (EUR 1,000) 1-6/2023 1-6/2022 1-12/2022
Net interest income 7,427 2,463 9,053
Net commission and fee income 847 9 1,511
Total operating expenses -5,747 -5,577 -11,601
Impairment of receivables -2,235 -4,174 -8,321
Profit before taxes 390 -7,381 -9,684
* Cost / income ratio, % 69 235 113
Balance sheet total 287,527 290,790 291,661
* Return on equity (ROE), % 2.6 neg. neg.
Total capital ratio (TC), % 15.5 19.4 16.8
Common Equity Tier (CET1), % 12.0 12.6
Number of employees, end of period 85 90 73
Earnings per share (EPS), EUR 0.00 -0.10 -0.14
* Impairment of receivables / loan portfolio, % 3.8 7.3 5.1

* The calculation principles of alternative performance measures are presented
in Appendix A.

Financial targets and outlook for 2023

In 2023, we aim for profitable growth. We increase the bank's loan portfolio
under the conditions of profitability and capital adequacy, taking into account
the uncertainty of the financial situation in lending. Our growth is supported
by more comprehensive banking services for our customers and our digital
services that create differentiation. The general rise in interest rates
continues to support the improvement of our profitability.

During the first half of 2023, we reached a positive profit level. In the second
half of 2023, the bank's profits are estimated to increase from the level of the
first half of 2023. The result before non-recurring items is estimated to be
positive in 2023. The target for the group's total capital adequacy ratio is 16
percent. The aim is to strengthen the company's own capital during the second
half of 2023.

Teemu Nyholm, CEO

Profitable result achieved

Profit before taxes for the reporting period was EUR 0.4 million. The positive
performance was an outcome of the loan portfolio growth, a positive net interest
income trend and a reduction in expected credit losses.

Our loan portfolio grew to EUR 170 million by the end of June. The general rise
in interest rates bolstered the growth of our interest income.

The corporate customer business continued to grow strongly. The launch of
banking operations improved our competitiveness and visibility, and this was
clearly reflected in corporate financing, where we gained a large number of new
financial services customers. In corporate financing, the volume of funding
increased by 19% compared to the second half of 2022. Growth was particularly
concentrated in invoice financing, and we tightened our corporate lending
policy. We believe that both demand for and our competitiveness in SME financing
will continue to be strong.

In consumer customers, our credit portfolio remained at the previous year's
level. In the markets demand for consumer financing continued to grow
moderately, but our growth was constrained by our tighter credit policy and
capital constraints.

In the international markets, we continued to carefully develop our business
with a focus on consumer financing in Denmark and Germany. In Germany, we
launched a partnership with Check 24, the largest loan broker in the market. In
both markets, loan repayments developed positively in line with our targets,
setting the stage for future growth in both Denmark and Germany.

The company's deposit portfolio stood at EUR 242 million at the end of June. We
diversified the structure and sources of our deposit base: the share of term
deposits increased, and we succeeded in improving the raising of deposit through
our digital channels. As interest rate rose, our funding costs increased, and at
the end of June, the annual average interest on our deposit base was 2.2%. At
the same time, the bank's net interest on funds increased significantly. We
expect that the rise in interest rates will level off in the second half of the
year though it will continue to support the improvement of the interest margin.

Despite a challenging market environment, the credit losses fell to 3.8% of the
loan portfolio. During the period under review, we continued to tighten our
lending criteria, taking into account the rising cost of living for consumer
customers and the tighter operating environment for SMEs. We anticipate that the
inflation and the weakening of consumer purchasing power will level off in 2023.
The employment rate has also remained high, which will buoy our customer's
liquidity.

The bank's liquidity position is strong, with liquid assets of 105 million
euros. The bank's total capital adequacy was 15.5 percent, falling short of the
target level of 16 percent. The official requirement for total capital adequacy
is 10.5%. We decided to withdraw from the issuance of our planned Tier 2 bond in
the spring due to the uncertainty regarding the capital adequacy and liquidity
position of international banks.

We have continued to systematically develop the bank's digital services. We
launched a credit card for our customers in January 2023 and payment transaction
accounts in February. These form a solid foundation for the bank's digital
services in the future.

In June, we launched banking services that are integrated with financial
administration systems (BaaS) in cooperation with Talenom Corporation. This will
allow Talenom's corporate customers to benefit from user-friendly banking
services integrated directly into their financial administration software.
Earlier this year, we also launched an e-commerce payment solution for SMEs with
Paytrail, Finland's largest payment intermediary. Both initiatives support our
strategy to use digital channels to acquire new customers.

In April, we changed the name of the bank to Alisa Bank. At the same time, we
launched new versions of our mobile and online banking services for our
customers. We are pleased to report that we achieved industry-leading ratings
(4.5/5) in app store reviews and our measured customer satisfaction remained at
a high level (Net Promoter Score: 47).

In late 2022, we started a cost-savings programme to achieve a significant
reduction in the bank's fixed costs. The programme has been successful, and our
operating efficiency developed positively in the reporting period with a
cost/income ratio of 69% at the end of the period. Going forward, business
growth will not require us to make significant additional investments or an
increase in the number of personnel, so as business volumes grow, our operating
efficiency will improve.

The growth of the bank's balance sheet requires the strengthening of equity as
planned during the second half of the year. We have also made progress in our
preparations to strengthen our capital structure. In the second half of the
year, however, we expect that maintaining our capital adequacy target will
constrain loan portfolio growth. Nevertheless, if we are successful in
strengthening capitalisation, we will be in an excellent position to continue to
grow our loan portfolio in the coming years in line with our long-term target of
25%.

During the second half of the year, we will continue our controlled growth,
focusing on growing our loan portfolio and deposits in both the corporate and
the consumer customer sector.

At the same time, we are determined to continue the development of our
innovative digital banking services to drive strong growth in customer numbers
and build awareness of Alisa Bank as the most user-friendly digital everyday
bank.

Achieving a positive result was an important step on the new bank's strategic
path, and it provides us a solid platform for future growth.

Teemu Nyholm

CEO

Additional information

Teemu Nyholm

CEO

teemu.nyholm@alisapankki.fi

+358 50 577 1028

Alisa Bank in brief

Alisa Bank (https://www.alisabank.com/) Plc is a new Finnish digital bank that
helps both personal and business customers to manage their day-to-day finances
in a flexible and straightforward manner. For savers, we offer an attractive
interest rate on deposits. Alisa Bank Plc is regulated by the Financial
Supervisory Authority of Finland and listed on Nasdaq Helsinki's main list
(ALISA). www.alisabank.com

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