Instabank — Earnings Release 2021

May 6, 2021

Q1 2021: Instabank reports strong growth

Q1 2021: Instabank reports strong growth

Instabank achieved strong growth in net loans for Q1 2021, combined with continued low losses on loans. Profits increased 160 percent compared to the same quarter in 2020.

- Our target is to increase net loans by NOK 1 billion in 2021. First-quarter proved that our ambition is realistic and we achieved this in a period where other banks report low or zero growth, says Robert Berg, CEO of Instabank. A gross lending growth of NOK 1 billion corresponds to a 35 per cent growth during 2021.

Net loans increased by MNOK 184 during the first quarter. Adjusted for currency effects growth in net loans was MNOK 244. Nearly all of this growth is attributed to the Norwegian market, which now accounts for 60 per cent of all loans. Mortgage loans, introduced to the market in the summer of 2020, accounts for the majority of total growth. During Q1 mortgage lending more than doubled, to MNOK 340. 19 per cent of total loans in Norway is now mortgage loans.

- Our mortgage loans offering has proved to be very competitive, and Instabank is becoming an increasingly more diversified bank. During this quarter we have also completed our joint product development with Coop Bygg. Customers can now choose the app, credit card or mobile as their preferred method of payment. The Instabank organization has adapted quickly to a changing business environment, and this flexibility will continue to be a core strength going forward, Robert Berg says.

Strong growth in profits

Instabank reports a pre-tax profit of MNOK 18,7, compared to MNOK 7,1 for Q12020. The after-tax profit was MNOK 14,0 (MNOK 5,3).

- Growth in profits will be stronger than growth in net loans during 2021. Our ambition is to achieve a return on equity (ROE) of 13 per cent for this year, Robert Berg says.

Both total income and operating expenses are stable, however losses on loans show a steep decline year-on-year. Losses amounted to 2,7 per cent of average gross loans in Q1. This favourable situation is caused by a combination of a better financial situation for many of the bank´s customers, a higher share of mortgage loans and an improved quality in the loan portfolio in general.

Interest rates for mortgage loans are lower than for consumer loans. However, this is balanced by lower cost of acquisition, greatly reduced churn and much lower losses. Mortgage loans will, in combination with smaller loans generated by retail partners like Coop and Skeidar, contribute to most of the expected growth in net loans for the remainder of 2021. Losses on loans are expected to remain moderate.

A presentation of the report will be held online on Teams at 13:00 on May 6th, facilitated by Sparebank 1 Markets.

For registration, please send an email to corporateaccess@sb1markets.no, and a link to the presentation will be returned.

Contact persons:

Robert Berg, CEO, robert.berg@instabank.no

Per Kristian Haug, CFO, perkristian.haug@instabank.no

This information is subject to the disclosure requirements pursuant to Section 5-12 of the Norwegian Securities Trading Act