Instabank — Earnings Release 2021

Feb 10, 2022

Fourth quarter 2021: Record high profits for Instabank

Fourth quarter 2021: Record high profits for Instabank

Instabank continues its strong growth and delivered a record high fourth quarter result. For the year, profit after tax doubled, from MNOK 42.7 in 2020 to MNOK 83.4 in 2021.

Instabank achieved the announced target of growth in lending of NOK 1 billion in 2021, which is a growth of 37 %. The market for traditional consumer loans shows a decline in Norway and has declining profitability, but Instabank has chosen to utilize available capital in mortgage-backed lending. Mortgages in the Norwegian market grew by MNOK 835 in 2021.

- We are proud of the innovation capacity our organization has shown," says CEO Robert Berg of Instabank. - In a short period of time, the bank developed a new lending product that makes better use of capital, has good profitability and low loan losses. The product is a success because customers who own their own homes can refinance expensive consumer loans and experience increased disposable income due to lower total borrowing costs. The majority of our mortgages are for refinancing purposes. We do not require the customer to refinance all their debt, such as existing mortgages, but choose the one that gives the customer the best financial savings. We also do not provide loans to customers who are in default on existing loans. This is shown by the fact that we have very low losses on this type of loan.

Profits doubled:

In the fourth quarter, Instabank delivered the strongest result in the bank's history, with a pre-tax profit of MNOK 34.9 and after-tax profit of MNOK 25.5, compared to MNOK 14.2 in the same quarter a year earlier. For the year, profits were almost doubled, from MNOK 42.7 to MNOK 83.5.

An important reason for the strong growth in profits is that the Bank has managed to achieve solid lending growth without substantially increasing costs. The cost level in the fourth quarter was about the same as a year earlier, and lower than the third quarter of 2021. Developments in loan losses also contribute to strong growth in profits. Losses were somewhat higher in the fourth quarter than earlier in the year because of seasonal variations but were still only 2.4 % of gross lending. As an increasing proportion of loans are mortgage-backed, losses are expected to remain low.

- We run a highly efficient business, with clear economies of scale. Costs measured against revenues have fallen from 45 % to 35 % over twelve months. Both we and our shareholders are of course focused on return on equity, and it reached 16.6 % in the last quarter. For all of 2021, we managed 14.4 %, well above our target," says Robert Berg.

Stronger growth in 2022:

The Bank sees no reason for growth to slow in 2022. The target is a growth in lending of 1.4 billion NOK, of which a substantial share in mortgage lending, which at year-end accounted for 40 % of total loans in Norway. Profit after tax is expected to increase from MNOK 83.4 in 2021 to MNOK 115 in 2022.

- We dare to set ambitious goals. The bank is becoming increasingly diversified, and we will continue to develop valuable services," says Robert Berg.

Instabank will hold a presentation of the report online on Teams at 13:00, facilitated by Sparebank 1 Markets. For registration, please send an email to corporateaccess@sb1markets.no, and a link to the presentation will be returned.

A physical presentation will also be held at 10:00 in Stavanger at Clarion Hotel Stavanger, Arne Rettedals gate 14. For registration, please send an email to corporateaccess@sb1markets.no.

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 the Norwegian Securities Trading Act