Instabank

Interim Presentation Q1 – 2021 May 6th, 2021

www.instabank.no instabank.no instabank.no

Importantinformation and disclaimer

THIS PRESENTATION (THE "PRESENTATION") HAS BEEN PRODUCED BY INSTABANK ASA (THE "COMPANY" OR "INSTABANK"), SOLELY FOR USE AT THE PRESENTATION TO INVESTORS AND IS STRICTLY CONFIDENTIAL AND MAY NOT BE REPRODUCED OR REDISTRIBUTED, IN WHOLE OR IN PART, TO ANY OTHER PERSON. TO THE BEST OF THE KNOWLEDGE OF THE COMPANY AND ITS BOARD OF DIRECTORS, THE INFORMATION CONTAINED IN THIS PRESENTATION IS IN ALL MATERIAL RESPECT IN ACCORDANCE WITH THE FACTS AS OF THE DATE HEREOF, AND CONTAINS NO MATERIAL OMISSIONS LIKELY TO AFFECT ITS IMPORT.

THIS PRESENTATION CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS RELATING TO THE BUSINESS, FINANCIAL PERFORMANCE AND RESULTS OF THE COMPANY AND/OR THE INDUSTRY IN WHICH IT OPERATES. FORWARDLOOKING STATEMENTS CONCERN FUTURE CIRCUMSTANCES AND RESULTS AND OTHER STATEMENTS THAT ARE NOT HISTORICAL FACTS, SOMETIMES IDENTIFIED BY THE WORDS "BELIEVES", EXPECTS", "PREDICTS", "INTENDS", "PROJECTS", "PLANS", "ESTIMATES", "AIMS", "FORESEES", "ANTICIPATES", "TARGETS", AND SIMILAR EXPRESSIONS. THE FORWARD-LOOKING STATEMENTS CONTAINED IN THIS PRESENTATION, INCLUDING ASSUMPTIONS, OPINIONS AND VIEWS OF THE COMPANY OR CITED FROM THIRD PARTY SOURCES ARE SOLELY OPINIONS AND FORECASTS WHICH ARE SUBJECT TO RISKS, UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE ACTUAL EVENTS TO DIFFER MATERIALLY FROM ANY ANTICIPATED DEVELOPMENT. NONE OF THE COMPANY OR ANY OF THEIR PARENT OR SUBSIDIARY UNDERTAKINGS OR ANY SUCH PERSON'S OFFICERS OR EMPLOYEES PROVIDES ANY ASSURANCE THAT THE ASSUMPTIONS UNDERLYING SUCH FORWARD-LOOKING STATEMENTS ARE FREE FROM ERRORS NOR DOES ANY OF THEM ACCEPT ANY RESPONSIBILITY FOR THE FUTURE ACCURACY OF THE OPINIONS EXPRESSED IN THIS PRESENTATION OR THE ACTUAL OCCURRENCE OF THE FORECASTED DEVELOPMENTS. THE COMPANY ASSUMES NO OBLIGATION, EXCEPT AS REQUIRED BY LAW, TO UPDATE ANY FORWARD-LOOKING STATEMENTS OR TO CONFORM THESE FORWARD-LOOKING STATEMENTS TO OUR ACTUAL RESULTS.

AN INVESTMENT IN THE COMPANY INVOLVES INHERENT RISKS AND IS SUITABLE ONLY FOR INVESTORS WHO UNDERSTAND THE RISKS ASSOCIATED WITH THIS TYPE OF INVESTMENT AND WHO CAN AFFORD A LOSS OF ALL OR PART OF THE INVESTMENT. SEVERAL FACTORS COULD CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS THAT MAY BE EXPRESSED OR IMPLIED BY STATEMENTS AND INFORMATION IN THIS PRESENTATION, INCLUDING, AMONG OTHERS, RISKS OR UNCERTAINTIES ASSOCIATED WITH THE COMPANY'S BUSINESS, ITS DEVELOPMENT, GROWTH MANAGEMENT, FINANCING, MARKET ACCEPTANCE AND RELATIONS WITH CUSTOMERS, AND, MORE GENERALLY, GENERAL ECONOMIC AND BUSINESS CONDITIONS, CHANGES IN DOMESTIC AND FOREIGN LAWS AND REGULATIONS, TAXES, CHANGES IN COMPETITION AND PRICING ENVIRONMENTS AND OTHER FACTORS. SHOULD ONE OR MORE OF THESE RISKS OR UNCERTAINTIES MATERIALISE, OR SHOULD UNDERLYING ASSUMPTIONS PROVE INCORRECT, ACTUAL RESULTS MAY VARY MATERIALLY FROM THOSE DESCRIBED IN THIS DOCUMENT. THE COMPANY DOES NOT INTEND, AND DOES NOT ASSUME ANY OBLIGATION, TO UPDATE OR CORRECT THE INFORMATION INCLUDED IN THIS PRESENTATION.

NO REPRESENTATION OR WARRANTY (EXPRESS OR IMPLIED) IS MADE AS TO, AND NO RELIANCE SHOULD BE PLACED ON, ANY INFORMATION, INCLUDING PROJECTIONS, ESTIMATES, TARGETS AND OPINIONS, CONTAINED HEREIN, AND NO LIABILITY WHATSOEVER IS ACCEPTED AS TO ANY ERRORS, OMISSIONS OR MISSTATEMENTS CONTAINED HEREIN, AND, ACCORDINGLY, NONE OF THE COMPANY OR ANY OF THEIR PARENT OR SUBSIDIARY UNDERTAKINGS OR ANY SUCH PERSON'S OFFICERS OR EMPLOYEES ACCEPTS ANY LIABILITY WHATSOEVER ARISING DIRECTLY OR INDIRECTLY FROM THE USE OF THIS DOCUMENT.

THERE MAY HAVE BEEN CHANGES IN MATTERS WHICH AFFECT THE COMPANY SUBSEQUENT TO THE DATE OF THIS PRESENTATION. NEITHER THE ISSUE NOR DELIVERY OF THIS PRESENTATION SHALL UNDER ANY CIRCUMSTANCE CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT THE AFFAIRS OF THE COMPANY HAVE NOT SINCE CHANGED, AND THE COMPANY DOES NOT INTEND, AND DOES NOT ASSUME ANY OBLIGATION, TO UPDATE OR CORRECT ANY INFORMATION INCLUDED IN THIS PRESENTATION. BY ATTENDING OR RECEIVING THIS PRESENTATION, YOU ACKNOWLEDGE THAT YOU WILL BE SOLELY RESPONSIBLE FOR FORMING YOUR OWN VIEW OF THE POTENTIAL FUTURE PERFORMANCE OF THE COMPANY.

THIS PRESENTATION SPEAKS AS OF 31 DECEMBER 2016. NEITHER THE DELIVERY OF THIS PRESENTATION NOR ANY FURTHER DISCUSSIONS OF THE COMPANY WITH ANY OF THE RECIPIENTS SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE SUCH DATE.

Key highlights Q1-21

Strong net loans growth of 184 MNOK Growth of 244 MNOK adjusted for negative currency effects

Mortgage product growth of 177 MNOK, 70 % higher than Q4-20 Mortgage volume hits 19 % of total loans in Norway

Profit before tax of 18.7 MNOK, after tax 14.0 MNOK Increase in profits of 160 % from Q1-20

Coop Byggekonto product roll-out completed Customers can now choose between paying with the Coopay app, the Coop Byggekonto Mastercard or by mobile using an Instabank QR code. Customer's preference is 1/3 on each alternative

Coop Byggekonto rollout-completed

Customers at Coop Obs Bygg and Coop Byggmix can now choose between three payment methods delivered by Instabank

Mastercard Coopay app QR-code

Net loan development

Net loan balance growth

Key comments

Adjusted for negative FX effects, net loans growth was 244 MNOK
Mortgages is driving the growth and hit a record high net loans growth of 177 MNOK in Q1-21, up from 106 MNOK in Q4-20
Although there are margin pressure and high repayment rate in the unsecured loans market, net unsecured loans growth was 67 MNOK adjusted for FX effects

Net loans to customers

Key comments

Mortgages to total net loans grew to 11 % end of Q1-21 from 6 % per end of Q4-20
In Norway, mortgages are 19 % of total net loans representing increased diversification and reduced credit risk in the Norwegian loan portfolio 5

Diversified loan portfolio

*) Includes accounts with zero balance with an available credit limit 6

Diversified funding volume

*) Currently new customers only per end of Q1-21, was effective May 1st for existing customers

Total income

Key comments

Interest income affected by two fewer interest days than the previous quarter and increased share of mortgages
Interest expenses positive impacted by decreasing deposit rates
Strong income from payment insurance commissions and upfront fees

Total income Total income detailed

MNOK MNOK

Funding cost and yields

Development in funding cost and yields Key comments

Loan yield decreased mainly due to increased share of mortgages at a lower loan yield as well as unsecured loans margin pressure in all three countries
The deposit interest rates continued its decreasing path following changes in rates in all three currencies

Operating expenses

Operating expenses breakdown MNOK 3,0 3,1 3,3 3,4 3,5 10,8 10,4 12,8 12,0 12,0 3,1 1,1 0,9 1,9 2,4 8,2 9,5 11,0 13,0 12,3 1,7 1,1 1,6 26,7 1,5 1,5 25,2 29,5 31,7 31,7 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21

Depreciation and amortisation Other administrative expenses Direct marketing costs Salary and other personell expenses

Key comments

Total operating expenses were stable compared to the previous quarter and came in at 31.7 MNOK.
Increased marketing expenses offset a decrease in employee bonus provisions

Cost/income ratio Other expenses

Credit risk

0,0 %

-80,0 %

-60,0 %

-40,0 %

-20,0 %

0,0 %

5,0 %

Impairment losses

Loans past due

% of gross lending

0,0 10,0 20,0 30,0 40,0

-5,0 % 5,0 % 15,0 % 25,0 % 35,0 % 45,0 %

Key comments

Losses on loans remained relatively low and were 20.3 MNOK or 2.7 % off average gross loans in the period, compared to 19,3 MNOK/ 2.6 % in the previous quarter 10,0 %
- The share of loans past due 1-30 by the end of the quarter was 13.0 %, significantly lower than one year earlier when it was 16.4 %
- The improvement in payment behavior is assumed to be a consequence of an increased share of mortgages in the loan portfolio, improved liquidity for most of our customers, and improved credit quality
- The share of non-performing loans was only 6.2 %, up from 5.6 % per end of Q4-20. The increase is mainly because the forward flow agreements in all three countries ended during the quarter and were not prolonged

Profit development

MNOK

Net profit Key comments

An increase in Total Income was offset by a slightly increase in losses on loans, while operating cost where stable compared to the previous quarter
Net profit after tax was 14.0 MNOK, up from 5.3 MNOK in the same quarter last year
Return on equity in the quarter was 10.2 %, up from 4.0 % in the same quarter last year

Capital adequacy

Developments in capital adequacy ratios

Key comments

Common equity Tier 1 Capital ratio was 19.6 %, and the total capital ratio was 23.0 % at the end of Q1-21, 2.7 % points above the total regulatory capital requirement of 20.3 %.
The surplus capital above the total regulatory capital requirement was 76 MNOK at the end of Q1-21

CET1 requirement per country and total

From startup to economies of scale

START UP 2016 | 2017

Establish core capabilities Ensure profitability Focus on loans and deposits

EXPANSION 2018 | 2020

Build and develop capabilities to enable product- and geographical expansion

ECONOMIES OF SCALE 2021 | 2023

Capitalize on strategic and operational platform; Economies of scale, profitability & solidity

Markets and products

Target growth in markets with highest ROE at any given time

Unsecured	Mortgage	Deposits	Retail	Online	Cards
Q3-2016	Q2-2020	Q3-2016	Q4-2017	Q4-2018	Q2-2019
Q4-2017	Tbd	Q3-2018	Q2-2020	Q2-2020	Tbd
Q4-2018	Tbd	Q1-2019	Tbd	Tbd	Tbd
na	na	Q3-2020	na	na	na

Our target is to achieve a more diversified portfolio by prioritizing mortgage loans going forward. This will reduce risk and improve profits.

Financials

Net loans

Growth is necessary to improve profits

Cost to income Economies of scale reduce cost

13 % Heading in the right direction 15-20 % Proof of success ~ 6.0 Bn. Proof of growth capacity 3.7 Bn. Growth shows direction ~30 % Compares with industry leaders < 38 % Among the better Updated outlook Q4-20 report Strategic ambitions >10 % Heading in the right direction 3.5 Bn. Growth shows direction < 40 % Among the better Outlook from Q3-20 report

Ambitions for 2021

o Increased diversification - Repositioning from a typical consumer loans bank
o Growth approx.1 billion NOK
- - Current excess equity and generated profits enable high growth
o Strong profit growth

- 75 % increase in result after-tax may be within reach

www.instabank.no instabank.no

Share price and ownership

Instabank is listed at Euronext Growth at Oslo Børs, ticker "INSTA"

#	Shareholders	# of shares	%
1	KISTEFOS AS	83 126 568	24,99%
2	HODNE INVEST AS	30 588 311	9,20%
3	VELDE HOLDING AS	24 275 000	7,30%
4	BIRKELUNDEN INVESTERINGSSELSKAP AS	18 305 911	5,50%
5	BJELLA INVESTMENTS AS	13 112 021	3,94%
6	HJELLEGJERDE INVEST AS	9 161 000	2,75%
7	KRISTIAN FALNES AS	9 000 000	2,71%
7	LEIKVOLLBAKKEN AS	8 500 000	2,56%
9	MOROAND AS	8 500 000	2,56%
10	FREDLY	6 562 741	1,97%
11	ALTO HOLDING AS	5 870 000	1,76%
12	SONSINVEST AS	5 108 195	1,54%
13	LEIRIN HOLDING AS	4 333 333	1,30%
14	ENZIAN AS	4 172 387	1,25%
15	MAGDALENA HOLDING AS	4 001 301	1,20%
16	VENDETTA AS	3 831 578	1,15%
17	CAHE FINANS AS	3 501 000	1,05%
18	TVEDT INVESTERING AS	3 138 000	0,94%
19	VELDE EIENDOM INVEST AS	3 050 000	0,92%
20	T SANDVIK AS	2 816 000	0,85%
	Sum Top 20	250 953 346	75,44%
	Other shareholders	81 688 693	24,56%
	Total	332 642 039	100,00%

Position	Name	# of shares	% of total
CEO	Robert Berg (Sonsinvest AS)	5 608 195	1,7 %
CCO	Eivind Sverdrup (Leirin Holding AS)	4 448 833	1,3 %
CTO	Farzad Jalily	784 417	0,2 %
CMO	Jørgen Rui	300 011	0,1 %
CFO	Per Kristian Haug	154 935	0,0 %
CRO	Kjetil Andre Welde Knudsen	123 028	0,0 %
COO	Anne Jørgensen	75 625	0,0 %
	Sum management	11 495 044	3,5 %
	Other employees	1 666 739	0,5 %
	Board members	2 150 000	0,6 %
	Total	15 311 783	4,6 %	18

Top 20 shareholders as of 30.04.2021 Share price development last 12 months

Financial summary

	Q1-21	FY 2020	Q4-20	Q3-20	Q2-20	Q1-20	FY 2019
Total income:
Interest Income using the effective interest method	80 501	329 514	84 080	82 478	79 854	83 102	305 752
Other interest income	0	400	33	0	37	330
Interest expenses	9 587	51 346	12 053	13 598	13 164	12 531	53 158
Net interest income	70 914	278 568	72 060	68 880	66 727	70 901	252 594
Net commission fees and other income	-268		-15 441 -1 942 -2 951 -6 648 -3 900				-10 429
Total income	70 646		263 127 70 118 65 929 60 079 67 001				242 165
Operating expenses:
Salary and other personnel expenses		12 327 41 666 12 976 11 019 9 507 8 164 39 355
Other administrative expenses, of which		14 360 52 920 13 885 13 644 11 466 13 925 62 384
- direct marketing cost		2 393 6 996 1 875			880 1 105 3 136		18 231
Depreciation and amortisation		3 490 12 742 3 385 3 271 3 106 2 980 8 719
Other expenses		1 511 5 878 1 452 1 608 1 144 1 674 5 302
Total operating expenses	31 687		113 206 31 698 29 542 25 223 26 743				115 7610
Losses on loans		20 256 92 911 19 282 18 794 21 704 33 131 71 429
Operating profit before tax		18 702 57 010 19 138 17 593 13 152 7 127 54 974 0					0
Tax		4 676 14 331 4 863 4 398 3 288 1 782 13 735
Profit and other comprehensive income		14 027 42 679 14 275 13 195 9 864 5 345 41 239

P&L (NOK '000) Balance sheet (NOK '000)

	Q1-21	Q4-20	Q3-20	Q2-20	Q1-20
Assets
Loans and deposits with credit institutions 209 131 202 601 222 177 165 812 229 380
Loans to customers, of which	3 040 171	2 852 172	2 869 717	2 644 120	2 859 294
- prepaid agent commissions	84 795	81 236	82 557	79 006	90 339
Certificates and bonds	754 657 889 664			1 035 261 863 415 328 138
Deferred tax assets	-	-	12 129	16 527	-
Other intangible assets	28 752	29 478	30 227	29 434	28 703
Fixed assets	7 827	8 414	9 067	9 740	10 414
Other receivables, of which:	18 950	13 802	57 128		50 504 101 827
Total assets	4 059 489	3 996 129	4 235 706	3 779 552	3 557 756
Liabilities
Deposits from and debt to customers	3 340 513	3 303 998	3 548 363	3 129 285	2 887 298
Other debts	17 620	14 706	28 122	9 973	38 565
Accrued expenses and liabilities	47 898	37 747	32 840	26 279	26 780
Subordinated loans	56 000	56 000	56 000	56 000	56 000
Total liabilities	3 462 031	3 412 451	3 665 326	3 221 537	3 008 644
Equity
Share capital	332 642	332 642	332 642	332 642	332 642
Share premium reserve	178 192	178 192	178 192	178 192	178 192
Retained earnings	45 724	31 944	18 645	6 280	-2 622
Tier 1 capital	40 900	40 900	40 900	40 900	40 900
Total equity		597 459 583 679 570 380 558 014 549 113
Total liabilities and equity	4 059 489	3 996 129	4 235 706	3 779 552	3 557 756