Instabank

Interim Presentation Q4 – 2020 February 10th, 2020

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 Q4-20

Profit before tax of 19.1 MNOK, after tax 14.3 MNOK Total income increased, and loan losses were stable at a relatively low level

The sale of part of the NPL portfolio confirms NPL valuation and reduces risk

The NPL ratio was nearly halved and fell to 5.6 % of gross loans

Net loans growth of 137 MNOK adjusted for sold NPL portfolio and negative currency effects Unadjusted, net loans decreased by 16 MNOK

Mortgage growth more than doubled to 106 MNOK in Q4-20 from 52 MNOK in Q3-20 New sales were better than planned at an attractive yield

Diversified loan portfolio

Diversified high funding volume

*) Deposit rate in Norway decreased to 1.00 % as per February 5th for new customers and the new rate will be effectice May 1st for existing customers

Net loan development

Net loans to customers

MNOK

( 300)

200

700

1 200

1 700

2 200

2 700

3 200

Norway Finland Sweden Series3

Excluding sale of the NPL portfolio (net 82 MNOK) and currency effects (- 71 MNOK), net loans growth was 137 MNOK
In Norway, the second priority mortgage product, launched by the end of Q2-20, continued its strong performance. Volumes increased by 107 MNOK to 163 MNOK

Total income

Key comments

Interest income increased by 1.6 MNOK from the previous quarter as the average loan balance was higher in Q4-20 than the previous quarter.
A decrease in deposit volume of 244 MNOK and reduced deposit rates led to a reduction of interest expenses of 1.5 MNOK from the previous quarter

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 rate
The deposit interest rates continued its decreasing path following changes in rates in all three currencies

Operating expenses

Cost/income ratio

Operating expenses breakdown

The increase in operating expenses from the previous quarters in 2020 was due to an unevenly distribution of employee bonus provisions throughout the year as well as non- recurring items
Personnel expenses increased by 1.9 MNOK as the employee bonus provisions were 3.0 MNOK compared to 1.4 MNOK if the provisions had been distributed evenly throughout each quarter in 2020. The increase in bonus provisions a consequence of achieving a higher target
Administrative expenses included non-recurring advisory cost of 0,9 MNOK.

Credit risk

0,0 %

-80,0 %

-60,0 %

-40,0 %

-20,0 %

0,0 %

5,0 %

Impairment losses

Loans past due

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

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

The relatively low loan losses provisions of 19.3 MNOK / 2.6 % is a result of good performance in terms of loans past due 10,0 %
- The negative seasonal developments in the share of loans past due we usually experience this time of year, did not incur and can be explained by better liquidity among most of our customers and stricter credit practice over time
- The share of loans past due 1-30 days was 12.7 % per year-end 2020, significantly lower than 17.2 % per year-end 2019
- At the end of Q4-20, all mortgages were performing loans, and no loans were in the 60-90 days past due category.
- Following the NPL portfolio sale, total NPL ratio dropped to 5.6 % from 10.4 % as per the end of the previous quarter

Profit development

Net profit before tax Key comments

MNOK

The increase in total income and relatively low losses on loans had a positive effect, while increased operating expenses partly due to non—recurring items as well as uneven distribution of employee bonus provisions throughout 2020, had a negative effect on the net profit
Net profit after tax was 14.3 MNOK, up from 13.2 MNOK in the previous quarter
Return on equity in the quarter was 10.7 %, up from 10.1 % in the previous quarter

Capital adequacy

Developments in capital adequacy ratios

CET1 requirement per country and total

The NPL portfolio sale, with a risk weight of 100 %, improved capital ratios by approximately 0.7 % points representing an increased growth capacity of 110 MNOK if allocated to unsecured loans or 230 MNOK for mortgages
Common equity Tier 1 Capital ratio was 19.8 % and the total capital ratio was 23.3 % at the end of Q4-20, 3.1 % points above the total regulatory capital requirement of 20.3 %.
The surplus capital above the total regulatory capital requirement was 86 MNOK at the end of Q4-20

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

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	APOLLO ASSET LIMITED	6 562 741	1,97%
11	ALTO HOLDING AS	5 770 000	1,73%
12	SONSINVEST AS	5 108 195	1,54%
13	ENZIAN AS	5 000 000	1,50%
14	LEIRIN HOLDING AS	4 333 333	1,30%
15	VENDETTA AS	3 919 317	1,18%
16	MAGDALENA HOLDING AS	3 720 141	1,12%
17	CAHE FINANS AS	3 500 000	1,05%
18	TVEDT INVESTERING AS	3 138 000	0,94%
19	VELDE EIENDOM INVEST AS	3 050 000	0,92%
20	GRUNNFJELLET AS	2 590 556	0,78%
	Sum Top20	251 261 094	75,53%
	Other shareholders	81 380 945	24,47%
	Total	332 642 039	100,00%

Position	Name	# of shares	% of total
CEO	Robert Berg (Sonsinvest AS)	5 497 195	1,7 %
CCO	Eivind Sverdrup (Leirin Holding AS)	4 403 833	1,3 %
CTO	Farzad Jalily	742 417	0,2 %
CFO	Per Kristian Haug	95 000	0,0 %
CRO	Kjetil Andre Welde Knudsen	70 000	0,0 %
COO	Anne Jørgensen	35 000	0,0 %
CMO	Jørgen Rui	234 011	0,1 %
	Sum management	11 077 456	3,3 %
	Other employees	1 612 548	0,5 %
	Board members	2 150 000	0,6 %
	Total	14 840 004	4,5 %

Top 20 shareholders as of 03.02.2021 Share price development last 12 months

Share price (NOK)

Financial summary

	FY 2020	Q4-20	Q3-20	Q2-20	Q1-20	FY 2019	Q4-19
Total income:
Interest Income using the effective interest method	329 514	84 080	82 478	79 854	83 102	305 752	79 957
Other interest income	400	33	0	37	330
Interest expenses	51 346	12 053	13 598	13 164	12 531	53 158	12 952
Net interest income	278 568	72 060	68 880	66 727	70 901	252 594	67 006
Net commission fees and other income		-15 441 -1 942 -2 951 -6 648 -3 900					-10 429 -5 269
Total income		263 127 70 118 65 929 60 079 67 001				242 165 61 737
Operating expenses:
Salary and other personnel expenses		41 666 12 976 11 019 9 507 8 164 39 355 8 788
Other administrative expenses, of which		52 920 13 885 13 644 11 466 13 925 62 384 12 438
- direct marketing cost		6 996 1 875		880 1 105 3 136			18 231 1 664
Depreciation and amortisation		12 742 3 385 3 271 3 106 2 980 8 719 2 306
Other expenses		5 878 1 452 1 608 1 144 1 674 5 302 1 458
Total operating expenses		113 206 31 698 29 542 25 223 26 743				115 761 24 989 0
Losses on loans		92 911 19 282 18 794 21 704 33 131 71 429 16 483
Operating profit before tax	0	57 010 19 138 17 593 13 152 7 127 54 974 20 264				0
Tax		14 331 4 863 4 398 3 288 1 782 13 735 5 133
Profit and other comprehensive income		42 679 14 275 13 195 9 864 5 345 41 239 15 131

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

	Q4-20	Q3-20	Q2-20	Q1-20	Q4-19
Assets
Loans and deposits with credit institutions 202 601 222 177 165 812 229 380 183 014
Loans to customers, of which	2 852 172	2 869 717	2 644 120	2 859 294	2 696 724
- prepaid agent commissions	81 236	82 557	79 006	90 339
Certificates and bonds	889 664		1 035 261 863 415 328 138 516 194
Deferred tax assets	-	12 129	16 527	-	-
Other intangible assets	29 478	30 227	29 434	28 703	29 804
Fixed assets	8 414	9 067	9 740	10 414	563
Other receivables, of which:	13 802	57 128		50 504 101 827 114 520
- prepaid agent commissions					93 216
Total assets	3 996 129	4 235 706	3 779 552	3 557 756	3 540 819
Liabilities
Deposits from and debt to customers	3 303 998	3 548 363	3 129 285	2 887 298	2 848 737
Other debts	14 706	28 122	9 973	38 565	22 378
Accrued expenses and liabilities	37 747	32 840	26 279	26 780	21 177
Subordinat	56 000	56 000	56 000	56 000	80 900
Total liabilities	3 412 451	3 665 326	3 221 537	3 008 644	2 973 193
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	31 944	18 645	6 280	-2 622	56 792
Tier 1 capital	40 900	40 900	40 900	40 900
Total equity		583 679 570 380 558 014 549 113 567 626
Total liabilities and equity	3 996 129	4 235 706	3 779 552	3 557 756	3 540 819