Lea Bank ASA

Earnings Release • Aug 16, 2018

2 nd quarter result presentation

Oddbjørn Berentsen (CEO) – Gard Haugen (CFO) - Christian Svendsen (COO)

| 16 August 2018 |

This Presentation from Easybank ASA ("Easybank" or the "Company") includes among other things forward-looking statements. Certain such forward-looking statements can be identified by the use of forward-looking terminology such as "believe", "may", "will", "should", "would be", "expect" or "anticipate" or similar expressions, or the negative thereof, or other variations thereof, or comparable terminology, or by discussions of strategy, plans or intentions. The forward-looking statements contained in this Presentation, including assumptions, opinions and views of the Company or cited from third party sources, reflect the current views with respect to future events and are subject to material risks, uncertainties and other factors that may cause actual events to differ materially from any anticipated development. Neither Easybank nor any of its officers or employees provides any assurance as to the correctness of such forward-looking information and statements. The Company does not intend, and assumes no obligation, except as required by law, to update any forward-looking statements or to conform these forward-looking statements to its actual results.

By attending or receiving this Presentation you acknowledge that you will be solely responsible for your own assessment of the market and the market position of Easybank and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of Easybank's business and the securities issued by Easybank.

This Presentation speaks as of 16 August 2018. Neither the delivery of this Presentation nor any further discussions of Easybank with any of the recipients shall, under any circumstances, create any implication that there has been no change in the affairs of Easybank since such date.

Table of contents

Easybank in brief

More than a consumer finance bank

Company history

• Based on a bank founded in 2003 rebranded to Easybank and raised new equity in March 2016 and March 2018
• New strategy from 2016 involving new management and Board of Directors in addition to significant changes in the shareholder base
• Successful turnaround completed
• Listed on NOTC 15 November 2016

Product portfolio

Key highlights and developments Q2 2018

Overview Q2

Diversified product portfolio – gross lending of NOK 2.2 billion

SME 127 MNOK	Car loans 54 MNOK	Competitive ROE	Increasing profits
capital 75 MNOK	Equity 457 MNOK	Stable and solid growth	Stable yield

Gross lending & number of customers

Growth in volume and customers continues

Gross lending per product Customer per product NOK million

Total income & profit before tax

Increasing total income and solid profit in Q2

Net interest income & yields

Increasing interest income and stable margins

Net interest income and net interest margin of total assets

Yields (end of quarter)

• Net interest margin slightly up due to less liquidity

• Good margins and ROE from SME & mortgage loans

• Increased consumer loan volume without compromising on margin

• Attractive funding rate due to multiple deposit products

Credit quality - Consumer loans

Satisfactory risk reward and forward flow agreement reduces downside risk

Coverage¹ and loan loss ratio² Comments

• Satisfactory risk reward taken into account margin level on consumer loans.
• Easybank sold 32.8 MNOK through the Forward-flow agreement with Kredinor in Q2 2018. No P&L effect as the loss model captures expected future sales.
• Improvement in arrears combined with sale of portfolio contributes to reduce 'Expected loss' in the portfolio in Q2 2018. Hence, reduced Coverage in Q2 2018.
• The forward-flow agreement, entered into with Kredinor Q3 2017, reduces downside risk for Easybank as it transfers risk to Kredinor. The agreement is not one-time transaction, but ongoing sales of loans and receivables.
• The forward flow agreement is fully operational and coverage rate decreases as a result of improvement of LGD values in Loss-model.

Overview

Good profitability and stable OPEX development

Profit after tax and ROE Losses and loss ratio consumer loans Equity and CET-1 ratio *

Gross lending Income and interest margin OPEX and C/I ratio

All numbers in NOK million * CET-1 ratio for Q1, Q2 and Q3 excludes YTD profit

Table of contents

Income statement

Amounts in thousands	Q2-2018	Q1-2018	Q4-2017	Q3-2017	Q2-2017	Q1-2017
Interest income			65 615 58 542 51 414	41 592	34 023	28 398
Interest expense			-11 302 -11 215 -9 485	-7 583	-6 243	-5 773
Net interest income			54 313 47 327 41 929	34 009	27 780	22 625
Comission and fee income			11 196 13 094 10 321	4 733	3 254	3 384
Comission and fee expenses			-9 988 -9 037 -7 660	-6 158	-5 036	-3 544
Net change in value on securities and currency	191	324	253	218	320	340
Other income	35	0	34	30	24	-
Net other income	1 433	4 382	2 949	-1 178	-1 439	180
Total income			55 747 51 709 44 878	32 831	26 341	22 805
Salary and other personell expenses			-7 627 -6 704 -8 720	-7 720	-7 173	-7 029
Other administrative expenses			-8 894 -7 831 -7 654	-7 893	-6 066	-5 670
- of which marketing expences			-3 992 -3 729 -3 023	-4 267	-2 281	-1 894
Depreciation			-1 205 -1 164 -1 164	-1 032	-978	-878
Other expenses			-2 330 -2 043 -2 332	-2 367	-2 914	-2 115
Total operating expenses					-20 055 -17 742 -19 869 -19 012 -17 131 -15 692
Profit before loan losses			35 692 33 967 25 009	13 819	9 210	7 113
Loan losses			-18 431 -18 950 -15 543	-9 710	-6 689	-7 571
Profit before tax		17 261 15 017	9 466	4 109	2 522	-458
Tax			-4 415 -3 851 -2 990	-1 027	-630	115
Profit after tax		12 846 11 166	6 476	3 082	1 891	-344

• Increasing interest income due to good growth in consumer loans
• Moderate OPEX increase
• ROE annualized 11,4%

Balance sheet

Amounts in thousands	30.06.2018	31.03.2018	31.12.2017	30.09.2017	30.06.2017	31.03.2017
Assets
Cash and deposits with the central bank	53 733	53 695	53 680	53 643	53 607	53 570
Loans and deposits with credit institutions				160 748 291 578 280 309 183 039 241 178 238 873
Loans to customers	2 194 148	1 985 555	1 780 862	1 583 576	1 335 848	1 222 093
- Loan impairment				-58 961 -53 344 -42 851 -33 737 -28 589 -27 041
Certificates and bonds		209 900 224 885 152 017		55 021	60 017	48 630
Shares and other securities	54 395	54 193	53 869	53 637	54 655	54 427
Shareholding in group companies	192	192	192	192	192	192
Deferred tax asset	11 927	16 242	19 996	22 986	24 014	24 644
Other intangible assets	20 522	20 966	20 398	20 176	20 610	20 170
Fixed assets	1 244	1 265	1 191	1 344	1 412	815
Other assets	276	1 484	1 576	1 049	950	1 286
Other receivables	101 646	99 397	86 022	70 234	52 268	45 365
- of which agent commisions	62 562	56 676	50 475	43 954	35 744	30 682
Total assets	2 749 768	2 696 108	2 407 262	2 011 162	1 816 160	1 683 023
Equity and liabilities
Deposits from customers	2 179 508	2 137 697	1 967 508	1 629 868	1 455 236	1 330 641
Other liabilities	21 202	24 140	18 508	19 391	11 615	10 107
Accrued expenses and deferred revenue	16 564	15 022	10 015	25 386	15 874	10 732
Tier 1 and tier 2 capital bond	75 000	75 000	75 000	10 000	10 000	10 000
Total liabilities	2 292 274	2 251 859	2 071 031	1 684 645	1 492 726	1 361 480
Share capital				324 326 324 326 260 690 259 990 259 990 259 990
Share premium reserve		124 510 124 510	91 681	91 481	91 481	91 481
Other paid-in equity	6 025	5 625	5 238	2 900	2 900	2 900
Other equity				2 633 -10 212 -21 378 -27 854 -30 936 -32 827
Total equity				457 494 444 249 336 231 326 516 323 435 321 543
Total equity and liabilities	2 749 768	2 696 108	2 407 262	2 011 162	1 816 160	1 683 023

• Increased equity of MNOK 13
• Tier 1 capital bonds of MNOK 35 and Tier 2 capital bonds of MNOK 40
• Customer deposits increase of MNOK 42
• Liquidity decrease of MNOK 146, however maintaining a strong liquidity position
• Loan impairment of MNOK 59
• CET 1 ratio 20,2%. Tier 1 capital ratio 21,6%. Total capital ratio 23,6% (including YTD profit respectively 21,4%, 22,9% and 24,9%)

Balance sheet structure

Strong funding and liquidity position

• Deposit ratio: 99 %
• Liquidity Coverage Ratio: 675 %
• Net Stable Funding Ratio: 160 %

Total assets Equity and liabilities

• Diversified customers deposits. 64 % of deposits with 35 days+ notice period
• MNOK 479 in surplus liquidity placed in Norges Bank, other banks and positions with short duration and low risk

Table of contents

Outlook

Focus going forward

Continue building on underlying run rate to deliver ROE growth

Optimize capital allocation to secure competitive ROE

^> Dialogue with potential new partners to broaden distribution and product mix

Shareholders & share price

Strong shareholder base

Top 30 shareholders as of 2 August 2018

# Investor	Shares	Shares %
1 SKAGERRAK SPAREBANK	4 311 980	9,3%
2 VERDIPAPIRFONDET ALF	3 344 349	7,2%
3 FONDSAVANSE AS	2 807 330	6,1%
4 LADEGAARD AS	2 275 032	4,9%
5 UMICO - GRUPPEN AS	1 945 357	4,2%
6 LINDBANK AS	1 655 985	3,6%
7 NORDIC PRIVATE EQUITY	1 639 230	3,5%
8 MP PENSJON PK	1 514 738	3,3%
9 SHELTER AS	1 392 727	3,0%
10 JENSSEN & CO A/S	1 287 879	2,8%
11 KROGSRUD INVEST AS	1 250 000	2,7%
12 JOLLY ROGER AS	1 145 630	2,5%
13 GH HOLDING AS	909 090	2,0%
14 INDEPENDENT OIL & RE	900 000	1,9%
15 BYHOLT AS	787 159	1,7%
16 WHITETAIL WEBSERVICE	705 009	1,5%
17 MENTOR MEDIER AS	656 422	1,4%
18 HJELLEGJERDE INVEST	600 000	1,3%
19 JARAS INVEST AS	440 909	1,0%
20 VITAMAR AS	408 412	0,9%
21 ULLTVEIT-MOE HILDEGU	400 222	0,9%
22 HHG INVEST AS	400 000	0,9%
23 B FINANS AS	400 000	0,9%
24 TRIPPEL-L AS	387 225	0,8%
25 MOTOR-TRADE EIENDOM	365 878	0,8%
26 LINDBAK GRUPPEN AS	364 045	0,8%
27 JUUL-VADEM HOLDING A	360 000	0,8%
28 WIST HOLDING AS	338 000	0,7%
29 TRULS AS	310 000	0,7%
30 ARILD HESTÅS INVEST AS	301 250	0,6%
Total top 20	33 603 858	72,4%
Other	12 786 981	27,6%
Grand total	46 390 839	100,0%

• 448 shareholders as of 2 August 2018
• The EASY share was registered on NOTC on 15 November 2016.
• Management holds a total of 2,489,414 shares, corresponding to 5.4% of shares outstanding
• Members of the board represents a total of 2,503,107 shares, corresponding to 5.4% of shares outstanding
• Current market capitalization of approx. NOK 500