POSITIVE UNDERLYING LOAN GROWTH, SUCCESSFUL LAUNCH IN SPAIN

Bank Norwegian Group (the Group) reported third quarter after-tax profit of NOK 276.1 million, down from NOK 367.8 million in the second quarter and down from NOK 500.6 million in the same quarter from last year. The decrease compared to the previous quarter is mainly caused by higher administrative costs related to the provision for legal and financial advisers’ fees related to the offer of Nordax Bank AB (publ) (Nordax), a negative change in the value of equities and lower interest income from the sale of two portfolios of non-performing loans during the quarter. This was partially offset by gains from the sale of non-performing loan portfolios which reduced loan loss provisions during the quarter. Net interest income was NOK 1,151 million, a decrease of NOK 32.2 million compared to the second quarter. The reduction is mainly explained by lower interest income due to the sale of non-performing loan portfolios in Norway and Denmark during the quarter and lower income from certificates and bonds mainly in Norway, partially offset by the reduction of interest charges on deposits in Norway.

Return on equity was 10.1%, compared to 13.3% in the prior quarter. Return on assets was 1.9%, compared to 2.5% in the previous quarter.

The total capital ratio was 28.8%, the core capital ratio was 26.8% and the CET1 ratio was 25.7%, including 60% of the net dividend income set aside for 2021 compared to to our internal CET1 target of 17.5%. The Board of Directors was authorized by the AGM of April 2021 to decide on a distribution to shareholders of a maximum amount of NOK 1 per share after October 1, 2021, in addition to the dividend of NOK 5 approved and paid in May. 2021. As one of the conditions for the completion of Nordax’s offer for the purchase of all Bank Norwegian shares is that Bank Norwegian will not make or decide to make any distribution to its shareholders, the Board of Directors has decided that no further distribution will be made. This led to an improvement in capital rations with around 49bp at the end of the quarter.

During the quarter, the Bank sold two portfolios, in July the non-performing installment loan portfolio in Denmark and in September a portfolio of non-performing installment and credit card loans in Norway. Adjusted for portfolio sales this quarter, currency-adjusted loan growth was positive at NOK 277.4 million. Broken down by product, currency-adjusted installment loan growth was NOK 21.4 million, adjusted for portfolio sales in Norway and Denmark, compared to NOK -318.9 million in the quarter. previous. The positive growth comes mainly from the increase in new sales. Currency-adjusted credit card loan growth was NOK 256.0 million, adjusted for portfolio sales in Norway, compared to NOK 294.2 million in the previous quarter, adjusted for portfolio sales in Norway. Sweden and Denmark. Installment loans amounted to NOK 27,498 million and credit card loans to NOK 10,213 million.

“I am pleased to see that installment loan sales in all four countries have reached their highest level in the past six quarters. The use of credit cards is increasing both in domestic consumption and in increased use abroad. The third quarter represents the first quarter since the start of the pandemic where we are seeing growth in loan balances, adjusted for currency and portfolio sales. During the quarter, the Bank sold two portfolios, in July the portfolio of non-performing installment loans in Denmark and in September a portfolio of installment loans and credit cards in Norway, thereby reducing the volume ratios of the Step 3. The net result from portfolio sales has been positive and gives additional comfort to our loan loss provisioning model, ”said Klara Lise Aasen, interim CEO and CFO.

Customer deposits were reduced by NOK 918.8 million compared to a decrease of NOK 366.9 million in the second quarter and by NOK 38,224 million at the end of the third quarter. Currency adjusted growth was NOK -870.0 million compared to NOK -845.7 million in the previous quarter. As in the second quarter, Norway continues to be the main source of the drop in deposits following reductions in deposit rates, with a decrease of NOK 1,430 million in the quarter.

At the end of the quarter, the final piece of the regulatory approval puzzle was secured for Nordax Bank AB (publ) (Nordax) to continue with the Bank Norwegian purchase process. Together with Nordax, Bank Norwegian will be the largest Nordic specialist bank with a combined total of loans of around NOK 70 billion. We look forward to joining forces to form and develop the most professional specialist bank in the Nordic region and its expansion into Europe.

On October 25, the Bank announced its entry into the Spanish market and on October 26, the first loan was repaid. The bank plans to set up in Germany soon.

During the last periods of the negative effects of COVID-19, the BN Group has maintained its strong financial position with high profitability, very large capitalization and high levels of liquid assets. The Bank is poised for growth with a launch in Spain and Germany in the fourth quarter and higher activity expected in the Nordic countries. With Nordax, we are confident that this will provide long-term profitable growth and high profits.

For more information, see the full quarterly report at: https://www.banknorwegian.no/OmOss/InvestorRelations

If you have any questions, please contact:

Interim CEO and CFO, Klara-Lise Aasen; phone: +47 47635583; e-mail: [email protected]

Head of the Treasury, Mats Benserud; phone: +47 95891539; e-mail: [email protected]

Press contact; Head of Communications and Sustainability, Melita Ringvold; phone +47 95121983; e-mail: [email protected]

This information is subject to disclosure requirements in accordance with Section 5-12 of the Norwegian Securities Law.

  • Third Quarter Report 2021 Bank Norwegian Group

  • Bank Norwegian Group Third Quarter 2021 Results Presentation

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