Bluestep Bank interim report January - June 2020

Result and financial position

The period refers to 1 January - 30 June 2020 compared to same period previous year, unless otherwise stated. Values are denominated in Swedish kronor (SEK).

• Outstanding lending to the public increased by 4.4% to 16,215m (15,535m). Adjusted for foreign exchange (FX) effects the increase was 10.0%. The portfolio development was negatively affected by the weaker Norwegian krona.
• New lending increased by 7.7% to 2 872m (2 668m). Adjusted for FX effects the increase was 14.5%.
• Operating profit decreased by 27% and amounted to 101m (137m). Adjusted for FX effects, investments in launching mortgages in Finland and ”60plusbanken”, as well as the additional provisions for increased expected credit losses resulting from Covid-19, the increase in operating profit was 11% and amounted to 151m.
• Net credit losses amounted to 44m (29m), with 14.8m (7.6m) relating to mortgages. This is equivalent to a credit loss level of 0.54% (0.37%), where 0.18% (0.10%) relates to mortgages. Net credit losses for the period includes an extra provision of 13.5m which has been made for increased expected loan losses, attributable to Covid-19. Most of the extra provision is attributable to unsecured personal loans.
• The Common Equity Tier 1 ratio (CET1) was 19.4% (17.4%). Bluestep has a long-term CET1 ratio target of at least 16.0%.

Strategic development and significant events

• The Finnish branch launched its mortgage offerings in Finland in June.
• ”60plusbanken” and its ”Nya Seniorlånet^TM“ (an equity release mortgage offered to people above 60), was launched in May.
• Strategic emphasis on mortgages was increased and Bluestep therefore ceased offering unsecured personal loans in February.
• Mia Lund Hanusek and Max Fischer became part of the management team in April, with responsibility as Chief Marketing Officer and Chief Information Officer, respectively.
• Andreas Pettersson Rohman left the Board of Directors in May, which reduced the number of ordinary directors from seven to six.
• Erik Walberg Olstad took over the legal responsibility for the Norwegian business as Branch Manager in addition to his role as Chief Operating Officer in Norway in January.
• The method for calculating capital requirements for operational risk was changed according to permission from the Swedish Financial Supervisory Authority (FI).

Financing

• Deposits from the public increased by 6.5% to 13,340m (12,525m). Adjusted for FX effects the increase was 15%.
• The Bank issued its first covered bond of 1,700m with a 3-year maturity in April. The bond was assigned a credit rating of Aa1 by Moody’s.
• The Bank’s credit rating was upgraded to A3 with stable outlook by Moody’s in June. In February the rating was upgraded to Baa1 (positive outlook) from Baa2 (stable outlook).
• The bondholders of ”Bluestep Mortgage Securities No 3 Designated Activity Company” (Step 3) were informed that the bonds would be redeemed in May. Following the redemption, voluntary liquidation of Step 3 was initiated.
• In February “Bluestep Finans Funding No 1 AB” (BFF1) repaid an existing 2,000m credit facility. The Bank acquired mortgages of 2,316m from BFF1.
• A new 2,000m credit facility, was contracted in January. The facility was primarily driven by the Bank’s permission to issue covered bonds. The facility was early redeemed in June.

The interim report January - June 2020 can be downloaded from: https://www.bluestepbank.com/investor-relations/financial-reports/

For further information, please contact:

Louise Bergström, Head of Investor Relations
+46 73 142 74 66
Louise.bergstrom@bluestep.se

Johanna Clason, CFO
+46 8 501 004 00
Johanna.clason@bluestep.se

This is information that Bluestep Bank AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Swedish Securities Market Act. The information was submitted for publication, through the contact person set out above on 27 August 2020 at 17:30 CET.

Bluestep is a market leading, solution-oriented lender that offers mortgages to customers in Sweden, Norway and Finland. Since 2005 we have helped tens of thousands of customers to improve their economic circumstances in a sustainable way through lending and saving services. Bluestep focuses on understanding and helping customers who for some reason are unable to receive loans from their traditional bank. Personal solutions, enabling customers to improve their economic circumstances is one of the key focus areas. Bluestep Bank AB (publ) is a banking limited company that is under the supervision of "Finansinspektionen" (Swedish FSA). Additional information about Bluestep can be found on our corporate website www.bluestepbank.com.