BRAbank ASA: BRA-ME – Operational and financial update

Bergen, 27 March 2020


The COVID-19 outbreak and various public initiatives to slow its spread are greatly affecting national economies as well as businesses and consumer activity. While uncertainty regarding the duration and extent of the COVID-19 situation makes it difficult to assess its long-term effects, BRAbank today provides an update on the operational and financial implications as currently assessed and related measures including;

* Safeguarding employees and their families

* Ensuring normal banking operations – focus on serving existing customers

* Temporarily pausing new lending activity

* Focus on strengthening capital adequacy and improving operations


Safeguarding employees through digital platform

BRAbank has established business continuity plans lead by a dedicated task force. The bank follows updated guidelines from the Institute of Public Health and the Directorate of Health to limit the spread of the virus while maintaining operations as normal as possible. Safeguarding employees and their families is of uttermost importance in this work. BRAbank is a digital bank with a cloud-based platform and the employees can operate the bank from home offices and virtual meetings are used extensively. To date, no COVID-19 cases have been registered among BRAbank’s employees.


Ensuring normal banking operations

It is important for BRAbank to ensure that all solutions work seamlessly for customers under any condition. The bank is operating as normal from an existing customer perspective. However, increased processing time can be expected at customer support. BRAbank has experienced an increase in applications for the postponement of instalments. The bank is generally supportive to customers who are facing temporary reduction in their debt service capacity.


Temporarily pausing new lending

Given the extraordinary market conditions, the Bank has decided to temporarily pause all new lending activity. The bank intends to accept new applications, subject to conservative underwriting criteria, as soon as market conditions stabilize. Further update on the bank’s lending activities will be provided in the first quarter 2020 interim report.


Focus on strengthening capital adequacy and improving operations

BRAbank has initiated several measures to strengthen the capital adequacy. In the first quarter of 2020, the bank completed the previously announced debt portfolio sale and a NOK 65 million private placement of new equity. The tier 2 bond issue is expected to be completed before the end of Q1 20.

Including these initiatives, the bank’s CET1 ratio was 18.5 percent and total capital ratio was 21.7 percent at the end of February. As of March 13, the respective financial supervisory authorities of Sweden and Norway have reduced the capital requirements applicable for banks. Following this, the CET1 capital requirement is 16.7 percent and total capital requirement is 20.2 percent.

Loan losses for the first two months of the year was 4.2% annualized, in line with expectations. However, with rising unemployment, the bank expects the loan-loss ratio to increase going forward. The impact will depend on the duration of the current crisis.

BRAbank is delivering on the communicated cost reduction program and is realising integration synergies from the merger in 2019. The bank has guided on NOK 38-41 million per quarter in operational expenditure excluding one-offs going forward.

BRAbank has a solid liquidity position and is primarily funded through customer deposits in Norway and Germany.


“I am proud of how our employees, organisation and our digital platform have enabled us to remain fully operational and serve our customers’ needs, evidencing the strengths of our fully digital business model. Given the extraordinary market conditions we have decided to temporarily pause new lending and focus on our existing customers and partners. Moving forward we will also focus on operational efficiency and adapting to the evolving market conditions”, says Hans Ljøen, CEO of BRAbank ASA.


For further information contact:

Hans Ljøen, Chief Executive Officer at BRAbank, phone: +47 481 87 750

Torbjørn Botnevik, Chief Financial Officer at BRAbank, phone: +47 982 80 233


About BRAbank

BRAbank ASA is a digital bank focused on consumer finance in the Nordics. BRAbank is a cloud-based bank with strong focus on customer experience and fintech solutions. BRAbank is based in Bergen, Norway and started operation as Monobank in November 2015 and merged with BRAbank in June 2019. The bank has experienced strong growth.

The bank offers unsecured lending to qualified private individuals in Norway, Finland and Sweden. The screening process is based on an automated evaluation system, developed using the latest technology and advanced analytics. The bank also offers attractive deposit rates on its savings accounts. Deposits up to NOK 2 million are guaranteed by the Norwegian Banks' Guarantee fund, of which BRAbank is a member.

BRAbank is an independent bank with approximately 1,300 shareholders and is listed on the Oslo Stock Exchange's Merkur Market with ticker symbol BRA-ME.


This information is published in accordance with the requirements of the Continuing Obligations of companies admitted to trading on Merkur Market.