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BRAbank ASA: Cost measures starting to materialise

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Highlights:

  • Underlying operation in line with expectations
    • OPEX in line with guidance
    • Limited COVID-19 impact on Q1 results
    • Decreased loan loss ratio adjusted for currency effects
  • Compliance with capital requirements restored after successful measures in Q1
    • Private placement, Tier 2 bond issue, sale of non-performing loans
  • Risk management remains key priority for 2020
    • Sales of new loans temporarily halted from mid-March
    • Plan to open for new loans by end of May
    • Still limited COVID-19 impact observed in April
    • Increased loan losses due to COVID-19 can be expected

BRAbank’s underlying financial performance for the first quarter of 2020 was in line with expectations as COVID-19 had limited impact on operations. However, results were affected by the substantial 17% depreciation of NOK to EUR during the quarter. This had a NOK 14 million negative effect on results.

Following the outbreak of COVID-19, the main priority has been to safeguard the employees and their families and maintain a normal operation from a customer perspective. BRAbank has so far only observed limited impact from the pandemic. However, uncertainty regarding the duration and extent of the COVID-19 situation makes it difficult to assess its long-term effects. As a consequence, BRAbank decided to temporarily pause all new lending activity from mid-March. The bank will gradually open for new loans by the end of May balancing risks levels and capital adequacy.

Net interest income for the quarter was NOK 83.7 million, an increase of 4.1 percent compared to the first quarter of last year (NOK 80.3 million).

Operating costs amounted to NOK 43.2 million in the first quarter (NOK 35.0 million). Excluding restructuring charges of NOK 4.7 million operating costs amounted to NOK 38.5 million, within the guided range.

Operating profit before impairment provisions was NOK 46.5 million in the first quarter compared to NOK 49.5 million in the same period last year.

Loan losses was NOK 58.3 million in the quarter compared to NOK 42.4 million in the first quarter 2019. This corresponds to a loan loss ratio of 5.4 percent p.a. Adjusted for the negative unrealised currency effect in the quarter, loan loss ratio was 3.3. percent p.a.

The result for the first quarter of 2020 was a deficit of NOK 8.9 million, compared to surplus of NOK 5.3 million in the first quarter 2019. Adjusted for currency and non-recurring costs, the result was a profit of NOK 8.8 million in the quarter.

“Operational performance in BRAbank was solid during Q1 2020 and financial development was in line with expectations.  The outbreak of the COVID-19 pandemic and the oil price shock led to currency fluctuations that significantly impacted the results in the first quarter negatively. I am proud of how the organisation has handled the outbreak and operation in the bank has been close to normal from a customer perspective. Key focus going forward will be to monitor and actively manage credit risk, running a cost-efficient operation and maintaining a healthy capital adequacy while supporting our existing customers”, says Hans Ljøen, CEO of BRAbank ASA

Conference call / webcast

An earnings conference call followed by Q&A will be hosted by CEO Hans Kristian Ljøen the same day at 10:00 CEST.

To dial in to the conference call where the first quarter results and Q&A will be hosted, please dial in to one of the following numbers:

NO: +47 2396 3938

FI: +358 9817 10 523

SE: +46 85 6642 704

UK: +44 333 3009 269

US: +1 833 8230 587 

You can also follow the presentation via webcast with supporting slides, available on:  https://brabank.eventcdn.net/2020q1/ 

Please note, that if you follow the webcast via the above URL, you will experience a 30 second delay compared to the main conference call.

Material

The report and presentation will also be made available on www.brabank.no/www.newsweb.no.

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.

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 subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

Tags:

Merkur Market BRAbank

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