CORRECTION: Monobank ASA (MONO-ME): Monobank and BRAbank to combine, creating a well-positioned bank with a strong capital base

This is a correction of the announcement from 08:01 08.02.2019 CEST. Reason for the correction: Updated with attachments included.

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Monobank and BRAbank to combine, creating a well-positioned bank with a strong capital base

On 8 February 2019, Monobank ASA (Monobank) and BRAbank ASA (BRAbank) entered into a merger agreement, with the intent to create a well capitalised bank with a broad distribution platform and fully funded growth ambitions.

• Monobank’s capital base will be strengthened by a combined approx. NOK 320-350 million, from the existing capital base of BRAbank* and an underwritten equity issue of NOK 100-130 million, giving a pro forma Q4 2018 CET1 ratio of ~25%
• The combination is intended to create significant value and benefits for both set of shareholders, from consolidating to one cost base and from generating revenue synergies from complementary distribution strengths
• BRAbank’s shareholders will receive 9.25 shares in Monobank for each share in BRAbank, representing 34.3% of the total outstanding shares following the merger, prior to the equity issues
• In conjunction with the merger, Monobank will raise NOK 100-130 million of new equity, of which NOK 100m is underwritten by BRAbank’s largest shareholder Braganza AB (Braganza)
• The transaction is unanimously recommended by the Board of Directors of both Monobank and BRAbank, and 59.4% of BRAbank shareholders and 47.2% of Monobank shareholders have pre-committed to vote in favour of the transaction
• The transaction is subject to shareholder approval from both Monobank and BRAbank, as well as regulatory approvals. The transaction is expected to close by the end of Q2 2019
• Monobank CEO Bent Hilding Gjendem will continue as CEO for the combined bank, which will be named BRAbank and be headquartered in Bergen. BRAbank's Chairman Geir Stormorken will be appointed Chairman for the combined bank, and Monobank’s Chairman Jan Greve-Isdahl will continue as Vice Chairman.

“We are highly enthusiastic about combining with BRAbank and creating a very strong platform for continuing the growth in the Nordic consumer finance market, where we see attractive opportunities ahead together. With this transaction we will have a very strong capital base that will allow us to pursue our ambition of reaching NOK 10bn in loans by year end 2024 and 20% return on equity long term. Braathens Aviation AB and Braganza are strong partners that will strengthen our distribution capabilities and our initiative to enter Sweden in 2019” says Bent Gjendem, CEO of Monobank.

“The combination of Monobank and BRAbank will create a strong and scalable platform, which will give a solid basis for realising our ambitions more efficiently. The market and regulatory trends in the Norwegian and Nordic consumer finance market have increased the need for scale and strong capitalisation. We are impressed by the platform Monobank has built over the last years, and see it as an ideal partner for BRAbank in order to accelerate the ambitions that we have in the market” says Geir Stormorken, Chairman of BRAbank and Executive Director of Braganza.

* Based on BRAbank’s preliminary and unaudited CET1 capital of NOK 223 million as of 31 December 2018

Investor and analyst presentation and webcast:

There will be a joint press conference, investor and analyst presentation at 12:00 on Friday 8thFebruary 2019 to be held at Felix Konferansesenter in Oslo. The participants for the presentation will be Geir Stormorken, Chairman of BRAbank and Bent Gjendem, CEO of Monobank.

The presentation can be followed by webcast via http://webtv.hegnar.no/presentation.php?webcastId=97603136

Transaction details and expected timetable:

The proposed transaction will be an all share merger, with BRAbank shareholders to receive 9.25 Monobank shares per BRAbank share, totalling 142.9 million new Monobank shares. The existing BRAbank shareholders will hold 34.3% of total outstanding shares after the merger (before the equity issues planned as part of the transaction)

As part of the transaction, Monobank will raise an additional NOK 100 to 130 million in equity at NOK 1.90 per share, consisting of between 52.6 and 68.4 million shares and divided into the following four tranches

• Private Placement I: Issue of 30,444,737 shares with gross proceeds of approx. NOK 57.8 million which have been pre-subscribed by Braganza at NOK 1.90 per share and with closing immediately after the general meetings in Monobank and BRAbank held to approve the merger and the equity issues. Completion of Private Placement I will give Braganza an ownership of 9.99% in Monobank prior to the consummation of the merger and the subsequent equity issues, and will not be conditional on completion of the merger;

• Private Placement II: Issue of 19,555,263 shares with gross proceeds of approx. NOK 37.2 million which have been offered for pre-subscription towards the largest shareholders in BRAbank following Braganza at NOK 1.90 per share prior to announcement of the transaction of which such shareholders have received full allocation of a total of 1,112,500 shares and the remaining 18,442,763 shares have been allocated to Braganza pursuant to an underwriting agreement. Private Placement II is conditional on approval of the merger and regulatory approvals and expected to close immediately after completion of the merger;

• Private Placement III: Issue of 2,631,579 shares with gross proceeds of NOK 5 million at NOK 1.90 per share towards existing BRAbank shareholders as at 7 February 2019 as registered in the Norwegian Central Securities Depositary (the "VPS") on 11 February 2019 (BRAbank shares trading exclusive the right to participate in Private Placement III from and including 8 February 2019) with the exception of shareholders in BRAbank being invited to participate in Private Placement I or Private Placement II, such offering to take place post completion of the merger (fully underwritten by Braganza); and

• Private Placement IV: Issue of up to 15,789,473 shares with gross proceeds of up to NOK 30 million at NOK 1.90 per share towards existing Monobank shareholders as at 7 February 2019 as registered in the Norwegian Central Securities Depositary (the "VPS") on 11 February 2019 (Monobank shares trading exclusive the right to participate in Private Placement IV from and including 8 February 2019), such offering to take place post completion of the merger.

The total number of outstanding shares in Monobank following the merger and private placements will be between 469,579,865 and 485,369,338.

Monobank and BRAbank will after adoption of a joint merger plan on or about 14 February 2019 call for general meetings to approve the transactions, expected to be held ultimo March 2019. Approval of the transaction from the Norwegian Financial Supervisory Authority is expected in May/June 2019, and subject to close of the statutory creditor notice period and all conditions being met the transaction is expected to be completed by the end of June 2019.

The Board of Directors for the combined bank will be Geir Stormorken (Chairman), Jan Greve-Isdahl (Vice Chairman), Mette Henriksen, Tore Hopen and Kristin Krohn Devold (in addition to employee-elected members). CEO of the combined company will be Bent Hilding Gjendem, with headquarters in Bergen, Norway. The name of the combined bank will be BRAbank.

A presentation of the combined bank has been published on www.newsweb.no and is also available on www.monobank.no/ir and https://brabank.no/om-oss/investor/.

ABG Sundal Collier and Pareto Securities have acted as financial advisors and Schjødt as legal advisor to Monobank. Sparebank 1 Markets has acted as financial advisor and Wiersholm as legal advisor to BRAbank.

Q4 and full year 2018 financials for Monobank

Monobank reports a net loss of NOK 8.8 million in Q4 2018, driven by high loan loss provisions that includes several extraordinary effects. Net profit for the year 2018 amounted to NOK 30.6 million. Net loans at the end of Q4 was NOK 3,706 million, up NOK 257 million from Q3 2018. The CET1 capital ratio was 16.1% as of Q4 2018.

Loan loss provisions in Q4 2018 was NOK 66.0 million, and included increased provisions on the remaining portfolio of loans more than 90 days overdue in Norway that has not been sold through forward flow agreements, and a one-off effect of NOK 11 million related to an error in the loan loss provisioning model identified as part of the due diligence process related to the merger.

Monobank’s Q4 and annual report for 2018 is available on www.monobank.no/ir and www.newsweb.no.

Unaudited, preliminary Q4 and full year 2018 key financials for BRAbank

BRAbank reports a net loss of NOK 20.7 million in Q4 and a net loss of NOK 47.7 million for FY 2018. Net outstanding loans total NOK 97.4 million, up NOK 60.7 million during Q4. Loan losses amounted to NOK 6.0 million for FY 2018 (calculated in accordance with IFRS 9). Equity was NOK 261 million, and CET 1 capital NOK 223 million, giving a CET1 of ratio of 131.4 %. Roll-out of consumer loans in Sweden is planned to start during Q1 2019.

BRAbank’s audited Q4 and full year accounts will be published on or about the 15thof February.

Investor and media contacts:

For further information contact:

Bent H. Gjendem, Chief Executive Officer at Monobank, phone: +47 996 11 996

Geir Stormorken, Chairman of the Board of BRAbank, phone: +47 907 54 984

About Monobank

Monobank ASA is a digital bank focused on consumer finance in the Nordics. Monobank is a cloud based bank with strong focus on customer experience and fintech solutions. Monobank is based in Bergen, Norway and started operation in November 2015. The bank has experienced strong growth and became profitable after only three quarters. The bank offers unsecured lending to qualified private individuals in Norway and Finland. The screening process is based on an automated evaluation system. Loans are granted up to NOK 500,000. 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 Monobank is a member. Monobank is an independent bank with approximately 1,000 shareholders and was listed on the Oslo Stock Exchange's Merkur Market on 16thFebruary 2017 under the ticker symbol MONO-ME. Monobank has been awarded with "Great Place to Work" twice since the start. Further information about Monobank, including its board and directors and executive management, is available on https://monobank.no/investor/corporate-governance/.

About BRAbank

BRAbank is a Norwegian consumer bank with business activities in Norway and Sweden. The bank operates on a banking license issued by The Norwegian Ministry of Finance on May 7, 2018. BRAbank opened for business in Norway late in June 2018. The bank’s activities in Sweden are organised as a cross-border operation with all bank-related activities run from the office in Oslo. BRAbank’s ownership structure, IT solutions and competence amongst key employees are the main elements behind the ambition of becoming a “Travel and Retail Bank”. BRAbank is a member of the Norwegian Banks’ Guarantee Fund, which secures all deposits from Norwegian customers up to NOK 2 million and EUR 100,000 from Swedish customers. BRAbank was listed on the Oslo Stock Exchange's Merkur Market on 29th August 2018 under the ticker symbol BRA-ME. BRAbank has currently 12 employees. Further information about BRAbank, including its board and directors and executive management, is available on https://brabank.no/om-oss/investor/.

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