Monobank ASA: Continued growth and improved profitability

Highlights:

• Q3’18 net loan balance increased 7.4% to NOK 3 449 million from Q2’18 on geographical expansion

• Scale effects effects drive profitability with Q3’18 net profit of NOK 15.5 million, up 12% vs. Q2’18

• Monobank’s multi-country platform enables continued geographical expansion and diversification; launching consumer loan offering in Sweden in Q1 2019

• Mono Pay credit card platform continues to develop, introduction of Widerøe-branded digital credit card platform in September and full launch by the end of 2018

Monobank experienced positive operational development and continued strategic progress through the third quarter of 2018. Overall loans and advances to customers increased 7% (NOK 243 million) to NOK 3 541 million, excluding provision for loan losses and prepaid agency commissions, from 3 298 million in the second quarter of 2018. Third-quarter interest income was NOK 106 million, an increase of 8% from the previous quarter (NOK 98 million). Cost/income ratio declined 9 percentage points in the quarter, mainly as a function of reduced marketing spending and staff costs.

The bank’s multi-country platform offers considerable operational synergies and adds strength to the company’s growth platform. Current operational expenses reflect that Monbank has successfully scaled for further growth, and the board has decided to launch consumer loan business in Sweden in the first quarter of 2019. The expansion will contribute to diversify the business model and regulatory risk exposure.

Monobank has adjusted its 2018 year-end target of overall net loans to a range of NOK 3.7 to 3.8 billion, from previously NOK 4.1 billion. The adjustment reflects partly that the bank did not adequately factor in forward flow-agreement effects when the guidance was given in April 2018. Furthermore, an uneven practice of new guidelines and uncertainty related to final regulations by the Financial Supervisory Authority in Norway has prompted a more conservative market approach by Monobank pending more clarity. These factors, combined with a slower-than-expected introduction of the Widerøe-branded credit card, impacted net lending growth already in the third quarter.

“Monobank continues to deliver growth and improved profitability. We are satisfied with close to NOK 40 million in profits year-to-date considering that we have built our digital bank focused on consumer loans independently from scratch three years ago. At the same time, we want to improve our profitability further and given that economies of scale matter we have firmed up our commitment to an ambitious goal of NOK 10 billion in consumer loans within the next three to four years”, said Bent H. Gjendem, Chief Executive Officer at Monobank.

Presentation in Oslo and webcast today Thursday 17 October at 11:00 AM CEST

The company will host a presentation of the third quarter 2018 results in Oslo today Thursday 17 October at 11:00 AM CEST at Hotel Continental, Stortingsgata 24, 0117.

The presentation can be followed through live webcast here: www.monobank.no/ir

Presentation in Bergen Thursday 18 October at 12:00 PM CEST

The company will also host a presentation of the second quarter 2018 results in Bergen Thursday 18. October at 12:00 PM CEST at Monobank’s headquarter, Telegrafen, Starvhusgaten 4, Entrance: Olav Kyrresgate 3rd floor, Bergen.

Material

The second quarter report and presentation will also be made available on www.monobank.no/ir and www.newsweb.no.

For further information contact:

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

About Monobank

Monobank ASA a is 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 went 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 16th February 2017 under the ticker symbol MONO-ME. Monobank has been awarded with "Great Place to Work" twice since the start. 

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

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