Komplett Bank annual report 2019

Board of Directors’ Report Overview Komplett Bank ASA (the “Bank”) started operations in March 2014 when the company received its banking licence from the Norwegian authorities. Komplett Bank offers convenient con- sumer financing products to credit-worthy customers. The Bank’s product suite consist of consumer loans, credit cards and point-of-sale (POS) finance products, and deposit products in the Norwegian, Swedish and German markets. The Bank’s main products are consumer loans, offering Komplett Bank’s “flexible loan,” a loan product with credit line functionality that gives the customer more flexibility in use of the credit line, and annuity loans, which were launched in May 2019. The “Komplett Bank Mastercard” is a credit card with product features tailored for online shopping. The Bank’s deposit products are characterised by highly attractive interest rates in both Norway, Sweden and Germany. As a member of the Norwegian Banks’ Guarantee Fund, customer deposits are guaranteed up to NOK 2 million per customer. Foreign deposits are guaranteed for up to EUR 100,000. Canica Invest AS, the owner of the leading web retailer in the Nordic countries, the Komplett Group, is Komplett Bank’s largest shareholder with an ownership of 19.4%. Komplett Bank has established a long- term commercial and strategic partnership with the Komplett Group. The Bank’s registered offices are at Vollsveien 2A and 2B in Lysaker outside Oslo, Norway. In November 2017, the Bank was listed on the Main List of Oslo Stock Exchange with ticker symbol “KOMP”. Strategy and long-term ambitions Komplett Bank is pursuing a growth strategy based on geograph- ical and product-wise diversification and expansion. The strategy is founded on a digital, scalable, efficient and low-cost operating model combined with strong risk control. The Bank operates on a cross-border basis from Lysaker, outside of Oslo. The Norwegian banking license provides for passporting of the Bank’s offering throughout the entire European Economic Area (EEA). The Bank launched consumer loans in Norway in Q1 2014, in Finland in Q1 2017 and Sweden in Q1 2018. In May 2019, the Bank launched a new annuity loan product tailored to meet new consumer lending regulations in Norway. Credit card operations started in Norway in Q4 2015, in Sweden in Q1 2019 and in Finland in Q2 2019. POS finance products were launched in Norway and Sweden in Q3 2017 and Q2 2018, respectively. In Q4 2018 the Bank launched EUR denominated deposits in Germany and SEK denominated deposits were launched in Sweden early in Q1 2020. In the near- to medium term, lending operations will be focused on the Nordic region and the Bank will continue its expansion by developing its current product portfolio in existing markets. Operational review Loan growth and product development Komplett Bank is well-positioned for sustainable growth, with a diversified geographical and product-wise footprint, and not reliant upon a single market. The Bank follows a diversified multi-channel marketing and distribu- tion strategy, has a strong financial position with a resilient balance sheet and a flexible and low-cost operating model. Combined with a well-known brand and strong distribution capabilities, this puts Komplett Bank in a favourable competitive position. During 2019, Komplett Bank continued to grow its loan portfolio and net loans grewby NOK 651million to reach NOK 8.5 billion at the end of 2019. This growth was driven primarily by consumer loans in Sweden and Finland, which grew by NOK 586million and NOK 708million, respectively. Loans in Norway decreased by NOK 759million, net of NOK 618million sold as part of the Bank’s forward flow agreement. In the fourth quarter of 2018, Komplett Bank implemented stricter credit measures, particularly in the Norwegian market, which impacted lending growth throughout the year. In addition, on 15 May 2019, new consumer lending regulations in Norway came into effect. These regulations introduced new requirements related to the amortisation schedule of revolving credit facilities. This had a direct impact on Komplett Bank’s “flexible loan” product and its competitive characteristics, particularly in the refinancing segment, the new regu- lations had an adverse effect on consumer loan growth in Norway. In response to the new consumer lending regulation in Norway, Komplett Bank launched a new annuity lending product in May 2019. An additional annuity lending product with refinancing functionality will be introduced to the Norwegian market during the first half of 2020 and is expected to improve Komplett Bank’s 22 Board of Directors’ Report