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 attractive consumer financing products to creditworthy customers. The Bank’s product suite consists of consumer loans, credit cards and point-of-sale (POS) finance products, as well as deposit products in the Norwegian, Swedish and German markets. The Bank’s main products are consumer loans, including annuity loans, as well as flexible loans which give the customer more flexibility in drawing on credit line. In April 2020, Komplett Bank also launched a refinancing product in Norway. In addition, the Bank offers the “Komplett Bank Mastercard,” a credit card tailored especially for online shopping. The Bank’s deposit products are characterised by attractive interest rates in Norway, Sweden and Germany. As a member of the Norwegian Banks’ Guarantee Fund, Norwegian customer deposits are guaranteed up to NOK 2 million per customer. Foreign deposits are guaranteed up to EUR 100,000. The Bank has a long term strategic partnership with Komplett Group, the largest e-commerce company in the Nordics. The Bank’s registered offices are at Vollsveien 2A in Lysaker outside Oslo, Norway. In November 2017 the Bank was listed on the main list of the Oslo Stock Exchange with the ticker symbol “KOMP.” Strategy and long-term ambitions Komplett Bank is pursuing a growth strategy based on geographical and product-wise diversification and expansion. The strategy is founded on a digital, scalable and efficient operating model with low costs and strong risk control. The Bank operates on a cross-border basis from its offices in Lysaker, outside of Oslo. The Norwegian banking license allows the Bank to market its products throughout the entire European Economic Area (EEA). The Bank launched consumer loans in Norway in Q1 2014, in Finland in Q1 2017 and in Sweden in Q1 2018. In May 2019, the Bank launched a new annuity loan product tailored to meet new consumer lending regulations in Norway and in April 2020 the Bank’s refinancing product was launched. Credit card operations started in Norway in Q4 2015, in Sweden in Q1 2019 and in Finland in Q2 2019. Point-of-sale (POS) financing products were launched in Norway and Sweden in Q3 2017 and Q2 2018, respectively. In Q4 2018 the Bank launched euro-denominated deposits in Germany and SEK-denominated deposits in Sweden early in Q1 2020. Regulatory changes and the Covid-19 pandemic have temporarily limited the growth opportunities for Komplett Bank. This has resulted in a period with declining profitability since the Bank’s operation was scaled for further growth. Consequently, the Bank conducted an extensive review of its operations in the fourth quarter 2021. Based on the findings Komplett Bank has established a clear action plan for repositioning the Bank for profitable growth. This plan is under implementation in 2022 with a gradual effect materialising throughout the year. Further, the Bank has prolonged its dividend policy of distributing surplus capital not required for growth initiatives. Dividend capacity is estimated to be 30-50% of after-tax earnings. Komplett Bank reported a negative profit after tax for the fiscal year 2021. Consequently, the Bank is not in a position to pay any dividend for the year. Operational review Loan growth and product development The Bank follows a diversified multi-channel marketing and distribution strategy, has a resilient balance sheet and a strong market position. The well-known brand and strong distribution capabilities places Komplett Bank in a favourable competitive position. During 2021, net loans declined by NOK 963 million to reach NOK 7.4 billion at the end of the year. This decline was driven primarily by disposal of a non-performing loan portfolio of NOK 1.4 billion in addition to a higher write-down rate on the remaining non-performing loans. Consumer loans in Norway increased by NOK 61.3 million. Consumer loans in Sweden and Finland decreased by NOK 128.6 million and NOK 684.3 million, respectively. During 2021, credit card loans declined by 17.2% to NOK 603.5 million. At the end of the year, credit card lending in Finland and Sweden represented 23.2% of the total portfolio of credit card loans. 30 Board of Directors’ Report
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