Financial Officer of Komplett Bank. Holtedahl has been with the Bank since 2018 and has over 20 years of experience in the industry. He came from the position of Product Director Credit Cards. He was the temporary CEO of the Bank from June 2021 until October 1, 2021, when Øyvind Oanes took over. Komplett Bank expanded its management team to include a Chief Commercial Officer (CCO) role to ensure the best possible coordination and focus for the Bank’s commercial efforts and growth ambitions. Enok Hanssen, who has been with the Bank since 2017, assumed this new position. He came from the position of Product Director for Consumer Loans and Purchase Financing in Komplett Bank. Wilhelm B. Thomassen, who has a long track record in the management team of Komplett Bank, continued in a broader COO role, while Martin Valland joined the Bank as the new CTO. Together with Wilhelm, he will focus on building a more efficient banking business for the future. Review of the annual accounts The annual financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS). Komplett Bank has identified the cost-income ratio, loan loss ratio, return on equity (ROE) and adjusted return on equity (ROE adj.) as Alternative Performance Measures in addition to the financial information prepared in accordance with IFRS as adopted by the EU. Please see note 22 for further details. 2022 financial highlights: Ǵ Total income: NOK 807 million Ǵ Pre-tax profit/(loss): NOK 2 million Ǵ Net lending: NOK 9,111 million as at 31 December 2022 Ǵ Cost-income ratio: 63% Ǵ Loan loss ratio: 3.3% Ǵ Return on Equity (ROE): -0.8% Profit and Loss Income Komplett Bank’s total income was NOK 876 million in 2021, a reduction Komplett Bank’s total income was NOK 801 million in 2022, a reduction of NOK 75 million (-9%) compared to 2021. The decrease in income was driven mainly by a lower average net interest margin. In April 2022, Komplett Bank sold a portfolio of non-performing loans worth 0.7 billion kroner. In addition, the Bank is continuously selling new non-performing loans every month, so-called “forward flow”. In 2022, approximately 550 million kroner was sold on forward flow.” Throughout 2022, the effective interest rate on credit cards increased from 14.6% to 15.8%, while the effective interest rate on loans was mostly flat at around 13% during the year. The flat development is a result of the returns on new loans being lower than on the loans they replace, while there is a delay in transferring the increased cost to customers due to regulated deadlines for notifying customers of interest rate increases. In addition, refinancing products drive most of the growth in Norway, where there is a requirement to offer the customer a lower interest rate than on the original loan. Commission income and income from banking services increased by 1 million kroner from 2021 to 53 million kroner in 2022. TABLE 2: INCOME NOK million 2022 2021 Endring Interest income 907 965 -6 % Interest expense -114 -82 -39 % Net interest income 793 884 -10 % Net commission and fees 10 -11 186 % Other -2 4 -153 % Total income 801 876 -9 % Operating expenses Operating expenses, including depreciation and impairment, increased by 22% from 2021 to NOK 507 million in 2022. Depreciation and impairment amounted to NOK 172 million in 2022. This was mainly related to impairment of historical IT investments due to the Bank’s decision to introduce a more efficient IT platform that will result in lower operating costs and increased scalability over time. The process of implementing the new IT platform is expected to be completed in the transition period of 2023/2024. Personnel expenses were reduced to NOK 133 million in 2022 from NOK 162 million in 2021, driven by a reduction in the number of employees made possible by increased automation. The cost reduction was partly offset by the general salary adjustments in 2022. In 2023, the Bank expects to see a significantly larger impact from these reductions. General and administrative expenses increased to NOK 159 32 Board of Directors’ Report
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