Komplett Bank Annual Report 2022

million, equivalent to 10% of gross loans. The sale of portfolios of non-performing loans and the increase in the loan portfolio affected the ratio between non-performing loans and gross loans. Customer deposits increased from 7,934 million NOK in 2021 to 9,348 million NOK at the end of 2022. The Bank’s liquid assets, consisting of bank deposits and liquid securities, amounted to NOK 2,261 million, equivalent to 20% of the Bank’s assets under management at the end of 2022. The total equity was NOK 1,953 million at the end of 2022, down from NOK 1,964 million at the end of 2021. The equity ratio was 17% at the end of 2022, down from 19% at the end of the previous year. TABLE 5: BALANCE SHEET NOK million 2022 2021 Endring Total assets 11,528 10,105 -13 % Total liabilities 9,575 8,141 -12 % Total equity 1,953 1,964 -15 % Total equity & liabilities 11,128 10,105 -13 % Capital adequacy On December 16, 2022, the Ministry of Finance decided to postpone the implementation of EU-harmonized capital adequacy requirements, which were expected to take effect from December 31, 2022, by one year. As a result of this postponement, the system risk capital buffer requirement was kept at 3% for exposures in all countries, while banks in other EU countries have a 0% requirement for exposures to Swedish and Finnish customers. Overall, this gives the Bank higher capital adequacy requirements in 2023 than if the implementation had not been postponed. The Bank assumes that Norwegian authorities will harmonize Norwegian requirements with European requirements from 2024. As of December 31, 2022, the minimum requirement for Komplett Bank’s pure Tier 1 capital ratio was 17.6%, and the requirement for total capital adequacy was 21.1%. Komplett Bank has set a CET1 ratio target of 18.6%, which includes a management buffer of 1.0%. The Bank therefore aims for a total capital adequacy ratio of 22.1%. At the end of 2022, Komplett Bank was well capitalized with a common equity Tier 1 capital ratio of 20.5%, above the regulatory minimum requirement. The total capital ratio was 23.6%, down from 24.0% at the end of 2021. To support continued strong growth, the Bank decided to raise NOK 100 million in new equity in a transaction that was completed on February 16, 2023. Proforma, the transaction results in a positive effect on the core capital adequacy ratio and the total capital adequacy ratio of around 1.0%. Perpetual Tier 1 (AT1) and additional Tier 2 (T2) capital made up 2.3% and 0.8% of the Bank’s capital adequacy ratio, respectively. For additional information on capital adequacy, please refer to Note 14.. Allocation of profit for the year Komplett Bank’s dividend policy is to pay out excess capital which is not deployed for growth purposes. Komplett Bank reports a profit after tax of NOK 1 million for the fiscal year 2022. Consequently, the Bank is not in a position to pay any dividend for the year. Given the current capital position and improved operations going forward, the Bank considers its dividend capacity to be 30-50% of annual profit after tax while maintaining ample capacity for growth. In the short to medium term, the Bank envisages prioritising growth over dividends. The total profit of 1 million NOK is proposed to be transferred to other equity. Outlook Komplett Bank has good prospects for growth and increased profitability. The positive outlook is rooted in the fact that at the beginning of 2023, the Bank has a well-diversified loan portfolio of 10 NOK billion, continued high demand in the form of incoming loan applications, underlying profitable operations, and exposure to a growing and robust Nordic consumer finance market. The underlying credit quality is stable, and the level of loan losses is expected to normalize at a lower level compared to the fourth quarter of 2022 after a period of high loan growth. Most of the more recent defaulted loans are sold on an ongoing basis (forward flow), which limits the risk on the balance sheet. In the last two quarters of 2022, Komplett Bank experienced a significant increase in new sales. The growth occurred across the geographic markets where the Bank operates and was driven by 34 Board of Directors’ Report

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