Q2 Interim report

April - June 2022

Q2 2022 | APRILA BANK ASA

2

Content

3 Key figures

4 Interim report

6 Condensed consolidated interim statement of comprehensive income

7 Condensed statement of financial position

8 Condensed statement of the cash flow position

9 Condensed statement of changes in equity

10 Notes

Q2 2022 | APRILA BANK ASA

3

Key figures

GROSS INCOME FROM LENDING

GROSS LOANS

26.4 517

NOK MILLION

NOK MILLION, EOP

UNIQUE CUSTOMERS

GROSS LOANS PER UNIQUE

5,521

CUSTOMER

93.4

EOP

NOK THOUSAND, EOP

GROSS INCOME PER CUSTOMER1)

PURCHASED AMOUNT2)

19.5 159

NOK THOUSAND, ANNUALISED

NOK MILLION

  1. Annualised gross income in the period divided by average number of unique customers in the period.
  2. Nominal value of invoices purchased in the period.

Q2 2022 | APRILA BANK ASA

4

Interim report

About Aprila Bank ASA

Aprila is a product- and technology company offering improved access to financing for small and medium sized enterprises (SMEs) through innovative financial solutions. Aprila's API-based technology platform supports both direct customer relationships as well as customer relationships established through partners. The bank commenced operations in April 2018 and offers three credit products to SMEs: credit line, spot factoring and B2B ecommerce checkout.

Aprila's technology infrastructure employs machine learning models that predict outcomes and price risk automatically, using real-time data in addition to ordinary sources of credit information. This enables the bank to offer credit to SMEs with a seamless customer experience.

The bank is owned by private and institutional investors in Norway and abroad. The largest shareholders are SES AS (18.2%), Amesto Group AS (15.5%), and Alliance Venture Spring AS (5.2%)3.

Second quarter 2022

Highlights from the quarter are outlined below.

  • Aprila delivered a pre-tax profit of NOK 1.6 million in the second quarter of 2022; its first positive quarterly result since the start of operations in Q2 2018.
  • Gross income from lending amounted to NOK 26.4 million, an increase of 90% YoY and 22% QoQ.
  • Total income amounted to NOK 22.9 million, an increase of 113% YoY and 28% QoQ.
  • Gross loans at the end of the quarter amounted to NOK 517 million, an increase of 104% YoY and 18% QoQ.
  • Gross lending to credit line accounts amounted to NOK 454 million at the end of the quarter, an increase of 130% YoY and 21% QoQ.
  • At the end of the quarter, Aprila had 5,521 unique customers, an increase of 43% YoY and 3% QoQ.
  • At the end of the quarter, Aprila had 6,217 open customer accounts distributed on Aprila's three lending platforms: spot factoring4 (3,301 accounts), credit line (2,886 accounts) and home rental5
    (30 accounts).

Financial figures

All figures are prepared and presented in accordance with IFRS. Comparable figures from Q2 2021 are presented in brackets.

Interest income in the quarter amounted to NOK 22.6 million (NOK 11.1 million), net interest income to NOK

21.2 million (NOK 10.5 million) and total income was NOK 22.9 million (NOK 10.8 million).

Total operating expenses amounted to NOK 12.9 million (NOK 14.0 million) of which NOK 5.4 million (42%) in salary and personnel expenses, NOK 5.4 million (42%) in general administrative expenses and NOK 2.0 million (15%) in ordinary depreciation.

Losses on loans amounted to NOK 8.4 million (NOK

  1. million). Pre-tax operating profit amounted to NOK
  1. million (NOK -7.3 million).

Total assets at the end of the quarter amounted to NOK 625 million (NOK 465 million) of which NOK 479 million (NOK 339 million) were net loans to customers. Total equity amounted to NOK 166 million (NOK 109 million) and the CET1-ratio was 41.3% (44.8%)6. Total liquid assets amounted to NOK 93 million (NOK 103 million) of which NOK 37 million in bank deposits and NOK 56 million in certificates and bonds.

  1. As registered in VPS 28 July 2022.
  2. Includes B2B ecommerce accounts (online merchants).
  3. Onboarding of new home rental customers ceased in H1 2021.
  4. Aprila implemented retail classification on eligible exposures as of 30 September 2021. Numbers for previous periods have been adjusted
    accordingly­ to make the numbers comparable.

Q2 2022 | APRILA BANK ASA

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Outlook

Macroeconomic outlook

In the second quarter, the Norwegian economy was characterised by high levels of inflation and capacity utilisation. Inflation (CPI) reached 6.3% year-on-year in June, and core inflation (CPI-ATE) reached 3.6%7.

Norges Bank raised the key policy rate from 0.75% to 1.25% in June and signalled that the rate may reach 2.25% by year-end and 3.00% by mid-2023.

The 1.25 percentage point increase in the key policy rate from September 2021 to June 2022 has, as of the date of this report, resulted in an increase of Aprila's funding cost of around 0.60 percentage points8. In terms of interest income, Aprila is favourably positioned to manage expected future hikes in interest level as the bank's loan agreements provide a high degree of pricing flexibility. Moreover, since the bank offers high-yielding products, the relative effect of the expected increase in interest rates on the customers' borrowing cost is quite modest.

In the current macro-economic environment, we consider the key uncertainties for Aprila to be the effect of high inflation and the prevailing geopolitical uncertainty on our customers' credit appetite and quality. Aprila's access to day-to-day accounting data for the majority of its customers provides a unique insight into the customers' financial position and the bank will continue to closely monitor the financial health of its customers and continuously align its risk appetite with the customers' financial performance.

Key priorities

During the second half of 2022 Aprila will focus on three key priorities:

Maintain a high growth trajectory

Over the past seven quarters, aprila.no has been the main source for attracting new customers. During the second half of 2022, Aprila will continue to enhance customer acquisition through own channels and select partner channels in order to maintain a high growth trajectory and continue to increase the ratio of customer lifetime value to customer acquisition cost.

Strengthen competitive advantage

Based on customer consent, Aprila receives day-today customer accounting data and transaction history from the partner systems where Aprila's products are embedded through APIs. The bank runs several machine-learning and expert models that calculate prices, make credit decisions, and enable a seamless customer experience. During the second half of 2022, Aprila will continue to focus on improving the models, as well as enhancing the data by adding new data sources.

Continue to improve underlying profitability Aprila has delivered healthy product profitability over the past five quarters, despite strong growth. In the second quarter of 2022, Aprila reached overall profitability. In the second half of 2022 Aprila will continue to focus on improving profitability through lending growth, price optimisation and increased automation of customer onboarding, servicing and monitoring.

Other information

The accounting surplus for the second quarter 2022 has in its entirety been booked against retained earnings. This interim report has not been audited by the company's external auditor.

Oslo, 11 August 2022

Board of Directors

Aprila Bank ASA

  1. CPI = KPI Totalindeks, CPI-ATE = KPI-JAE Totalindeks. Source: ssb.no, visited 30 July 2022.
  2. From 1.0 percent in September 2021 to 1.62 percent from 4 July 2022.

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Aprila Bank ASA published this content on 12 August 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 August 2022 05:08:06 UTC.