Q3 Interim report

July - September 2022

Q3 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

Q3 2022 | APRILA BANK ASA

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Key figures

GROSS INCOME FROM LENDING

GROSS LOANS

30.2 595

NOK MILLION

NOK MILLION, EOP

UNIQUE CUSTOMERS

GROSS LOANS PER UNIQUE

5,790

CUSTOMER

103

EOP

NOK THOUSAND, EOP

GROSS INCOME PER CUSTOMER1)

PURCHASED AMOUNT2)

21.3 139

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.

Q3 2022 | APRILA BANK ASA

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Interim report

About Aprila Bank ASA

Aprila is a product- and technology company offering improved access to financing for businesses through innovative financial solutions. The bank commenced operations in April 2018 and offers three credit products to businesses: 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 businesses with a seamless customer experience.

The bank is owned by private and institutional investors in Norway and abroad. The largest shareholders are SES AS (19.9%), Amesto Group AS (15.5%), and Alliance Venture Spring AS (5.2%)3.

Third quarter 2022

Highlights from the quarter are outlined below.

  • Aprila delivered a pre-tax profit of NOK -3.6 million in the third quarter of 2022.
  • Gross income from lending amounted to NOK 30.2 million, an increase of 78% YoY and 14% QoQ.
  • Total income amounted to NOK 25.2 million, an increase of 87% YoY and 10% QoQ.
  • Gross loans at the end of the quarter amounted to NOK 595 million, an increase of 104% YoY and 15% QoQ.
  • Gross lending to credit line accounts amounted to NOK 533 million at the end of the quarter, an increase of 127% YoY and 17% QoQ.
  • At the end of the quarter, Aprila had 5,790 unique customers, an increase of 33% YoY and 5% QoQ.
  • At the end of the quarter, Aprila had 6,477 open customer accounts distributed on Aprila's three lending platforms: credit line (3,241 accounts), spot factoring4 (3,212 accounts), and home rental5 (24 accounts).

Financial figures

All figures are prepared and presented in accordance with IFRS. Comparable figures from Q3 2021 are presented in brackets.

Interest income in the quarter amounted to NOK 25.6 million (NOK 13.8 million), net interest income to NOK

23.4 million (NOK 13.1 million) and total income was NOK 25.2 million (NOK 13.5 million).

Total operating expenses amounted to NOK 16.8 million (NOK 15.5 million) of which NOK 9.4 million (56%) in salary and personnel expenses, NOK 5.5 million (32%) in general administrative expenses and NOK 2.0 million (12%) in ordinary depreciation.

Losses on loans amounted to NOK 11.9 million (NOK

3.4 million). Pre-tax operating profit amounted to NOK -3.6 million (NOK -5.4 million).

Total assets at the end of the quarter amounted to NOK 657 million (NOK 378 million) of which NOK 545 million (NOK 275 million) were net loans to customers. Total equity amounted to NOK 162 million (NOK 84 million) and the CET1-ratio was 39.7% (36.6%). Total liquid assets amounted to NOK 94 million (NOK 81 million) of which NOK 38 million in bank deposits and NOK 56 million in certificates and bonds.

  1. As registered in VPS 28 October 2022.
  2. Includes B2B ecommerce accounts (online merchants).
  3. Onboarding of new home rental customers ceased in H1 2021.

Q3 2022 | APRILA BANK ASA

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Outlook

Macroeconomic outlook

In the third quarter, the Norwegian economy showed signs of slow-down. According to Norges Bank's regional network, export- and oil- and gas-related industries experienced strong growth, whereas domestically oriented industries reported a decline in output and capacity utilisation weakened. Inflation (CPI) reached 6.9% year-on-year in September, and core inflation (CPI-ATE) reached 5.3%7. Norges Bank raised the key policy rate twice in the quarter; from 1.25% to 1.75% in August and from 1.75% to 2.25% in September. In the September meeting, Norges Bank signalled that the rate may reach 3.00% during the winter. In the November meeting, Norges Bank raised the key policy rate to 2.50%.

The 2.50 percentage point increase in the key policy rate from September 2021 to November 2022 has, as of the date of this report, resulted in an increase of Aprila's funding cost of around 1.6 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 focuses on three key priorities:

Accelerate growth

Over the past eight 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 continues 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 six quarters, despite strong growth. In the second quarter of 2022, Aprila reached overall profitability. In the second half of 2022 Aprila continues to focus on improving profitability through lending growth, price optimisation and increased automation of customer onboarding, servicing and monitoring.

Other information

The accounting deficit for the third 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 November 2022

Board of Directors

Aprila Bank ASA

  1. CPI = KPI Totalindeks, CPI-ATE = KPI-JAE Totalindeks. Source: ssb.no
  2. From 1.0 percent in September 2021 to 2.59 percent from 2 November 2022.

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Aprila Bank ASA published this content on 14 November 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 November 2022 07:31:05 UTC.