Aprila Bank : Q2 2023 interim report

Q2 Interim report

April - June 2023

Q2 2023 | APRILA BANK ASA

2

Content

3 Interim report

5 Condensed consolidated interim statement of comprehensive income

6 Condensed statement of financial position

7 Condensed statement of the cash flow position

8 Condensed statement of changes in equity

9 Notes

Q2 2023 | APRILA BANK ASA	3

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 two credit products to businesses: credit line and spot factoring.

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 (14.8%), and Alliance Venture Spring AS (4.8%)1.

Second quarter 2023

Highlights from the quarter are outlined below.

• Aprila delivered a pre-tax profit of NOK 7.8 million in the quarter.
• Total income amounted to NOK 37.4 million, an increase of 63% YoY and 10% QoQ.
• Gross loans at the end of the quarter amounted to NOK 811 million, an increase of 57% YoY and 8% QoQ.
• Gross lending to credit line accounts amounted to NOK 753 million at the end of the quarter, an increase of 66% YoY and 9% QoQ.
• At the end of the quarter, Aprila had 6,621 unique business customers, an increase of 21% YoY and 1% QoQ.
• At the end of the quarter, Aprila had 7,271 open customer accounts distributed on Aprila's three lending platforms: credit line (4,380 accounts), spot factoring2 (2,875 accounts), and home rental3 (16 accounts).

Financial figures

All figures are prepared and presented in accordance with IFRS. Comparable figures from Q2 2022 are presented in brackets.

Interest income in the quarter amounted to NOK 40.7 million (NOK 22.6 million), net interest income to NOK 34.2 million (NOK 21.2 million) and total income was NOK 37.4 million (NOK 22.9 million).

Total operating expenses amounted to NOK 17.8 million (NOK 12.9 million) of which NOK 9.7 million (54%) in salary and personnel expenses, NOK 6.4 million (36%) in general administrative expenses and NOK 1.7 million (10%) in ordinary depreciation.

Losses on loans amounted to NOK 11.8 million

(NOK 8.4 million). Pre-tax operating profit amounted to NOK 7.8 million (NOK 1.6 million).

Total assets at the end of the quarter amounted to NOK 997 million (NOK 787 million) of which NOK 728 million (NOK 479 million) were net loans to customers. Total equity amounted to NOK 198 million (NOK 166 million) and the CET1-ratio was 32.4% (41.3%). Total liquid assets amounted to NOK 252 million (NOK 93 million) of which NOK 125 million in bank deposits and NOK 127 million in certificates and bonds.

1. As registered in VPS 17 July 2023.
2. Includes B2B ecommerce accounts (online merchants).
3. Onboarding of new home rental customers ceased in H1 2021.

Q2 2023 | APRILA BANK ASA	4

Outlook

Macroeconomic outlook

Norges Bank raised the key policy rate 75 bps in the quarter: from 3.00% to 3.25% in May and from 3.25% to 3.75% in June. Key factors behind the central bank's assessment in June were higher-than expected inflation, a substantial depreciation of the Norwegian currency and a continued increase in interest rates internationally.

In the policy meeting in June, the central bank announced another increase in August and an interest rate path that indicated that the key policy rate may reach 4.25% during the second half of 2023. On 10 July, Statistics Norway released the inflation figures for June, showing that Inflation (CPI) reached 6.4% year-on-year in June. Core inflation (CPI-ATE) reached 7.0%4, above Norges Bank's projections.

The 3.75 percentage point increase in the key policy rate from September 2021 to May 2023 has, as of the date of this report, resulted in an increase of Aprila's funding cost of around 3 percentage points5. 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 2023 Aprila will continue to focus on the following three key priorities:

Strengthen competitive advantage

We believe that unmatched operational scalability combined with high quality of processes and output is key to create sustainable competitive advantage in Aprila's market. During the second half of 2023, Aprila will continue to focus on implementing a set of carefully selected and prioritised initiatives that will increase the level of automation and quality, and thus strengthen Aprila's competitive advantage.

Continue the strong growth

Aprila.no is the main source for attracting new customers. During the second half of 2023, 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.

Improve profitability

Aprila reached underlying overall profitability in the second quarter 2023; an important milestone for the bank. The accomplishment reflects the bank's operational efficiency and the scalability of its business model. Looking ahead, the bank remains committed to improving its underlying profitability and expects to deliver a robust net income in 2023.

Other information

The accounting surplus for the second quarter 2023 has in its entirety been added to retained earnings. The interim report has not been audited by the company's external auditor, and hence, the retained earnings year- to-date as of 30 June 2023 is deducted from common equity tier 1, cf. CRR Article 26.

Oslo, 14 August 2023

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 4.03 percent from 13 July 2023.

Q2 2023 | APRILA BANK ASA	5

Condensed consolidated interim statement of comprehensive income

Amounts in NOK thousand	Note	Q2 2023	Q2 2022	YTD 2023	YTD 2022	2022
Interest income		40,674	22,579	76,308	40,524	96,166
Interest expense		6,489	1,343	11,323	2,425	8,642
Net interest income		34,184	21,236	64,985	38,099	87,524
Income commissions and fees		3,197	1,746	6,168	2,979	8,154
Expenses commissions and fees		243	154	403	314	626
Net commissions and fees		2,953	1,591	5,765	2,666	7,528
Net gains / losses (-) on certificates, bonds and currency		249	39	500	-2	597
Other income		0	0	0	0	0
Total income		37,386	22,866	71,249	40,762	95,649
Salary and other personnel expenses		9,674	5,442	22,247	14,096	33,531
General administrative expenses	8	6,362	5,447	17,747	12,795	27,366
Total salary and administrative expenses		16,036	10,889	39,994	26,891	60,898
Ordinary depreciation		1,719	1,986	3,762	3,972	8,234
Total operating expenses excl. losses on loans		17,755	12,875	43,757	30,863	69,132
Losses on loans	2, 3	11,796	8,352	21,698	13,558	35,083
Pre-tax operating profit		7,835	1,639	5,794	-3,659	-8,565
Tax	9	0	0	0	0	0
Profit after tax		7,835	1,639	5,794	-3,659	-8,565
Earnings per share (NOK)		0.12	0.03	0.09	-0.07	-0.15
Diluted earnings per share (NOK)		0.12	0.03	0.09	-0.07	-0.15

COMPREHENSIVE INCOME
Amounts in NOK thousand	Q2 2023	Q2 2022	YTD 2023	YTD 2022	2022
Comprehensive income for the period	7,835	1,639	5,794	-3,659	-8,565