Q4 Interim report

October - December 2022

Q4 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

Q4 2022 | APRILA BANK ASA

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Key figures

GROSS INCOME FROM LENDING

GROSS LOANS

35.2 673

NOK MILLION

NOK MILLION, EOP

UNIQUE CUSTOMERS

GROSS LOANS PER UNIQUE

CUSTOMER

6,190

109

EOP

NOK THOUSAND, EOP

GROSS INCOME PER CUSTOMER1)

PURCHASED AMOUNT2)

23.5 157

NOK THOUSAND, ANNUALISED

MNOK

  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.

Q4 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 (14.8%), and Alliance Venture Spring AS (4.8%)3.

Fourth quarter 2022

Highlights from the quarter are outlined below.

  • Aprila delivered a pre-tax profit of NOK -1.4 million in the fourth quarter of 2022.
  • Gross income from lending amounted to NOK 35.2 million, an increase of 77% YoY and 17% QoQ.
  • Total income amounted to NOK 29.7 million, an increase of 81% YoY and 18% QoQ.
  • Gross loans at the end of the quarter amounted to NOK 673 million, an increase of 85% YoY and 13% QoQ.
  • Gross lending to credit line accounts amounted to NOK 610 million at the end of the quarter, an increase of 102% YoY and 14% QoQ.
  • At the end of the quarter, Aprila had 6,190 unique customers, an increase of 26% YoY and 7% QoQ.
  • At the end of the quarter, Aprila had 6,854 open customer accounts distributed on Aprila's three lending platforms: credit line (3,660 accounts), spot factoring4 (3,175 accounts), and home rental5 (19 accounts).

Financial figures

All figures are prepared and presented in accordance with IFRS. Comparable figures from Q4 2021 are presented in brackets.

Interest income in the quarter amounted to NOK 30.0 million (NOK 17.0 million), net interest income to NOK

26.0 million (NOK 15.8 million) and total income was NOK 29.7 million (NOK 16.4 million).

Total operating expenses amounted to NOK 21.4 million (NOK 16.6 million) of which NOK 10.0 million (47%) in salary and personnel expenses, NOK 9.1 million (43%) in general administrative expenses and NOK 2.3 million (11%) in ordinary depreciation.

Losses on loans amounted to NOK 9.6 million (NOK 6.3 million). Pre-tax operating profit amounted to NOK -1.4 million (NOK -6.5 million).

Total assets at the end of the quarter amounted to NOK 787 million (NOK 465 million) of which NOK 612 million (NOK 339 million) were net loans to customers. Total equity amounted to NOK 192 million (NOK 109 million) and the CET1-ratio was 36.3% (35.9%). Total liquid assets amounted to NOK 132 million (NOK 103 million) of which NOK 65 million in bank deposits and NOK 67 million in certificates and bonds.

  1. As registered in VPS 27 January 2023.
  2. Includes B2B ecommerce accounts (online merchants).
  3. Onboarding of new home rental customers ceased in H1 2021.

Q4 2022 | APRILA BANK ASA

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Outlook

Macroeconomic outlook

Russia's war in Ukraine continues to create headwinds for the global economy. High inflation, increased interest levels and elevated energy prices are expected to curb growth in 2023. In Norway, inflation (CPI) reached 5.9% year-on-year in December, and core inflation (CPI-ATE) reached 5.8% . Norges Bank raised the key policy rate twice in the quarter; from 2.25% to 2.50% in November and from 2.50% to 2.75% in December. In the January 2023 meeting, Norges Bank decided to keep the policy rate unchanged at 2.75% and signalled that the rate probably will be increased in March.

The 2.75 percentage point increase in the key policy rate from September 2021 to December 2022 has, as of the date of this report, resulted in an increase of Aprila's funding cost of around two percentage points . 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 first half of 2023 Aprila focuses on 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 first half of 2023, Aprila will 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

Over the past nine quarters, aprila.no has been the main source for attracting new customers. During the first 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.

Reach profitability

Aprila has delivered healthy product profitability over the past seven quarters, despite strong growth. In the second quarter of 2022, Aprila delivered overall profitability. In the second half of 2022 the bank failed to deliver a positive net income due to high loan loss provisions in the third quarter and high marketing spend in the fourth quarter. In the first half of 2023 Aprila will continue to focus on improving underlying profitability through continued lending growth and increased yield.

Other information

The accounting deficit for the fourth 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, 14 February 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 3.08 percent from 16 January 2023.

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Aprila Bank ASA published this content on 15 February 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 February 2023 07:04:06 UTC.