optin bank asa · about optin ank asa optin bank asa is a fintech scale-up in the ecommerce space,...
Post on 07-Jul-2020
6 Views
Preview:
TRANSCRIPT
1
Interim report as of 31 December 2019
Optin Bank ASA
Interim report
as of 31 December 2019
2
Interim report as of 31 December 2019
THE BOARD'S REPORT
Optin Bank ASA
Q4 2019
Letter from the CEO
Another major milestone has been reached for Optin in Q4 when hard work materialized in commercial
agreements with very high potential. In addition, we are so fortunate to partner with start- and scale-ups with
disruptive products and high level of competence. We have further developed our technical platform, and our
product offering can now compete with the best in the market. The platform has been built for scalability in terms
of partner and transaction volumes, to support new functionality, as well as scale to new regions.
The developments in Q4 makes me optimistic that we will deliver 2020 with solid financial results. We continue
to build a solid foundation for Optin Bank to address the opportunities generated in 2019 and the team did an
amazing job landing clients and delivery of outstanding technical functionality, combined with massive
progression operationally and in back-office.
We strengthened the capital in the bank in Q4 and our current shareholders has the same belief in Optin as
myself and the rest of the Optin team.
As we are heading into 2020, I am confident that we have built a solid platform and foundation with our team,
processes, and tech base. All in all, the bank is geared for profitable growth, and I believe that when we look
back in time a couple of years from now we will look back at 2020 as a key year on our path to success.
Harald Dahl Pedersen
CEO
3
Interim report as of 31 December 2019
THE BOARD'S REPORT
Key developments
Successful capital raise of NOK 36.75 million
We landed on target with the funding round, securing that the
bank can deliver on its commitment while also building a
platform for growth in 2020
Signing of commercial agreement with Opus Dental
Opus Dental is a provider of Dental Heath Record systems to
+1500 dental clinics in Norway. In total these clinics generate
revenues in the range of NOK 20 billion every year. We have
tailored our product OptinPay Dental with a close integration
with Opus Dental in order to offer the best solution possible in
the dental care sector.
Partnerships to pave the way for international
expansion
The bank signed several commercial and technical agreements
to support growth in Norway, The Nordics and Europe. Adding
Bambora for card payments in OptinPay strengthens the
overall product offering and offers a stronger platform for
growth in, as well as outside, the Nordics. A new agreement
with Hudya/Payr combined with our agreement with Fair paves
the way for a Nordic rollout to take place in 2020.
Operational developments
The bank continues to strengthen its client base with
several signings in the service sector. The most
significant contract signed in Q3 was the agreement to
deliver OptinPay to the dental health sector (Branded
as OptinPay Dental) through a partnership with dental
health records provider Opus Dental. The agreement
is significant from a volume perspective as well as a
strategic perspective due to the sheer number of
clinics/dentists (merchants) and patients
(transactions), target market potential, and the level of
integration.
Volume wise, Opus Dental aggregates a total of
+1500 dental clinics in Norway alone, and taps into a
transaction volume of approximately NOK 20 billion.
While the competition in this sector is fierce with
players such as Swedbank and Svea Finance having
a strong foothold, the integration with Opus Dental
offers functionality unique to OptinPay Dental.
The Opus agreement marked a milestone in
integration as solutions on both sides are developed
with new functionality to provide a better and more
competitive offering for the operations of the dental
health clinics.
To strengthen the product portfolio, the bank reached
an agreement with Bambora to integrate Credit and
Debit card payments into the check-out solution. With
Bambora onboard, OptinPay now offers full spectrum
payment options with invoice (Paper, eFaktura, PDF
over e-mail, and Digipost), deferred invoice/pay later,
accounts, and card payments. Check-out options
include plugins for web shopping platforms, combined
with a strong, open and flexible API which allows the
bank to tap into literally any kind of payment
transaction in existence. Q4 also saw the birth of a
mobile check-out solution capable of supporting Level
3 security for sensitive data distribution.
Besides Opus Dental, the bank showed strong
commercial traction with signed agreements with 10
new merchants, representing an addressable
business volume in the upper range of NOK 200
Million. The partner mix is showing success in three
key markets: a) services, b) product sales with
medium ticket sizes, and c) system providers / re-
sellers delivering solutions to the eCommerce space,
bundling OptinPay with the delivery.
The Bank also took a first step towards by
internationalization of its product portfolio by issuing
passport applications for operations in Poland, UK,
and Sweden.
4
Interim report as of 31 December 2019
THE BOARD'S REPORT
The first international commercial activity was the
signing of an agreement with a Norwegian company
with subsidiaries in 13 European countries to offer
OptinPay for international deployment, starting with
Poland, with UK as a second target market.
Operations commenced to include back-office
developments and partner developments to support a
full ecommerce value-chain for B2B clients.
The bank has strengthened its relationship with Payr
and will together with the new owner, Hudya, launch
the Payr platform under the governance of Optin Bank
in Q1 2020.
The capital base of the bank was strengthened through
a share issue aimed at existing shareholders. The
capital increase was completed in December 2019 with
a price of NOK 11 per share and a total amount of NOK
36.75 million.
Optin Bank was de-listed from the NOTC in order to
secure that the bank can operate more freely,
strengthen its communication efforts toward all
stakeholders, and better address new business
opportunities .
Financial information
The loan portfolio at the end of Q4 2019 was NOK
205.8 million. A total of NOK 39.2 million was paid for
new loans in the fourth quarter of 2019 and NOK 150.9
million for the year. Net lending growth in the quarter
has been adjusted for redemptions and sales of non-
performing loans in the forward-flow agreement by
NOK -62.7 million. Deposits from customers amounted
to NOK 350,5 million at the end of Q4 2019.
The total assets amounted to NOK 482.7 million, and
cash equivalents in the form of bank deposits and the
interest-bearing securities amounted to NOK 209,1
million.
Optin Bank had a core capital adequacy ratio of
30.8 per cent at the end of Q4 2019.
Profit after tax for the fourth quarter of 2019 is NOK
–10.7 million and NOK -36.5 million for the year.
Net interest income amounted to NOK 4.1 million in
the fourth quarter of 2019 and NOK 20.0 million for
the year.
Net commission costs in the fourth quarter
amounted to NOK 1.3 million and NOK 4,8 million
for the year and are mainly related to agent
commissions for loan brokerage.
Operating expenses in Q4 2019 were NOK 11,9
million and NOK 45.2 million for the year. Rental
costs are booked as depreciation an accordance
with IFRS 16 for 2019.
Optin Bank ASA had NOK 3.0 million in overdue
commitments over 90 days as of December 31,
2019.
We have since inception had a conservative Credit
policy and have constantly tuned the policy to
ensure good credit quality customers.
With an exception of a few loans, new business
volume outside the ecommerce platform has not
been booked since H1 2019.
A major part of the loan loss reserves is originating
from the start up and the first- and second-
generation scorecard. The proportion of non-
performing loans in the portfolio has been reduced
as credit quality in the portfolio have increased and
we have performed a sale of a non-performing loan
portfolio Loans. We have had a Forward Flow
agreement with Axactor to sell our non-performing
loans.
5
Interim report as of 31 December 2019
THE BOARD'S REPORT
This agreement was terminated per the end Q4 2019.
The pre- and legal collection will in the future be
performed by Fair Group.
Our loans loss reserves are assessed for write-down
adjustments in accordance with IFRS 9 and provision is
made for expected losses from the date of payment.
The bank has a conservative approach to expected
cash flow from commitments maturing over 90 days
and offsetting between 60 and 100 percent of principal
for anticipated losses. Loss provisions in Q4 2019
amounted to NOK 5.7 million and NOK 19.8 million for
the whole year.
Future development
2020 for the bank is all about building an solid engine
for scaling; increasing our partner base and continue
developing our sales pipeline, rapid partner
onboarding, re-seller development, and an international
expansion with a strong focus on the Nordic region
together with our partners Fair Group, Hudya and
Bambora.
To support this, we will continue to strengthen our
commercial team as well as increasing our technical
baseline to fully automate every part of the value-chain.
In addition, the bank will continue to position ourselves
as a FinTech scale-up with high ambitions.
About Optin Bank ASA
Optin Bank ASA is a FinTech scale-up in the
eCommerce space, offering services in the payments
and financial transactions segment, combined with a
savings accounts product at very competitive interest
rates .
Optin Bank ASA was converted from Optin Prosjekt AS
August 22nd, 2017.
The company was granted a banking license by the
Norwegian Financial Supervisory Authority on Sep-
tember 8th, 2017. Optin Bank ASA is mainly owned
by Norwegian investors. The bank has a business
office in Munkedamsveien 53B in Oslo. Optin Bank
is a member of the Banks' Guarantee Fund and all
customers` deposits up to NOK 2 million are se-
cured with a deposit guarantee.
Our eCommerce platform has been developed in
partnership with market leading players such as Ap-
tic, Flowize, Fair Group, Bambora, Payr and Hudya.
Together with these partners we offer an end to end
solution for payments ranging from checkout to col-
lections. Payment options online and mobile check-
out includes Invoices, Deferred invoices, Accounts,
Cards, and VIPPS. The Card and VIPPS settle-
ments are executed through the partnership with
Bambora.
Our savings account offers very competitive terms
for the consumer, including low risk, higher interest
rates compared to a traditional payroll or utility ac-
count, without any additional fees or withdrawal re-
strictions. The savings account product is consist-
ently ranked amongst the top 10 best savings ac-
counts in Norway, and we experience a good re-
cruitment of new deposit customers. The interest
rate of the savings account is aligned with the devel-
opment of the market and our liquidity and capital
requirements.
Oslo, 31 January 2020
The Board of Optin Bank ASA
6
Interim report as of 31 December 2019
INCOME STATEMENT
Amounts in NOK 1 000 Note 4Q 2019 Jan-Dec
2019
4Q 2018 Jan-Dec
2018
2018
Interest income, amortised cost 5 715 25 249 5 140 8 792 8 792
Other interest income 133 625 1 763 3 146 3 146
Interest income 5 848 25 874 6 904 11 939 11 939
Interest expense, amortised cost -1 678 -5 838 -2 190 -3 261 -3 261
Other interest expense -47 -47 -40 -132 -132
Interest expense -1 726 -5 885 -2 230 -3 394 -3 394
Net interest income 6 4 122 19 989 4 674 8 545 8 545
Commission and fee income 78 354 30 52 52
Commission and fee expense -1 424 -5 187 -794 -1 285 -1 285
Net commission and fee expense 7 -1 347 -4 834 -765 -1 233 -1 233
Net gain/(loss) on financial instruments at fair value 488 1 175 -1 477 - 2 434 -2 434
Total income 3 264 16 330 2 432 4 878 4 878
Salaries and administrative expenses 8 -4 866 -19 749 -5 277 -16 770 -16 770
Depreciation on fixed and intangible assets -2 707 -6 407 -952 -2 259 -2 259
Other operating expenses 9 -4 334 -19 075 -5 296 -15 504 -15 504
Total operating expenses before impairment losses -11 908 -45 231 -11 524 -34 533 -34 533
Impairment losses on loans to customers -5 675 -19 794 -5 483 -8 014 -8 014
Profit before tax -14 319 -48 695 -14 575 -37 669 -37 669
Income tax expense 3 580 12 174 3 573 9 347 9 347
Profit for the period -10 739 -36 521 -11 001 -28 322 -28 322
STATEMENT OF COMPREHENSIVE INCOME
Amounts in NOK 1 000 Note 4Q 2019 Jan-Dec
2019
4Q 2018 Jan-Dec
2018
2018
Profit for the period -10 739 -36 521 -11 001 -28 322 -28 322
Other comprehensive income 0
Total comprehensive income -10 739 -36 521 -11 001 -28 322 -28 322
7
Interim report as of 31 December 2019
STATEMENT OF FINANCIAL POSITION
Amounts in NOK 1 000 Note 31 December 2019 31 December 2018 31 December 2018
ASSETS
Loans and advances to credit institutions 2,4 64 208 75 780 75 780
Loans and advances to customers 3,4 205 773 192 788 192 788
Debt instruments 4 144 942 159 141 159 141
Intangible assets 19 511 17 614 17 614
Deferred tax assets 27 575 15 401 15 401
Fixed assets 7 053 367 367
Other assets 13 673 12 203 12 203
TOTAL ASSETS 482 735 473 295 473 295
LIABILITIES
Deposits from customers 350 508 381 374 381 374
Other liabilities 11 054 5 510 5 510
TOTAL LIABILITIES 361 561 386 884 386 884
EQUITY
Share capital 8 093 5 672 5 672
Share premium 183 174 115 179 115 179
Total paid-in equity capital 191 267 120 851 120 851
Other equity -33 572 -6 119 -6 119
Total comprehensive income -36 521 -28 322 -28 322
Total other equity -70 093 -34 441 -34 440
TOTAL EQUITY 121 173 86 411 86 411
TOTAL LIABILITIES AND EQUITY 482 735 473 295 473 295
8
Interim report as of 31 December 2019
STATEMENT OF CHANGES IN EQUITY
1 January - 31 December 2019
Amounts in NOK 1 000 Share capital Share premium Other equity Total equity
Equity at 01.01.2019 5 672 115 179 -34 440 86 411
Issue of share capital (net of transaction costs) 868 868
Employee stock options 2 421 67 994 70 415
Total comprehensive income -36 521 -36 521
Equity at 31.12.2019 8 093 183 174 -70 093 121 173
1 January - 31 December 2018
Amounts in NOK 1 000 Share capital Share premium Other equity Total equity
Equity at 01.01.2018 5 672 114 900 -6 685 113 888
Employee stock options 566 566
Share issuance transaction costs 279 279
Total comprehensive income -28 322 -28 322
Equity at 31.12.2018 5 672 115 179 -34 440 86 411
1 January - 31 December 2018
Amounts in NOK 1 000 Share capital Share premium Other equity Total equity
Equity at 01.01.2018 5 672 114 900 -6 685 113 888
Employee stock options 566 566
Share issuance transaction costs 279 279
Total comprehensive income -28 322 -28 322
Equity at 31.12.2018 5 672 115 179 -34 440 86 411
9
Interim report as of 31 December 2019
STATEMENT OF CASH FLOWS
Amounts in NOK 1 000 31 December 2019 31 December 2018 31 December 2018
Net payments on loans to customers -33 873 -199 805 -199 805
Net receipts/(payments) on deposits from customers -32 866 381 371 381 371
Interest received 25 369 8 302 8 302
Interest paid -5 885 -3 391 -3 391
Net (increase)/decrease in debt securities -5 356 -158 946 -158 946
Net payments on commissions and fees 17 068 -10 402 -10 402
Payments to operations -31 526 -33 391 -33 391
Net cash flows from operating activities -67 070 -16 262 -16 262
Purchase of fixed and intangible assets -14 990 -16 054 -16 054
Net cash flows from investing activities -14 990 -16 054 -16 054
Proceeds from issuance of share capital 70 415 0 0
Net cash flows from financing activities 70 415 0 0
Net cash flows -11 644 -32 316 -32 316
Cash and cash equivalents at 1 January 74 309 106 625 106 625
Net increase/(decrease) in cash and cash equivalents -11 644 -32 216 -32 216
Cash and cash equivalents at end of period 62 664 74 309 74 309
10
Interim report as of 31 December 2019
NOTES TO THE FINANCIAL STATEMENTS Note 1 Accounting principles
The financial statements for Optin Bank ASA are prepared in accordance with the International Financial Reporting standards (IFRS) as
adopted by EU. The financial statements as of 31 December 2019 follow IAS 34 Interim reporting and the same accounting principles as
Note 2 Loans and advances to credit institutions
Amounts in NOK 1 000
31 December 2019 31 December 2018 31 December 2018
Loans and advances to credit institutions without agreed period of notice 64 208 75 780 75 780
Total loans and advances to credit institutions 64 208 75 780 75 780
Note 3 Loans to customers
Amounts in NOK 1 000
31 December 2019 31 December 2018 31 December 2018
Gross loans to customers 213 482 200 512 200 512
Loan loss allowances Stage 1 -1 637 -1 146 -1 146
Loan loss allowances Stage 2 -3 694 -2 000 -2 000
Loan loss allowances Stage 3 -2 378 -4 579 -4 579
Net loans to customers 205 773 192 788 192 788
Reconciliation of gross loans to customers
Stage 1 Stage 2 Stage 3 Total
Gross loans to customers at 01.01.19 175 875 18 881 5 756 200 512
Transfers between Stage 1 and Stage 2 -11 784 10 305 - -1 479
Transfers between Stage 1 and Stage 3 -144 - 140 -4
Transfers between Stage 2 and Stage 3 - -466 467 1
Derecognised in the period -79 789 -18 368 -3 882 -102 039
Originated during the period 105 647 10 278 566 116 491
Gross loans to customers at 31.12.19 189 804 20 631 3 047 213 482
Reconciliation of loan loss allowances
Stage 1 Stage 2 Stage 3 Total
Loan loss allowances at 01.01.19 -1 146 -2 000 -4 579 -7 725
Transfers between Stage 1 and Stage 2 84 - 2 134 - - 2 050
Transfers between Stage 1 and Stage 3 1 - - 28 - 27
Transfers between Stage 2 and Stage 3 - 55 -413 -359
Derecognised in the period 151 1 940 2 979 5 069
Originated during the period -727 -1 555 -336 -2 618
Loan loss allowances at 31.12.19 -1 637 -3 694 -2 378 -7 709
Gross loans to customers by past due status
31 December 2019 31 December 2018 31 December 2018
Not past due 158 300 154 479 154 479
Past due 1-30 days 31 549 21 280 21 280
Past due 31-60 days 13 715 5 064 5 064
Past due 61-90 days 6 916 4 015 4 015
Past due over 90 days 3 003 15 675 15 675
Gross loans to customers 213 482 200 512 200 512
11
Interim report as of 31 December 2019
Note 3 Loans to customers (cont.)
Amounts in NOK 1 000
Geographic distribution of loans to customers 31 December 2019 31 December 2018 31 December 2018
Oslo 33 087 27 631 27 631
Akershus 45 886 25 390 25 390
Østfold 14 880 17 517 17 517
Hedmark 6 878 5 363 5 363
Oppland 4 881 6 539 6 539
Buskerud 9 379 12 406 12 406
Vestfold 12 315 9 803 9 803
Telemark 6 246 7 255 7 255
Rogaland 11 364 10 980 10 980
Vest-Agder 5 824 6 381 6 381
Aust-Agder 3 781 3 595 3 595
Hordaland 18 108 17 460 17 460
Sogn og Fjordane 1 726 1 922 1 922
Møre og Romsdal 9 087 8 940 8 940
Trøndelag 13 055 16 652 16 652
Nordland 7 184 11 459 11 459
Troms 6 132 6 582 6 582
Finnmark 3 669 4 639 4 639
Gross loans to customers 213 482 200 512 200 512
Note 4 Classification of financial instruments
Amounts in NOK 1 000
At 31 December 2019 Amortised cost FVTPL Total
Loans and advances to credit institutions 64 208 64 208
Loans to customers 205 773 205 773
Debt instruments 144 942 144 942
Total financial assets 205 773 209 150 414 923
Deposits from customers 350 508 350 508
Total financial liabilities 350 508 - 350 508
At 31 December 2018 Amortised cost FVTPL Total
Loans and advances to credit institutions 75 780 75 780
Loans to customers 192 788 192 788
Certificates and obligations 159 141 159 141
Total financial assets 192 788 234 921 427 709
Deposits from customers 381 374 381 374
Total financial liabilities 381 374 381 374
At 31 December 2018 Amortised cost FVTPL Total
Loans and advances to credit institutions 75 780 75 780
Loans to customers 192 788 192 788
Debt instruments 159 141 159 141
Total financial assets 192 788 234 921 427 709
Deposits from customers 381 374 381 374
Total financial liabilities 381 374 381 374
12
Interim report as of 31 December 2019
Note 5 Regulatory capital
Amounts in NOK 1 000
31 December 2019
Share capital 8 093
Share premium 183 174
Other equity - 70 093
(-) Intangible assets -19 511
(-) Deferred tax assets -27 784
Common Equity Tier 1 capital 73 879
Total regulatory capital 73 879
Credit risk
Institutions 13 843
Retail 185 672
Other 20 726
Total credit risk 220 241
Market risk 3
Operational risk 19 883
Total risk-weighted assets 240 124
Common Equity Tier 1 capital ratio 30,77 %
Tier 1 capital ratio 30,77 %
Total capital ratio 30,77 %
Liquidity Coverage Ratio - LCR 1 854,64 %
Leverage Ratio - LR 2 17,0 %
1 The Liquidity Coverage Ratio (LCR) measures high-quality liquid assets held by Optin Bank to meet its short-term obligations. The CRD IV-regulation § 8 requires a 100 per cent
LCR, which means an amount of highly liquid assets that is equal or greater than the net cash outflow over a 30-day stress period.
2 The Leverage Ratio (LR) measures Optin Bank’s Tier 1 capital relative to the non-risk-weighted exposure of all assets and off-balance sheet items. The CRD IV-regulation §5
requires a 3 per cent leverage ratio, and an additional buffer of 2 per cent.
13
Interim report as of 31 December 2019
Note 6 Net interest income
Amounts in NOK 1 000
4Q 2019 4Q 2018 2018 Jan-Dec 2019 Jan-Dec2018
Interest income from loans and advances to credit
institutions 133 165 524 332 524
Interest income from loans to customers 5 715 5 140 8 792 25 249 8 792
Interest income from debt instruments - 599 2 623 293 2 623
Total interest income 5 848 6 904 11 939 25 874 11 939
Interest expense on deposits to customers -1 678 -2 190 -3 261 -5 838 -3 261
Deposit Guarantee Fund levy -47 -40 -132 -47 -132
Total interest expenses -1 726 - 2 230 -3 394 - 5 885 -3 394
Net interest income 4 122 4 674 8 545 19 989 8 545
Note 7 Net commission and fee expense
Amounts in NOK 1 000
4Q 2019 4Q 2018 2018 Jan-Dec2019 Jan-Dec2018
Commission and fee income 78 30 52 354 52
Commission to loan agents -1 325 -775 -1 204 -4 758 -1 204
Fees on banking services -99 -20 -80 -429 -80
Net commission and fee expenses - 1 347 -765 -1 233 -4 834 -1 233
Note 8 Salaries and administrative expenses
Amounts in NOK 1 000
4Q 2019 4Q 2018 2018 Jan-Dec 2019 Jan-Dec 2018
Salaries -3 407 -3 771 -11 329 -13 882 -11 329
Employer contribution -825 -808 -2 296 -3 000 -2 296
Pension costs -316 -308 -1 072 -123 -1 072
Other personnel expenses -318 -389 -2 072 -1 745 -2 072
Total salaries and administrative expenses -4 866 -5 277 -16 770 -19 749 -16 770
Note 9 Other operating costs
Amounts in NOK 1 000
4Q 2019 4Q 2018 2018 Jan-Dec 2019 Jan-Dec 2018
IT-expenses -3 767 -3 926 -10 602 -14 286 -10 602
Property rental 704 -468 -1 638 -858 -1 638
Marketing expenses -101 -309 -882 -163 -882
Other operating expenses -171 -593 -2 381 -3 767 -2 381
Total other operating expenses -4 334 - 5 296 -15 504 -19 075 -15 504
top related