Interim report 3 rd quarter 2017

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Solid third quarter results, equity issue to fund further growth • Record-high loan growth for the quarter, net loan balance of NOK 1 867 million• Successful start of the consumer loan business in Finland• Planned equity issue of NOK 175 to 225 million to fund further growth• Net interest income of NOK 44.6 million, up from NOK 37.1 million in Q2 2017• Net profit after tax reached NOK 5.7 million, up from NOK 3.0 million in Q2 2017• Credit quality develops in line with projections after introducing internally developed

scorecard• Successful placement of hybrid Tier 1 and subordinated Tier 2 capital in September

Net loans and advances to customers Net profit after tax

About Monobank ASA

Monobank ASA received its banking licence from the Financial Supervisory Authority of Norway in November 2015, and commenced regular banking operations the same month.

The bank offers unsecured lending to qualified private individuals in Norway and Finland. The screening process is based on an automated evaluation system. Loans are granted in sizes from NOK 10 000 to NOK 500 000 on flexible terms adapted to the applicants’ needs as well as their financial ability to service the loan. In exceptional circumstances loan up to NOK 700 000 may be granted.

The bank also offers attractive deposit rates on its savings accounts. Deposits up to NOK 2 million are guaranteed by the Norwegian Banks’ Guarantee fund, of which Monobank is a member.

Monobank’s largest owner is Prioritet Group AB of Gothenburg with an 11.9% ownership. The bank has approximately 1000 shareholders. Monobank was listed on the Oslo Stock Exchange’s Merkur Market on 16th February 2017 under the ticker symbol MONO-ME.

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Third quarter 2017 developments

Monobank’s operations and marketing activities continue to perform well and according to plan. The bank has successfully completed the development of a multi country platform to facilitate efficient and expedient geographical expansion of its core business.

Third quarter loans and advances to customers increased by NOK 431 million to NOK 1 904 million excluding provision for loan losses and prepaid agency commissions.

The credit quality has further developed in line with expectations. With a rapidly growing data base, the tuning of the internally developed credit model continues. An integrated pricing model has been gradually implemented. The aim has been to further optimize credit quality overall and selective pricing among different

customer groups. The bank is starting to see the effects of this work.

The entry into Finland has so far been a success. Applications are coming in at levels similar to those registered in Norway. Cost of customer acquisition compares favourably to the Norwegian market. However, credit extension has been restricted to prime customers until business volume allowed Monobank to gain access to the local Finnish debt registry in September.

To facilitate Monobank’s continued robust growth, NOK 50 million in Hybrid Tier 1 capital and NOK 50 million in subordinated Tier 2 capital was successfully placed in September.

Financial figures

Total assets amounted to NOK 2 527 million as of 30th September 2017, up from NOK 1 915 million at the end of the second quarter. The bank’s net loan balance was NOK 1 867 million (NOK 1 446 million) including unspecified loss provisions, but excluding prepaid agency commissions. Of net loans outstanding at 30th

September, NOK 186 million was extended to Finnish customers.

Deposits from customers were NOK 2 043 million (NOK 1 556 million). Monobank’s bank deposits and liquid securities amounted to NOK 552 million. Within policy guidelines, the bank seeks to optimize interest income through diversified placement of liquidity within eligible investment instruments. Total equity was NOK 345 million and CET1 was 16.5%. For further information about regulatory capital ratios, see note 3.

Interest income for the third quarter was NOK 53.5 million compared to NOK 43.2 million in

the second quarter. Average loan size is stable around NOK 220 000.

Net interest income was NOK 44.6 million. Operating costs amounted to 22.7 million which are broadly in line with budget. Operating profit before impairment provisions was NOK 18.5 million compared to a profit of NOK 12.3 million in the previous quarter. The bank has decided to make NOK 10.9 million in provisions for loan losses for the quarter, up from NOK 8.3 million in the previous quarter. The provision equals 2.6% annualized of average gross loans outstanding for the quarter, compared to 2.5% in the previous quarter. There is no change in methodology used in determining the loss provision.

This resulted in a third quarter profit of NOK 7.6 million before taxes. The after-tax profit of NOK 5.7 million has been added to other equity.

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Market developments and outlook

Recent changes in regulatory guidelines for consumer banks took effect on 1st October. Monobank has adapted to these guidelines where necessary. Albeit some moderate product modifications have been made, loan demand is not expected to be materially affected. The Norwegian loan portfolio is therefore expected to continue to grow at a solid pace. Direct marketing efforts will be increased to further build the Monobank brand. This should have a positive impact on the share of loans generated directly. However, the bank is also expanding its domestic distribution channels through additional agency agreements.

Specially imposed lending restrictions have now been lifted in Finland, and loan growth in Finland is expected to accelerate considerably in the fourth quarter.

The development of a joint credit card with airline Widerøe continues. The project led by Monobank and its technical partners Visa and Evry are progressing according to plan. Commercial launch is currently scheduled for around March 2018. The credit card will be offered to all Widerøe customers, and will allow credit card users to earn Eurobonus points through an agreement with SAS Eurobonus. The card will offer attractive, additional features when launched. A final launch plan will be developed based on the overall project progress and other commercial initiatives.

With the successful launch of lending operations in Finland, additional countries are now being analysed and evaluated for expansion. These cross-border initiatives are expected to achieve considerable operational synergies and further strengthen the bank’s growth platform. It will also contribute to diversify the business model and regulatory risk exposure.

Overall, Monobank expects net loans outstanding to reach NOK 2.3 billion at the end of 2017. The continued loan growth should lead to a considerable improvement in financial results in the fourth quarter. However, the bank continues to be in a rapid development phase, and new initiatives and projects will continue to have an impact on costs.

Monobank’s core business is unsecured consumer lending. In addition to consumer loans and credit cards, the Bank is looking into other areas for business development, for instance purchase financing delivered on a digital platform.

Consistent with the bank’s growth strategy, the capital structure and capital adequacy will be monitored to ensure that liquidity and capital position are maintained at satisfactory levels.

Events after the balance date

In conjunction with the announcement of the third quarter report, the board has decided to announce a planned equity issue of NOK 175 - 225 million as well as an additional repair issue. The background for the increase is to fund the bank’s continued growth as well as to provide the necessary capital for further cross border and credit card expansions.

Pareto Securities AS and ABG Sundal Collier ASA are acting as Monobank’s advisors in conjunction with the stock issue.

Other information

This interim report has not been audited by external auditors.

Bergen, 17 October 2017

Board of Directors, Monobank ASA

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Financial statement (unaudited) Statement of comprehensive income

In NOK thousands Q3 2017 Q3 2016 YTD 2017 YTD 2016 2016

Interest income 53 535 17 815 130 927 36 865 63 544 Interest expenses 8 953 2 597 19 368 5 194 9 138 Net interest income 44 581 15 218 111 559 31 671 54 406

Income commissions and fees 4 076 1 286 9 648 3 546 5 586 Expenses commissions and fees 7 201 2 048 17 085 4 397 7 433

Total income 41 457 14 456 104 122 30 820 52 559

Income/(loss) from trading activities (279) 191 (997) (135) (259)

Staff costs 6 862 2 203 18 538 9 244 15 735 Other administrative expenses 13 806 6 999 41 826 23 592 32 549 - of which marketing expenses 7 705 3 610 23 830 12 074 16 703

Depreciation and amortisation 1 999 546 4 578 1 796 2 131 Total operating costs 22 666 9 749 64 942 34 632 50 415

Profit/(loss) before impairment losses 18 511 4 898 38 183 (3 946) 1 886

Impairment releases/(losses) (10 946) (4 207) (24 141) (9 207) (12 878) Operating profit/(loss) before tax 7 565 692 14 042 (13 153) (10 993) Tax charge (1 857) (172) (3 478) 3 271 2 787 Profit/(Loss) for the year 5 708 520 10 564 (9 881) (8 206)

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Statement of financial position

NOK million 30.09.2017 30.09.2016 31.12.2016 Assets

Loans and advances to banks 63 559 27 735 51 219 Loans and advances to customers 1 904 116 634 159 853 569 Provision for impairment losses 37 278 9 900 13 531

Net loans and advances to customers 1 866 839 624 259 840 038

Debt securities 488 535 110 002 301 265 Deferred tax asset 8 902 10 989 12 380 Other intangible assets 31 606 9 835 12 898 Property, plant and equipment 1 675 166 346 Prepayments, accrued income and other assets 65 980 24 795 31 296 - of which accrued commission to agents 62 677 22 225 29 815

Total assets 2 527 096 807 780 1 249 441

Equity and liabilities

Liabilities

Deposits by customers 2 042 687 637 734 903 406 Provisions, accruals and other liabilities 40 370 13 289 14 656 Subordinated loan 98 811

Total liabilities 2 181 868 651 024 918 062

Equity

Share capital 200 746 156 000 199 461 Surplus capital 143 475 756 131 534 Not registered capital 622 Other paid in capital (options) 384 384

Total equity 345 228 156 756 331 379

Total equity and liabilities 2 527 096 807 780 1 249 441

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Statement of changes in equity

In NOK thousands

Share capital

Surplus capital

Other paid-in capital

(options)

Not registered

capital Total Equity at 01.01.2017 199 461 131 534 384 331 379 Profit/(loss) for the year 10 564 10 564 Option programme

Shares issued 1 285 1 378 622 3 285 Equity at 30.09.2017 200 746 143 475 384 622 345 228

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Statement of cash flows

In NOK thousand Q3 2017 Q3 2016 2016

Cash flows from operating activities

Operating profit/(loss) before tax 7 565 692 (10 993) Exchange rate effects on operating activities (587) 0 0 Adjustment for change in provision for impairment losses 10 938 4 200 12 831 Adjustment share option programme 0 0 384 Depreciation and amortisation 1 999 546 2 131 Changes in loans and advances to customers (430 787) (183 488) (815 719) Changes in deposits by customers 486 360 113 997 889 827 Changes in debt securities (164 025) 48 212 (186 681) Changes in other operating assets and liabilities 8 364 (3 065) (21 856) Net cash flows from operating activities (80 173) (18 906) (130 076)

Cash flows from investing activities

Purchase of property, plant and equipment (284) 0 (373) Investment in intangible assets (6 440) (2 652) (7 723) Net cash flows from investing activities (6 724) (2 652) (8 096)

Cash flows from financing activities

Issue of ordinary shares 0 (0) 172 187Issued Tier 1 and Tier 2 capital 98 495 0 0Net cash flows from financing activities 98 495 (0) 172 187

Net increase/(decrease) in cash and cash equivalents 11 599 (21 559) 34 015

Currency effect on cash and cash equivalents (121) 0 0 Cash and cash equivalents at period start 52 081 49 293 17 204 Cash and cash equivalents at period end 63 559 27 735 51 219

Cash and cash equivalents consists of: 0 0 0 Loans and advances from banks 63 559 27 735 51 219

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Notes to the financial statements Note 1 Accounting principles

Monobank Q3 2017 report is prepared in accordance with general accounting principles as described in the annual report for 2016. The report has not been audited.

Note 2 Loans and advances to customers

In NOK thousands 30.09.2017 30.09.2016 31.12.2016 Loans and advances to customers 1 904 116 634 159 853 569 Provision for impairment losses 37 278 9 900 13 531 Net loans and advances to customers 1 866 839 624 259 840 038

In NOK thousands 30.09.2017 30.09.2016 31.12.2016 Realized losses in the period 8 7 (48) The period's change on individual impairment of loans 9 020 0 0 The period's change on impairment of loans - collectively assessed 1 918 4 200 12 926

Write downs on loans 10 946 4 207 12 878

Defaulted loans and losses In NOK thousands 30.09.2017 30.09.2016 31.12.2016 Defaulted loans 135 653 651 40 708 Individual impairment of loans 29 844 0 0 Net defaulted loans 105 809 651 40 708

Impairment of loans - collectively assessed 7 434 9 900 13 531

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Note 3 Capital adequacy

In NOK thousands 30.09.2017 30.09.2016 31.12.2016 Share capital 200 746 156 000 199 461 Surplus capital 132 911 756 131 534 Not registered capital 0 0 0 Other equity 0 0 0 - Deduction of deferred tax assets and other intangible assets (33 095) (18 186) (22 355) Common equity Tier 1 capital 300 562 138 570 308 640 Additional Tier 1 capital instruments 26 973 0 0 Tier 1 capital 327 535 138 570 308 640 Subordinated loan capital 35 964 0 0 Tier 2 capital 363 499 138 570 308 640

Capital requirements Institutions 55 942 7 635 15 703 Loans to customers 75% as of 25.04.17 1 353 616 641 314 843 939 Defaulted loans 100% 105 809 0 0 Covered bonds 3 825 2 017 2 612 Other assets 67 655 24 961 31 642 Corporate 95 030 1 573 98 814 Regional governments or local authorities 38 309 7 546 16 744

Market risk 0 0 0 Operational risk 98 548 99 651 97 561 CVA risk 5 0 0

Total risk-weighted volume and capital requirements 1 818 737 784 697 1 107 015

Common equity Tier 1 capital ratio 16.5 % 17.7 % 27.9 % Tier 1 capital ratio 18.0 % 17.7 % 27.9 % Capital ratio 20.0 % 17.7 % 27.9 %

LCR (Liquidity Coverage Ratio) 133% and NSFR (Net stable funding ratio) 153% as of 30.09.2017

Note 4 Events after the balance sheet date

In conjunction with the announcement of the third quarter report, the board has decided to announce a planned equity issue of NOK 175 to 225 million as well as an additional repair issue. The background for the increase is to fund the bank’s successful growth story as well as to provide the necessary capital for further cross border and credit card expansions.

ABG Sundal Collier ASA and Pareto Securities AS are acting as Monobank’s advisors in conjunction with thestock issue.

Monobank ASA - Starvhusgaten 4, 5014 Bergen - 55 96 10 00 - www.monobank.no