Instabank (INSTA) Q4 2019 earnings summary

Executive summary

• Q4-19 profit before tax reached 20.3 MNOK, up 96% YoY, supported by improved margins, low loan losses and operating efficiency.�

• Net loans fell 22 MNOK in Q4 as new lending was deliberately restrained; 2020 priorities emphasize profitability over volume growth.�

Financial highlights

• FY 2019 total income was 242.1 MNOK, operating profit before tax 55.1 MNOK and profit after tax 41.3 MNOK.�

• Q4-19 total income was 61.7 MNOK, up 14% YoY; profit before tax was 20.3 MNOK, up 96% YoY.�

• Q4-19 net loans were 2,697 MNOK, up 9% YoY; net loans declined 22 MNOK during the quarter versus 271 MNOK growth in Q4-18.�

Outlook and guidance

• 2020 total growth target: 200–250 MNOK; net loans target: 2,900–2,950 MNOK, from 2,697 MNOK at year-end 2019.�

• Finland and Sweden are expected to offer the strongest growth opportunities; Norwegian volumes are expected to continue declining.�

• Profitable growth remains the aim, but cost of capital limits near-term expansion; growth depends on capital access, efficiency, credit risk and margins.�

• 2020 product plans include mortgage lending, small-ticket point-of-sale finance and a mobile platform for CRM and cross-selling.�