Instabank (INSTA) Q4 2021 earnings summary

Executive summary

• Q4-21 profit before tax reached a record NOK 34.9m, up 82% YoY; FY21 net profit was NOK 83.4m and ROE was 14.4%, above the 14% target.

• Net loans grew NOK 1.012bn in 2021 to NOK 3.783bn; mortgage lending expanded and increased portfolio diversification.

Financial highlights

• Q4-21 total income was NOK 89.8m, up 28% YoY; FY21 total income was NOK 321.1m versus NOK 263.1m in FY20.

• Q4-21 operating expenses were NOK 31.9m, up NOK 0.2m YoY; cost-to-income ratio was 35.5%, down from 45.5% in Q4-20.

• Q4-21 loan losses were NOK 23.0m, or 2.4% of average gross lending annualized; FY21 impairment losses totaled NOK 80.9m versus NOK 92.9m in FY20.

• Q4-21 net profit was NOK 25.5m versus NOK 14.3m in Q4-20; FY21 net profit was NOK 83.4m versus NOK 42.7m in FY20.

Outlook and guidance

• 2022 targets: net loans of NOK 5.3bn, profit above NOK 115m, ROE above 15% and cost-to-income below 39%.

• Mid-term ambitions: net loans of ~NOK 9.0bn, profit above NOK 230m, ROE above 20% and cost-to-income of ~33%.

• 2022 loan growth target is ~NOK 1.4bn; management said current excess equity and generated profits support high growth, with after-tax result growth above 35% within reach.