Annual Report 2020 Content

Banking is changing 3

Komplett Bank in brief 4

2020 in numbers 6

Letter from the CEO 8

Shareholder information 10

Board of Directors 12

Management 14

Corporate governance 16

ESG/Sustainability/CSR report 2020 22

Board of Directors’ Report 30

Confirmation on Annual Report and Board of Directors’ Report 38

Financial statements 41

Notes to the financial statements 46

Auditor’s report 114 Komplett Bank Annual Report 2020 3

Banking is changing

In an increasingly digital society, with a multitude of available options, we understand the importance of flexibility. We therefore work hard to provide a high-quality, convenient and flexible customer experience. 4 Komplett Bank in brief

Komplett Bank in brief

Komplett Bank is a specialised consumer finance company with an ambition for long-term value creation, offering a variety of financing solutions to creditworthy customers in the Nordic region. In an increasingly digital market, Komplett Bank is focused on creating value for its customers by offering flexible, convenient financing solutions, and efficient, customer friendly processes. Komplett Bank is pursuing a growth strategy based on geographical and product-wise diversification and expansion. Its product portfolio comprises consumer loans, credit cards, point-of-sales finance solutions and high-yield deposit accounts.

Consumer loans Credit cards

70,000 customers 62,000 customers NOK 7,055 million net loans NOK 729 million net loans

Point-of-sales finance Deposit accounts

156,000 customers 37,000 customers NOK 577 million net loans NOK 8,992 million deposits Komplett Bank Annual Report 2020 5

Digital and scalable organisation headquartered Sverige in Lysaker, outside Oslo Finland

Norge Komplett Bank‘s strategy is founded on a digital, scalable, efficient and low-cost operating model combined with strong risk control. This strategy Lysaker is enabled by maintaining a centralised corporate structure and fully digital operations utilizing modern technology. Komplett Bank’s consumer financing products are offered to customers in Norway, Sweden and Finland. In addition, the Bank offers high-yield deposits accounts in Norway, Sweden and Germany.

Tyskland

Komplett Bank’s strategic roadmap for geographical and product-wise expansion

Consumer loans Credit cards Point-of-sales finance Deposit accounts

Q1 Q4 Q3 Q1 Norway 2014 2015 2017 2014

Q1 Q2 Finland TBD TBD 2017 2019

Q1 Q1 Q2 Q1 Sweden 2018 2019 2018 2020

EU TBD TBD TBD Q4 2018 6 2020 in numbers

2020 in numbers

At the end of 2020, Komplett Bank had net loans of NOK 8.4 billion and approximately 288,000 customers spread across its products and markets. Komplett Bank is well capitalised with a CET1 ratio of 22.7 per cent as of 31 December 2020.

Net loans (NOK million)

9,000 - 8,000 Loans -Sweden ,000

6,000 Point-of-sales - finance ,000 - ,000 Loans Finland

3,000 Credit cards 2,000

1,000 Loans Norway 0 201 2016 201 2018 2019 2020

Net loan distribution Customer distribution by product by product

Loans Norway 38% Loans Norway 12%

NOK Loans Finland 30% Loans Finland 9% Loans Sweden 17% 288,000 Loans Sweden 3% 8.4billion Credit cards 9% Credit cards 21%

Point-of-sales finance 7% Point-of-sales finance 54% Komplett Bank Annual Report 2020 7

Net loan growth Net loan (NOK) -1.6% 8.4 bn

Return on equity CET1 ratio 13.6% 22.7%

Key figures

Figures in NOK million 2020 2019 2018 2017 2016

P&L items Net interest income 1,027 1,087 959 670 371 Total income 1,100 1,176 1,031 709 391 Operational expenses -388 -442 -339 -222 -129 Losses on loans -364 -454 -249 -119 -86 Profit after tax 263 203 331 274 128 Earnings per share (NOK) 1.36 1.11 1.91 1.60 0.87

Balance sheet items Net loans to customers 8,361 8,496 7,844 5,461 3,322 Deposits from customers 8,992 8,520 7,366 4,330 3,313 Total equity 2,304 1,850 1,620 1,402 718

Other key figures CET1 ratio 22.7% 21.2% 20.0% 25.7% 20.2% Total capital ratio 26.3% 22.5% 21.4% 27.8% 23.6% Cost/income ratio 33.5% 30.5% 22.5% 20.1% 20.4% Loan loss ratio 4.3% 5.6% 3.7% 2.7% 3.5% Return on equity (ROE) 13.6% 12.0% 22.6% 27.0% 25.5% Price per share (NOK) 9.0 12.5 12.6 19.0 16.0 Number of shares 187 184 173 171 148 Market cap 1,680 2,298 2,176 3,256 2,374 8 Letter from the CEO

Letter from the CEO

2020 was the year when Komplett Bank truly benefitted from the organisation’s ability to adapt, and in the fourth quarter of the year the Bank resumed net lending growth. With attractive products, good profitability and a solid balance sheet, Komplett Bank is now positioned to deliver good growth and sustainable value creation for its stakeholders in the years to come.

Since 2014, Komplett Bank has been offering simple and intuitive Earnings financing services to creditworthy private individuals, creating In June, Komplett Bank resumed its lending activity to new cus- financial flexibility for each customer. By being a responsible tomers, and after gradually increasing its level of activity, the Bank lender and offering liquidity to the private market, Komplett Bank returned to net lending growth in the fourth quarter. At the same also contributes to generating economic activity and growth, time, loan losses were stable at a satisfactory level throughout all creating value for society. four quarters, which is important for the Bank’s profitability and ability to contribute to society. The customers At the end of 2020, Komplett Bank had more than 320,000 Although revenues declined last year due to our controlled customers in Norway, Sweden, Finland and Germany, up by more slowdown in new lending, lower costs, helped by the Bank’s flexible than 50,000 from the previous year. We are proud of the trust our business model, and lower loan losses contributed to the net profit customers place in us, but first let’s return to the very beginning of in 2020 ending at NOK 263 million, up 30 percent from 2019. This this special year we have put behind us. is a result that I am very proud of, and it comes from dedicated and targeted work from all the Bank’s employees who have quickly Komplett Bank entered 2020 with increased uncertainty about adapted to their new everyday life working from home offices. loan losses after the fourth quarter of 2019. This uncertainty increased further towards the end of the first quarter of 2020, Based on the Bank’s target for core Tier 1 capital adequacy, the when the acceleration of Covid-19 cases brought with it the return on equity would have been 18% for the year adjusted for increased risk of an economic downturn. As a responsible the negative macroeconomic provisions related to Covid-19. In employer and lender, the Bank’s response was first and foremost comparison, our goal is a long-term return on equity of 20%. to ensure that employees and their families were taken care of, while at the same time helping existing customers who had ESG temporary problems servicing their loans. This was part of the In the annual report, we have included an extended section on joint effort volunteer work the authorities strongly encouraged Komplett Bank’s social responsibility. New this year is that we have during these special times. carried out a materiality analysis in which the Bank’s most important stakeholders have contributed with views about which factors We then decided to temporarily reduce our risk appetite, and we should prioritise within the environment, social conditions effectively put the brakes on issuing loans to new customers. This and corporate governance (ESG) areas. The most material topics meant that Komplett Bank’s net lending growth was negative in that were highlighted were anti-corruption and money laundering, the first two quarters of the year. responsible lending, as well as data security and privacy – which is in line with leading ESG framework assessments of our industry. Despite rapidly rising unemployment in the Nordic countries, and an economic slowdown as society was partially shut down, As a result of the work with ESG, we have set important key figures we experienced that our customers prioritised servicing their and targets in 2020, at the same time as the Bank’s Board and loans. Only a few customers asked for temporary relief, which we management agree that we will increase the level of ambition in continuously assessed and granted. the ESG areas in the years to come. Komplett Bank Annual Report 2020 9

Komplett Bank is well capitalised, highly diversified and in a strong competitive position in the attractive Nordic markets.

The organisation digitalisation of society, as well as persistently high demand for our Throughout 2020, Komplett Bank’s 157 dedicated employees have products. With this backdrop, we expect to deliver lending growth shown a great ability to adapt to change, and we believe our corpo- of 5-10 percent in 2021. At the same time, we aim to have a long- rate culture gives us a comparative advantage. Drive and willingness term dividend capacity of 30-50% of the annual result. to take responsibility and ownership sum it up well. Throughout 2020, employees have also been engaged in defining the purpose However, to deliver annual lending growth of 10% or more over and values of the Bank. The result of this work is that the Bank has time at target returns, the Bank must expand by offering more been able to strengthen its culture and the employees’ commitment products or by entering new geographical areas. Both these even with the challenges Covid-19 has brought. strategic alternatives are now being evaluated with the attractive- ness of each market and synergies with current operations as the During 2020, the Bank has proven to be very competitive in terms two key criteria. of our cost and profitability compared to financial enterprises as a whole, according to our analysis. In addition, Komplett Bank is one In 2022, we expect to take the next step in our strategic roadmap, of the most well-capitalised consumer banks in the Nordic region. and with it strengthen our ability to offer even more private individuals financial flexibility. To further strengthen Komplett Bank’s competitiveness, we have prioritised the following areas: This is the last annual report I will present as CEO of Komplett Ǵ Increase customer satisfaction by improving the understanding Bank. I will, as previously announced, leave the Bank this summer of customer needs, as well as delivering better service and ever to become the CEO of Entercard Group. I want to thank our better product offerings employees, partners and owners for good teamwork over the Ǵ Continue the work of optimising credit risk by improving risk years. I am proud that together we have managed to strengthen analysis, customer processes and collection Komplett Bank’s position during 2020. The Board and manage- Ǵ Strengthen operational efficiency, simplify processes and ment have a common goal of what Komplett Bank will achieve, and ensure continuous improvement of operations the Bank has a good foundation for growth and value creation in 2021 and beyond. The outlook In addition to continuously working to increase the value we deliver to customers and at the same time improve our own efficiency, Jan Olov Haglund, the Bank is supported by underlying macro trends, including Chief Executive Officer 10 Shareholder information

Shareholder information

Komplett Bank strives to ensure non-discriminatory distribution of information in its communication with the financial markets to develop end retain investor confidence. Furthermore, it is the intention of Komplett Bank to ensure that shareholders, investors and analysts have sufficient information about the Bank to assess the fair and proper value of its shares.

Upon publication, all investor information, such as annual- and 512,625 shares were traded per day, which is a total of 121.2 interim reports, presentations, and the financial calendar, shall be million shares for the full year. This corresponds to a turnover of 69 made available on the Bank’s website. per cent of the total number of shares issued.

For additional information regarding the Bank’s share, reference Voting rights is made to note 6 of the annual financial statements as well as Komplett Bank has one share class with equal voting rights and Komplett Bank’s investor relations website; ir.komplettbank.com. are freely tradable. Shareholders’ voting rights at the general meeting correspond to the number of shares they own and have The share registered with the Norwegian Central Securities Depository (VPS) Komplett Bank’s shares are listed on the Oslo Stock Exchange at the time of the meeting. with the ticker symbol KOMP. As of 31 December 2020, there were 186,613,739 shares issued with a par value of NOK 1.0. Not Dividend policy counting options or subscription rights exercised as part of the The Board of Directors of Komplett Bank has adopted a dividend Bank’s share option programme, the latest share issue was in policy to pay out excess capital which is not deployed for growth relation to Komplett Bank’s initial public offering and subsequent purposes in accordance with the Bank’s strategy. As of 31 listing on the Oslo Stock Exchange in November 2017. December 2020, Komplett Bank has not yet paid dividends.

At the end of 2020, the market value of Komplett Bank was NOK Shareholders 1.7 billion, down from NOK 2.3 billion at the end of 2019. This At the end of 2020, Komplett Bank had 3,855 shareholders and the equals 0.7 times the book value of the Bank’s equity as of 31 10 largest shareholders held 52.4 per cent of the Bank’s shares. December 2020. At the end of 2020, 153,222,015 shares were held by Norwegian investors and 33,391,724 shares were held by foreign investors, The share price as of 31 December 2020 was NOK 9.00, corresponding to a total foreign ownership of 18.0 per cent. compared to NOK 12.48 at the end of 2019, which corresponds to a return of -27.88 per cent for the year. The highest recorded price Kistefos AS is Komplett Bank’s largest shareholder with 44.7 million for the share during the year was NOK 12.80 per share in January, shares, equivalent to 24.0 per cent ownership, as of 31 December while the lowest recorded price was NOK 3.06 per share in March 2020. 2020. Several employees of Komplett Bank own shares and share Throughout 2020, Komplett Bank’s shares were traded on 252 options in Komplett Bank. Please see note 11 for details regarding out of 252 trading days at the Oslo Stock Exchange. An average the ownership of primary insiders of Komplett Bank. Komplett Bank Annual Report 2020 11

Relative share performance

16NOK 1

31 Dec 19 31 Jan 20 28 Feb 20 29 Mar 20 30 Apr 20 31 May 20 28 Jun 20 31 Jul 20 30 Aug 20 30 Sep 20 31 Oct 20 29 No 20 31 Dec 20

Komplett Bank Oslo Stock Exchange benchmark index (rebased = Komplett Bank as at 31 December 2019)

Geographical distribution of Largest shareholders as of shareholders as of 31 December 2020 31 December 2020

Number of shares Ownership (thousands) (%) Norway 82%

Kistefos AS 35,747 19.2 USA 9% State Street Bank and Trust Comp 17,244 9.2 Alfab Holding AS 9,111 4.9 United Kingdom 3% DNB Markets Aksjehandel/Analyse 8,546 4.6 The Bank og New York Mellon SA/NV 5,245 2.8

Luxembourg 3% Macama AS 4,913 2.6 Sanden AS 4,706 2.5 SEB Prime Solutions Sissenes Canop 4,500 2.4 Other 3% OM Holding AS 4,269 2.3 Directmarketing Invest AS 3,415 1.8 Top 10 97,697 52.4

Analysts

Below is an overview of investment banks with active coverage of Komplett Bank as of 31 December 2020, including the name and contact information of the analysts. Which banks and analysts that have active coverage of Komplett Bank may change at any given time. For an updated list, please visit our investor relations webpage; ir.komplettbank.com.

Company Analyst Phone Email address

ABG Sundal Collier Jan Erik Gjerland +47 22 01 61 16 [email protected]

Pareto Securities Vegard Toverud +47 22 87 88 24 [email protected]

SEB Thomas Svendsen +47 21 00 85 18 [email protected]

SpareBank 1 Markets Nils Christian Øyen +47 99 50 02 40 [email protected] 12 Board of Directors

Board of Directors

Stig Eide Sivertsen Bodil Palma Hollingsæter Chair of the board Vice chair of the board

Mr. Sivertsen has served as independent board member in Komplett Mrs. Hollingsæter was elected Vice Chair of the Bank in April 2015 and has Bank ASA since the general meeting of 2018. He was appointed Chair served on the board since March 2014. Mrs. Hollingsæter currently works as of the Board in August 2019. He has broad operational experience from Special Advisor at Innovation Norway and as Vice Chair of Teknika AS. She technology, media and finance as well as extensive experience as a board has an extensive banking background on an executive level from positions, member of listed companies. Sivertsen served as CFO in Schibsted and such as Director at Innovation Norway, Regional General Manager at PGS, was the founder and CEO of Nettavisen and group CEO of Telenor Sparebanken Møre and Bank Manager at Romsdals Fellesbank. She also has Broadcast Holding AS, in addition to group CEO in Opplysningen (1881) AS. board experience from companies including Eksportfinans, Kommunekreditt He holds a BA (Hons) Econ and an MSc. from University of Durham (UK) and and Kommunalbanken. She holds an MSc. in Business and Economics and an supplementary Law degree from the University of Bergen. AFA (CEFA equiv.) from the Norwegian School of Economics.

Live Haukvik Nishant Fafalia Member of the board Member of the board

Ms. Haukvik has been Member of the Board of Directors since 2013 and Board Member since February 2021. Mr. Fafalia is Investment Director in the Chair of the Board of Directors from December 2013 until August 2019. Kistefos AS and has worked in Kistefos for 10 years. During that period, he Ms. Haukvik previously worked as CFO / COO in Komplett Group. She has followed up the company’s significant involvement as a shareholder in both extensive board experience from several blue chip companies including Norwegian and international banks, and has, among other things, been a Eksportfinans, Kvaerner, BI Norwegian Business School, Sparebanken 1 BV member of the board of Advanzia Bank based in Luxembourg and operating and Borgestad. She holds a Master of Finance (liz.rer.pol.) from Université in a number of European countries, for the past 4 years. Fafalia also holds a de Fribourg, Switzerland and a Master of Management from BI Norwegian number of board positions in other companies in significant growth. Business School. Komplett Bank Annual Report 2020 13

Kristian Tovsen Harald Hjorthen Member of the board Member of the board

Employee elected board member since March 2020. Mr. Tovsen has been Member of the board of Directors since August 2019. Mr. Hjorthen has employed by Komplett Bank ASA since June 2017 and currently holds the extensive experience from the financial industry as a credit analyst at DNB, position as Head of Business- and Product Development. He has broad investment analyst at Kistefos AS, seven years as portfolio manager at experience in business development, mainly in the cross-section between Norges Bank Investment Management (NBIM) stationed in Norway and IT and Business. Before working with the bank, Tovsen worked as a manag- Singapore and as an analyst in Trient Asset Management. Today he works ing consultant in an IT consulting firm in Oslo. As a consultant, he worked as manager of his family’s investment company, Sniptind Invest AS. He for more than four years with the FSA in Norway, in addition to working with holds a MSc in Economics and Business Administration from the Norwegian several other customers within the financial industry. Mr. Tovsen holds a School of Economics. MSc. in Industrial Economics and Technology Management from NTNU (2009) and a BSc. in Industrial Design from Høgskolen i Østfold (2005).

Jonna Kyllönen Member of the board

Employee elected board member since March 2020. Ms. Kyllönen has been employed in Komplett Bank ASA since November 2016 and currently holds the position as Operations Manager for Customer Service. She has broad experience from the banking sector in Finland and managing customer service operations. Before working in the bank, Kyllönen worked with both individual investments and lending. Ms. Kyllönen holds an MBA from Kajaani University of Applied Sciences and a BBA from Jyväskylä University of Applied Sciences. 14 Management

Management

Jan Haglund Henning Fagerbakke Steffen Ryengen Chief Executive Officer Chief Financial Officer Chief Marketing Officer/ Chief Information Officer

Mr. Haglund was appointed CEO in January Mr. Fagerbakke was CFO in January 2019, before Co-founder and CMO / CIO. Mr. Ryengen has a 2019. Mr. Haglund has worked at Komplett Bank which he held the position of Finance Manager. comprehensive background in the financial ser- since 2015 and has previously held the positions He is an experienced finance professional and vices industry. Previous positions include Head of Chief Financial Officer (CFO) and Chief state authorized public accountant with a back- of Distribution, Marketing and Analytics Financial Strategy Officer (CSO). He has an extensive ground including several years as Senior Auditor Services at Accenture, Product Development background from the financial services industry and Manager at KPMG Norway and Business Manager at Santander Consumer Bank and and previous positions include CEO of Buckaroo, Controller at Gresvig. He holds an Master in Project Manager at SEB Kort. He holds an MSc Managing Director of Intrum Justitia Finance and Accounting and Auditing from the Norwegian in business administration and economics and Nordic Head of Banks at Entercard. He holds an School of Economics. an Executive MBA from the Norwegian School of MSc in Business Administration and Russian as Economics. well as a Master of Law from Uppsala University.

Wilhelm B. Thomassen Christina H. Pedersen Annika Ramstedt Director Legal & HR Chief Operation Officer Director Credit Risk & Collections

Thomassen served as Chief Compliance officer Pedersen has been with the company since its Ramstedt has been with Komplett Bank since from May 2015 until May 2019 when he was founding and served as Employee Elected Board early 2017. Before being appointed Director appointed Director Legal & HR. He also served Member from March 2014 to March 2018. Before Credit Risk and Collections in June 2019, she as a board member from December 2012 to being appointed COO in June 2019 she held worked for a period as Project Director followed May 2015. Previous positions include Director the position of Chief Human Relations Officer. by Director Loans Sweden & Finland. She has an Lean & Business Development at Statoil Fuel Previous positions include Corporate Trainee and extensive background in the Consumer Finance and Retail and Department Director of Cards at Senior Project Manager in DNB. Mrs. Pedersen sector in roles such as Head of Personal Loans Santander Consumer Bank. He holds a Master holds an MSc in Business Administration and in Bluestep and Head of Credit Risk Sweden at in European Business from Royal Holloway Economics from BI Norwegian Business School EnterCard. She holds a BA in Statistics from the University of London and an Executive MBA from and an MSc in Business Management with University of Stockholm. the Norwegian School of Economics. Finance from Heriot-Watt University. Komplett Bank Annual Report 2020 15

Enok Hanssen Eirik Holtedahl Eivind Bagås Director Consumer loans & POS Director Credit Cards Chief Compliance Officer

Mr. Hanssen has been with the company since Mr. Holtedahl was appointed Director of Credit Mr. Bagås has extensive experience from early 2017 as Director of POS and in June 2019, Cards in March 2018. Mr. Holtedahl has more than working with compliance in the banking his responsibilities were expanded to include over- 20 years of experience working with consumer and financial industry. Previous experience seeing consumer loans. Before joining Komplett finance, credit cards and financial services. includes Compliance Officer at Storebrand Bank Hanssen held a number of positions with Previous positions include Co-Founder, CFO Kapitalforvaltning AS 2008-2014 and at Intrum Justitia, including Group IT Director and Deputy CEO in Advanzia Bank, Luxembourg, Storebrand Finansiell Rådgivning AS from 2014- Western Europe, Managing Director for Intrum Co-Founder and VP of Treasury in Bankia Bank 2017. Bagås has been with Komplett Bank since Justitia Italy and Business Development Manager ASA and Deputy Director General in the Norwegian 2017 and previously held the position of risk and Central Europe. He also held the position of CIO/ Ministry of Finance. Mr. Holtedahl holds a Bachelor compliance manager before he was appointed COO for Buckaroo. Mr. Hanssen holds a BBA from of Commerce, Economics and Accountancy from Chief Compliance and Risk Officer in June 2019. the University of Gothenburg. Concordia University (Canada) and an MSc. studies In September 2020 Bagås was appointed Chief in Economics from the University of Oslo. Compliance Officer after internal restructuring. Bagås holds a bachelor’s degree in accounting and a bachelor of business law from BI Norwegian Business School.

Ove Holstangen Chief Risk Officer

Mr. Holstangen was hired as Chief Risk Officer (CRO) in September 2020. Mr. Holstangen has an extensive background within banking and finance. Previous positions include CRO at Kommunalbanken ASA and CFO in Fondsfinans. Mr. Holstangen has experience from the Financial Supervisory Authority Norway. He holds an MSc in Engineering from Chalmers University of Technology and Imperial College and Cand. Merc in Business Administration from the Norwegian School of Economics. 16 Corporate governance

Corporate governance

Norwegian Code of Practice for Corporate strategies and value creation are reviewed annually by the Board Governance and communicated to the market through annual and quarterly 1. Statement of corporate governance reports. Good corporate governance is a key priority for the Board of Komplett Bank. The bank seeks to maintain high standards for Komplett Bank has also prepared several guidelines that will guide corporate governance which it considers to be an important the Board, management and employees in their daily work, as well prerequisite for long-term value creation. as contribute to building trust and credibility internally and externally. These include guidelines for ethics, anti-corruption and money As a Norwegian public limited company listed on the Oslo laundering, data security and whistleblowing. Corporate governance Stock Exchange, Komplett Bank is subject to requirements in at Komplett Bank is designed to achieve the Bank’s strategic goals accordance with the Accounting Act 3-3b as well as the Oslo and at the same time safeguard the Bank’s values and ethical Stock Exchange’s “Ongoing obligations for listed companies” guidelines. An organisational structure has been established with regarding the annual statement of principles and practices for clearly defined areas of responsibility that facilitate the overall corporate governance. The bank follows the Norwegian Code management of the Bank. of Practice for Corporate Governance (the “Code”), adopted by the Norwegian Committee for Corporate Governance (NUES) The Bank’s goals, strategies and risk profile are described in the on 17 October 2018. The Code is built on the “follow or explain” annual report for 2020, together with an account of the Bank’s work principle, which means that companies applying the Code may related to ESG responsibility. deviate from individual regulations but must then provide an explanation for the deviation. 3. Share capital and dividends The Board of Directors of Komplett Bank continually assesses the Komplett Bank’s management and Board conduct an annual review Bank’s capital situation considering regulatory requirements, the of the Bank’s principles and practices relating to corporate govern- Bank’s goals, strategy and the desired risk profile. Komplett Bank ance. This report explains Komplett Bank’s principles for corporate aims to have a total capital adequacy ratio of 21.5%, including a governance, and how the Bank complies with the Code. There are common equity Tier 1 capital adequacy ratio of 18.0% to provide no significant discrepancies between the Code of Practice and room for manoeuvre to achieve the Bank’s financial targets Komplett Bank’s practice. Komplett Bank had as at 31 December 2020 an equity of NOK 2. Operations 2,306.6 million. In accordance with established calculation rules Komplett Bank may, within the framework of the legislation that for capital adequacy for financial enterprises, Komplett Bank’s applies at any given time, perform all transactions and services total capital adequacy was 26.3%, while the common equity Tier 1 that are common or natural for banks to perform. This is stated capital adequacy was 22.7%. The requirement for common equity in the bank’s articles of association, which are available at www. Tier 1 capital is 17.0%, and the Board considers the Bank’s capital komplettbank.no. position to be strong

Komplett Bank primarily offers unsecured financing to private Komplett Bank’s Board of Directors has adopted a dividend policy individuals who qualify after a specific credit assessment. to ensure that the Bank has sufficient capital to grow in selected Komplett Bank also follows a growth strategy based on geo- markets in accordance with the Bank’s strategy. Surplus capital will graphical distribution in the Nordic region and has launched its be distributed to the shareholders in the form of dividends. Komplett loan products aimed at the private market in Norway, Finland and Bank has so far not paid dividends. Sweden. Credit cards are offered in Norway, Finland and Sweden. The bank offers point-of-sale (POS) financing products in Norway The Board of Directors of Komplett Bank proposes that NOK 78.5 and Sweden. Deposit accounts are offered to private customers in million be paid as a dividend after the 2021 Annual General Meeting. Norway, Sweden and Germany. Furthermore, the Board will ask the General Meeting for authorisation to pay additional dividends for 2020. The authorisation will give The Board sets clear goals, strategies and a risk profile for the Bank the Board the opportunity to decide on a dividend of up to NOK with a view to creating value for its stakeholders. The bank’s goals, 52.3 million of the result allocated to shareholders for 2020 if the Komplett Bank Annual Report 2020 17

macroeconomic outlook so allows. The authorisation will apply until Komplett Bank has established a long-term commercial and the next Annual General Meeting in 2022, and payment will take strategic partnership with Komplett Group and aims to develop place no earlier than the fourth quarter of 2021. Dividends of total financial products and services based on this partnership. There NOK 130.8 million represent NOK 0.70 each share. is a co-operation agreement between Komplett AS and Komplett Bank ASA. The agreement covers IP rights, marketing co-operation Board authorisations and other services. The agreement was renewed in 2017 with a At the Annual General Meeting on 25 March 2020, four authorisa- duration of five years. Furthermore, an agreement has been entered tions were given to the Board with defined purposes. Each of the into on product collaboration related to the Bank’s credit card and items was voted on separately: its associated benefits programme. The agreement was renewed in 2018 with a duration of five years. An agreement has also been Ǵ Authorisation to increase the Bank’s share capital by up to NOK entered into with Komplett AS for the development of a solution for 6,000,000 in connection with the Bank’s option programme for integrating the Bank’s products for point-of-sale (POS) financing employees. As at 31 December 2020, the authorisation has been into the Komplett Group’s POS solutions. partially used. The authorisation is valid until the Bank’s Annual General Meeting in 2021, but no longer than until 30 June 2021. The bank’s products are implemented with all their core functional- The Board proposes that the authorisation be renewed for one ity as part of the trading platforms for komplett.no and komplett.se. year reduced to NOK 4,000,000 until the Annual General Meeting All transactions with related parties are carried out on similar terms 2022, but no longer than until 30 June 2022. and conditions as if they had been entered into between inde- Ǵ Authorisation to increase the Bank’s share capital by up to NOK pendent parties. For more information on transactions with related 18,411,972, corresponding to 10% of the Bank’s share capital, in parties, see note 17 in the annual report for 2020. order to strengthen the Bank’s financial structure. The authorisation is valid until the Bank’s Annual General Meeting in 2021, but 5. Shares and negotiability no longer than until 30 June 2021. As at 31 December 2020, the Komplett Bank’s shares are listed on the Oslo Stock Exchange with authorisation has not been used. the ticker “KOMP” and are freely tradable. The articles of association Ǵ Authorisation to issue bonds that are approved as other Tier do not contain any restrictions related to owning, trading or voting 1 capital and/or subordinated loans that are approved as addi- for the Bank’s shares. tional capital for up to NOK 500,000,000. The authorisation runs until the Annual General Meeting in 2022. As at 31 December 6. General meeting 2020, NOK 200,000,000 of the authorisation has been used. Through the general meeting of Komplett Bank, the shareholders Ǵ Authorisation to purchase own shares by up to NOK 9,000,000 exercise the supreme authority in the Bank. According to the to optimise the Bank’s financial structure. The authorisation is articles of association, the Annual General Meeting must be held valid until the Bank’s Annual General Meeting in 2021, but no each year by the end of April. longer than until 30 June 2021. As at 31 December 2020, the authorisation has not been used. Notice of the general meeting, as well as a meeting notice and a proxy form, will be made available on Komplett Bank’s website www. 4. Equal treatment of shareholders and transactions with komplettbank.no no later than 21 days before the general meeting associates is held. The Board of Directors and the management of Komplett Bank emphasise that all shares in the Bank must be treated equally Shareholders who wish to attend the general meeting must send in and that they must have the same opportunity to exert influence. the registration form or proxy form as stated in the meeting notice. Komplett Bank has one share class, and each share allows one vote. The procedure for voting, including the procedure for attending by proxy, and the shareholders’ right to submit alternatives to the The bank’s transactions in own shares are made on the stock Board’s proposals on the agenda of the general meeting, must be exchange or in some other manner at the stock exchange price. included in the notice. In the event of increases in the share capital, the Bank’s existing shareholders have a pre-emptive right. Any deviation from this According to Komplett Bank’s articles of association, the chair of pre-emptive right must be justified in a stock exchange announce- the Board declares the general meeting open and facilitates the ment related to the capital increase. There were no such cases election of an independent chairperson. The Board members and during 2020. auditor must also attend the ordinary general meeting. The Board members have the right to be present and speak at the general Komplett Bank has established guidelines for transactions with meeting. The chair of the Board and the managing director have a related parties. This means, among other things, that transactions duty to attend unless there is an excused absence, in which case a with related parties must be carried out at arm’s length and on deputy must be appointed. market terms. For not insignificant transactions between the Bank and related parties, an independent valuation must be obtained which must be made known to the shareholders. 18 Corporate governance

The general meeting elects the Board’s shareholder-elected The recommendation must include relevant information about the members as well as members of the nomination committee. The candidates and an assessment of their independence from the general meeting also elects the Bank’s auditor. Separate voting is company’s management and Board. The nomination committee arranged for members of the Board and the nomination committee should be in contact with shareholders, the Board members and who are up for election. the CEO in the task of proposing candidates for the Board and getting support for its recommendation from the Bank’s largest Decisions are made by a simple majority, unless otherwise provided shareholders. The nomination committee’s reasoned recommenda- by law or the articles of association. In 2020, the Annual General tion to the general meeting is made available no later than 21 days Meeting was held on March 25 with 39.41 percent of the total before the general meeting is held. The nomination committee’s outstanding shares and votes represented. There were no extraor- recommendations must always satisfy the requirements for the dinary general meetings in 2020 composition of the Board laid down in applicable legislation and relevant regulations. 7. Nomination committee In line with the articles of association, the bank has established a 8. Board of directors, composition and independence nomination committee consisting of three members. The members According to the current articles of association, the Bank’s Board of are elected by the general meeting for two years at a time. As at 31 Directors must consist of five members who are all elected by the December, the nomination committee consists of: general meeting, as well as two employee representatives who are elected by and from among the bank’s employees. Ǵ Tom O. Collett (chair, up for election in 2022) Ǵ Nils J. Krogsrud (up for election in 2021) Overall, the Board shall have the competence that is necessary to Ǵ Herman Alexander Knopp (up for election in 2022) carry out its tasks based on the Bank’s organisation and activities, and at least one of the members shall have qualifications in All three are considered independent of the Board and day-to-day accounting or auditing. According to the current articles of associa- management. Board members, the CEO and other members of the tion, two of the Board’s elected members must be employees of the Bank’s executive management may not be elected as members of Bank. For these members, two personal deputies with the right to the nomination committee. attend and speak on the Board shall be elected.

Separate guidelines have been issued for the nomination commit- The general meeting elects the chair and deputy chair of the Board. tee’s tasks, composition and criteria for eligibility. The Board members are elected for two years at a time.

The nomination committee’s duties are to propose candidates for The majority of the shareholder-elected members of the Board election as members of the Board and to make recommendations of Directors are independent of senior executives and significant on remuneration for members of the Board and its subcommit- business associates and at least two of the shareholder-elected tees, as well as for the nomination committee. The report from members are independent of the Bank’s main shareholders. the Board’s annual self-evaluation is handled by the nomination committee. The nomination committee shall report on its work In 2020, the Board held 18 meetings. The audit and risk committee and present its reasoned recommendation to the general meeting. has held 10 meetings.

AS AT 31 DECEMBER 2020, THE BANK’S BOARD OF DIRECTORS CONSISTED OF THE FOLLOWING MEMBERS:

Independent of First time On Number of Number of shares in Name Role largest shareholder elected election meetings in 2020 Komplett Bank

AGM Stig Eide Sivertsen Chair Yes 2018 18 meetings 200 000 2022 Bodil Palma Hollingsæter Vice chair Yes 2014 GM 2021 18 meetings 459 117 Live Haukvik Board member Yes 2013 GM 2022 18 meetings 0 Nishant Fafalia Board member N0 2021 GM 2022 0 meetings 70 000 Harald Hjorten Board member Yes 2019 GM 2021 18 meetings 80 000 Jonna Kyllönen Employee elected Yes 2020 GM 2022 14 meetings 3 343 Kristian Tovsen Employee elected Yes 2020 GM 2022 14 meetings 45 000

Information about the Board members’ background and competency is available on Komplett Bank’s website https://ir.komplettbank.com/corporate-governance/board of-directors/. Komplett Bank Annual Report 2020 19

9. The work of the board of directors the audit and risk committee were held in 2020. The Board of Komplett Bank shall ensure a sound organisation of the business. The Board adopts plans and budgets as well as guide- In 2020, the Board established a remuneration committee consisting lines and necessary authorisations for the Bank’s activities and of up to 2 Board members and an employee representative, who are ensures that the company has appropriate systems in place for risk independent of the company’s management. The remuneration com- management and internal control. The Board keeps informed on an mittee is responsible for preparing and proposing Komplett Bank’s ongoing basis about the company’s financial position when review- remuneration scheme to the Board and shall ensure that it contributes ing and approving quarterly and annual reports as well as monthly to promoting and providing incentives for good management and reviews of Komplett Bank’s financial position and development. control of the Bank’s risk, counteracts high risk-taking and contributes to avoiding conflicts of interest. The remuneration scheme is The Board shall monitor and manage the Bank’s overall risk. designed in accordance with the requirements applicable at any given Furthermore, the Board shall regularly assess whether the Bank’s time for financial enterprises in law and regulations. In accordance with management and control routines are adapted to the level of risk the Public Limited Liability Companies Act 6-16a, the Board prepares and the scope of the business. a statement on the determination of the salaries for the CEO and other senior executives. At the end of 2020, the remuneration committee The Board of Directors has drawn up a set of instructions for the consisted of Live Bertha Haukvik (chair), Jonna Kyllönen and Harald Board’s responsibilities and duties, The Board has prepared an Rygh Hjorthen. instruction for the Board’s responsibilities and tasks, which matters are to be dealt with by the Board, as well as procedures and rules. 10. Risk management and internal control An annual evaluation of the Board’s work and competency is carried Risk management and internal control form a central part of out, which is reported to the nomination committee. The Board also Komplett Bank’s strategy and operations. The bank has imple- establishes an annual plan for its work. mented guidelines and procedures to ensure that risk management and internal control are appropriate and sufficient considering the The Board has also established instructions for the day-to-day level of risk and scope of the business. management of the Bank. The CEO is responsible for ensuring that the Board’s adopted goals, frameworks, guidelines and The Board of Directors of Komplett Bank is responsible for ensuring authorisations for the Bank’s risk management and internal control that the Bank has regulatory capital that is appropriate for the risk are observed, including ensuring that senior executives implement profile adopted and regulatory requirements. Risk management and document necessary internal control measures to identify, and internal control also form a key part of the Bank’s assessment measure, monitor and control risk as well as provide the Board with of the capital requirements in the short and long term, where risks relevant and timely information that is important for the Bank’s risk associated with the business and potential risks are included in the management and internal control. The CEO is also responsible for assessment. ensuring compliance with the Bank’s policies and guidelines, as well as with the Board’s decisions. Risk management and internal control in the Bank shall ensure the achievement of the Bank’s strategic goals and at the same time The bank has adopted special procedures regarding notification ensure solid financial stability. This goal is achieved by: and impartiality where Board members and/or management have Ǵ A strong organisational culture characterised by a high aware- a personal or financial interest in transactions the bank enters into. ness of risk. Before a case that is of particular importance to Board members Ǵ Good understanding of risks that create earnings, including the or company management, or any related parties, is handled, the ability to operate within the risk profile defined by the Board. person who is not eligible to participate in the handling of the case Ǵ Striving for optimal capital utilisation within the adopted business or the decision must declare his/her ineligibility and refrain from all strategy. further involvement in the case. The same follows from the Bank’s Ǵ Avoiding unexpected events that could have a material adverse ethical guidelines. effect on the Bank’s financial position or reputation.

Board committee As Komplett Bank primarily generates earnings through credit The Board has established an audit and risk committee consisting exposure in the retail market for unsecured credit, it follows from the of two external Board members, in which the CEO and CFO par- guidelines that Komplett Bank’s risk appetite for credit risk is higher ticipate from the administration. The committee makes thorough than the risk appetite for liquidity, market and operational risk. assessments of the Bank’s risk management and internal control as well as the Bank’s financial position, including financial report- Komplett Bank has established ethical guidelines that apply to all ing. The audit and risk committee shall further ensure that the employees, as well as a framework for risk management and internal Bank has an independent and efficient external and internal audit control that includes, among other things, several guidelines for and satisfactory financial reporting in accordance with laws and anti-corruption and money laundering, data security, accounting regulations. At the end of 2020, the committee consisted of Bodil reporting and handling of inside information. Komplett Bank is Palma Hollingsæter (chair) and Stig Eide Sivertsen. 10 meetings of subject to statutory supervision in the countries where licensed 20 Corporate governance

activities are conducted, including by the Financial Supervisory In 2019, the Board established an internal audit function as part of Authority of Norway in Norway, in addition to control from the Bank’s the work to ensure good internal control and identify risks. EY was own control bodies and external auditor. elected as an independent internal auditor. The role of the internal audit is to check that the Bank is organised and operated in a Risk management and internal control responsible manner and in accordance with current requirements The areas of responsibility of the Board and the CEO are defined in for the business. Matters that are considered unsatisfactory the Board instructions and the instructions to the CEO, respectively. must be reported to the audit and risk committee and the general In addition, the Bank has a clear organisational structure with manager. The internal auditor performs his audit in accordance with clearly defined roles and areas of responsibility for the Bank’s risk annual audit plan approved by the Board and instructions estab- management and internal control. lished by the Board.

Risk assessment is part of the Bank’s management responsibility, Financial reporting where the department heads are responsible for identifying, Komplett Bank’s CFO is responsible for the finance department and assessing and managing risks related to their area that may affect shall always maintain an overview of the Bank’s financial position the Bank’s ability to achieve its goals. These assessments are and prepare accounts and reports, including preparing the financial regularly reported to the CEO. reporting to public authorities and conducting ongoing management and control of the Bank’s total liquidity and financial risk. The The responsibility for the Bank’s special control functions for risk CFO is also responsible for ensuring that the accounting process and internal control lies with the Bank’s risk control function and the takes place in accordance with current regulations, including IFRS. compliance officer. The risk control function shall ensure that all significant risks in the company are identified, handled and reported The Board receives periodic reports on the company’s financial by the relevant units in Komplett Bank. The risk control function results, as well as quarterly reports in connection with the Bank’s reports directly to the Board in cases where the Board does not earnings reports. The auditor participates in meetings with the audit receive the necessary information in the normal internal reports and risk committee and the Board meeting related to the presenta- or notifies the Board in cases where identified risks affect or may tion of the preliminary annual accounts. affect the Bank negatively. The compliance officer is responsible for performing independent control, reporting and monitoring the The finance department is responsible for risk management Bank’s compliance with internal and regulatory requirements, and related to market risk, liquidity risk, financial risk and counterparty reports directly to the CEO and the Board. risk outside the lending business. The finance department is responsible for complying with risk decisions adopted in the Bank’s The bank has also established a balance sheet committee, which finance policy, which are adopted by the Board of Komplett Bank. exercises the overall management of the Bank’s liquidity risk level. The policy sets the framework for what the board considers to be The committee prepares, i.a., proposals to the Board of Directors for a satisfactory risk profile and shall contribute to appropriate risk changes in the Bank’s financial policy and decides on investment management and internal control, and thus ensure regular reporting strategies and changes in the terms of the Bank’s deposit products and monitoring. Information on the Bank’s most important risk as well as follows up internal control and reporting. The committee factors is described in the Board’s annual report and note 18 to the is also responsible for preparing matters for the Board regarding annual accounts. the internal capital assessment process (ICAAP), including judging capital requirements, and the Bank’s contingency plan for liquidity. 11. Remuneration to the board The committee consists of the CEO, CFO, credit and collection The Board’s remuneration is determined by the general meeting director, IT and marketing director and the product director for credit based on a recommendation from the nomination committee. cards, and is chaired by the CFO. Remuneration to the Board of Directors is not performance-dependent or dependent on the performance of the Bank’s shares. The CEO, CFO, credit and debt collection director and IT and market- No options are issued to the Board members, and the sharehold- ing director make up the Bank’s credit committee. The compliance er-elected Board members are not entitled to a pension scheme or officer has the right to attend, but not the right to vote. The commit- severance pay from the company. None of the shareholder-elected tee is chaired by the director of credit and debt collection. The credit Board members have duties for the Bank beyond the Board committee shall, among other things, approve proposals to the Board position. of Directors regarding changes to the Bank’s credit policy, decide on the delegation of credit authorisations and change or establish new The Board members are encouraged to own shares in the Bank, and credit routines and credit processes. Furthermore, the committee the Board members must follow the general insider rules for share shall follow up internal control and submit regular reports regarding trading. Reference is made to note 14 in the annual accounts for an the Bank’s exposure and management of credit risk. overview of shares owned by Board members.

The remuneration to the Board is explained in more detail in the annual report, note 11. Komplett Bank Annual Report 2020 21

12. Remuneration to senior executives from the website www.ir.komplettbank.com. The Bank will strive to The bank has prepared guidelines for remuneration for its senior ensure non-discriminatory sharing of information when the Bank executives as well as other employees with significant responsibility is in contact with shareholders and analysts. Communication with for the company’s risk exposure. The purpose of the guidelines is shareholders, investors and analysts is a priority for the Bank. It is to help promote and provide incentives for good management and mainly the CEO and CFO who speak on behalf of the Bank to the control of the Bank’s risk, counteract high risk-taking and help to capital markets. avoid conflicts of interest. The bank’s guidelines for remuneration to senior executives are described in note 11 to the annual accounts Investor information such as annual and interim reports, open for 2020 and are presented annually for consideration of the presentations and the financial calendar are made available on the general meeting. It is clearly stated which guidelines are indicative Bank’s website at the same time as they are released to the market. for the Board, and which are binding. The general meeting votes Stock exchange announcements are published via the Oslo Stock separately on the two parts of the guidelines. Exchange’s official communication channel for listed companies, Newspoint. Remuneration to senior executives consists of a fixed salary, variable remuneration as well as pension and insurance schemes. The Board has also established guidelines for the Bank’s contact It shall motivate hard work to achieve long-term value creation and with shareholders outside the general meeting. sensible risk-taking in the Bank. 14. Company acquisition The Board makes an annual assessment of the maximum level for Any party who wants to carry out acquisitions that will result in them variable remuneration. For 2020, the variable remuneration is limited becoming the owner of a qualified ownership interest (10% or more) to 50% of the fixed salary. Remuneration is determined based on an in a financial enterprise, must in advance send notification of this overall assessment, based on quantitative and qualitative factors to the Financial Supervisory Authority of Norway. Acquisition of a related to the individual’s role and responsibilities, as well as the qualified ownership interest can only be carried out with permission Bank’s results, risk profile and value creation over time. Komplett from the Financial Supervisory Authority of Norway. Bank’s variable remuneration scheme is designed in accordance with current requirements for remuneration schemes for banks. The bank has prepared guidelines for any takeover bids, and the Board of Komplett Bank will handle any bids in accordance with A share option programme has also been established for senior these guidelines. executives. The option programme is based on the employee’s basic salary and other variable remuneration, with the possibility 15. Auditor of receiving options for up to 33% of the fixed salary. The share Komplett Bank’s auditor is PricewaterhouseCoopers AS, and is options are granted at full market value at the time of the allotment elected by the general meeting. The auditor presents the annual plan based on the trading price in accordance with Black & Scholes’ for carrying out the audit work to the Board. The auditor participates option pricing model, and entails a lock-up period of three years. in Board meetings that consider the annual accounts and annually Regarding fixed salary, the employees may, within intervals based reviews the company’s internal control of the Board. In accordance on the employee’s position in the Bank, choose the proportion of with established Board instructions, the Board meets with the auditor the salary to be granted in share options. The option programme is at least once a year without the CEO or other executive managers reviewed and evaluated annually by the Bank’s Board. being present. The auditor confirms in writing each year its independence and reports each year on which services other than statutory 13. Information and communication auditing have been provided to the company during the financial year. Komplett Bank has adopted an investor relations policy to ensure The bank has drawn up its own guidelines for which non-audit tasks that the financial market and shareholders have sufficient informa- can be performed by the bank’s auditor. tion about Komplett Bank to ensure efficient pricing. This is available 22 ESG/Sustainability/CSR report 2020

ESG/Sustainability/ CSR report 2020

Introduction The Board of Directors has the overall responsibility for alignment Stakeholder value creation is the foundation for Komplett Bank’s of Komplett Bank’s strategy and corporate social responsibility strategy, and the beacon for the Bank’s environmental, social and (CSR) and sustainability considerations. The day-to-day opera- governance (ESG) framework, goals and KPIs. tional responsibility is delegated to the Chief Risk Officer.

Komplett Bank’s mission is to provide straightforward and intuitive Komplett Bank has adopted ethical guidelines, which set out the financing services to creditworthy individuals. By offering financial framework for helping its representatives perform their duties flexibility, Komplett Bank empowers its customers to take charge in an ethically responsible manner and in line with the standards of their own situation, in their own way and on their own time. established by the Bank. An account is given below of how the Bank ensures that corporate social responsibility forms an integral By being a responsible lender and providing creditworthy part of its operations and long-term value creation. individuals with financial flexibility, Komplett Bank contributes to generating economic activity and growth – creating value for the Material ESG factors society at large. In 2020, Komplett Bank initiated a programme for developing its framework for transparent reporting and communication related Komplett Bank’s organisation and culture are the key drivers to the Bank’s corporate responsibility. To ensure that Komplett behind the Bank’s stakeholder value creation. The following four Bank prioritises issues that matter most to its business and its core values describes the Bank’s culture, and guides the organisa- stakeholders, a materiality analysis was conducted at the end of tions’ choices when faced with opportunities and challenges: the year. Ǵ Flexible Ǵ Ambitious The materiality analysis was a result of feedback from external and Ǵ Competent internal stakeholders on their expectations, and the risk factors Ǵ Efficient and opportunities they perceive as important to the Bank’s long- term value creation. It was based on a questionnaire with topics These values – being open to change, setting ambitious targets, defined by the Bank as likely to be considered material (inspired executing competently and eliminating waste – are prerequisites by Global Reporting Initiative (GRI) standards), either electronically for driving continuous ESG improvement, as the Bank sees it. or through interviews. Stakeholders included partners, investors, employees, and management.

The topics included in the survey by alphabetical order:

• Anti-corruption and anti-money laundering • Environmental footprint

• Customer privacy • Ethical business behaviour

• Customer service • Responsible lending

• Data security • Selling practices and product labelling

• Diversity, non-discrimination and equal opportunities • Working conditions Komplett Bank Annual Report 2020 23

Based on the results from the materiality analysis, Komplett Bank Materiality Map®”) as factors that are likely to materially affect the has identified the following three topics as focus areas for long- financial condition or operating performance of companies within term value creation for all stakeholders: the financial services sector and specifically for the consumer Ǵ Responsible lending finance sub-industry, as well as with material issues highlighted by Ǵ Anti-corruption and money-laundering (AML) MSCI ESG Ratings in their overview for the Financials sector and Ǵ Data security and customer privacy Consumer Finance sub-category.

These topics resonate with those identified by the Sustainability Below is an overview of the feedback from external and internal Accounting Standards Board’s Materiality Map (the “SASB stakeholders:

Feedback from external and internal stakeholders

9 Anti-corruption and anti-money laundering

8 Responsible lending

7 Data security

Diversity, Ethical business 6 non-discrimination and Customer behavior equal opportunities privacy

5 Customer service 4

Selling practices Working and product

Importance to stakeholders stakeholders to Importance 3 conditions labelling Environmental footprint

0 0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0 8,0 9,0

Importance to company 24 ESG/Sustainability/CSR report 2020

Reporting and future priorities ESG performance over time as shown below. In 2020, the Bank This report centres around the three focus areas, describing the achieved its target related to anti-corruption and money-laun- Bank’s approach, initiatives and results under each section. Other dering training. While number of cases lost in Finansklagenemda key ESG topics are also addressed in the report. related to communication of terms and conditions and data and GDPR breaches were few, the Bank will intensify its efforts to Komplett Bank has further defined targets for measuring its achieve its zero targets in these departments going forward.

Defined targets for measuring its ESG performance over time

Anti-corruption and Data security and Responsible lending money-laundering (AML) traning customer privacy

Target: No well-founded complaints from Target: No data and GDPR breaches and Target: All employees complete annual customers on wrongful, lacking or unclear no wrongful sharing of personal customer training communication of terms and conditions data

Two cases lost in Finansklagenemda 2020: 100 per cent of employees equalling 0.001 per cent of total customer Two incidents in 2020 completed AML training engagements

This report is included in the annual report rather than as a stand- Contribution to UN Sustainable Development Goals alone document and reflects a continuous commitment to integrate Komplett Bank is committed to being a responsible provider of corporate responsibility in all processes and daily operations. It is loans and other financial services and being a fair, supportive and also in line with the UN Sustainable Development Goal (SDG) target non-discriminatory employer. The Bank supports the UN SDGs and of adopting sustainable practices and to integrate sustainability described below are those considered to be the most material for information the reporting cycle (SDG target 12.6). Komplett Bank and where it can have the greatest impact.

Komplett Bank’s contribution to the UN Sustainability Development Goals

Komplett Bank works actively towards equal opportunities and gender balance in work and economic life. When hiring employees diversity is a criterium. Women and men are paid the same rate for the work they do (sub-target 5.1)

Komplett Bank promote employees on merits and personal skills. Both men and women are encouraged to take maternity leave (sub- target 5.5)

Komplett Bank provide safe and meaningful jobs, in compliance with international and national labour standards. When hiring, the Bank looks for people, skills and personalities that complement any missing qualities and support Komplett Bank’s future development (sub-target 8.8)

Komplett Bank offers equal pay for the same work and performance regardless (sub-target 8.5, c.f. SDG 5)

Komplett Bank is an innovation and technology driven consumer bank with resources and competence to combat money laundering and terrorist financing. The bank has systems in place to identify and report potential anti-money laundering (AML) activity, and provides regular training of employees within AML/terrorist financing (sub-target 16.5 and 16b) Komplett Bank Annual Report 2020 25

Sustainable business geography) manually declined when reviewing detailed info Responsible lending – throughout the credit lifecycle and documentation provided by the applicants Komplett Bank is committed to being a responsible lender, defined Ǵ Launched refinancing product in Norway in 2020; a prerequisite as the practice of acting in customers’ best interests, ensuring for offering this solution is that it reduces the customer’s total affordability, transparency of terms and conditions and supporting costs related to the loan a borrower if they experience repayment difficulties. Responsible lending is considered a material factor for the Bank. 3. Customer service Ǵ Well-established internal process mapping, routine descriptions The Board of Directors has adopted specific guidelines and and yearly training schedule to ensure good service towards the procedures for the lending business, which are intended to ensure bank’s customers and applicants compliance with this objective. In addition, the Bank’s internal Ǵ Komplett Bank’s customer service is available through e-mail procedures and processes are aligned with applicable laws, regu- and a manned phone service. The customer service teams lations and other regulatory requirements. All customers must be are followed up on KPIs based on best practices regarding subject to a credit assessment based on a complete set of data response- and waiting time as well as quality measures relevant for assessing the applicants’ financial situation. Komplett Bank does not grant loans or issue credit cards to customers who 4. Default are assessed to lack sufficient debt servicing capacity. Marketing Ǵ Established credit policy that governs treatment of defaulted of the Bank’s products is aligned with statutory and regulatory loans requirements and the Code of Practice of the Association of Ǵ Received a limited number of forbearance requests in 2020, Norwegian Finance Houses (Finansieringsselskapenes Forening) focus on temporary assisting existing customers to overcome regarding the marketing of credit cards and consumer loans. short-term challenges during pandemic Ǵ Norwegian customers with Flexible Loan-agreements are con- Komplett Bank has put in place the following measures to ensure tacted on a regular basis to encourage down-payment plans responsible lending practices throughout the credit lifecycle: and ensure customers have a plan on how to repay their loans Ǵ If a customer is in default, Komplett Bank ensures that it’s 1. Marketing collection partners adheres to the standards of Komplett Bank Ǵ Established internal guidelines for responsible selling practices and that the partners are equally or better equipped to assist and product labelling the Bank’s customers in servicing their loans - Ensure messaging, channels and scope of marketing efforts are suited to attract creditworthy individuals Anti-corruption and Money Laundering (AML) - Ensure to avoid misleading marketing Exposure to corruption and money-laundering is considered a - Ensure agents adhere to Komplett Bank’s selling and product material risk for Komplett Bank and its license to operate. The labelling practices Bank has systems in place to identify and report potential AML Ǵ Goal: No well-founded complaints from customers on wrongful, activity and provides frequent training of employees within AML/ lacking or unclear communication of terms and conditions terrorist financing. These activities represent Komplett Bank’s - KPI: Number of cases lost in Finansklagenemda support to achieving UN SDG 16, sub-targets 16.5 and 16b. - Two cases lost in 2020 equalling 0.001 per cent of total customer engagements. Both engagements were entered Komplett Bank has established a comprehensive framework for into in 2016 and were related to payment insurance. The Bank preventing money laundering and terrorist financing. This includes has since changed its procedures related to how insurance onboarding and risk assessments of new customers, review of is offered. high-risk customers and accounts, running customer and transaction monitoring and reporting and follow-up processes. The AML 2. Onboarding Risk Assessment and Policy are subject to yearly revisions by the Ǵ Established credit policy to ensure credit is provided only to Board of Directors. creditworthy individuals Ǵ Strict onboarding process consisting of both automatic and Work and procedures related anti-corruption and money-laun- manual evaluation of applicants’ credit worthiness dering has the highest priority. The COO is the bank’s AML Officer - 80 per cent of applications were declined based on the (“Hvitvaskingsansvarlig”). The Credit and AML departments are Bank’s credit policies and score cards, the remaining 20 per responsible for customer onboarding and KYC-processes (Know cent got a conditional offer Your Customer), as well as the ongoing due diligence and continu- - Additional 40-50 per cent (depending on product and ous monitoring and follow-up on suspicious customer behaviour. 26 ESG/Sustainability/CSR report 2020

Both departments report directly to the COO. The CCO is responsi- During 2020, two new employees joined the AML team, and by the ble for second-line controls, and report quarterly on AML-activities end of 2020 the team consisted of six fulltime resources. and status to the Board of Directors. A dedicated AML manager joined the Bank’s legal department late 2019 responsible for Below is an overview of Komplett Bank’s organisation and line of ensuring compliance and implementation of regulatory changes. responsibilities.

External Audit Internal Audit Board of Directors The Nomination Committee (PWC) (EY)

Risk Control CEO Compliance The Audit and Risk Committee Ove Holstangen Jan Haglund Eivind Bagås

Credit Risk & Collection HR & Legal The Compensation Committee Annika Ramstedt Wilhelm Thomassen

Finance Operations Henning Fagerbakke Christina Pedersen

Commercial Director IT, Marketing, Business Loans & POS development Enok Hanssen Steffen Ryengen

Commercial Director Cards Eirik Holtedahl

In addition to the AML framework, the Bank has also established All employees at all levels, including Board of Directors and guidelines and procedures which describe measures and full-time external consultants working for the bank for extended business processes to secure proper onboarding KYC-processes. periods shall complete annual training related to anti-corruption The bank’s KYC processes includes pre-fraud, AML and credit and money-laundering (AML). In 2020, 100 per cent completed evaluations intended to prevent acts such as various categories of such training, compared to 100 per cent in 2019. fraud, identity theft and corruption. All routines are maintained on a continuous basis and subject bi-annual review. Komplett Bank will continue to prioritise developing and improving its framework to prevent money laundering and financial crime by The bank developed and implemented a pre-fraud tool in 2020, maintaining policies and guidelines in accordance with regulations which helps identifying potential fraudsters and identity thefts. During and best practice, by leveraging innovation and technology to 2020, the bank managed to detect and prevent fraud on 444 credit monitoring and reporting suspicious transaction as through applications, preventing potential losses exceeding NOK 70 million. regular AML training of its employees.

The Bank places great emphasis on organising the practice of Data security and customer privacy the Boards of Directors, senior management and employees In a digital world, personal data is increasingly at risk of being to enhance awareness and build expertise on how to prevent misplaced, stolen or shared without consent. At the same time, financial crimes. Regular training of all employees in AML related with intelligent use of personal data, Komplett Bank can better guidelines and procedures is a core element in the Bank’s risk understand its customers and develop more relevant and more management system. customer-centric banking products and services. Therefore, Komplett Bank Annual Report 2020 27

Komplett Bank recognises its responsibility of managing the data but they are not exhaustive. The current version of the guidelines collected and processed about its customers in a responsible was last updated 23 September 2020. manner and keeping consumer data safe. Anyone who represents Komplett Bank must always strive to Komplett Bank is subject to laws and regulations that stipulate exercise good judgement, caution and consideration. The Bank’s how consumer data can be collected and processed, such as risk management recognises that unethical actions or omissions GDPR. Back in 2018, when GDPR came into force, the Bank in breach of human rights represent a potential operational risk appointed a Data Protection Officer (DPO). factor. The Banks guidelines and other procedures have been put in place to help ensure that Komplett Bank does not become The Bank has implemented strict guidelines and procedures to involved in business transactions and other projects which ensure compliance. This involves regularly reviews and develop- constitute unethical actions or omissions. ment of the Bank’s internal control systems and risk management processes to continuously improve and address existing and Environmental footprint emerging data security and privacy threats. Komplett Bank’s activities are concentrated to the Nordic consumer credit market with the Bank having limited influence on Employees and consultants who collect, process or have access what the credit is used for. The environmental impact of Komplett to customer data on behalf of the Bank receive mandatory training Bank’s activities is mainly related to energy consumption and in data privacy facilitated by the DPO on regular basis. All manag- waste from its premises, and some travelling. ers are responsible for ensuring that employees with access to personal data have the necessary competence and are suitably Being a fully digitalized bank, with the products offered online qualified to secure our customers’ personal data rights, through through the Bank’s website, consumption of paper and the need following our procedures for information security. for travel is minimised. The Bank has not prepared any specific guidelines relating to the external environment but encourage Any breaches to data security and consumer privacy are reported employees to reduce consumption and waste generated from and followed up immediately. Komplett Bank registered one their daily activities, e.g. food waste in the cantina which was effec- data and GDPR breaches and one wrongful sharing of personal tively reduced during 2020. In order to reduce business travel, customer data incidents in 2020. employees are encouraged to use digital solutions such as video conferencing and travelling by public transport when travel is Whistleblower routines necessary. For data storage, Komplett Bank uses Microsoft Office Komplett Bank has established procedures for whistleblowing, 365 and Azure Compute, which are between 80-98 per cent more adopted by the Board of Directors, and implemented both internal energy efficient than traditional on-premise datacentres. and external channels for whistleblowing to facilitate reporting of any irregularities. The procedure shall safeguard both the In 2021, Komplett bank will take further steps towards measuring whistleblower and the person(s) reported on and is available for all and disclosing its overall environmental impact. the Bank’s employees in both Norwegian and English. The external whistleblowing channel is operated by KPMG, and information on The employees any reported cases is according to process forwarded to CCO, Komplett Bank wants to be an attractive employer which offers a Legal advisor and Head of the Audit and risk committee to the good working environment for the employees, which are consid- Board of Directors. In 2020, no reports were received. ered the Bank’s most important resource. Komplett Bank relies on motivated and engaged employees to reach its business goals, Ethical business behaviour and wants to provide its employees opportunities to develop, Komplett Bank has adopted ethical guidelines, which set out a enhance their skills and assume new responsibilities. To ensure framework for helping the Bank’s representatives perform their value creation for all stakeholders, the Bank also need individuals duties in an ethically responsible manner and in line with the that complement each other and work well together. Komplett standards established by the Bank through its other procedures Bank’s employment practices ensure compliance with internation- and guidelines ally recognised human rights and labour rights.

Komplett Bank’s ethical guidelines supplement laws, rules, Diversity and equal opportunities instructions and provisions which apply to the Bank’s activities Komplett Bank believes a diverse and inclusive workforce is fun- and establish principles for conduct and actions in areas which damental to ensure innovation and value creation over time. As a other regulations otherwise do not cover. The guidelines provide a general principle, all employees shall be treated equally, regardless framework for what the Bank considers to be responsible conduct, of age, gender, disability, cultural background, religious beliefs 28 ESG/Sustainability/CSR report 2020

or sexual orientation in recruitment processes and throughout activities. The employee survey forms an integral part of the the employment relationship. No kinds of discrimination or Bank’s internal control and provides a basis for implementing harassment is accepted. There were no reported breaches of the improvement measures as and when deemed necessary. company’s guidelines in 2020. In 2020, the sick leave was 3.0 per cent, down from 3.8 per cent in Komplett Bank works actively to ensure diversity and equal oppor- 2019. The Bank has implemented various activities and welfare ini- tunities. As a result, the Bank has over 20 different nationalities tiatives like boot camp, running sessions with trainer and squash, represented and a good gender distribution across departments to promote an active social environment and well-being at the and management levels. At the end of 2020, the Bank employed workplace. The Bank’s HR manager works systematically to reduce 152 persons and women account for 38.3 per cent of all staff and sick leave, through preventive working environment measures and 39.2 per cent of all management. One of the Bank’s objectives is close follow-ups and dialogue of employees on absence. to ensure that both genders are represented in all management bodies. At the end of the year, 43 per cent of Komplett Bank’s The Bank has established a working environment committee, a board members were women, while there were two women of 10 cooperative body whose main function is to contribute to a fully members of the executive management team. satisfactory working environment in the Bank. The committee consists of two management representatives and two employees. Women and men are paid the same rate for the work they do, and The committee participates in the planning of protection and employees are promoted on merits. Komplett Bank encourages environmental work and pays attention to the development in a good work-life balance for all employees. To encourage women questions regarding the safety, health, and welfare of the employ- to remain in the workplace, the Bank offers flexible working and ees. The committee held two meetings in 2020. maternity policies. Of 152 employees, three are employed on a part-time basis (whereof one is female) motivated by employee When Norway closed 12 March 2020, the Bank implemented preferences. several measures. One was facilitating home offices to ensure business continuity and efficient operation. Komplett Bank also Both men and women are encouraged to take parental leave. set new guidelines for employees, which has been continuously Komplett Bank offers permanent employees paid parental leave updated based on changes in regulations and recommendations equalling 100 percent of their salary, above the statutory require- from the authorities. ments in Norway. In 2020, a total of 16 of the Bank’s employees took parental leave, and eight of these were men. On average The Bank has expanded the use of Microsoft Teams as a common women took 26.3 weeks and men 11.3 weeks. communication platform. Company meetings and management follow-up today take place primarily via this channel. Working conditions Komplett Bank is committed to ensuring good working conditions Further, the bank has established a joint morning meeting - that promote health and flexibility in order to maintain a motivated “Breakfast Club”. This is a digital meeting, 45 minutes every other workforce. week, where internal and external speakers contribute to information and competence sharing for all employees. Furthermore, a Komplett Bank conducts an annual employee survey to measure weekly digital newsletter was established, where information and employees’ satisfaction and wellbeing at work. The survey is a the latest news from the Bank are shared. These two measures feedback method based on the Job-Demand Resource model, have had a positive effect on employee motivation and well-being which indicates the Bank’s ability to develop a work environment and will be continued in a normal situation. that balances requirements and resources, providing the basis for a work environment that improves command of work tasks During the pandemic, considerable time and resources has been and commitment to the organisation as such. The results of the spent on a successful relaunch of the Bank’s values. This includes survey provide important feedback, which is used to develop and several fully digital meetings for all employees, with great feedback measure changes to the work environment going forward. The and commitment among the employees. annual review for 2020 indicates that the Bank’s employees are generally happy at work and considers their working environment The Bank has encouraged and facilitated physical activity through- to be good, a view which is underlined by acceptable turnover out the home office period. This means, among other things, “walk rates amongst employees and generally low levels of sick leave. and talk” meetings whenever possible. Furthermore, digital lunch Feedback from employees have entailed the implementation of a training has been arranged. To ensure adequate communication weekly newsletter, Breakfast Club meetings as well as team-level and unity across the Bank, digital one-on-one meetings (approx. Komplett Bank Annual Report 2020 29

800 meetings in total) have been conducted where employees The company culture is based on knowledge sharing and have had digital 5-10-minute conversations with a randomly diversification of work tasks, to encourage employees challenging selected colleague. themselves. With the constantly developing digitization of the banking industry, competition increases while new demands arise In addition to this, the company has arranged social digital activ- from customers and authorities. To keep up with change and new ities such as “Escape Room”, “Kahoot” and more. The Bank has expectations, the ability of innovation and to swiftly adjust is key. also entered into an agreement with the «Health Phone» where Komplett Bank therefore cultivate innovation through efficient employees can call when assistance is needed from a nurse / use of resources and encouraging to openly exchange ideas. doctor or other health services. Collaboration across departments and areas of responsibility enables improvement, and it is therefore a priority to nurture a Several new employees have started during the Covid-19 period. good feedback culture, and we have a strong focus on leadership Both interview processes and onboarding have primarily taken development. Where possible, Komplett Bank recruits internally. place digitally. The bank has further increased cleaning frequency in the office premises at Lysaker, and employees have been given Komplett Bank has established an employee share option pro- face masks sent to their home. gramme to enhance and align the mutual interests of the Bank’s employees with those of the company and the shareholders. The The bank has conducted several internal Covid-19 surveys to share option programme is also considered to promote increased map how employees experience the home office situation, and commitment, motivation and understanding of the business. At to follow up and improve the work situation at the home office for the end of 2020, 28.3 per cent of the Bank’s employees held everyone. shares/share options in the company. The Bank also provide favourable pension and employer’s liability insurance plans. Professional and personal development For Komplett Bank, learning and development at work is important. 30 Board of Directors’ Report

Board of Directors’ Report

Overview started in Norway in Q4 2015, in Sweden in Q1 2019 and in Komplett Bank ASA (the “Bank”) started operations in March Finland in Q2 2019. Point-of-sale (POS) financing products were 2014 when the company received its banking licence from the launched in Norway and Sweden in Q3 2017 and Q2 2018, Norwegian authorities. Komplett Bank offers attractive consumer respectively. financing products to creditworthy customers. In Q4 2018 the Bank launched euro-denominated deposits The Bank’s product suite consists of consumer loans, credit cards in Germany and SEK-denominated deposits were launched in and point-of-sale (POS) finance products, as well as deposit prod- Sweden early in Q1 2020. ucts in the Norwegian, Swedish and German markets. The Bank’s main products are consumer loans, including annuity loans, as well Komplett Bank sees good opportunities for growth based on its as flexible loans which give the customer more flexibility in drawing market position and financial strength at the end of 2020 and on the credit line. In April 2020, Komplett Bank also launched a expects lending growth of 5-10% in 2021. The Bank is currently refinancing product in Norway. In addition, the Banks offers the evaluating strategic possibilities for expansion, and both the Board “Komplett Bank Mastercard,” a credit card tailored especially for and management are dedicated to the ambition of establishing a online shopping. The Bank’s deposit products are characterised presence in new geographical markets and/or product categories by attractive interest rates in Norway, Sweden and Germany. As in 2022, which can contribute to a higher growth rate. a member of the Norwegian Banks’ Guarantee Fund, customer deposits are guaranteed up to NOK 2 million per customer. Further, the Bank has a dividend policy of distributing surplus Foreign deposits are guaranteed up to EUR 100,000. capital not required for growth initiatives. Dividend capacity is estimated to be 30-50% of after-tax earnings, based on the In 2020, Kistefos AS purchased Canica Invest AS’ ownership Bank’s level of profitability in 2020, the balance sheet at the end stake of 19.4% in Komplett Bank. At the end of 2020, Kistefos of the year, and the current capital adequacy requirements. This is has an ownership stake of 24%, and is Komplett Bank’s largest seen as a sustainable level of dividends even with annual growth shareholder. of 10% in the medium term. Komplett Bank has a long-term target of a return of equity over 20%. The Bank’s registered offices are at Vollsveien 2A in Lysaker outside Oslo, Norway, and in November 2017, the Bank was listed Operational review on the main list of the Oslo Stock Exchange with the ticker symbol Loan growth and product development “KOMP.” The Bank follows a diversified multi-channel marketing and distribution strategy, has a resilient balance sheet and a flexible Strategy and long-term ambitions and cost-efficient operating model. Combined with a well-known Komplett Bank is pursuing a growth strategy based on geograph- brand and strong distribution capabilities, this puts Komplett Bank ical and product-wise diversification and expansion. The strategy in a favourable competitive position. is founded on a digital, scalable and efficient operating model with low costs and strong risk control. The Bank operates on a In light of increased macroeconomic risks due to Covid-19, cross-border basis from its offices in Lysaker, outside of Oslo. The Komplett Bank prioritised maintaining its financial strength and Norwegian banking license allows the Bank to market its products limited lending growth in 2020. throughout the entire European Economic Area (EEA). During 2020, net loans declined by NOK 135 million to reach NOK The Bank launched consumer loans in Norway in Q1 2014, in 8.4 billion at the end of the year. This decline was driven primarily Finland in Q1 2017 and in Sweden in Q1 2018. In May 2019, the by consumer loans in Norway, which declined by NOK 531 million Bank launched a new annuity loan product tailored to meet new after subtracting NOK 65 million sold as part of the Bank’s forward consumer lending regulations in Norway and in April 2020 the flow agreement. Consumer loans in Sweden and Finland grew by Bank’s refinancing product was launched. Credit card operations NOK 340 million and NOK 55 million, respectively. Komplett Bank Annual Report 2020 31

Net loan distribution Customer distribution by product by product

Loans Norway 38% Loans Norway 12%

NOK Loans Finland 30% Loans Finland 9% Loans Sweden 17% 288,000 Loans Sweden 3% 8.4billion Credit cards 9% Credit cards 21%

Point-of-sales finance 7% Point-of-sales finance 54%

During 2020, credit card loans declined by 9% to NOK 729 million. During 2020, Komplett Bank continued to develop and expand At the end of the year, credit card lending in Finland and Sweden its operational platform with new solutions. In the first half of the represented 17% of the total portfolio of credit card loans. year, the Bank launched a mobile banking app which simplifies and enhances services provided to customers. It also allows for Point-of-sales (POS) financing grew by 14% in 2020 to NOK 577 more extensive self-service functionality, which enhances the cost million, driven by seasonal effects in Q4. Currently, POS finance is efficiency and scalability in the business model. available as a payment solution on three of the Komplett group’s Norwegian and Swedish websites. At the end of the year, the Bank had approximately 325,000 customers, an increase of 20% from 270,000 customers at the In 2020, deposits grew by 6% to NOK 8,992 million. Deposit prod- end of 2019. Of these, 22% were consumer lending customers, ucts are without fixed terms, except for German customers who 19% were credit card customers, 48% were point-of-sales finance can also choose fixed-term deposits with one- or two-year fixed customers and 11% were deposit customers. interest rates. Komplett Bank entered the Swedish deposit market in January 2020, and both the German and the Swedish deposits Komplett Bank uses credit models to make lending decisions. are expected to contribute to lowering the Bank’s overall funding When private individuals apply for loans, they must give informa- costs going forward. In 2020, the Bank reduced the deposit rate tion relevant for their debt-servicing ability. Komplett Bank’s credit in Norway from 1.95% to 1.00%, and in Germany from 0.40% to models give automatic, but conditional offers of credit to private 0.17% on deposit rates without fixed terms. individuals deemed creditworthy. After that, data is collected from internal and external sources and analysed before a final credit decision is taken. Among the external data sources used are the TABLE 1: NET LENDING BY PRODUCT debt registers in Norway, Sweden and Finland NOK million 2020 2019 Change Organisational development Consumer loans 7,055 7,190 -2% Changes in top management Credit cards 729 801 -9% In 2020, Ove Holstangen was appointed as the company’s Chief POS Finance 577 505 14% Risk Officer. Holstangen comes from a position as a regulatory Deposits 8,992 8,520 6% adviser in the Norwegian FSA and started in his role at the Bank 1 September. Operational efficiency Operational efficiency with low costs is a priority for Komplett After leading the bank from the beginning of 2019, Jan Haglund Bank, enabled by centralised operations and modern digital announced in early 2021 his resignation as Chief Executive systems. At the same time, the Bank is continuously working to Officer (CEO) after accepting a similar position at the Entercard improve its ability to interact with customers. Group, based in Sweden. Before his role as CEO, Jan Haglund had been Chief Financial Officer (CFO) less than one year, and before 32 Board of Directors’ Report

that, he served as Chief Strategy Officer for nearly three years. TABLE 2: INCOME

According to plans, Haglund will remain in his position until the NOK million 2020 2019 Change end of Q2 2021, although the final date of his departure will be decided later. The Board has initiated a process to find a new CEO Interest income 1,172 1,254 -7% for Komplett Bank. Interest expense -145 -167 -13% Net interest income 1,027 1,087 -6% Review of the annual accounts Net comm. and fees 62 87 -29% The annual financial statements have been prepared in accord- Other gains/losses 12 2 575% ance with the International Financial Reporting Standards (IFRS). Total income 1,100 1,176 -6%

Komplett Bank has identified the cost-income ratio, loan loss ratio, Operating expenses return on equity (ROE) and adjusted return on equity (ROE adj.) Operating expenses excluding marketing were NOK 365 million, as Alternative Performance Measures in addition to the financial roughly the same as in 2019. information prepared in accordance with IFRS as adopted by the EU. Please see note 21 for further details. In total, operating expenses fell 12% in a year with negative growth in lending. Marketing costs in 2020 were NOK 23 million, down 2020 financial highlights: from NOK 84 million in 2019. The decline was first and foremost Ǵ Total income of NOK 1,100 million due to the Bank actively braking lending growth – highlighting the Ǵ Pre-tax profit of NOK 349 million flexibility in Komplett Bank’s business model. Ǵ Net lending: NOK 8,361 million as at 31 December 2020 1) Ǵ Cost-income ratio was 33.5% TABLE 3: OPERATING EXPENSES Ǵ Loan loss ratio was 4.3% 2) Ǵ Return on Equity (ROE) was 13.6% 3) NOK million 2020 2019 Change Ǵ Adjusted return on equity (ROE adj.): 14.7% 4) Salary & personnel 144 135 6% General admin 106 88 20% Profit and Loss Direct marketing 23 84 -73% Income Depreciation 72 55 31% Komplett Bank’s total income was NOK 1,100 million in 2020, a Other 43 79 -46% reduction of NOK 75 million (-6%) compared to 2019. The reduced Total OPEX incl. marketing 388 442 -12% income was driven by lower net interest income, which declined by 6% from NOK 1,087 million in 2019, primarily due to a reduction Losses on loans in the loan portfolio after the Bank tightening lending because of Loan losses were NOK 364 million in 2020, down from NOK 454 macroeconomic uncertainty from the Covid-19 pandemic. million in 2019. The Bank further increased macroeconomic loan loss provisions for 2020 by NOK 40 million. Loan losses adjusted Income from commissions and fees decreased to NOK 111 million for changes in macroeconomic provisions were NOK 313 million in 2020 from NOK 125 million in 2019. Expenses from commis- in 2020 and 348 million in 2019, 3.9% and 4.3% respectively. sions and fees grew from NOK 39 million in 2019 to NOK 49 million in 2020. This increase was largely the result of launching Underlying credit quality improved during 2020. In the fourth credit cards in Sweden and Finland. quarter, the amount of loans sent to collection was 41% lower than in Q4 2019. As a result, net commissions and fees declined by 29% year-on- year to NOK 62 million in 2020. Profits and taxes Pre-tax operating profit was NOK 349 million, up from NOK 280 million in 2019.

Tax expenses for the full year were NOK 86 million, up from NOK 77 million in 2019.

1) Total operating expenses, excluding marketing expense and losses on loans/net interest income and net commissions. See Note 21 of the annual financial statements for a detailed calculation. 2) Losses on loans for the year/average yearly net loans to customers as a percentage. 3) Profit for the year/average yearly equity as a %. See Note 21 of the annual financial statements for a detailed calculation. 4) Adjusted PAT / Adjusted average equity. See note 21 of the annual financial statements for a detailed calculation Komplett Bank Annual Report 2020 33

The resulting profit after tax for the year was NOK 263 million, up loans when new loans aren’t issued, and other lenders repay their from NOK 203 million in 2019. This corresponds to a return on loans. equity (ROE) of 13.6%, up from 12% in 2019, but below the Bank’s long-term target of 20%. Accumulated impairments of loans as at 31 December 2020 amounted to NOK 1,146 million, up from NOK 810 million at Adjusted for the additional macroeconomic loan loss provisions December 2019. Losses on loans for the 2020 financial year were in 2020, profit after tax was NOK 293 million, corresponding to an NOK 364 million, a decrease from NOK 454 million in 2019. adjusted return on equity of 14.7%. Deposits from customers increased from NOK 8,520 million in Cash flow 2019 to NOK 8,992 million at the end of 2020 driven by the launch In 2020, cash flow from operating activities was NOK 551 million, of Swedish deposit products in 2020. compared to NOK -197 million in 2019. Profits after tax contributed positively by NOK 263 million, but the increase was otherwise In 2020, the Bank issued a perpetual Tier 1 bond of NOK 200 mainly driven by customer payments and increased deposits. million to strengthen the Bank’s capital. The new issue refinances another perpetual Tier 1 bond of NOK 65 million being repaid in The cash flow from investments was NOK -80 million, down from February 2021. NOK -99 million in 2019. Among the most important projects the Bank is working on are related to activities to strengthen risk The Bank’s liquid assets, comprising deposits with credit institu- management. As a result of this, the Bank has switched to the tions and liquid securities, totalled NOK 3,052.2 million, which is Standardised Approach for calculation of operating risk for capital equivalent to 26.3% of the Bank’s total assets. adequacy purposes. Total equity was NOK 2,304 million, up from NOK 1,850 million at The cash flow from financing activities was NOK 190 million, up the end of 2019. from NOK -378 million in 2019. The positive cash flow from financing activities corresponded to the net proceeds from issuing a TABLE 5: BALANCE SHEET perpetual Tier 1 bond of NOK 200 million in June 2020. NOK million 2020 2019 Change At the end of the period, total cash and cash equivalents were NOK 1,204 million, up from NOK 615 million at the end of 2019. Total assets 11,586 10,620 9% Total liabilities 9,283 8,771 6% Total equity 2,304 1,850 25% TABLE 4: CASH FLOW Total equity & liabilities 11,586 10,620 9%

NOK million 2020 2019 Capital adequacy Cash flow from operations 551 -197 In May 2019, The Financial Supervisory Authority of Norway Cash flow from investments -80 -99 completed its Supervisory Review and Evaluation Process (SREP) Cash flow from financing 190 -378 of Komplett Bank and set the Bank’s Pillar 2 common equity Tier 1 Net cash flow 662 -674 Cash at the end of the period 1,204 615 (CET1) buffer requirement to 6.5% of risk-weighted assets.

Because of the pandemic, the Swedish FSA reduced the counter- Financial position cyclical capital buffer requirement from 2.5% to 0.0% in 2020, and As at 31 December 2020, total assets were NOK 11,586 million, the Norwegian Ministry of Finance reduced the countercyclical an increase from NOK 10,620 million at the end of 2019. The capital buffer requirement from 2.5% to 1.0% in March 2020. In increase is mainly driven by growth in cash holdings during 2020. Finland, the countercyclical capital buffer requirement was already 0% before the pandemic. As at 31 December 2020, the Bank’s Defaulted loans at the end of 2020 amounted to NOK 2,039 weighted countercyclical capital buffer requirement was 0.49%. million, equivalent to 21.5% of gross lending to customers. At the end of 2019, defaulted loans were NOK 1,285 million, correspond- As of 31 December 2020, the minimum requirement for CET1 for ing to 13.8% of gross lending. Due to the Bank tightening lending Komplett Bank was 17.0% and the total capital requirement was because of macroeconomic uncertainty, the loan balance was 20.5%. reduced, which impacted the ratio of impaired loans to gross loans. The share of impaired loans increases as a percent of total Komplett Bank has set a CET1 ratio target of 18.0%, which 34 Board of Directors’ Report

includes a 1.0% management buffer. The Bank thus targets a total The annual result totalled NOK 263 million. NOK 9 million have capital ratio of 21.5%. been allocated to owners of perpetual Tier 1 bonds. The remain- der is transferred to other equity. At the end of 2020, Komplett Bank remained well capitalised with a CET1 ratio of 22.7%, significantly above the minimum regulatory Outlook requirement. The total capital adequacy ratio was 26.3%, up from Growth 22.5% at the end of 2019. Komplett Bank follows a strategic roadmap for long-term value creation based on geographical and product-wise diversification Perpetual Tier 1 (AT1) and additional Tier 2 (T2) capital made up and expansion. In 2020, however, the Bank’s focus has been to 2.8% and 0.7% of the Bank’s capital adequacy, respectively. maintain its resilience and to strengthen its position within existing products and geographic markets. In the fourth quarter of 2020, the Bank changed from the Basic Indicator Approach to the Standardised Approach for measuring In the aftermath of increased capital requirements in 2019, operational risk. The change had a positive impact of 1.1% point increased loan losses in Q4 2019 and increased macroeconomic on the Bank’s capital adequacy as at 31 December 2020. uncertainty related to Covid-19, the Bank held back on lending to new customers in the first half of 2020. This was to strengthen For additional information on capital adequacy, please refer to the ability to withstand potential, temporarily increasing lending Note 9. losses. The impact of Covid-19 has so far shown itself to be rather limited, and only a few customers have asked for their lending Allocation of profit for the year terms to be eased. With demand still good, stable lending losses Komplett Bank’s dividend policy is to pay out excess capital which in the existing portfolio and an underlying improvement in credit is not deployed for growth purposes. quality through the first half of 2020, the Bank resumed lending to new customers starting in Q3. In the fourth quarter, net lending Both the Norwegian and European authorities have introduced growth was once again positive. limits to all kinds of dividends from banks due to the uncertainty regarding the ongoing Covid-19 pandemic. Norwegian authorities Throughout 2020, Komplett Bank experienced strong demand for have in recent publications encouraged Norwegian banks to exer- its financing products, and combined with a continual improve- cise caution when evaluating potential dividends. Nonetheless, ment of customer processes, this gives a good basis for further well-capitalised banks have justification for some dividends growth. in 2021, within certain limitations determined by regulatory authorities. It has been said that total distributions should be at For 2021, the Bank expects lending growth of 5-10%, based on most 30% of the cumulative annual result for the years 2019 and existing products and geographic markets. In 2022, Komplett 2020 until 30 September 2021. The limitation will thus be below Bank expects to expand in new geographical areas or launch NOK 140 million for Komplett Bank, based on the total cumulative new products, which should further support the Bank’s growth earnings for 2019 and 2020. ambitions

After a thorough evaluation, the Board proposes to the general Operational efficiency meeting in Komplett Bank that NOK 78.5 million, equal to NOK Komplett Bank will continue to focus on creating customer value 0.42/share, be paid as dividend after the ordinary general meeting through improved interaction with customers, as well as develop- in 2021. This corresponds to 30% of the Bank’s earnings for 2020 ing new products and related services. One example is how the and lies within the Bank’s stated dividend target of 30-50% of the launch of the mobile app has enabled easier access to information annual result. for the customer and reduced the need to contact the Bank’s customer services. Furthermore, the Board will ask the general meeting of Komplett Bank for authorisation to pay additional dividends for 2020. The At the same time, Komplett Bank has increased its focus on costs authorisation will give the Board the opportunity to decide on during 2020, which will continue into 2021 and beyond. The Bank the payment of a dividend of up to NOK 52.3 million of the result expects that measures implemented to improve cost efficiency, allocated to shareholders for 2020 if the macroeconomic outlook along with operational gearing, will result in a lower cost/income permits. The authorisation will apply until the next ordinary general ratio in 2021 and beyond. The Bank has, among other things, meeting in 2022, and payment will take place no earlier than the started the process of renegotiating terms in the most important fourth quarter of 2021. supplier contracts as well as reducing the use of external consultants. In addition, further justification is required before hiring, to Komplett Bank Annual Report 2020 35

make sure the Bank keeps an efficient workforce. A combined process is carried out using an application score and specific credit rules. The Bank applies risk-based pricing in Growth in sales, combined with increased operational efficiency accordance with the assessment carried out in connection with and a stable outlook for loan losses, means that the Bank expects the establishment of each loan. earnings to grow in 2021. Expansion in 2022 is expected to contribute further to the company’s growth and earnings. Efforts are continuously being made to improve the Bank’s invoicing and collection processes, including the functionality for Credit losses paying bills (e-invoices and direct debit agreements). Komplett Bank will maintain its strong focus on handling credit risk and defaults, as well as continuously developing the Bank’s data Operational risk and analysis capabilities. The Board has adopted policies that include guidelines for operational risk, risk limits, monitoring and reporting. The policies are After implementing measures to improve credit quality in 2019, discussed by the Board at least once a year. The Board receives loan losses stabilised at a lower level in 2020 than in the prior regular updates and reports on operational matters and any year. Some of the measures have been establishing scorecards in planned or possible measures. Norway and Finland for more precise credit evaluation, implementing credit collection systems and adjusting credit rules. Even Services from external service providers are used extensively in though the Bank increased lending to new customers toward the the Bank’s operations. These services are monitored in line with end of 2020, loan losses are expected to be relatively stable in established guidelines for outsourcing. The Bank strives for a 2021 compared to the end of 2020. high degree of automated, effective and scalable processes that safeguard the needs of customers and the Bank in a satisfactory Solidity and reliable manner. Komplett Bank has a solid financial position and was well-capitalised at the end of 2020. The Bank’s CET1 ratio was 22.7% at Liquidity risk the end of 2020 and the capital adequacy ratio was 26.3%. In The Board has adopted a financial policy, which includes guide- comparison, the Bank’s targeted CET1 ratio is 18.0%, correspond- lines for liquidity management, risk limits, monitoring and reporting ing to the capital requirement of 17.0% plus one percentage point within this area. The guidelines are discussed by the Board at least in the management buffer. once a year. The Board receives regular reports on developments in the Bank’s liquidity risk. Profitability The long-term profitability target for Komplett Bank is a return The Bank’s objective is to have low liquidity risk. Liquidity risk is on equity of more than 20%. In 2020, the Bank’s capital position regularly monitored, and the Bank’s investments are made in such had a negative effect on the return on equity. Based on a CET1 a manner that the liquidity risk is kept at a low level. The Bank’s ratio of 18%, the return on equity adjusted for the additional loss investments principally consist of deposits in other financial provisions related to Covid-19 would have been 18% for the year. institutions and interest-bearing securities with good liquidity and low counterparty risk. In 2021 and onwards, Komplett Bank expects to increase its return on equity towards the long-term target of 20 per cent. The liquidity risk was considered low during 2020. Loans to customers have been financed using paid-in equity, retained earnings, Financial risk subordinated bonds and deposits from the Bank’s customers. Credit risk The board has adopted a credit policy with guidelines for granting The liquidity coverage ratio (LCR) requirement that entered into credit, risk limits, monitoring and reporting. The Board is regularly force on 31 December 2015 has been complied with, and with a updated on important credit risk processes and key indicators. good margin. The Bank had an LCR of 774% as at 31 December The credit risk appetite stipulated in the Bank’s policy for credit 2020, compared to a regulatory requirement of 100%. The Bank’s risk is enforced by the Bank. liquidity has largely been strengthened during 2020 due to the launch of deposits in Sweden. The bank only offers loans to private individuals after a credit assessment that considers the borrower’s willingness and ability Market risk to pay. The credit decision for the individual loan application The Board-approved finance policy also covers guidelines for is based on an assessment of available external and internal market risk (including interest rate and currency risk), risk limits, information about the applicant. monitoring and reporting in this area. The guidelines are reviewed 36 Board of Directors’ Report

by the Board at least once a year. The Board receives regular The Bank has established guidelines to ensure that no discrimi- reports on developments in the Bank’s market risk. nation or harassment occurs based on ethnicity, national origin, descent, skin colour, language, religion or beliefs in matters such The Bank’s objective is to have low market risk. Market risk is as recruitment and pay. The same applies to gender, age, sexual regularly monitored, and the Bank’s investments made in such a orientation, political views or disabilities. For more information, manner that low market risk is maintained. The Bank’s investments please find the separate statement on ESG in this annual report primarily consist of deposits in other financial institutions and for 2020. interest-bearing securities with short-term fixed interest rates and good liquidity. Corporate governance Good corporate governance is a key priority for the Board of In 2020, the Bank made purchases in foreign currencies and has Komplett Bank. The bank seeks to maintain high standards for loans in the Finnish and Swedish markets, in addition to Norway. corporate governance which it considers to be an important Deposits are from customers in the Norwegian, Swedish and prerequisite for long-term value creation. The bank follows the German markets. The Bank’s net currency exposure is kept low Norwegian Code of Practice for Corporate Governance (the and is controlled by a multi-currency facility at another bank. Net “Code”), adopted by the Norwegian Committee for Corporate loans to Finnish and Swedish customers were respectively EUR Governance (NUES) on 17 October 2018. The Bank has a separate 238.1 million and SEK 1,592.1 million, equivalent to NOK 2,493.3 report in this annual report related to corporate governance. There million and NOK 1,661.4 million as at 31 December 2020. The are no significant discrepancies between the Code of Practice and Bank’s open net currency exposure was EUR 2.7 million and SEK Komplett Bank’s practice. -59.2 million as at 31 December 2020. Other information The Bank does not offer fixed-term interest rates on any of its The Bank had extensive development activities in 2020. Among products other than fixed-term deposits in Germany. other things, these were linked to the development of tools that will contribute to the Bank’s present operations and forward-look- Organisation, environment and social responsibility ing projects were initiated to reinforce the Bank’s commercial At the start of the year, the Bank employed 140 persons, position. compared to 152 at year end. The Bank has implemented various activities and welfare initiatives to promote an active social The Board confirms that the Bank satisfies the going concern environment, well-being at the workplace and to prevent and assumption. The Board is not aware of events after the balance reduce sick leave. The Bank established a working environment sheet date that are of material importance to the annual financial committee to ensure that the working environment maintain a statements. satisfactory level in the Bank. Total sick leave in 2020 was 3.0%, down from 3.8% in 2019 Komplett Bank Annual Report 2020 37

Bærum, 24 March 2021 – Board of Directors of Komplett Bank ASA

Stig Eide Sivertsen Bodil Palma Hollingsæter Live Bertha Haukvik Chair of the board Vice Chair of the board Member of the board

Harald Rygh Hjorthen Nishant Fafalia Kristian Tovsen Member of the board Member of the board Member of the board

Jonna Kyllönen Jan Olov Haglund Member of the board Chief Executive Officer 38 Confirmation on Annual Report and Board of Directors’ Report

Confirmation on Annual Report and Board of Directors’ Report

We confirm that, to the best of our knowledge, the Annual report for the period from 1 January 2020 to 31 December 2020 has been prepared in accordance with the applicable accounting standards with such additional information as required by the Accounting Act and gives a true and fair view of the Bank’s assets, liabilities, financial position and results of operations, and that the Board of Directors’ report provides a true and fair view of the development and performance of the business and the position of the Bank, together with a description of the key risks and uncertainty factors that the Bank is facing.

Bærum, 24 March 2021 – Board of Directors of Komplett Bank ASA

Stig Eide Sivertsen Bodil Palma Hollingsæter Live Bertha Haukvik Chair of the board Vice Chair of the board Member of the board

Harald Rygh Hjorthen Nishant Fafalia Kristian Tovsen Member of the board Member of the board Member of the board

Jonna Kyllönen Jan Olov Haglund Member of the board Chief Executive Officer Komplett Bank Annual Report 2020 39 40 Financial statements Komplett Bank Annual Report 2020 41

Financial statements

Statement of profit or loss and other comprehensive income for the period 42

Statement of financial position as at the end of the period 43

Statement of cash flow for the period 44

Statement of changes in equity for the period 45 42 Financial statements

Statement of profit or loss and other comprehensive income for the period

Amounts in NOK million Note 2020 2019 1)

Interest income 2, 10, 23 1,171.9 1,254.2 Interest expenses 2, 7, 10, 23 -144.8 -167.2 Net interest income 1,027.1 1,087.0

Income commissions and fees 2, 10, 23 111.0 125.4 Expenses commissions and fees 2, 10, 23 -49.3 -38.6 Net commissions and fees 61.8 86.8

Net gains / losses (-) on certificates and bonds, and currency 4, 19, 20 11.6 1.7 Total income 1,100.4 1,175.6

Salary and other personnel expenses 11, 14 -143.8 -135.4 General administrative expenses 12 -128.9 -172.4 Total salary and administrative expenses -272.7 -307.8

Ordinary depreciation 5 -72.1 -54.9 Other expenses 11, 12, 17 -42.8 -79.0 Total operating expenses excluding lossses on loans -387.6 -441.7 Losses on loans 2 -364.3 -454.3 Pre-tax operating profit 348.5 279.6 Tax expenses 13 -85.7 -76.7 Profit after tax 16 262.8 202.9

Attributable to Shareholders 253.5 200.0 Additional Tier 1 capital investors 9.3 2.9 Profit after tax 262.8 202.9

Earnings per share (NOK) 16 1.36 1.11 Diluted earnings per share (NOK) 16 1.34 1.06

1) The 2019 numbers are reworked. See note 23

Comprehensive income

Amounts in NOK million 2020 2019

Profit after tax 16 262.8 202.9 Other comprehensive income - - Comprehensive income for the period 16 262.8 202.9 Komplett Bank Annual Report 2020 43

Statement of financial position as at the end of the period

Amounts in NOK million Note 31.12.2020 31.12.2019

Assets Loans and deposits with credit institutions 3, 15, 19 1,204.2 614.7 Loans to customers 2, 15, 19 8,361.2 8,495.8 Certificates and bonds 4, 15, 19, 20 1,848.0 1,329.8 Other intangible assets 5 154.2 143.3 Deferred tax assets 13 - 0.8 Fixed assets 5, 22 13.2 17.3 Other receivables 17, 19 5.5 18.8 Total assets 24, 25 11,586.3 10,620.4

Equity and liabilities Deposits from and debt to customers 7, 15, 19 8,991.8 8,519.5 Other debt 7, 15, 17, 19, 22 142.5 149.5 Subordinated loans 7, 15, 19 65.0 64.9 Deferred tax 13 0.5 - Tax payable 13 82.9 37.0 Total liabilities 9,282.7 8,770.9

Share capital 6, 9 186.6 184.1 Share premium reserve 9 786.7 786.7 Other paid-in equity 9 48.3 45.8 Retained earnings 9 1,037.5 788.4 Tier 1 capital 9 244.6 44.6 Total equity 2,303.6 1,849.6 Total equity and liabilities 24, 25 11,586.3 10,620.4

Bærum, 24 March 2021 – Board of Directors of Komplett Bank ASA

Stig Eide Sivertsen Bodil Palma Hollingsæter Live Bertha Haukvik Chair of the board Vice Chair of the board Member of the board

Harald Rygh Hjorthen Nishant Fafalia Kristian Tovsen Member of the board Member of the board Member of the board

Jonna Kyllönen Jan Olov Haglund Member of the board Chief Executive Officer 44 Financial statements

Statement of cash flow for the period

Amounts in NOK million Note 2020 2019

Cash flow from operating activities Profit after tax 262.8 202.9 Tax expenses 13 85.7 76.7 Taxes paid 13 -37.0 -107.2 Depreciation 5 72.1 54.9 Change in impairments on loans to customers 2 335.6 338.5 Change in loans to customers 2 -201.0 -989.9 Effects of currency on loans to customers in the period 1 274.6 -18.4 Change in deposits from and debt to customers 7 472.3 1,153.9 Effects of currency on deposits from and debt to customers in the period -199.7 -46.9 Purchase of certificates and bonds 4 -2,373.3 -1,688.9 Sale of certificates and bonds 4 1,878.8 795.5 Change in accruals -19.5 31.6 Net cash flow from operating activities 551.3 -197.2

Cash flows from investing activities Investments in fixed assets 5 -1.1 -0.6 Investments in intangible assets 5 -78.3 -98.6 Net cash flow used in investing activities -79.5 -99.2

Cash flows from financing activities Paid-in equity 6 2.4 26.2 Net receipts from issue of Tier 1 capital 6 200.0 - Payment of senior unsecured bond 7 - -400.0 Payment to Tier 1 capital investors -12.4 -3.8 Net cash flow from financing activities 190.1 -377.6

Net cash flow for the period 661.9 -674.0 Cash and cash equivalents at the start of the period 3 614.7 1,232.4 Effects of currency on loans and deposits with credit institutions in the period 1 -72.4 56.3 Cash and cash equivalents at the end of the period 3 1,204.2 614.7 Komplett Bank Annual Report 2020 45

Statement of changes in equity for the period

Share premium Additional Tier Other paid-in Retained Amounts in NOK million Share capital reserve 1 capital equity earnings Total Equity

Equity as at 01.01.2019 172.7 771.9 44.6 42.2 588.4 1,619.8 Changes deriving from profit or loss: Profit after tax - - - - 202.9 202.9 Changes deriving from transactions with owners: Share capital increase 11.4 14.8 - - - 26.2 Other changes recognized in equity Changes in other paid-in equity due to - - - 3.6 - 3.6 share options program Net interest paid to additional Tier 1 capital - - - - -2.9 -2.9 investors equity as at 31.12.2019 184.1 786.7 44.6 45.8 788.4 1,849.5 Changes deriving from profit or loss: Profit after tax - - - - 262.8 262.8 Changes deriving from transactions with owners: Share capital increase 2.5 - - - - 2.5 Paid-in additional Tier 1 capital - - 200.0 - -4.4 195.7 Other changes recognized in equity Changes in other paid-in equity due to share - - - 2.5 2.5 options program Net interest paid to additional Tier 1 capital - - - - -9.3 -9.3 investors Equity as at 31.12.2020 186.6 786.7 244.6 48.3 1,037.5 2,303.6

The board of directors have asked the general assembly for a power of attorney to distribute dividend later in 2021. The board of directors have also proposed a dividend for distribution after the general meeting.

Please see the board’s annual report for further information. 46 Notes to the financial statements

Notes to the financial statements

Note 1 Accounting principles 47 Note 14 Share option programme 100

Note 2 Loans to customers 53 Note 15 Liquidity and interest rate risk 102

Note 3 Loans and deposits with credit institutions 84 Note 16 Earnings per share and key figures 105

Note 4 Certificates and bonds 84 Note 17 Related parties and other information 106

Note 5 Intangible assets and fixed assets 85 Note 18 Risk management 106

Note 6 Shareholders 86 Note 19 Classification of financial instruments 107

Note 7 Specification of debt 88 Note 20 Financial instruments assessed at fair value 108

Note 8 Items not recognised in the balance sheet 89 Note 21 Alternative performance measures 109

Note 9 Capital adequacy 89 Note 22 Leasing agreements 111

Note 10 Specification of interest and commission and Note 23 Reworked comparable numbers 112 fees 91 Note 24 Contingent liabilities 113 Note 11 Payments to employees and remuneration to Note 25 Covid 19 update 113 trustees 92 Note 26 Events after the reporting period 113 Note 12 Specification of costs 98

Note 13 Tax 98 Komplett Bank Annual Report 2020 47

Note 1 Accounting principles

At the end of 2020, Komplett Bank ASA (“The bank”) offered con- Loans to customers are recognised in the financial position at the sumer loans, credit cards and high-interest accounts to private time when the loan is paid out to the customer. Financial assets individuals in Norway and Sweden and consumer loans and credit are derecognised when the Bank’s rights to receive cash flows cards to private individuals in Finland. The Bank also offers point from the asset cease. Financial liabilities are derecognised from of sales finance products in Norway and Sweden in collaboration the date the rights to the contractual terms are fulfilled, expired or with the Komplett Group. The Bank offers deposit products to cancelled. German customers. The company is headquartered at Vollsveien 2, 1366 Lysaker. 1a Financial liabilities Financial liabilities covering deposits from and debt to customers, The financial statements for 2020 have been prepared in subordinated loans, other debt and senior unsecured bond are accordance with International Financial Reporting Standards (IFRS) recognised on initial recognition at fair value less any transaction approved by the European Union. costs on establishment. In subsequent periods, the liabilities are measured at amortised cost in accordance with the effective Unless otherwise directly indicated in the notes, amounts are interest method (internal rate of return), and the difference stated in NOK millions. between two periods is recognised through profit or loss under the item interest expenses. 1. Financial instruments Financial assets and liabilities mainly cover loans to and deposits 1b. Financial assets with credit institutions, loans to customers, certificates and bonds, On initial recognition, financial assets are classed in one of the other receivables, subordinated loans, senior unsecured bond, categories pursuant to the table below, depending on the Bank’s other debt and deposits from and debt to customers. Financial business model for management of the financial assets and the instruments are recognised in the balance sheet on the date the hallmarks of the financial assets contractual cash flow. Bank will become party to the instrument’s contractual terms. 48 Notes to the financial statements

Category according to Key financial IFRS 9 assets Criterion for classification in the category and accounting treatment for such assets

At fair value Certificates and The category mainly applies to financial assets classed as held for trading. The instrument will be through profit or bonds classed as held for trading where it has been acquired or assumed with the purpose of a short-term loss sale.

The portfolio of certificates and bonds is classed in this category as these items are controlled and valued based on fair value in accordance with the Bank’s established guidelines for investments in certificates and bonds.

On initial recognition of assets in this category, the assets are measured at fair value. In subsequent periods, assets are measured at fair value, with any changes in value being recognised in the accounting line net gains/losses on certificates and bonds, and currency.

Income from interest on certificates and bonds is presented in the income statement under interest income.

Financial instruments at fair value are placed in the different levels below based on the quality of market data for the individual type of instrument. The levels reflect the hierarchy that prevails in IFRS on how to measure fair value. In the events that input data from level 1 are available, this should be used rather than input from level 2 and 3.

Level 1: Valuation based on listed prices in an active market Financial instruments valued using listed prices in active markets for identical assets or liabilities are placed in level 1. This category includes government bonds and bonds with pre-emption rights traded in active markets.

Level 2 Valuation based on observable market data Financial instruments valued using information where prices are directly or indirectly observable for the assets or liabilities are placed in level 2. This category includes government bond funds.

Level 3 Valuation based on non-observable market data If a valuation cannot be established in levels 1 or 2, valuation methods are used that are based on non- observable market data..

Loans and Financial assets which are held in a business model whose object is to hold financial assets in order Financial assets deposits to receive contractually regulated cash flows having contractual terms that lead at specific times measured at with credit to cash flows which solely constitute the payment of the principal and outstanding interest on the amortised cost institutions principal, shall be measured at amortised cost unless decisions intrinsic to the company would lead to measurements at fair value over profit and loss. Loans to customers Loans to customers, which mostly consist of framework loans and credit card receivables are measured at amortised cost. Upon initial recognition, the asset’s fair value is the amortised cost Other (normally the acquisition cost) plus transaction costs which are directly attributable to the acquisition receivables or issuing of the financial asset. In subsequent periods, the amortised cost is the value upon initial recognition with the inclusion of capitalised interest net of received cash flows, with the addition or subtraction for changes in the net present value of expected contractual cash flows and net of recorded losses on loans.

The effective interest rate is the interest rate which discounts the loan’s contractual cash flows (interest, repayments and fees) over the expected term to the loan’s amortised cost at the time of the establishment.

For assets that are not credit impaired, the effective interest is calculated at the asset’s book value before provisions for loan losses. For credit impaired assets, the effective interest rate is computed on the asset’s book value (amortised cost).

The Bank considers that a loan or a claim on a client is credit impaired when the loan is more than 90 days past due on the balance sheet date, has been transferred to a debt collection agency (DCA) for recovery, the client is deceased or there is suspicion of fraud. Such exposures are categorised as loans in stage 3. Komplett Bank Annual Report 2020 49

Category according to Key financial IFRS 9 assets Criterion for classification in the category and accounting treatment for such assets

The Bank will derecognise a loan from its balance sheet when the rights to the cash flows have expired, normally as a consequence of the client paying principal and interest, but also as a sale to a third party. The Bank will also remove a loan (or a part thereof) with the according loan loss provisions from the balance sheet when the Bank does not have a reasonable expectation to recover the loan (or part thereof). The Bank categorises such a removal from the balance sheet as a realised loss.

The Bank will, upon bankruptcy or a legal judgement, record a credit loss as a realised loss. This also applies to those cases where the Bank has ended recovery activities or relinquished parts or the entire exposure. Such cases have been considered immaterial for 2019 and 2020.

Realised loan losses are derecognised in the Bank’s accounts. Loans that have been sold as a consequence of portfolio sales are derecognised in the accounts, and differences originating from settlements that are lower than the gross amount leads to the Bank recognising a realised losses.

The Bank will make provisions for losses on assets that are measures at amortised cost. For assets not having exhibited a significant increase in credit risk (loans in stage 1), the Bank will make provisions for expected losses from default which may arise in the lesser of the asset’s expected life time or 12 months from balance sheet date. For other assets (stage 2 and stage 3), the Bank will make provisions for expected losses over the asset’s expected remaining life time. The Bank has defined lifetime as the expected time horizon for default or full repayment of principal and interest, whichever occurs first.

The Bank considers changes in the risk of default since initial recognition as decisive for assessing whether there is a significant increase in credit risk. The Bank considers a loan to be defaulted when it is 90 days or more past due, if the loan has been transferred to a DCA for recovery, if the client is deceased or if there is a suspicion of fraud.

The model employed by the Bank to calculate loan losses includes, inter alia, the probability of default (PD), discount rate, exposure at the time of default (EAD) and loss given default (LGD).

The Bank utilises various indicators to consider whether an asset has been subject to a significant increase in credit risk. Such information is based on the actual behaviour of the client, where Komplett Bank has established set of rules that are identified as indicators for significant increase in credit risk. Examples of such rules include a high utilisation of credit limits combined with the loan being past due, new clients not paying their first invoice (”straight rollers”), and loans that in the past have been 30 days or more past due and that again are past due. All cases where the loan is more than 30 days past due are defined as a significant increase in credit risk compared to initial recognition.

Transitions among stages 1, 2 and 3 A loan that at balance sheet date is more than 90 days past due, will be transferred to a DCA within a few working days. It is not possible for loans that have been sent to a DCA to be transferred back to stage 1 or 2, and such exposures will hence remain in stage 3 until they have been repaid or derecognised. As at 31 December 2020 and 31 December 2019 the possible amount transferred from stage 3 to stage 2 or stage 1 are insignificant. Loans that are 90 days or more past due on the balance sheet date and where the client repays before being transferred to the DCA, an amount which is at least equivalent to the minimum payment, will have the possibility for a subsequent transfer to stage 2 or 1. Loans that previously have been at least 30 days past due in relation to a previously agreed payment plan, and that again are past due, will remain quarantined in stage 2 for three months. The quarantining does not restrict the loan from being transferred to stage 3 whilst in quarantine.

Description of the model for calculating expected credit losses and the Bank’s calculation of PD, EAD and LGD The Bank calculates the PD by using historical data based on the client’s actual behaviour. The Bank has categorised its exposures into segments that the Bank considers sharing the same credit risk profile. Each of these segments is monitored using monthly snapshots where each loan is monitored over the segment’s defined life time. For stage 1, the life time is limited to 12 months, while the lifetime may extend beyond this in stage 2 as the Bank here uses the PD for the lifetime. Whilst being monitored, it is then decided whether the loan is defaulted, and this is taken into consideration for the Bank’s probability calculations. The Bank has decided to use up to 24 data points for its assessment of PD. The Bank is updating its parameters for PD at least once per quarter. For new products, or for products with limited data points, the Bank will be using existing products with similar characteristics in order to extrapolate missing data points. The representativeness of the underlying data going forward is continually evaluated by the Bank’s management. 50 Notes to the financial statements

Category according to Key financial IFRS 9 assets Criterion for classification in the category and accounting treatment for such assets

The Bank revised its methodology for estimating LGD in Q4 2019, by switching from an LGD based on portfolio sales to third parties, to applying expected future cash flows from defaulted loans. These expected cash flows are based on the Bank’s own records to the extent that this is available as well as estimates from third parties with experience from similar portfolios. The Bank has decided to apply expected repayments for 15 years from the time of default. Given the Bank’s relatively short track history and limited experience data, there will be some degree of uncertainty for the cash flow estimates. The present value of the cash flows is computed by discounting these with the exposures’ effective interest rates. The loss is then computed as the difference between the book value of the asset at the time of defaulting and the discounted value of the future expected cash flows. In 2020, the Bank entered into a forward flow agreement for the sale of defaulted consumer loans Norway. The terms of the agreement stipulate that 80 per cent of the remaining balance at 180 days after transfer to the DCA will be sold for a determined amount. The Bank has considered the effects this agreement has on its expected cash flows when calculating delinquencies for Norway as at 31 December 2019. The effects did not have a significant impact on the Bank’s calculation of expected credit losses. The agreement has a duration of 12 months.

The forward flow agreement is defined as a financial derivative. The bank has made the conclusion that the value of the derivate is insignificant and the agreement is not capitalized. The assessment is based in the fact that the agreement is sealed in 2020 on market conditions in addition to a comparison of the LGD that the bank gets with the agreement compared with LGD`s in observable markets for comparable products.

When calculating the expected credit losses in stage 1 and 2, the Bank is discounting these losses to the balance sheet date, using the effective interest rate as the discount rate. The Bank is estimating the time for when the expected loss is foreseen to take place in order to determine the duration of the discounting.

The Bank’s exposure at the time of default is in the model restricted to concern the loans that are not past due. The Bank revokes automatically unutilised credit lines once the loan is past due. For loans not being past due, the Bank is estimating expected credit limit utilisation based on historical data. This applies to all products where the client has the possibility to draw on unutilised credit limits.

The Bank is also applying forward looking elements for its credit loss model. The Bank’s overall losses are adjusted by considering a certain set of macro-economic variables. The credit losses are adjusted on a portfolio basis, and are based on the expected development of the economies in the countries in which the Bank is offering loans. The macro-economic variables are not utilised to transfer loans among the various stages. The Bank is applying three sets of indicators from OECD to the expected credit loss models for the respective countries: 1) the expected development in the unemployment rate, 2) the growth in the gross domestic product and 3) the short-term interest rate level. The Bank applies three scenarios when considering the macro-economic adjustment: a positive outlook, a neutral outlook and a negative outlook. The Bank assigns a probability and weight to these scenarios based on the expectations for the macro-economic situation. There is uncertainty related to the estimates as they are forward-looking.

The Bank considers that the Norwegian macro-economic variables are favourable, considering the Covid-19 pandemic, and has on that basis determined an adjustment of the losses with a factor of 104 per cent (87 per cent in 2019). The Finnish variables are considered less favourable for the Bank’s credit loss levels and are adjusted with a factor 106 per cent (92 per cent in 2019). The Bank considers that the Swedish outlook is somewhat weaker, and has as a consequence increased the expected credit losses with a factor of 112 per cent (123 per cent in 2019). The development in the GNP is estimated better as at 31 December 2020 compared with 31 December 2019 before the Covid-19 outbreak for Sweden. This, together with higher weighting of a neutral scenario is the reason for reduced macro-economic provision for Sweden in 2020 compared with 2019.

The Bank has developed and implemented a set of internal control measures that contributes to validate the input data which are used in the impairment model. The Bank will in 2021 work further on implementing validation tools in order to ensure that the estimates and conditions on which the model is based, work as intended.

The Bank does not use the simplification rules for loss impairment for which the IFRS 9 framework allows. This means that the Bank does not use the exemption for low credit risk or simplifications linked to 12-month probability of default (PD). Komplett Bank Annual Report 2020 51

Vesentligste Kategori finansielle Kriteriet for å havne i kategorien og regnskapsmessig behandling av etter IFRS 9 eiendeler eiendeler som havner i kategorien

Losses on loans in the statement of profit and loss In the statement profit and loss, the item Losses on loans consists of the book value of impaired loans, the difference between the book value and the real value of the consideration for the sale (portfolio sale), payments that are received on loans that have previously been impaired and changes to the impairments of loans.

The effect of IFRS 9 on capital adequacy As of the date of implementation (1 January 2018), the effect of the transition from IAS 39 to IFRS 9 was an increase in loss impairments of NOK 157.8 million. After tax effects, this resulted in a reduction in equity of NOK 118.4 million. Komplett Bank has not restated the comparative figures to conform to the IFRS 9 standard. The Bank uses the transition rules published by the EU, which permit the gradual phasing-in of the effects that IFRS 9 will have on the Bank’s capital adequacy. In 2018, 5 per cent of the transitional effect was recognised in line with the transitional rules and a further 10 per cent in 2019. In 2020 additional 15 per cent of the transitional effect was recognised, while the corresponding figures for subsequent years are expected to be as follows: 20 per cent (2021) and 25 per cent (2022). The transition rules will be fully phased in at the beginning of 2023.

2. Fixed assets means the amount in cash or cash equivalents paid at the date Fixed assets are recognised at historical cost less accumu- of acquisition or manufacture. Expenses relating to maintenance lated depreciation and any impairments. The cost includes of software, systems etc. are recognised as expenses on an the purchase price of the asset and other directly attributable ongoing basis. Assets with a limited lifetime are amortised using costs, such as shipping expenses and non-refundable taxes and the straight-line method over the expected useful life from the purchase fees. Ordinary depreciation charges operating expenses date when the asset is available for use. The Bank assess that and appears on a separate line in the income statement, together using straight-line depreciation is a systematic allocation of the with depreciation of intangible assets. Depreciation is based on depreciable amount over the expected useful life of the asset. In the cost minus the expected residual value and allocated on a the case of intangible assets with a limited useful life, where there straight-line basis over the expected useful life of the asset. The are indications of impairment, the Bank carries out measurements value of fixed assets is derecognised in the balance sheet on dis- of the asset’s recoverable amount. The recoverable amount is the posal or when no further future economic benefits are expected higher of the net sales value and value in use. If the recoverable from using the asset or on disposal. amount is lower than the carrying amount, the intangible asset is written down to the recoverable amount. Intangible assets are In cases where there are indications of an impairment of non-cur- derecognised on disposal or when no further future economic rent assets, the Bank will measure the non-current asset’s benefits are expected from using or disposing of the asset. The recoverable amount. The recoverable amount is the higher of the Bank’s intangible assets are depreciated over 3-5 years. net sales value and the value in use. If the recoverable amount is lower than the carrying amount, the non-current asset is written Expenses from in-house development are recognised in the down to the recoverable amount. The impairment is reversed in balance sheet to the extent that a future financial benefit attached cases where the criteria for recognising an impairment are no to the development of an identifiable intangible asset can be longer present. In no circumstances can the reversal lead to the identified and the expenses can be reliably measured. Otherwise, asset’s value exceeding the original cost price or the amount that these expenses are recognised as expenses on an ongoing basis. would have been recognised in the balance sheet if the asset had followed the original depreciation plan. Where the depreciation 4. Tax plan is changed, the effect is allocated over the remaining depreci- 4a. Deferred tax liabilities/deferred tax assets ation period. The Bank’s fixed assets are depreciated from 3-5 Deferred tax liabilities/deferred tax assets are recognised in line years. with IAS 12. Deferred tax liabilities/deferred tax assets are calculated at a nominal rate based on temporary differences that exist 3. Other intangible assets between the accounting and taxable values existing at the end of Intangible assets are recognised in the balance sheet to the the accounting period. Tax-increasing and tax-reducing temporary extent that it is probable that financial benefits will accrue to the differences that reverse or could be reversed in the same period Bank in the future and these expenses can be measured reliably. are set off and recognised net in the balance sheet. The applicable Intangible assets are recognised in the balance sheet at cost rate of tax forming the basis for the calculation of deferred tax minus accumulated amortisation and any impairments. Cost liabilities/deferred tax assets is 25 per cent. 52 Notes to the financial statements

Deferred tax assets are recognised in the balance sheet to the 8. Business areas extent it is probable that the asset will be realised at a future date. The Bank views its business as a collective business area. The business area is linked to unsecured financing and as at 31 4b. Tax expense December 2020 consisted of three loan products (credit card The tax expense in the income statement includes both changes and loans, and POS solutions in cooperation with the Komplett to deferred tax and tax payable for the period. The tax expense Group) and deposit products for Norwegian. Swedish and German also includes under- or over-provisions for tax payable relating to customers. In 2020, all business were directed at the Norwegian, previous periods. Swedish and Finnish markets and there was no significant differentiation connected with regular monitoring, management 4c. Tax payable and controls in the Bank’s geographical business area. The man- Tax payable for the current present and previous periods, to the agement of the Bank also calls for uniform reporting of business extent this has not been paid, is recognised as a liability. Tax areas. The company’s top management is the Bank’s Board of payable is tax calculated on the taxable profit for the year. The Directors. The disclosures presented in Note 2 under the headline applicable rate of tax forming the basis for the calculation of tax “information on products and geographical distributions” are the payable is 25 per cent. The tax rate is industry-specific. Tax on same as used for internal management. paid interest that relates to Tier 1 capital is recognised against equity and reduces the tax payable. 9. Statement of cash flow The statement of cash flow has been prepared according to 5. Pensions the indirect method. Cash and cash equivalents consist of bank The Bank is subject to the Compulsory Occupational Pensions deposits. Act and has a pension plan that satisfies the statutory requirements. The Bank has a defined contribution plan that applies to 10. Share-based remuneration all employees. Contributions to the plan are paid on an ongoing Options value for the granted options are established based on basis and, for this reason, no provision is made for future pension the full market value calculated using observed trading prices liabilities at the end of the period. at the grant date and Black & Scholes’s option pricing model. Risk-free interest, using 5-year government bonds, is used as 6. Currency a prerequisite in the calculation. The fixed price for exercising The Bank uses NOK as its presentation currency. Balance sheet the positions is NOK 1 for all outstanding options. In the case of items in foreign currency are converted to NOK using the currency options granted in 2015 and later, there is also a variable price exchange rate at the balance sheet date. Items in foreign currency for exercising the positions, which is equivalent to the employer’s included in the income statement are converted to NOK using contribution at the date of exercise. The value of vested options is the average exchange rate. Over the course of the year, the Bank recognised in other paid-in equity. did not receive any significant revenue in any currency other than NOK, SEK and EUR. The Bank also did not incur any significant 11. Leasing agreements costs in any currency other than NOK, SEK and EUR. The Bank’s IFRS 16 – Leases entered into force from 1 January 2019 and functional currency is NOK. Currency exchange differences that replaced IAS 17 Leases. The standard removes the distinction are recognised in the statement of profit or loss as of 31.12.2020 between operating and finance leases for the lessee and is a equalled NOK 5.2 million in cost (8.9 million in 2019). The Bank’s model to be used for all leases with individual specific exceptions. currency exposure as at 31.12.2020 is EUR 2.7 million (7.7 million Assets are depreciated over the lease term, while the commit- EUR in 2019) and SEK -59.2 million (32.6 million SEK in 2019). ment is measured at the present value of agreed, not paid lease. Leases will be treated as financial instruments included in the 7. Estimates scope of application of IFRS 9 for impairments. See note 22 for The estimation of valuation items and discretionary valuations is further information on the Bank’s leasing agreements. The only based on the Bank’s historical experience and likely expectations agreement the bank is involved with related to IFRS 16 is rental of of future events. The Bank regards loss provisions as described in the premises for the bank. The bank is not part of any agreement item 1 as a central valuation item where discretionary valuations where the bank operates as lessee. also act as a basis.

For other descriptions of significant estimates and sensitivity analyses see note 2. Komplett Bank Annual Report 2020 53

Note 2 Loans to customers

LOANS TO CUSTOMERS

NOK million 31.12.2020 31.12.2019

Gross loans to customers 9,506.9 9,305.9 Gross loans to customers 9,506.9 9,305.9 Impairment of loans to customers 1,145.8 810.1 Net loans to customers 8,361.2 8,495.8

DEFAULTS AND LOSSES

NOK million 31.12.2020 31.12.2019

Gross defaulted loans to customers 1) 2,039.2 1,284.9 Impairment of loans to customers in stage 3 829.7 493.6 Net defaulted loans to customers 1,209.6 791.3 Impairments of loans to customers in stage 1 and 2 316.1 316.5

1) Defaulted loans compromise, amongst other, of loans which are 91 days or more overdue according to agreed payment schedule. Such loans continue to be considered defaulted regardless og future payment status. Defaulted loans also comprise of loans with indications of unlikeness to pay.

REALIZED LOSSES

NOK million 2020 2019

Realized losses in the period 28.6 115.8

IMPAIRMENT OF STAGE 3 LOANS TO CUSTOMERS (BALANCE SHEET ITEM)

NOK million 31.12.2020 31.12.2019

Impairment of loans at beginning of period 493.6 268.8 +/- Change in stage 3 impairment of loans in the period 336.1 224.8 Impairment of stage 3 loans to customers 829.7 493.6 54 Notes to the financial statements

IMPAIRMENT OF STAGE 1 AND 2 OF LOANS (BALANCE SHEET ITEM)

NOK million 31.12.2020 31.12.2019

Impairment of loans at beginning of period 316.5 202.8 +/- Change in impairment on stage 1 and stage 2 of loans to customers in the period -0.4 113.7 Impairment on stage 1 and 2 of loans to customers 316.1 316.5

The Bank has for extensive parts of 2019 and 2020 been part of an agreement with Axactor to continuously transfer defaulted loans to customers in a forward flow agreement. The agreement included Norwegian consumer loans and credit card loans. In 2020 there has been transferred gross loans to customers of NOK 90.1 million to Axactor (NOK 776 million in 2019) . The bank has recognised a positive effect in losses on loans due to the transfer of loans to customers in 2019 and a unsignificant loss on the transfers in 2020.

100 per cent of loans to customers is to private customer as at 31 December 2020 (100 per cent as at 31 December 2019). The Bank has not issued any guarantees as at 31 December 2020 (none as at 31 December 2019).

Of the Bank’s financial assets, onlyloans to customers have, in the opinion of the Bank, been impaired and consequently, no impairments have been recognised for other financial assets. Loans and deposits with credit institutions and other receivables are valuated at amortised cost, but there are not any impairments recognized for these posts as at 31 December 2020 (or as at 31 December 2019).

RECONCILIATION OF LOSSES ON LOANS

NOK million 2020 2019

+/- Change in stage 3 impairment of loans in the period 336.1 224.8 +/- Change in impairment on stage 1 and 2 of loans to customers in the period -0.4 113.7 Realized losses in the period 28.6 115.8 Losses on loans 364.3 454.3

AGEING OF LOANS TO CUSTOMERS

NOK million 31.12.2020 31.12.2019

Loans not past due 5,989.8 6,055.7 Past due 1 - 30 days 1,153.0 1,321.2 Past due 31 - 60 days 228.0 449.4 Past due 61 - 90 days 96.9 196.8 Past due 91+ days 2,039.2 1,282.8 Total gross loans to customers 9,506.9 9,305.9

AGEING OF LOANS IN PERCENTAGE OF TOTALT GROSS LOANS TO CUSTOMERS

NOK million 31.12.2020 31.12.2019

Loans not past due 63% 65% Past due 1 - 30 days 12% 14% Past due 31 - 60 days 2% 5% Past due 61 - 90 days 1% 2% Past due 91+ days 21% 14% Total 100% 100% Komplett Bank Annual Report 2020 55

RISK CLASSES

Risk stagees 31.12.2020 31.12.2019 Horizon Interval of PD

Established loans Norway risk stage A 25% 27% 12 months 4.1% - 8,8% New loans Norway risk stage A 2% 5% 12 months 8.8% Established loans Norway risk stage B 3% 4% Lifetime 39.7% - 56,2% New loans Norway risk stage B 0% 1% Lifetime 56.2% Established loans Norway risk stage C 0% 1% Lifetime 71.6% - 84,8% New loans Norway risk stage C 0% 0% Lifetime 84.8% Established loans Norway risk stage D 7% 5% Lifetime 100.0% New loans Norway risk stage D 0% 0% Lifetime 100.0% Established credit card loans risk stage A 4% 5% 12 months 0.0% - 5,7% New credit card loans risk stage A 0% 0% 12 months 0.0% - 9,2% Established credit card loans risk stage B 1% 2% Lifetime 33.3% New credit card loans risk stage B 0% 0% Lifetime 42.9% Established credit card loans risk stage C 0% 0% Lifetime 7.5% New credit card loans risk stage C 0% 0% Lifetime 83.7% Established credit card loans risk stage D 2% 1% Lifetime 100.0% New credit card loans risk stage D 0% 0% Lifetime 100.0% Loan Finland risk stage A 19% 22% 12 months 8.4% - 11,3% Loan Finland risk stage B 2% 3% Lifetime 50.9% - 56,4% Loan Finland risk stage C 1% 1% Lifetime 83.1% - 89,1% Loan Finland risk stage D 9% 5% Lifetime 100.0% Pos Finance risk stage A 5% 4% 12 months 9.2% Pos Finance risk stage B 1% 1% Lifetime 42.9% Pos Finance risk stage C 1% 1% Lifetime 100.0% Loans Sweden risk stage A 13% 10% 12 months 8.4% Loans Sweden risk stage B 1% 1% Lifetime 50.9% Loans Sweden risk stage C 0% 0% Lifetime 83.1% Loans Sweden risk stage D 4% 2% Lifetime 100.0% New credit card loans Sweden risk stage A 1% 1% 12 months 0.0% - 9,2% New credit card loans Sweden risk stage B 0% 0% Lifetime 42.9% New credit card loans Sweden risk stage C 0% 0% Lifetime 83.7% New credit card loans Sweden risk stage D 0% 0% Lifetime 100.0% New credit card loans Finland risk stage A 0% 0% 12 months 0.0% - 9,2% New credit card loans Finland risk stage B 0% 0% Lifetime 42.9% New credit card loans Finland risk stage C 0% 0% Lifetime 83.7% New credit card loans Finland risk stage D 0% 0% Lifetime 100.0% Total 100% 100%

The ratios shown as of 31 December 2020 and 31 December 2019 in the table above shows the distribution of each risk class in percentage of gross loans to customers. 56 Notes to the financial statements

MAXIMUM EXPOSURE FOR LOANS TO CUSTOMERS AS AT 31.12.2020

NOK million stage 1 stage 2 stage 3

Credit risk rating grade Established loans Norway risk stage A 3,268.9 - - New loans Norway risk stage A 169.0 - - Established loans Norway risk stage B - 261.4 - New loans Norway risk stage B - 6.0 - Established loans Norway risk stage C - 35.8 - New loans Norway risk stage C - 0.6 - Established loans Norway risk stage D - - 623.9 New loans Norway risk stage D - - 0.9 Established credit card loans risk stage A 999.2 - - New credit card loans risk stage A 34.1 - - Established credit card loans risk stage B - 75.0 - New credit card loans risk stage B - 0.6 - Established credit card loans risk stage C - 8.0 - New credit card loans risk stage C - 0.0 - Established credit card loans risk stage D - - 197.3 New credit card loans risk stage D - - 0.0 Loan Finland risk stage A 2,330.0 - - Loan Finland risk stage B - 220.3 - Loan Finland risk stage C - 67.0 - Loan Finland risk stage D - - 795.0 Pos Finance risk stage A 424.5 - - Pos Finance risk stage B - 65.0 - Pos Finance risk stage C - - 104.5 Loans Sweden risk stage A 1,443.6 - - Loans Sweden risk stage B - 85.1 - Loans Sweden risk stage C - 20.1 - Loans Sweden risk stage D - - 326.5 New credit card loans Sweden risk stage A 630.5 - - New credit card loans Sweden risk stage B - 1.3 - New credit card loans Sweden risk stage C - 0.0 - New credit card loans Sweden risk stage D - - 0.9 New credit card loans Finland risk stage A 21.5 - - New credit card loans Finland risk stage B - 0.7 - New credit card loans Finland risk stage C - 0.1 - New credit card loans Finland risk stage D - - 0.6 Total maximum exposure for loans to customers 9,321.2 847.2 2,049.7

Maximum exposures for loans to customers include both drawn and undrawn credit facilities. Komplett Bank Annual Report 2020 57

MAXIMUM EXPOSURE FOR LOANS TO CUSTOMERS AS AT 31.12.2019

NOK million stage 1 stage 2 stage 3

Credit risk rating grade Established loans Norway risk stage A 3,274.0 - - New loans Norway risk stage A 730.1 - - Established loans Norway risk stage B - 368.6 - New loans Norway risk stage B - 69.4 - Established loans Norway risk stage C - 67.1 - New loans Norway risk stage C - 15.0 - Established loans Norway risk stage D - - 453.0 New loans Norway risk stage D - - 37.0 Established credit card loans risk stage A 1,138.0 - - New credit card loans risk stage A 30.4 - - Established credit card loans risk stage B - 167.7 - New credit card loans risk stage B - 2.8 - Established credit card loans risk stage C - 20.7 - New credit card loans risk stage C - 0.3 - Established credit card loans risk stage D - - 135.9 New credit card loans risk stage D - - 0.6 Loan Finland risk stage A 2,425.4 - - Loan Finland risk stage B - 232.9 - Loan Finland risk stage C - 56.6 - Loan Finland risk stage D - - 454.2 Pos Finance risk stage A 368.9 - - Pos Finance risk stage B - 65.1 - Pos Finance risk stage C - - 73.7 Loans Sweden risk stage A 1,108.3 - - Loans Sweden risk stage B - 76.2 - Loans Sweden risk stage C - 18.4 - Loans Sweden risk stage D - - 172.7 New credit card loans Sweden risk stage A 242.9 - - New credit card loans Sweden risk stage B - 0.4 - New credit card loans Sweden risk stage C - 0.1 - New credit card loans Sweden risk stage D - - 0.1 New credit card loans Finland risk stage A 4.9 - - New credit card loans Finland risk stage B - 0.3 - New credit card loans Finland risk stage C - 0.0 - New credit card loans Finland risk stage D - - 0.0 Total maximum exposure for loans to customers 9,323.0 1,161.8 1,327.1

Maximum exposures for loans to customers include both drawn and undrawn credit facilities. 58 Notes to the financial statements

RECONCILIATION OF GROSS LOANS TO CUSTOMERS

NOK million stage1 stage2 stage3 Total

Gross loans 01.01.2020 6,840.8 1,180.2 1,284.9 9,305.9 Q1 2020: Transfer from stage 1 to stage 2 -455.4 455.4 - - Transfer from stage 1 to stage 3 -166.1 - 166.1 - Transfer from stage 2 to stage 3 - -281.8 281.8 - Transfer from stage 3 to stage 2 - 3.6 -3.6 - Transfer from stage 2 to stage 1 252.0 -252.0 - - Transfer from stage 3 to stage 1 2.4 - -2.4 - New assets 1,133.8 108.5 106.9 1,349.4 Assets derecognized -600.9 -58.6 -161.6 -821.2 Gross loans 31.03.2020 7,006.7 1,155.2 1,672.1 9,834.0 Q2 2020: Transfer from stage 1 to stage 2 -386.4 386.4 - - Transfer from stage 1 to stage 3 -158.2 - 158.2 - Transfer from stage 2 to stage 3 - -235.6 235.6 - Transfer from stage 3 to stage 2 - 2.7 -2.7 - Transfer from stage 2 to stage 1 248.0 -248.0 - - Transfer from stage 3 to stage 1 3.4 - -3.4 - New assets 431.6 18.2 -20.4 429.3 Assets derecognized -547.9 -57.0 -189.0 -793.9 Gross loans 30.06.2020 6,597.0 1,022.0 1,850.5 9,469.5 Q3 2020: Transfer from stage 1 to stage 2 -354.4 354.4 - - Transfer from stage 1 to stage 3 -125.8 - 125.8 - Transfer from stage 2 to stage 3 - -187.5 187.5 - Transfer from stage 3 to stage 2 - 5.0 -5.0 - Transfer from stage 2 to stage 1 206.2 -206.2 - - Transfer from stage 3 to stage 1 4.3 - -4.3 - New assets 736.5 56.1 35.4 827.9 Assets derecognized -506.3 -40.3 -261.4 -808.0 Gross loans 30.09.2020 6,557.5 1,003.5 1,928.5 9,489.4 Q4 2020: Transfer from stage 1 to stage 2 -317.5 317.5 - - Transfer from stage 1 to stage 3 -106.8 - 106.8 - Transfer from stage 2 to stage 3 - -198.1 198.1 - Transfer from stage 3 to stage 2 - 3.4 -3.4 - Transfer from stage 2 to stage 1 189.9 -189.9 - - Transfer from stage 3 to stage 1 11.6 - -11.6 - New assets 796.5 43.5 -8.0 832.0 Assets derecognized -590.9 -52.3 -171.2 -814.4 Gross loans 31.12.2020 6,540.4 927.5 2,039.2 9,506.9 Komplett Bank Annual Report 2020 59

RECONCILIATION OF GROSS LOANS TO CUSTOMERS

NOK million stage1 stage2 stage3 Total

Gross loans 01.01.2019 6,313.2 1,158.2 844.6 8,316.0 Q1 2019: Transfer from stage 1 to stage 2 -430.7 430.7 - - Transfer from stage 1 to stage 3 -48.0 - 48.0 - Transfer from stage 2 to stage 3 - -176.5 176.5 - Transfer from stage 3 to stage 2 - 0.7 -0.7 - Transfer from stage 2 to stage 1 251.4 -251.4 - - Transfer from stage 3 to stage 1 0.1 - -0.1 - New assets 886.5 57.9 14.8 959.2 Assets derecognized -538.4 -119.4 -214.3 -872.1 Gross loans 31.03.2019 6,434.1 1,100.1 868.9 8,403.2 Q2 2019: Transfer from stage 1 to stage 2 -401.4 401.4 - - Transfer from stage 1 to stage 3 -50.8 - 50.8 - Transfer from stage 2 to stage 3 - -145.7 145.7 - Transfer from stage 3 to stage 2 - 0.6 -0.6 - Transfer from stage 2 to stage 1 218.6 -218.6 - - Transfer from stage 3 to stage 1 0.9 - -0.9 - New assets 925.7 75.7 16.1 1,017.5 Assets derecognized -484.1 -173.3 -124.9 -782.3 Gross loans 30.06.2019 6,643.0 1,040.2 955.2 8,638.4 Q3 2019: Transfer from stage 1 to stage 2 -482.7 482.7 - - Transfer from stage 1 to stage 3 -50.4 - 50.4 - Transfer from stage 2 to stage 3 - -173.6 173.6 - Transfer from stage 3 to stage 2 - 1.8 -1.8 - Transfer from stage 2 to stage 1 236.0 -236.0 - - Transfer from stage 3 to stage 1 1.2 - -1.2 - New assets 967.6 78.0 19.2 1,064.8 Assets derecognized -489.2 -109.5 -134.7 -733.4 Gross loans 30.09.2019 6,825.6 1,083.6 1,060.6 8,969.8 Q4 2019: Transfer from stage 1 to stage 2 -533.0 533.0 - - Transfer from stage 1 to stage 3 -73.2 - 73.2 - Transfer from stage 2 to stage 3 - -260.6 260.6 - Transfer from stage 3 to stage 2 - 1.5 -1.5 - Transfer from stage 2 to stage 1 153.2 -153.2 - - Transfer from stage 3 to stage 1 1.0 - -1.0 - New assets 964.5 72.9 21.2 1,058.5 Assets derecognized -497.2 -97.0 -128.2 -722.4 Gross loans 31.12.2019 6,840.8 1,180.2 1,284.9 9,305.9 60 Notes to the financial statements

RECONCILIATION OF GROSS LOANS TO CUSTOMERS NORWAY

NOK million stage1 stage2 stage3 Total

Gross loans 01.01.2020 2,984.2 523.9 477.7 3,985.8 Q1 2020: Transfer from stage 1 to stage 2 -190.5 190.5 - - Transfer from stage 1 to stage 3 -18.0 - 18.0 - Transfer from stage 2 to stage 3 - -113.6 113.6 - Transfer from stage 3 to stage 2 - 0.6 -0.6 - Transfer from stage 2 to stage 1 118.5 -118.5 - - Transfer from stage 3 to stage 1 1.1 - -1.1 - New assets 218.4 12.5 5.2 236.1 Assets derecognized -226.8 -24.9 -19.0 -270.7 Gross loans 31.03.2020 2,886.8 470.5 593.8 3,951.1 Q2 2020: Transfer from stage 1 to stage 2 -135.1 135.1 - - Transfer from stage 1 to stage 3 -11.3 - 11.3 - Transfer from stage 2 to stage 3 - -77.2 77.2 - Transfer from stage 3 to stage 2 - 0.6 -0.6 - Transfer from stage 2 to stage 1 113.4 -113.4 - - Transfer from stage 3 to stage 1 2.1 - -2.1 - New assets 83.3 4.1 1.3 88.7 Assets derecognized -222.5 -24.8 -43.1 -290.4 Gross loans 30.06.2020 2,716.7 394.8 637.9 3,749.4 Q3 2020: Transfer from stage 1 to stage 2 -220.1 220.1 - - Transfer from stage 1 to stage 3 -23.2 - 23.2 - Transfer from stage 2 to stage 3 - -121.0 121.0 - Transfer from stage 3 to stage 2 - 1.6 -1.6 - Transfer from stage 2 to stage 1 83.1 -83.1 - - Transfer from stage 3 to stage 1 3.0 - -3.0 - New assets 125.2 8.0 6.4 139.6 Assets derecognized -161.4 -14.9 -129.8 -306.0 Gross loans 30.09.2020 2,523.3 405.6 654.0 3,583.0 Q4 2020: Transfer from stage 1 to stage 2 -108.0 108.0 - - Transfer from stage 1 to stage 3 -13.8 - 13.8 - Transfer from stage 2 to stage 3 - -59.0 59.0 - Transfer from stage 3 to stage 2 - 1.0 -1.0 - Transfer from stage 2 to stage 1 77.4 -77.4 - - Transfer from stage 3 to stage 1 10.2 - -10.2 - New assets 146.6 10.8 11.5 169.0 Assets derecognized -263.1 -26.5 -63.2 -352.8 Gross loans 31.12.2020 2,372.6 362.5 664.1 3,399.1 Komplett Bank Annual Report 2020 61

RECONCILIATION OF GROSS LOANS TO CUSTOMERS NORWAY

NOK million stage1 stage2 stage3 Total

Gross loans 01.01.2019 3,578.0 667.6 446.4 4,692.0 Q1 2019: Transfer from stage 1 to stage 2 -249.1 249.1 - - Transfer from stage 1 to stage 3 -31.7 - 31.7 - Transfer from stage 2 to stage 3 - -70.3 70.3 - Transfer from stage 3 to stage 2 - -0.0 0.0 - Transfer from stage 2 to stage 1 137.8 -137.8 - - Transfer from stage 3 to stage 1 -0.1 - 0.1 - New assets 258.3 13.9 11.6 283.8 Assets derecognized -249.9 -95.5 -134.9 -480.3 Gross loans 31.03.2019 3,443.2 627.1 425.2 4,495.6 Q2 2019: Transfer from stage 1 to stage 2 -192.4 192.4 - - Transfer from stage 1 to stage 3 -29.6 - 29.6 - Transfer from stage 2 to stage 3 - -38.4 38.4 - Transfer from stage 3 to stage 2 - 0.1 -0.1 - Transfer from stage 2 to stage 1 131.7 -131.7 - - Transfer from stage 3 to stage 1 0.3 - -0.3 - New assets 223.5 30.3 5.4 259.2 Assets derecognized -206.6 -139.3 -85.0 -431.0 Gross loans 30.06.2019 3,370.1 540.5 413.2 4,323.8 Q3 2019: Transfer from stage 1 to stage 2 -235.9 235.9 - - Transfer from stage 1 to stage 3 -25.9 - 25.9 - Transfer from stage 2 to stage 3 - -51.8 51.8 - Transfer from stage 3 to stage 2 - -0.5 0.5 - Transfer from stage 2 to stage 1 143.1 -143.1 - - Transfer from stage 3 to stage 1 0.5 - -0.5 - New assets 131.5 3.6 4.1 139.2 Assets derecognized -162.1 -82.1 -83.3 -327.6 Gross loans 30.09.2019 3,221.4 502.4 411.7 4,135.4 Q4 2019: Transfer from stage 1 to stage 2 -226.9 226.9 - - Transfer from stage 1 to stage 3 -38.0 - 38.0 - Transfer from stage 2 to stage 3 - -98.5 98.5 - Transfer from stage 3 to stage 2 - -0.8 0.8 - Transfer from stage 2 to stage 1 61.2 -61.2 - - Transfer from stage 3 to stage 1 0.2 - -0.2 - New assets 100.8 7.6 8.3 116.8 Assets derecognized -134.5 -52.5 -79.4 -266.4 Gross loans 31.12.2019 2,984.2 523.9 477.7 3,985.8 62 Notes to the financial statements

RECONCILIATION OF GROSS LOANS TO CUSTOMERS FINLAND

NOK million stage1 stage2 stage3 Total

Gross loans 01.01.2020 2,013.8 286.1 448.1 2,748.0 Q1 2020: - Transfer from stage 1 to stage 2 -117.8 117.8 - - Transfer from stage 1 to stage 3 -21.6 - 21.6 - Transfer from stage 2 to stage 3 - -85.1 85.1 - Transfer from stage 3 to stage 2 - 1.2 -1.2 - Transfer from stage 2 to stage 1 41.3 -41.3 - - Transfer from stage 3 to stage 1 - - - - New assets 508.0 55.9 85.4 649.3 Assets derecognized -147.7 -6.6 -11.8 -166.1 Gross loans 31.03.2020 2,276.1 327.9 627.1 3,231.1 Q2 2020: Transfer from stage 1 to stage 2 -131.4 131.4 - - Transfer from stage 1 to stage 3 -20.7 - 20.7 - Transfer from stage 2 to stage 3 - -91.2 91.2 - Transfer from stage 3 to stage 2 - 0.5 -0.5 - Transfer from stage 2 to stage 1 33.4 -33.4 - - Transfer from stage 3 to stage 1 0.2 - -0.2 - New assets -7.6 -12.3 -33.4 -53.2 Assets derecognized -106.1 -7.2 -11.2 -124.5 Gross loans 30.06.2020 2,043.9 315.8 693.7 3,053.4 Q3 2020: Transfer from stage 1 to stage 2 -10.5 10.5 - - Transfer from stage 1 to stage 3 -1.7 - 1.7 - Transfer from stage 2 to stage 3 - -7.3 7.3 - Transfer from stage 3 to stage 2 - 0.1 -0.1 - Transfer from stage 2 to stage 1 39.0 -39.0 - - Transfer from stage 3 to stage 1 - - - - New assets 128.8 12.9 18.8 160.6 Assets derecognized -111.1 -7.0 -19.8 -137.9 Gross loans 30.09.2020 2,088.5 286.0 701.7 3,076.1 Q4 2020: Transfer from stage 1 to stage 2 -100.1 100.1 - - Transfer from stage 1 to stage 3 -16.9 - 16.9 - Transfer from stage 2 to stage 3 - -73.1 73.1 - Transfer from stage 3 to stage 2 - 1.1 -1.1 - Transfer from stage 2 to stage 1 27.2 -27.2 - - Transfer from stage 3 to stage 1 - - - - New assets 32.3 -7.7 -30.7 -6.1 Assets derecognized -95.5 -7.8 -18.2 -121.4 Gross loans 31.12.2020 1,935.4 271.5 741.7 2,948.6 Komplett Bank Annual Report 2020 63

RECONCILIATION OF GROSS LOANS TO CUSTOMERS FINLAND

NOK million stage1 stage2 stage3 Total

Gross loans 01.01.2019 1,482.9 166.0 198.6 1,847.5 Q1 2019: Transfer from stage 1 to stage 2 -57.0 57.0 - - Transfer from stage 1 to stage 3 -9.2 - 9.2 - Transfer from stage 2 to stage 3 - -46.7 46.7 - Transfer from stage 3 to stage 2 - - - - Transfer from stage 2 to stage 1 24.7 -24.7 - - Transfer from stage 3 to stage 1 - - - - New assets 221.4 -1.0 - 220.4 Assets derecognized -93.4 -4.0 -3.8 -101.2 Gross loans 31.03.2019 1,569.4 146.6 250.7 1,966.7 Q2 2019: Transfer from stage 1 to stage 2 -78.7 78.7 - - Transfer from stage 1 to stage 3 -14.9 - 14.9 - Transfer from stage 2 to stage 3 - -48.4 48.4 - Transfer from stage 3 to stage 2 - 0.3 -0.3 - Transfer from stage 2 to stage 1 14.8 -14.8 - - Transfer from stage 3 to stage 1 - - - - New assets 379.3 11.1 2.0 392.4 Assets derecognized -93.1 -4.9 -5.7 -103.7 Gross loans 30.06.2019 1,776.9 168.6 309.9 2,255.4 Q3 2019: Transfer from stage 1 to stage 2 -95.2 95.2 - - Transfer from stage 1 to stage 3 -15.8 - 15.8 - Transfer from stage 2 to stage 3 - -49.7 49.7 - Transfer from stage 3 to stage 2 - 1.6 -1.6 - Transfer from stage 2 to stage 1 17.5 -17.5 - - Transfer from stage 3 to stage 1 - - - - New assets 365.4 14.8 7.6 387.8 Assets derecognized -108.2 -5.7 -7.6 -121.5 Gross loans 30.09.2019 1,940.7 207.2 373.8 2,521.7 Q4 2019: Transfer from stage 1 to stage 2 -145.3 145.3 - - Transfer from stage 1 to stage 3 -21.2 - 21.2 - Transfer from stage 2 to stage 3 - -63.5 63.5 - Transfer from stage 3 to stage 2 - 0.7 -0.7 - Transfer from stage 2 to stage 1 18.1 -18.1 - - Transfer from stage 3 to stage 1 0.2 - -0.2 - New assets 348.2 22.1 -0.9 369.5 Assets derecognized -126.9 -7.8 -8.5 -143.2 Gross loans 31.12.2019 2,013.8 286.1 448.1 2,748.0 64 Notes to the financial statements

RECONCILIATION OF GROSS LOANS TO CUSTOMERS SWEDEN

NOK million stage1 stage2 stage3 Total

Gross loans 01.01.2020 916.0 93.6 167.6 1,177.3 Q1 2020: - Transfer from stage 1 to stage 2 -46.8 46.8 - - Transfer from stage 1 to stage 3 -7.6 - 7.6 - Transfer from stage 2 to stage 3 - -32.3 32.3 - Transfer from stage 3 to stage 2 - 0.8 -0.8 - Transfer from stage 2 to stage 1 15.7 -15.7 - - Transfer from stage 3 to stage 1 - - - - New assets 129.8 10.9 11.7 152.4 Assets derecognized -71.0 -4.9 -3.4 -79.2 Gross loans 31.03.2020 936.2 99.3 215.1 1,250.5 Q2 2020: Transfer from stage 1 to stage 2 -45.2 45.2 - - Transfer from stage 1 to stage 3 -8.2 - 8.2 - Transfer from stage 2 to stage 3 - -28.1 28.1 - Transfer from stage 3 to stage 2 - 0.3 -0.3 - Transfer from stage 2 to stage 1 15.0 -15.0 - - Transfer from stage 3 to stage 1 - - - - New assets 99.1 6.0 9.0 114.1 Assets derecognized -63.3 -4.4 -4.3 -72.0 Gross loans 30.06.2020 933.5 103.2 255.8 1,292.6 Q3 2020: Transfer from stage 1 to stage 2 -39.9 39.9 - - Transfer from stage 1 to stage 3 -7.9 - 7.9 - Transfer from stage 2 to stage 3 - -31.3 31.3 - Transfer from stage 3 to stage 2 - 2.1 -2.1 - Transfer from stage 2 to stage 1 16.7 -16.7 - - Transfer from stage 3 to stage 1 0.1 - -0.1 - New assets 213.9 12.6 5.5 232.0 Assets derecognized -66.3 -3.4 -4.5 -74.2 Gross loans 30.09.2020 1,050.1 106.5 293.8 1,450.4 Q4 2020: Transfer from stage 1 to stage 2 -38.4 38.4 - - Transfer from stage 1 to stage 3 -7.8 - 7.8 - Transfer from stage 2 to stage 3 - -36.4 36.4 - Transfer from stage 3 to stage 2 - 0.2 -0.2 - Transfer from stage 2 to stage 1 16.3 -16.3 - - Transfer from stage 3 to stage 1 - - - - New assets 263.9 19.9 4.1 287.9 Assets derecognized -67.2 -2.2 -6.9 -76.3 Gross loans 31.12.2020 1,216.8 110.2 335.0 1,662.0 Komplett Bank Annual Report 2020 65

RECONCILIATION OF GROSS LOANS TO CUSTOMERS SWEDEN

NOK million stage1 stage2 stage3 Total

Gross loans 01.01.2019 414.6 64.9 29.6 509.1 Q1 2019: Transfer from stage 1 to stage 2 -33.1 33.1 - - Transfer from stage 1 to stage 3 -5.4 - 5.4 - Transfer from stage 2 to stage 3 - -19.9 19.9 - Transfer from stage 3 to stage 2 - - - - Transfer from stage 2 to stage 1 16.0 -16.0 - - Transfer from stage 3 to stage 1 - - - - New assets 214.0 6.5 - 220.5 Assets derecognized -38.2 -2.1 -1.1 -41.4 Gross loans 31.03.2019 568.0 66.4 53.8 688.2 Q2 2019: Transfer from stage 1 to stage 2 -37.7 37.7 - - Transfer from stage 1 to stage 3 -4.2 - 4.2 - Transfer from stage 2 to stage 3 - -27.4 27.4 - Transfer from stage 3 to stage 2 - - - - Transfer from stage 2 to stage 1 5.9 -5.9 - - Transfer from stage 3 to stage 1 - - - - New assets 157.5 14.4 -0.5 171.4 Assets derecognized -41.3 -2.7 -0.3 -44.3 Gross loans 30.06.2019 648.2 82.5 84.7 815.4 Q3 2019: Transfer from stage 1 to stage 2 -42.7 42.7 - - Transfer from stage 1 to stage 3 -7.0 - 7.0 - Transfer from stage 2 to stage 3 - -31.6 31.6 - Transfer from stage 3 to stage 2 - 0.2 -0.2 - Transfer from stage 2 to stage 1 15.1 -15.1 - - Transfer from stage 3 to stage 1 0.3 - -0.3 - New assets 262.9 20.8 1.2 285.0 Assets derecognized -55.3 -3.4 -1.5 -60.2 Gross loans 30.09.2019 821.5 96.2 122.5 1,040.1 Q4 2019: Transfer from stage 1 to stage 2 -45.1 45.1 - - Transfer from stage 1 to stage 3 -11.2 - 11.2 - Transfer from stage 2 to stage 3 - -34.8 34.8 - Transfer from stage 3 to stage 2 - 0.3 -0.3 - Transfer from stage 2 to stage 1 20.6 -20.6 - - Transfer from stage 3 to stage 1 - - - - New assets 186.9 11.0 0.6 198.5 Assets derecognized -56.6 -3.7 -1.0 -61.4 Gross loans 31.12.2019 916.0 93.6 167.6 1,177.3 66 Notes to the financial statements

RECONCILIATION OF GROSS LOANS TO CREDIT CARD LOAN CUSTOMER

NOK million stage1 stage2 stage3 Total

Gross loans 01.01.2020 535.1 189.8 132.6 857.6 Q1 2020: Transfer from stage 1 to stage 2 -56.4 56.4 - - Transfer from stage 1 to stage 3 -1.8 - 1.8 - Transfer from stage 2 to stage 3 - -36.9 36.9 - Transfer from stage 3 to stage 2 - 0.0 -0.0 - Transfer from stage 2 to stage 1 47.5 -47.5 - - Transfer from stage 3 to stage 1 0.3 - -0.3 - New assets 94.8 10.0 1.9 106.7 Assets derecognized -106.3 -14.0 -5.5 -125.7 Gross loans 31.03.2020 513.3 157.9 167.4 838.6 Q2 2020: Transfer from stage 1 to stage 2 -33.4 33.4 - - Transfer from stage 1 to stage 3 -1.4 - 1.4 - Transfer from stage 2 to stage 3 - -24.4 24.4 - Transfer from stage 3 to stage 2 - 0.1 -0.1 - Transfer from stage 2 to stage 1 46.6 -46.6 - - Transfer from stage 3 to stage 1 0.2 - -0.2 - New assets 98.1 5.9 0.6 104.6 Assets derecognized -95.4 -12.0 -8.3 -115.6 Gross loans 30.06.2020 527.8 114.4 185.3 827.5 Q3 2020: Transfer from stage 1 to stage 2 -43.4 43.4 - - Transfer from stage 1 to stage 3 -1.1 - 1.1 - Transfer from stage 2 to stage 3 - -15.0 15.0 - Transfer from stage 3 to stage 2 - 0.1 -0.1 - Transfer from stage 2 to stage 1 31.3 -31.3 - - Transfer from stage 3 to stage 1 0.3 - -0.3 - New assets 106.6 8.4 2.2 117.2 Assets derecognized -102.8 -7.5 -9.6 -120.0 Gross loans 30.09.2020 518.7 112.5 193.6 824.8 Q4 2020: Transfer from stage 1 to stage 2 -32.2 32.2 - - Transfer from stage 1 to stage 3 -1.5 - 1.5 - Transfer from stage 2 to stage 3 - -16.8 16.8 - Transfer from stage 3 to stage 2 - - - - Transfer from stage 2 to stage 1 33.7 -33.7 - - Transfer from stage 3 to stage 1 0.2 - -0.2 - New assets 128.0 6.5 3.8 138.3 Assets derecognized -101.0 -8.7 -11.3 -121.0 Gross loans 31.12.2020 545.9 91.9 204.3 842.1 Komplett Bank Annual Report 2020 67

RECONCILIATION OF GROSS LOANS TO CREDIT CARD LOAN CUSTOMER

NOK million stage1 stage2 stage3 Total

Gross loans 01.01.2019 558.6 205.5 145.9 910.0 Q1 2019: Transfer from stage 1 to stage 2 -73.4 73.4 - - Transfer from stage 1 to stage 3 -1.5 - 1.5 - Transfer from stage 2 to stage 3 - -38.8 38.8 - Transfer from stage 3 to stage 2 - - - - Transfer from stage 2 to stage 1 54.8 -54.8 - - Transfer from stage 3 to stage 1 - - - - New assets 104.9 20.0 1.1 126.1 Assets derecognized -85.8 -10.8 -73.3 -169.9 Gross loans 31.03.2019 557.6 194.6 114.0 866.2 Q2 2019: Transfer from stage 1 to stage 2 -71.2 71.2 - - Transfer from stage 1 to stage 3 -1.9 - 1.9 - Transfer from stage 2 to stage 3 - -29.0 29.0 - Transfer from stage 3 to stage 2 - 0.1 -0.1 - Transfer from stage 2 to stage 1 52.2 -52.2 - - Transfer from stage 3 to stage 1 0.5 - -0.5 - New assets 103.4 15.9 1.5 120.8 Assets derecognized -81.1 -26.8 -33.7 -141.6 Gross loans 30.06.2019 559.5 173.8 112.2 845.5 Q3 2019: Transfer from stage 1 to stage 2 -90.0 90.0 - - Transfer from stage 1 to stage 3 -1.5 - 1.5 - Transfer from stage 2 to stage 3 - -35.1 35.1 - Transfer from stage 3 to stage 2 - - - - Transfer from stage 2 to stage 1 38.3 -38.3 - - Transfer from stage 3 to stage 1 0.3 - -0.3 - New assets 104.4 18.1 0.9 123.3 Assets derecognized -75.9 -11.3 -39.9 -127.1 Gross loans 30.09.2019 535.2 197.1 109.5 841.7 Q4 2019: Transfer from stage 1 to stage 2 -81.4 81.4 - - Transfer from stage 1 to stage 3 -2.4 - 2.4 - Transfer from stage 2 to stage 3 - -55.3 55.3 - Transfer from stage 3 to stage 2 - 0.1 -0.1 - Transfer from stage 2 to stage 1 35.4 -35.4 - - Transfer from stage 3 to stage 1 0.3 - -0.3 - New assets 124.2 15.0 1.7 140.8 Assets derecognized -76.1 -13.0 -36.0 -125.0 Gross loans 31.12.2019 535.1 189.8 132.6 857.6 68 Notes to the financial statements

RECONCILIATION OF GROSS LOANS TO POS FINANCE CUSTOMER

NOK million stage1 stage2 stage3 Total

Gross loans 01.01.2020 391.7 86.7 58.9 537.3 Q1 2020: - Transfer from stage 1 to stage 2 -44.0 44.0 - - Transfer from stage 1 to stage 3 -117.1 - 117.1 - Transfer from stage 2 to stage 3 - -13.9 13.9 - Transfer from stage 3 to stage 2 - 0.9 -0.9 - Transfer from stage 2 to stage 1 29.0 -29.0 - - Transfer from stage 3 to stage 1 1.0 - -1.0 - New assets 182.9 19.2 2.7 204.8 Assets derecognized -49.2 -8.3 -122.0 -179.4 Gross loans 31.03.2020 394.2 99.7 68.7 562.7 Q2 2020: Transfer from stage 1 to stage 2 -41.3 41.3 - - Transfer from stage 1 to stage 3 -116.5 - 116.5 - Transfer from stage 2 to stage 3 - -14.7 14.7 - Transfer from stage 3 to stage 2 - 1.2 -1.2 - Transfer from stage 2 to stage 1 39.5 -39.5 - - Transfer from stage 3 to stage 1 0.9 - -0.9 - New assets 158.7 14.4 2.0 175.2 Assets derecognized -60.5 -8.7 -122.2 -191.4 Gross loans 30.06.2020 375.1 93.6 77.7 546.5 Q3 2020: Transfer from stage 1 to stage 2 -40.5 40.5 - - Transfer from stage 1 to stage 3 -92.0 - 92.0 - Transfer from stage 2 to stage 3 - -13.0 13.0 - Transfer from stage 3 to stage 2 - 1.1 -1.1 - Transfer from stage 2 to stage 1 36.1 -36.1 - - Transfer from stage 3 to stage 1 0.9 - -0.9 - New assets 161.9 14.2 2.4 178.5 Assets derecognized -64.6 -7.5 -97.6 -169.8 Gross loans 30.09.2020 376.9 92.9 85.4 555.2 Q4 2020: Transfer from stage 1 to stage 2 -38.8 38.8 - - Transfer from stage 1 to stage 3 -66.7 - 66.7 - Transfer from stage 2 to stage 3 - -12.8 12.8 - Transfer from stage 3 to stage 2 - 1.0 -1.0 - Transfer from stage 2 to stage 1 35.4 -35.4 - - Transfer from stage 3 to stage 1 1.2 - -1.2 - New assets 225.6 13.9 3.3 242.8 Assets derecognized -64.1 -7.1 -71.7 -142.9 Gross loans 31.12.2020 469.7 91.3 94.2 655.1 Komplett Bank Annual Report 2020 69

RECONCILIATION OF GROSS LOANS TO POS FINANCE CUSTOMER

NOK million stage1 stage2 stage3 Total

Gross loans 01.01.2019 279.1 54.2 24.1 357.3 Q1 2019: Transfer from stage 1 to stage 2 -18.0 18.0 - Transfer from stage 1 to stage 3 -0.1 0.1 - Transfer from stage 2 to stage 3 -0.9 0.9 - Transfer from stage 3 to stage 2 0.7 -0.7 - Transfer from stage 2 to stage 1 18.0 -18.0 - Transfer from stage 3 to stage 1 0.2 -0.2 - New assets 87.8 18.5 2.1 108.4 Assets derecognized -71.1 -7.0 -1.2 -79.3 Gross loans 31.03.2019 295.9 65.5 25.1 386.5 Q2 2019: Transfer from stage 1 to stage 2 -21.5 21.5 - Transfer from stage 1 to stage 3 -0.2 0.2 - Transfer from stage 2 to stage 3 -2.5 2.5 - Transfer from stage 3 to stage 2 0.1 -0.1 - Transfer from stage 2 to stage 1 14.0 -14.0 - Transfer from stage 3 to stage 1 - - - New assets 62.0 4.0 7.7 73.7 Assets derecognized -61.9 0.3 -0.2 -61.9 Gross loans 30.06.2019 288.3 74.9 35.2 398.3 Q3 2019: Transfer from stage 1 to stage 2 -19.0 19.0 - Transfer from stage 1 to stage 3 -0.2 0.2 - Transfer from stage 2 to stage 3 -5.4 5.4 - Transfer from stage 3 to stage 2 0.5 -0.5 - Transfer from stage 2 to stage 1 22.0 -22.0 - Transfer from stage 3 to stage 1 0.1 -0.1 - New assets 103.4 20.8 5.4 129.6 Assets derecognized -87.7 -7.0 -2.4 -97.1 Gross loans 30.09.2019 306.9 80.7 43.2 430.8 Q4 2019: Transfer from stage 1 to stage 2 -34.3 34.3 - Transfer from stage 1 to stage 3 -0.4 0.4 - Transfer from stage 2 to stage 3 -8.5 8.5 - Transfer from stage 3 to stage 2 1.2 -1.2 - Transfer from stage 2 to stage 1 18.0 -18.0 - Transfer from stage 3 to stage 1 0.3 -0.3 - New assets 204.3 17.1 11.5 232.9 Assets derecognized -103.1 -20.1 -3.2 -126.4 Gross loans 31.12.2019 391.7 86.7 58.9 537.3

Loans with granted special conditions as at 31.12.2020 amounts to MNOK 31.9. MNOK 27.2 is classified in stage 2 and MNOK 4.6 is classified in stage 3. No receivables with special conditions were recognized as at 31.12.2019. 70 Notes to the financial statements

RECONCILIATION OF IMPAIRMENTS OF LOANS TO CUSTOMERS

NOK million stage 1 stage 2 stage 3 Total

Impairment 01.01.2020 143.7 172.8 493.6 810.1 Q1 2020: Transfer from stage 1 to stage 2 -7.8 7.8 - - Transfer from stage 1 to stage 3 -2.5 - 2.5 - Transfer from stage 2 to stage 3 - -47.1 47.1 - Transfer from stage 3 to stage 2 - 1.5 -1.5 - Transfer from stage 2 to stage 1 25.8 -25.8 - - Transfer from stage 3 to stage 1 1.1 - -1.1 - New financial assets originated 5.6 11.4 - 17.0 Increased expected credit loss 4.5 42.2 72.2 118.9 Assets derecognized -29.8 -5.9 -13.9 -49.6 Decreased expected credit loss -2.7 -1.7 -5.3 -9.7 Exchange rate movements 14.4 14.2 48.2 76.8 Macroeconomic model changes 21.9 28.1 - 50.0 Other changes 0.2 -0.5 -0.6 -1.0 Impairment 31.03.2020 174.4 197.0 641.2 1,012.7 Q2 2020: Transfer from stage 1 to stage 2 -9.4 9.4 - - Transfer from stage 1 to stage 3 -2.9 - 2.9 - Transfer from stage 2 to stage 3 - -55.5 55.5 - Transfer from stage 3 to stage 2 - 0.9 -0.9 - Transfer from stage 2 to stage 1 34.4 -34.4 - - Transfer from stage 3 to stage 1 1.2 - -1.2 - New financial assets originated 4.1 0.3 0.0 4.3 Increased expected credit loss 6.8 72.4 66.1 145.3 Assets derecognized -39.4 -7.6 -15.2 -62.2 Decreased expected credit loss -4.0 -3.1 -9.9 -16.9 Exchange rate movements -4.4 -4.6 -15.9 -24.9 Macroeconomic model changes 7.1 7.1 - 14.2 Other changes -2.3 -3.9 - -6.2 Impairment 30.06.2020 165.6 178.0 722.6 1,066.3 Q3 2020: Transfer from stage 1 to stage 2 -8.3 8.3 - - Transfer from stage 1 to stage 3 -2.6 - 2.6 - Transfer from stage 2 to stage 3 - -45.4 45.4 - Transfer from stage 3 to stage 2 - 1.8 -1.8 - Transfer from stage 2 to stage 1 28.9 -28.9 - - Transfer from stage 3 to stage 1 1.5 - -1.5 - New financial assets originated 9.5 2.0 0.0 11.5 Increased expected credit loss 5.6 66.3 62.2 134.2 Assets derecognized -35.4 -8.5 -37.3 -81.2 Decreased expected credit loss -2.3 -1.6 -1.3 -5.2 Exchange rate movements 1.7 1.7 14.0 17.4 Macroeconomic model changes -5.6 -5.8 - -11.4 Other changes 12.5 7.6 -3.3 16.7 Impairment 30.09.2020 171.3 175.5 801.5 1,148.2 Q4 2020: Transfer from stage 1 to stage 2 -8.2 8.2 - - Transfer from stage 1 to stage 3 -2.2 - 2.2 - Transfer from stage 2 to stage 3 - -50.8 50.8 - Transfer from stage 3 to stage 2 - 1.4 -1.4 - Transfer from stage 2 to stage 1 26.2 -26.2 - - Transfer from stage 3 to stage 1 6.5 - -6.5 - New financial assets originated 15.9 5.4 0.3 21.7 Increased expected credit loss 8.0 64.1 72.8 144.9 Assets derecognized -37.7 -8.9 -41.8 -88.4 Decreased expected credit loss -2.8 -1.3 -2.2 -6.4 Exchange rate movements -3.6 -3.7 -18.0 -25.3 Macroeconomic model changes -7.1 -6.0 - -13.1 Other changes -0.2 -7.6 -28.1 -35.9 Impairment 31.12.2020 166.1 150.0 829.7 1,145.8

Other changes for 2020 relates amongst other to changes in the Bank’s estimate of loss given default and probability of default not covered by other parts of the specifications in the reconciliation. Komplett Bank Annual Report 2020 71

RECONCILIATION OF IMPAIRMENTS OF LOANS TO CUSTOMERS

NOK million stage 1 stage 2 stage 3 Total

Impairment 01.01.2019 102.1 100.8 268.8 471.6 Q1 2019: Transfer from stage 1 to stage 2 -5.2 5.2 - - Transfer from stage 1 to stage 3 -0.6 - 0.6 - Transfer from stage 2 to stage 3 - -23.8 23.8 - Transfer from stage 3 to stage 2 - 0.2 -0.2 - Transfer from stage 2 to stage 1 18.3 -18.3 - - Transfer from stage 3 to stage 1 0.0 - -0.0 - New financial assets originated or change in provisions 16.1 52.0 41.0 109.1 Assets derecognized or change in provisions -18.8 -14.0 -49.7 -82.4 Other changes 1.1 0.8 0.0 1.9 Impairment 31.03.2019 113.0 102.8 284.4 500.2 Q2 2019: Transfer from stage 1 to stage 2 -5.3 5.3 - - Transfer from stage 1 to stage 3 -0.7 - 0.7 - Transfer from stage 2 to stage 3 - -23.4 23.4 - Transfer from stage 3 to stage 2 - 0.2 -0.2 - Transfer from stage 2 to stage 1 16.1 -16.1 - - Transfer from stage 3 to stage 1 0.6 - -0.6 - New financial assets originated or change in provisions 13.3 50.1 43.9 107.3 Assets derecognized or change in provisions -17.1 -15.9 -32.6 -65.6 Other changes -10.9 18.2 -1.2 6.1 Impairment 30.06.2019 109.1 121.3 317.6 548.0 Q3 2019: Transfer from stage 1 to stage 2 -7.1 7.1 - - Transfer from stage 1 to stage 3 -0.9 - 0.9 - Transfer from stage 2 to stage 3 - -29.3 29.3 - Transfer from stage 3 to stage 2 - 0.6 -0.6 - Transfer from stage 2 to stage 1 23.1 -23.1 - - Transfer from stage 3 to stage 1 1.2 - -1.2 - New financial assets originated or change in provisions 17.9 69.0 42.0 128.8 Assets derecognized or change in provisions -28.1 -14.9 -34.6 -77.6 Other changes 4.7 1.6 2.9 9.1 Impairment 30.09.2019 119.8 132.4 356.2 608.3 Q4 2019: Transfer from stage 1 to stage 2 -8.6 8.6 - - Transfer from stage 1 to stage 3 -1.3 - 1.3 - Transfer from stage 2 to stage 3 - -40.9 40.9 - Transfer from stage 3 to stage 2 - 0.7 -0.7 - Transfer from stage 2 to stage 1 16.3 -16.3 - - Transfer from stage 3 to stage 1 0.6 - -0.6 - New financial assets originated or change in provisions 18.7 73.9 78.1 170.7 Assets derecognized or change in provisions -22.1 -14.4 -36.9 -73.4 Other changes 20.3 28.8 55.5 104.5 Impairment 31.12.2019 143.7 172.8 493.6 810.1

Estimate changes for the first quarter of 2019 relates in all materiality to changes in the Bank’s estimate of probability of default. Estimate changes for the second quarter of 2019 relates amongst other to changes in the Bank’s estimate of loss given default, which resulted in higher impairment equal to NOK 29 million. In the same quarter, the Bank also changed its estimate on exposure at default resulting in NOK 25 million in lower impairments. Other estimate changes in this quarter mainly relates to changes in the estimate of probability of default. The effects of estimate changes in the third quarter of 2019 mainly refers to estimate change on the probability of default. In the fourth quarter of 2019 the Bank changed its method on how to estimate loss given default. The Bank went from using a method based on expected sale prices from third parties to a method using expected cash flows based on incoming payments from defaulted customers. The change in loss given default increased the impairments with NOK 96 million. The Bank also updated its estimates of discount factor, resulting in an increase of NOK 7 million. Other estimate changes in the quarter relates to updating the probability of default and macro adjustments, resulting in a respectively increase in impairments of NOK 2 million and a decrease in impairments of NOK 1 million

. 72 Notes to the financial statements

RECONCILIATION OF IMPAIRMENTS OF CONSUMER LOANS TO CUSTOMERS NORWAY

NOK million stage 1 stage 2 stage 3 Total

Impairment 01.01.2020 45.0 72.4 168.9 286.3 Q1 2020: Transfer from stage 1 to stage 2 -2.2 2.2 - - Transfer from stage 1 to stage 3 -0.2 - 0.2 - Transfer from stage 2 to stage 3 - -14.0 14.0 - Transfer from stage 3 to stage 2 - 0.3 -0.3 - Transfer from stage 2 to stage 1 10.9 -10.9 - - Transfer from stage 3 to stage 1 0.5 - -0.5 - New financial assets originated 0.2 10.3 - 10.5 Increased expected credit loss 1.9 -0.9 24.4 25.4 Assets derecognized -11.7 -2.2 -3.2 -17.1 Decreased expected credit loss -1.0 -0.8 -4.3 -6.0 Exchange rate movements - - - - Macroeconomic model changes 11.5 15.6 - 27.1 Other changes -0.7 1.9 -0.6 0.6 Impairment 31.03.2020 54.1 74.0 198.7 326.8 Q2 2020: Transfer from stage 1 to stage 2 -2.4 2.4 - - Transfer from stage 1 to stage 3 -0.2 - 0.2 - Transfer from stage 2 to stage 3 - -15.9 15.9 - Transfer from stage 3 to stage 2 - 0.1 -0.1 - Transfer from stage 2 to stage 1 17.9 -17.9 - - Transfer from stage 3 to stage 1 0.6 - -0.6 - New financial assets originated 0.2 0.1 - 0.3 Increased expected credit loss 2.0 21.2 22.9 46.1 Assets derecognized -20.0 -3.1 -3.4 -26.5 Decreased expected credit loss -2.2 -2.0 -7.7 -11.8 Exchange rate movements - - - - Macroeconomic model changes 0.3 0.5 - 0.8 Other changes -6.1 -2.8 - -8.9 Impairment 30.06.2020 44.2 56.7 225.8 326.8 Q3 2020: Transfer from stage 1 to stage 2 -2.0 2.0 - - Transfer from stage 1 to stage 3 -0.1 - 0.1 - Transfer from stage 2 to stage 3 - -10.7 10.7 - Transfer from stage 3 to stage 2 - 0.1 -0.1 - Transfer from stage 2 to stage 1 11.7 -11.7 - - Transfer from stage 3 to stage 1 0.9 - -0.9 - New financial assets originated 0.6 0.1 - 0.7 Increased expected credit loss 1.2 20.0 29.2 50.3 Assets derecognized -14.7 -3.6 -16.6 -34.9 Decreased expected credit loss -0.2 -0.3 -0.2 -0.8 Exchange rate movements - - - - Macroeconomic model changes -0.7 -0.9 - -1.6 Other changes -0.1 -0.7 -29.0 -29.8 Impairment 30.09.2020 40.9 51.0 218.8 310.7 Q4 2020: Transfer from stage 1 to stage 2 -1.6 1.6 - - Transfer from stage 1 to stage 3 -0.2 - 0.2 - Transfer from stage 2 to stage 3 - -11.4 11.4 - Transfer from stage 3 to stage 2 - 0.4 -0.4 - Transfer from stage 2 to stage 1 10.6 -10.6 - - Transfer from stage 3 to stage 1 5.9 - -5.9 - New financial assets originated 1.0 0.2 -0.0 1.2 Increased expected credit loss 2.6 16.7 32.1 51.3 Assets derecognized -18.5 -3.8 -26.5 -48.8 Decreased expected credit loss -0.2 -0.3 -0.4 -1.0 Exchange rate movements - - - Macroeconomic model changes -0.9 -1.1 - -2.0 Other changes 1.6 0.7 18.4 20.7 Impairment 31.12.2020 41.0 43.5 247.7 332.2 Komplett Bank Annual Report 2020 73

RECONCILIATION OF IMPAIRMENTS OF CONSUMER LOANS TO CUSTOMERS NORWAY

NOK million stage 1 stage 2 stage 3 Total

Impairment 01.01.2019 44.7 49.7 138.1 232.5 Q1 2019: Transfer from stage 1 to stage 2 -2.2 2.2 - - Transfer from stage 1 to stage 3 -0.3 - 0.3 - Transfer from stage 2 to stage 3 - -6.0 6.0 - Transfer from stage 3 to stage 2 - -0.0 0.0 - Transfer from stage 2 to stage 1 10.4 -10.4 - - Transfer from stage 3 to stage 1 -0.0 - 0.0 - New financial assets originated or change in provisions 0.4 25.6 16.2 42.2 Assets derecognized or change in provisions -6.9 -7.9 -28.8 -43.5 Other changes -1.6 -5.3 -1.5 -8.3 Impairment 31.03.2019 44.5 48.0 130.4 222.9 Q2 2019: Transfer from stage 1 to stage 2 -0.7 0.7 - - Transfer from stage 1 to stage 3 -0.2 - 0.2 - Transfer from stage 2 to stage 3 - -2.6 2.6 - Transfer from stage 3 to stage 2 - 0.1 -0.1 - Transfer from stage 2 to stage 1 9.2 -9.2 - - Transfer from stage 3 to stage 1 0.1 - -0.1 - New financial assets originated or change in provisions -1.8 17.5 17.7 33.4 Assets derecognized or change in provisions -6.3 -12.9 -21.6 -40.9 Other changes -4.8 14.0 0.9 10.1 Impairment 30.06.2019 40.0 55.4 130.1 225.5 Q3 2019: Transfer from stage 1 to stage 2 -1.7 1.7 - - Transfer from stage 1 to stage 3 -0.3 - 0.3 - Transfer from stage 2 to stage 3 - -4.3 4.3 - Transfer from stage 3 to stage 2 - -0.1 0.1 - Transfer from stage 2 to stage 1 14.1 -14.1 - - Transfer from stage 3 to stage 1 0.5 - -0.5 - New financial assets originated or change in provisions -2.7 24.7 15.5 37.5 Assets derecognized or change in provisions -11.8 -9.3 -20.1 -41.2 Other changes 0.3 0.2 -0.2 0.3 Impairment 30.09.2019 38.5 54.2 129.4 222.1 Q4 2019: Transfer from stage 1 to stage 2 -2.0 2.0 - - Transfer from stage 1 to stage 3 -0.5 - 0.5 - Transfer from stage 2 to stage 3 - -12.5 12.5 - Transfer from stage 3 to stage 2 - 0.1 -0.1 - Transfer from stage 2 to stage 1 6.9 -6.9 - - Transfer from stage 3 to stage 1 0.2 - -0.2 - New financial assets originated or change in provisions -5.3 24.3 37.2 56.2 Assets derecognized or change in provisions -1.6 -7.8 -23.4 -32.8 Other changes 8.9 18.9 13.0 40.8 Impairment 31.12.2019 45.0 72.4 168.9 286.3 74 Notes to the financial statements

RECONCILIATION OF IMPAIRMENTS OF CONSUMER LOANS TO CUSTOMERS FINLAND

NOK million stage 1 stage 2 stage 3 Total

Impairment 01.01.2020 58.9 62.8 197.4 319.1 Q1 2020: Transfer from stage 1 to stage 2 -3.1 3.1 - - Transfer from stage 1 to stage 3 -0.6 - 0.6 - Transfer from stage 2 to stage 3 - -20.7 20.7 - Transfer from stage 3 to stage 2 - 0.6 -0.6 - Transfer from stage 2 to stage 1 7.5 -7.5 - - Transfer from stage 3 to stage 1 - - - - New financial assets originated 3.6 0.5 - 4.1 Increased expected credit loss 0.9 25.5 23.3 49.8 Assets derecognized -8.6 -1.9 -4.3 -14.8 Decreased expected credit loss -1.0 -0.3 -0.2 -1.5 Exchange rate movements 11.5 11.9 39.5 63.0 Macroeconomic model changes 10.9 11.3 - 22.2 Other changes 0.4 -2.0 - -1.6 Impairment 31.03.2020 80.4 83.5 276.4 440.3 Q2 2020: Transfer from stage 1 to stage 2 -4.7 4.7 - - Transfer from stage 1 to stage 3 -0.7 - 0.7 - Transfer from stage 2 to stage 3 - -28.7 28.7 - Transfer from stage 3 to stage 2 - 0.2 -0.2 - Transfer from stage 2 to stage 1 7.6 -7.6 - - Transfer from stage 3 to stage 1 0.2 - -0.2 - New financial assets originated 2.1 0.1 - 2.1 Increased expected credit loss 1.3 35.3 23.2 59.7 Assets derecognized -8.8 -2.5 -5.2 -16.5 Decreased expected credit loss -1.1 -0.3 -0.7 -2.1 Exchange rate movements -4.3 -4.6 -15.8 -24.8 Macroeconomic model changes 4.9 5.2 - 10.1 Other changes 2.5 -1.1 - 1.3 Impairment 30.06.2020 79.3 84.1 306.8 470.2 Q3 2020: Transfer from stage 1 to stage 2 -3.9 3.9 - - Transfer from stage 1 to stage 3 -0.6 - 0.6 - Transfer from stage 2 to stage 3 - -23.7 23.7 - Transfer from stage 3 to stage 2 - 0.5 -0.5 - Transfer from stage 2 to stage 1 8.9 -8.9 - - Transfer from stage 3 to stage 1 - - - - New financial assets originated 2.7 0.2 - 3.0 Increased expected credit loss 0.3 29.9 15.3 45.5 Assets derecognized -9.9 -2.9 -7.3 -20.1 Decreased expected credit loss -1.3 -0.7 -0.2 -2.1 Exchange rate movements 1.2 1.3 5.9 8.4 Macroeconomic model changes -3.7 -4.0 - -7.7 Other changes 0.0 -0.4 - -0.4 Impairment 30.09.2020 73.0 79.3 344.4 496.8 Q4 2020: Transfer from stage 1 to stage 2 -3.9 3.9 - - Transfer from stage 1 to stage 3 -0.7 - 0.7 - Transfer from stage 2 to stage 3 - -23.7 23.7 - Transfer from stage 3 to stage 2 - 0.5 -0.5 - Transfer from stage 2 to stage 1 6.4 -6.4 - - Transfer from stage 3 to stage 1 - - - - New financial assets originated 4.1 0.5 0.1 4.7 Increased expected credit loss 0.3 28.8 19.2 48.2 Assets derecognized -7.5 -3.3 -7.4 -18.2 Decreased expected credit loss -1.2 -0.6 -0.1 -1.9 Exchange rate movements -3.1 -3.5 -16.9 -23.6 Macroeconomic model changes -2.4 -2.6 - -5.0 Other changes -12.7 -14.8 -62.7 -90.2 Impairment 31.12.2020 52.2 58.2 300.4 410.8 Komplett Bank Annual Report 2020 75

RECONCILIATION OF IMPAIRMENTS OF CONSUMER LOANS TO CUSTOMERS FINLAND

NOK million stage 1 stage 2 stage 3 Total

Impairment 01.01.2019 33.6 23.4 69.9 126.8 Q1 2019: Transfer from stage 1 to stage 2 -1.2 1.2 - - Transfer from stage 1 to stage 3 -0.2 - 0.2 - Transfer from stage 2 to stage 3 - -9.4 9.4 - Transfer from stage 3 to stage 2 - - - - Transfer from stage 2 to stage 1 2.8 -2.8 - - Transfer from stage 3 to stage 1 - - - - New financial assets originated or change in provisions 5.0 9.8 10.6 25.4 Assets derecognized or change in provisions -2.8 -1.4 -2.4 -6.6 Other changes 2.0 5.7 1.0 8.7 Impairment 31.03.2019 39.1 26.6 88.7 154.3 Q2 2019: Transfer from stage 1 to stage 2 -1.8 1.8 - - Transfer from stage 1 to stage 3 -0.3 - 0.3 - Transfer from stage 2 to stage 3 - -10.4 10.4 - Transfer from stage 3 to stage 2 - 0.1 -0.1 - Transfer from stage 2 to stage 1 2.3 -2.3 - - Transfer from stage 3 to stage 1 - - - - New financial assets originated or change in provisions 7.5 16.0 12.8 36.2 Assets derecognized or change in provisions -2.5 -0.9 -1.8 -5.1 Other changes -2.6 0.6 -0.8 -2.8 Impairment 30.06.2019 41.6 31.6 109.4 182.6 Q3 2019: Transfer from stage 1 to stage 2 -2.2 2.2 - - Transfer from stage 1 to stage 3 -0.4 - 0.4 - Transfer from stage 2 to stage 3 - -11.1 11.1 - Transfer from stage 3 to stage 2 - 0.6 -0.6 - Transfer from stage 2 to stage 1 2.8 -2.8 - - Transfer from stage 3 to stage 1 - - - - New financial assets originated or change in provisions 7.2 18.8 13.0 39.0 Assets derecognized or change in provisions -4.4 -1.9 -2.8 -9.1 Other changes 2.3 0.8 2.7 5.7 Impairment 30.09.2019 46.9 38.1 133.3 218.3 Q4 2019: Transfer from stage 1 to stage 2 -3.5 3.5 - - Transfer from stage 1 to stage 3 -0.5 - 0.5 - Transfer from stage 2 to stage 3 - -13.9 13.9 - Transfer from stage 3 to stage 2 - 0.4 -0.4 - Transfer from stage 2 to stage 1 2.9 -2.9 - - Transfer from stage 3 to stage 1 0.2 - -0.2 - New financial assets originated or change in provisions 7.7 29.1 16.5 53.3 Assets derecognized or change in provisions -5.1 -2.0 -3.7 -10.8 Other changes 10.3 10.5 37.6 58.3 Impairment 31.12.2019 58.9 62.8 197.4 319.1

76 Notes to the financial statements

RECONCILIATION OF IMPAIRMENTS OF CONSUMER LOANS TO CUSTOMERS SWEDEN

NOK million stage 1 stage 2 stage 3 Total

Impairment 01.01.2020 28.5 22.3 64.6 115.4 Q1 2020: Transfer from stage 1 to stage 2 -1.4 1.4 - - Transfer from stage 1 to stage 3 -0.2 - 0.2 - Transfer from stage 2 to stage 3 - -8.7 8.7 - Transfer from stage 3 to stage 2 - 0.3 -0.3 - Transfer from stage 2 to stage 1 3.2 -3.2 - - Transfer from stage 3 to stage 1 - - - - New financial assets originated 1.3 0.5 - 1.9 Increased expected credit loss 0.4 10.8 8.2 19.3 Assets derecognized -4.0 -0.8 -0.9 -5.7 Decreased expected credit loss -0.6 -0.3 -0.1 -1.1 Exchange rate movements 2.6 2.0 8.2 12.9 Macroeconomic model changes -2.1 -1.6 - -3.7 Other changes 0.4 -0.7 - -0.4 Impairment 31.03.2020 28.0 22.1 88.6 138.7 Q2 2020: Transfer from stage 1 to stage 2 -1.3 1.3 - - Transfer from stage 1 to stage 3 -0.2 - 0.2 - Transfer from stage 2 to stage 3 - -7.4 7.4 - Transfer from stage 3 to stage 2 - 0.1 -0.1 - Transfer from stage 2 to stage 1 2.8 -2.8 - - Transfer from stage 3 to stage 1 - - - - New financial assets originated 1.3 0.1 - 1.4 Increased expected credit loss 0.5 9.9 10.0 20.4 Assets derecognized -3.6 -0.7 -1.0 -5.2 Decreased expected credit loss -0.6 -0.6 -0.4 -1.6 Exchange rate movements -0.0 -0.0 -0.1 -0.1 Macroeconomic model changes 1.6 1.2 - 2.9 Other changes 0.9 -0.3 - 0.6 Impairment 30.06.2020 29.5 22.9 104.6 157.0 Q3 2020: Transfer from stage 1 to stage 2 -1.3 1.3 - - Transfer from stage 1 to stage 3 -0.3 - 0.3 - Transfer from stage 2 to stage 3 - -8.4 8.4 - Transfer from stage 3 to stage 2 - 0.7 -0.7 - Transfer from stage 2 to stage 1 3.3 -3.3 - - Transfer from stage 3 to stage 1 0.1 - -0.1 - New financial assets originated 5.5 1.6 - 7.1 Increased expected credit loss 0.7 9.6 10.8 21.2 Assets derecognized -4.1 -1.0 -6.7 -11.8 Decreased expected credit loss -0.7 -0.4 -0.4 -1.5 Exchange rate movements 0.5 0.3 8.1 8.8 Macroeconomic model changes -1.0 -0.7 - -1.7 Other changes 14.3 9.2 25.7 49.2 Impairment 30.09.2020 46.5 32.0 149.9 228.4 Q4 2020: Transfer from stage 1 to stage 2 -1.7 1.7 - - Transfer from stage 1 to stage 3 -0.4 - 0.4 - Transfer from stage 2 to stage 3 - -13.2 13.2 - Transfer from stage 3 to stage 2 - 0.1 -0.1 - Transfer from stage 2 to stage 1 4.4 -4.4 - - Transfer from stage 3 to stage 1 - - - - New financial assets originated 10.3 4.6 0.2 15.1 Increased expected credit loss 1.1 13.0 11.6 25.7 Assets derecognized -5.4 -0.8 -2.0 -8.1 Decreased expected credit loss -1.2 -0.2 -1.0 -2.5 Exchange rate movements -0.3 -0.2 -1.1 -1.6 Macroeconomic model changes -2.9 -1.7 - -4.6 Other changes 0.2 0.1 -4.2 -3.9 Impairment 31.12.2020 50.7 31.0 166.9 248.6 Komplett Bank Annual Report 2020 77

RECONCILIATION OF IMPAIRMENTS OF CONSUMER LOANS TO CUSTOMERS SWEDEN

NOK million stage 1 stage 2 stage 3 Total

Impairment 01.01.2019 10.3 10.6 12.2 33.1 Q1 2019: Transfer from stage 1 to stage 2 -0.7 0.7 - - Transfer from stage 1 to stage 3 -0.1 - 0.1 - Transfer from stage 2 to stage 3 - -4.3 4.3 - Transfer from stage 3 to stage 2 - - - - Transfer from stage 2 to stage 1 2.3 -2.3 - - Transfer from stage 3 to stage 1 - - - - New financial assets originated or change in provisions 4.7 7.7 4.7 17.0 Assets derecognized or change in provisions -2.4 -0.4 -0.4 -3.2 Other changes 0.5 0.4 -1.7 -0.8 Impairment 31.03.2019 14.6 12.3 19.2 46.1 Q2 2019: Transfer from stage 1 to stage 2 -0.8 0.8 - - Transfer from stage 1 to stage 3 -0.1 - 0.1 - Transfer from stage 2 to stage 3 - -6.1 6.1 - Transfer from stage 3 to stage 2 - - - - Transfer from stage 2 to stage 1 0.9 -0.9 - - Transfer from stage 3 to stage 1 - - - - New financial assets originated or change in provisions 3.4 10.0 5.0 18.4 Assets derecognized or change in provisions -1.4 -0.3 -0.0 -1.8 Other changes -2.0 0.1 -0.3 -2.2 Impairment 30.06.2019 14.7 15.7 30.2 60.6 Q3 2019: Transfer from stage 1 to stage 2 -1.0 1.0 - - Transfer from stage 1 to stage 3 -0.2 - 0.2 - Transfer from stage 2 to stage 3 - -7.0 7.0 - Transfer from stage 3 to stage 2 - 0.1 -0.1 - Transfer from stage 2 to stage 1 2.4 -2.4 - - Transfer from stage 3 to stage 1 0.3 - -0.3 - New financial assets originated or change in provisions 5.6 11.1 6.9 23.7 Assets derecognized or change in provisions -3.5 -0.7 -0.5 -4.8 Other changes 0.8 0.2 0.4 1.3 Impairment 30.09.2019 19.1 17.9 43.7 80.7 Q4 2019: Transfer from stage 1 to stage 2 -1.0 1.0 - - Transfer from stage 1 to stage 3 -0.3 - 0.3 - Transfer from stage 2 to stage 3 - -7.8 7.8 - Transfer from stage 3 to stage 2 - 0.1 -0.1 - Transfer from stage 2 to stage 1 3.3 -3.3 - - Transfer from stage 3 to stage 1 - - - - New financial assets originated or change in provisions 3.8 9.3 9.0 22.1 Assets derecognized or change in provisions -4.0 -0.8 -1.4 -6.2 Other changes 7.6 5.8 5.4 18.8 Impairment 31.12.2019 28.5 22.3 64.6 115.4 78 Notes to the financial statements

RECONCILIATION OF IMPAIRMENTS OF CREDIT CARD LOANS TO CUSTOMERS

NOK million stage 1 stage 2 stage 3 Total

Impairment 01.01.2020 6.1 10.8 40.2 57.1 Q1 2020: Transfer from stage 1 to stage 2 -0.5 0.5 - - Transfer from stage 1 to stage 3 -0.0 - 0.0 - Transfer from stage 2 to stage 3 - -2.8 2.8 - Transfer from stage 3 to stage 2 - 0.0 -0.0 - Transfer from stage 2 to stage 1 2.4 -2.4 - - Transfer from stage 3 to stage 1 0.3 - -0.3 - New financial assets originated 0.5 0.0 - 0.6 Increased expected credit loss 0.6 3.7 10.7 15.0 Assets derecognized -3.1 -0.7 -0.8 -4.5 Decreased expected credit loss -0.1 -0.3 -0.7 -1.1 Exchange rate movements 0.2 0.0 0.0 0.2 Macroeconomic model changes 0.9 2.0 - 2.9 Other changes 0.0 0.0 - 0.1 Impairment 31.03.2020 7.3 11.0 51.9 70.2 Q2 2020: Transfer from stage 1 to stage 2 -0.4 0.4 - - Transfer from stage 1 to stage 3 -0.0 - 0.0 - Transfer from stage 2 to stage 3 - -2.4 2.4 - Transfer from stage 3 to stage 2 - 0.1 -0.1 - Transfer from stage 2 to stage 1 2.9 -2.9 - - Transfer from stage 3 to stage 1 0.2 - -0.2 - New financial assets originated 0.5 0.0 0.0 0.5 Increased expected credit loss 0.7 2.6 4.9 8.3 Assets derecognized -3.4 -0.8 -1.0 -5.1 Decreased expected credit loss -0.1 -0.3 -1.0 -1.5 Exchange rate movements -0.0 -0.0 -0.0 -0.0 Macroeconomic model changes 0.2 0.1 - 0.3 Other changes -0.2 -0.0 - -0.2 Impairment 30.06.2020 7.6 7.8 57.0 72.5 Q3 2020: Transfer from stage 1 to stage 2 -0.5 0.5 - - Transfer from stage 1 to stage 3 -0.0 - 0.0 - Transfer from stage 2 to stage 3 - -1.4 1.4 - Transfer from stage 3 to stage 2 - 0.1 -0.1 - Transfer from stage 2 to stage 1 2.0 -2.0 - - Transfer from stage 3 to stage 1 0.3 - -0.3 - New financial assets originated 0.7 0.0 0.0 0.7 Increased expected credit loss 0.8 3.4 2.0 6.3 Assets derecognized -2.9 -0.5 -2.0 -5.4 Decreased expected credit loss -0.1 -0.2 -0.5 -0.8 Exchange rate movements 0.0 0.0 0.0 0.0 Macroeconomic model changes -0.1 -0.1 - -0.3 Other changes -1.0 -0.3 - -1.3 Impairment 30.09.2020 6.7 7.4 57.7 71.8 Q4 2020: Transfer from stage 1 to stage 2 -0.3 0.3 - - Transfer from stage 1 to stage 3 -0.0 - 0.0 - Transfer from stage 2 to stage 3 - -1.6 1.6 - Transfer from stage 3 to stage 2 - - - - Transfer from stage 2 to stage 1 2.0 -2.0 - - Transfer from stage 3 to stage 1 0.2 - -0.2 - New financial assets originated 0.6 0.0 0.0 0.7 Increased expected credit loss 0.9 2.4 4.9 8.2 Assets derecognized -2.8 -0.5 -2.0 -5.3 Decreased expected credit loss -0.1 -0.2 -0.6 -1.0 Exchange rate movements -0.1 -0.0 -0.0 -0.1 Macroeconomic model changes -0.6 -0.3 - -0.9 Other changes 8.2 5.5 16.8 30.5 Impairment 31.12.2020 14.7 11.0 78.1 103.8 Komplett Bank Annual Report 2020 79

RECONCILIATION OF IMPAIRMENTS OF CREDIT CARD LOANS TO CUSTOMERS

NOK million stage 1 stage 2 stage 3 Total

Impairment 01.01.2019 8.9 12.1 42.3 63.3 Q1 2019: Transfer from stage 1 to stage 2 -0.7 0.7 - - Transfer from stage 1 to stage 3 -0.0 - 0.0 - Transfer from stage 2 to stage 3 - -3.3 3.3 - Transfer from stage 3 to stage 2 - - - - Transfer from stage 2 to stage 1 2.7 -2.7 - - Transfer from stage 3 to stage 1 - - - - New financial assets originated or change in provisions 1.2 5.5 3.7 10.3 Assets derecognized or change in provisions -2.8 -0.9 -17.1 -20.8 Other changes 0.2 0.1 2.1 2.4 Impairment 31.03.2019 9.4 11.3 34.4 55.2 Q2 2019: Transfer from stage 1 to stage 2 -0.7 0.7 - - Transfer from stage 1 to stage 3 -0.0 - 0.0 - Transfer from stage 2 to stage 3 - -2.7 2.7 - Transfer from stage 3 to stage 2 - 0.1 -0.1 - Transfer from stage 2 to stage 1 2.6 -2.6 - - Transfer from stage 3 to stage 1 0.5 - -0.5 - New financial assets originated or change in provisions 0.7 4.9 4.6 10.2 Assets derecognized or change in provisions -3.3 -1.6 -7.3 -12.2 Other changes -1.7 3.0 -1.1 0.2 Impairment 30.06.2019 7.6 13.0 32.7 53.3 Q3 2019: Transfer from stage 1 to stage 2 -1.0 1.0 - - Transfer from stage 1 to stage 3 -0.0 - 0.0 - Transfer from stage 2 to stage 3 - -3.6 3.6 - Transfer from stage 3 to stage 2 - - - - Transfer from stage 2 to stage 1 2.5 -2.5 - - Transfer from stage 3 to stage 1 0.3 - -0.3 - New financial assets originated or change in provisions 1.4 8.5 3.9 13.9 Assets derecognized or change in provisions -3.3 -1.0 -8.1 -12.3 Other changes 1.2 0.4 0.0 1.6 Impairment 30.09.2019 8.7 15.8 31.9 56.5 Q4 2019: Transfer from stage 1 to stage 2 -1.1 1.1 - - Transfer from stage 1 to stage 3 -0.0 - 0.0 - Transfer from stage 2 to stage 3 - -5.8 5.8 - Transfer from stage 3 to stage 2 - 0.1 -0.1 - Transfer from stage 2 to stage 1 2.4 -2.4 - - Transfer from stage 3 to stage 1 0.3 - -0.3 - New financial assets originated or change in provisions 2.1 7.1 11.3 20.5 Assets derecognized or change in provisions -3.2 -1.2 -8.1 -12.6 Other changes -3.0 -3.8 -0.6 -7.4 Impairment 31.12.2019 6.1 10.8 40.2 57.1 80 Notes to the financial statements

RECONCILIATION OF IMPAIRMENTS OF POS FINANCE LOANS TO CUSTOMERS

NOK million stage 1 stage 2 stage 3 Total

Impairment 01.01.2020 5.2 4.5 22.6 32.3 Q1 2020: Transfer from stage 1 to stage 2 -0.5 0.5 - - Transfer from stage 1 to stage 3 -1.5 - 1.5 - Transfer from stage 2 to stage 3 - -0.9 0.9 - Transfer from stage 3 to stage 2 - 0.3 -0.3 - Transfer from stage 2 to stage 1 1.9 -1.9 - - Transfer from stage 3 to stage 1 0.3 - -0.3 - New financial assets originated - - - - Increased expected credit loss 0.7 3.1 5.6 9.4 Assets derecognized -2.4 -0.4 -4.7 -7.5 Decreased expected credit loss - - - - Exchange rate movements 0.1 0.2 0.5 0.8 Macroeconomic model changes 0.6 0.8 - 1.4 Other changes 0.0 0.3 - 0.3 Impairment 31.03.2020 4.5 6.5 25.7 36.7 Q2 2020: Transfer from stage 1 to stage 2 -0.6 0.6 - - Transfer from stage 1 to stage 3 -1.7 - 1.7 - Transfer from stage 2 to stage 3 - -1.2 1.2 - Transfer from stage 3 to stage 2 - 0.4 -0.4 - Transfer from stage 2 to stage 1 3.1 -3.1 - - Transfer from stage 3 to stage 1 0.3 - -0.3 - New financial assets originated - - - - Increased expected credit loss 2.2 3.4 5.1 10.7 Assets derecognized -3.7 -0.5 -4.7 -8.9 Decreased expected credit loss - - - - Exchange rate movements -0.0 -0.0 -0.0 -0.0 Macroeconomic model changes 0.1 0.1 - 0.2 Other changes 0.7 0.3 - 1.0 Impairment 30.06.2020 5.0 6.3 28.4 39.7 Q3 2020: Transfer from stage 1 to stage 2 -0.7 0.7 - - Transfer from stage 1 to stage 3 -1.5 - 1.5 - Transfer from stage 2 to stage 3 - -1.1 1.1 - Transfer from stage 3 to stage 2 - 0.3 -0.3 - Transfer from stage 2 to stage 1 3.1 -3.1 - - Transfer from stage 3 to stage 1 0.3 - -0.3 - New financial assets originated - - - - Increased expected credit loss 2.6 3.5 4.8 10.9 Assets derecognized -3.8 -0.5 -4.7 -9.0 Decreased expected credit loss - - - - Exchange rate movements 0.0 0.0 0.1 0.1 Macroeconomic model changes -0.1 -0.1 -0.0 -0.2 Other changes -0.7 -0.2 -0.0 -1.0 Impairment 30.09.2020 4.2 5.8 30.5 40.6 Q4 2020: Transfer from stage 1 to stage 2 -0.6 0.6 - - Transfer from stage 1 to stage 3 -1.0 - 1.0 - Transfer from stage 2 to stage 3 - -1.0 1.0 - Transfer from stage 3 to stage 2 - 0.3 -0.3 - Transfer from stage 2 to stage 1 2.8 -2.8 - - Transfer from stage 3 to stage 1 0.4 - -0.4 - New financial assets originated - - - - Increased expected credit loss 3.2 3.2 5.1 11.4 Assets derecognized -3.6 -0.4 -4.0 -8.0 Decreased expected credit loss - - - - Exchange rate movements -0.0 -0.0 -0.1 -0.1 Macroeconomic model changes -0.3 -0.2 0.0 -0.5 Other changes 2.4 0.9 3.7 7.0 Impairment 31.12.2020 7.5 6.3 36.6 50.3 Komplett Bank Annual Report 2020 81

RECONCILIATION OF IMPAIRMENTS OF POS FINANCE LOANS TO CUSTOMERS

NOK million stage 1 stage 2 stage 3 Total

Impairment 01.01.2019 4.6 5.0 6.3 15.9 Q1 2019: Transfer from stage 1 to stage 2 -0.4 0.4 - - Transfer from stage 1 to stage 3 -0.0 - 0.0 - Transfer from stage 2 to stage 3 - -0.8 0.8 - Transfer from stage 3 to stage 2 - 0.2 -0.2 - Transfer from stage 2 to stage 1 0.2 -0.2 - - Transfer from stage 3 to stage 1 0.1 - -0.1 - New financial assets originated or change in provisions 4.9 3.4 5.8 14.1 Assets derecognized or change in provisions -3.9 -3.3 -1.0 -8.2 Other changes - - - - Impairment 31.03.2019 5.4 4.6 11.7 21.7 Q2 2019: Transfer from stage 1 to stage 2 -1.4 1.4 - - Transfer from stage 1 to stage 3 -0.1 - 0.1 - Transfer from stage 2 to stage 3 - -1.6 1.6 - Transfer from stage 3 to stage 2 - - - - Transfer from stage 2 to stage 1 1.1 -1.1 - - Transfer from stage 3 to stage 1 - - - - New financial assets originated or change in provisions 3.5 1.8 3.8 9.1 Assets derecognized or change in provisions -3.6 -0.1 -1.9 -5.7 Other changes 0.3 0.5 - 0.8 Impairment 30.06.2019 5.2 5.5 15.2 26.0 Q3 2019: Transfer from stage 1 to stage 2 -1.3 1.3 - - Transfer from stage 1 to stage 3 - - - - Transfer from stage 2 to stage 3 - -3.2 3.2 - Transfer from stage 3 to stage 2 - 0.1 -0.1 - Transfer from stage 2 to stage 1 1.3 -1.3 - - Transfer from stage 3 to stage 1 - - - - New financial assets originated or change in provisions 6.4 5.8 2.6 14.8 Assets derecognized or change in provisions -5.1 -1.9 -3.1 -10.2 Other changes 0.1 0.1 - 0.2 Impairment 30.09.2019 6.6 6.4 17.8 30.8 Q4 2019: Transfer from stage 1 to stage 2 -1.0 1.0 - Transfer from stage 1 to stage 3 - - - - Transfer from stage 2 to stage 3 - -0.9 0.9 - Transfer from stage 3 to stage 2 - - - - Transfer from stage 2 to stage 1 0.8 -0.8 - Transfer from stage 3 to stage 1 - - - - New financial assets originated or change in provisions 10.5 4.0 4.1 18.6 Assets derecognized or change in provisions -8.1 -2.6 -0.3 -11.1 Other changes -3.5 -2.6 0.1 -6.0 Impairment 31.12.2019 5.2 4.5 22.6 32.3 82 Notes to the financial statements

SENSITIVITY ANALYSIS CHANGING PARAMETERS IN THE LOAN LOSS MODEL

2020: Consumer loans Credit POS NOK million Norway Finland Sweden cards Finance Total

Sensitivity by changing loss given default parameters at the end of 2020 Profit or loss effect at 1% change 9.7 11.0 4.9 2.7 1.7 30.0 Profit or loss effect at 2% change 19.4 22.0 9.8 5.4 3.4 60.0 Profit or loss effect at 5% change 48.5 55.1 24.4 13.4 8.5 149.9

Sensitivity by changing probability of default parameters at the end of 2020 Profit or loss effect at 0.5% change 4.5 3.6 3.3 1.2 1.0 13.6 Profit or loss effect at 1% change 9.1 7.2 6.6 2.4 2.1 27.3 Profit or loss effect at 2% change 18.1 14.3 13.2 4.8 4.1 54.6

Sensitivity by changing macro adjustments at the end of 2020 Profit or loss effect at 1% change 0.8 1.0 0.7 0.2 0.1 2.9 Profit or loss effect at 2% change 1.6 2.1 1.5 0.5 0.3 5.9 Profit or loss effect at 5% change 4.0 5.2 3.7 1.2 0.7 14.7

The effect is measured as changes in percentage points.

2019: Consumer loans Credit POS NOK million Norway Finland Sweden cards Finance Total

Sensitivity by changing loss given default parameters at the end of 2019 Profit or loss effect at 1% change 8.2 7.2 3.1 2.2 1.3 22.0 Profit or loss effect at 2% change 16.4 14.4 6.2 4.5 2.5 44.0 Profit or loss effect at 5% change 41.0 35.9 15.6 11.2 6.3 110.0

Sensitivity by changing probability of default parameters at the end of 2019 Profit or loss effect at 0.5% change 5.3 1.1 2.0 0.5 0.3 9.2 Profit or loss effect at 1% change 10.7 5.3 3.9 1.0 0.7 21.6 Profit or loss effect at 2% change 21.3 13.6 7.9 2.2 1.4 46.3

Sensitivity by changing macro adjustments at the end of 2019 Profit or loss effect at 1% change 1.3 1.3 0.4 0.2 0.1 3.4 Profit or loss effect at 2% change 2.7 2.7 0.8 0.4 0.2 6.7 Profit or loss effect at 5% change 6.7 6.6 2.1 0.9 0.5 16.9

The effect is measured as changes in percentage points. Komplett Bank Annual Report 2020 83

Information on products and geographical distribution Below comes information about income, cost, net loans to customers and impairments related to the different products the Bank is offering.

2020: Consumer loans Not Credit POS allocated NOK million Norway Finland Sweden cards Finance product Total

Income 2020 Interest income 505.3 314.0 152.4 134.9 60.9 4.4 1,171.9 Income commissions and fees 25.9 20.5 4.1 29.5 31.0 - 111.0 Total 531.2 334.6 156.5 164.3 91.8 4.4 1,282.9

Selected costs per product 2020 Interest expenses 53.3 44.1 25.1 12.7 9.6 - 144.8 Expenses commissions and fees 5.2 5.5 2.5 35.1 0.9 - 49.3 Losses on loans 80.6 77.2 119.8 45.5 41.2 - 364.3 Total 139.2 126.8 147.4 93.4 51.7 - 558.5

Net loans 31.12.2020 Net loans to customers 3,168.9 2,484.2 1,402.1 728.7 577.2 - 8,361.2 Total 3,168.9 2,484.2 1,402.1 728.7 577.2 - 8,361.2

Impairment 31.12.2020 Impairment of loans to customers 333.0 409.5 248.6 104.4 50.4 - 1,145.8 Total 333.0 409.5 248.6 104.4 50.4 - 1,145.8

2019: Consumer loans Not Credit POS allocated NOK million Norway Finland Sweden cards Finance product Total

Income 2019 Interest income 619.2 277.3 119.3 163.5 53.2 21.8 1,254.2 Income commissions and fees 34.3 19.9 1.3 40.9 25.3 3.5 125.4 Total 653.5 297.2 120.6 204.4 78.5 25.3 1,379.6

Selected costs per product 2019 Interest expenses 82.5 43.8 16.4 16.4 8.0 - 167.2 Expenses commissions and fees 5.5 6.0 1.6 24.7 0.7 - 38.6 Losses on loans 142.4 189.6 79.4 26.5 16.4 - 454.3 Total 230.4 239.4 97.5 67.7 25.1 - 660.1

Net loans 31.12.2019 Net loans to customers 3,699.5 2,428.9 1,061.8 800.5 505.0 - 8,495.8 Total 3,699.5 2,428.9 1,061.8 800.5 505.0 - 8,495.8

Impairment 31.12.2019 Impairment of loans to customers 286.3 319.1 115.4 57.1 32.3 - 810.1 Total 286.3 319.1 115.4 57.1 32.3 - 810.1 84 Notes to the financial statements

Note 3 Loans and deposits with credit institutions

NOK million 31.12.2020 31.12.2019

Loans and deposits with credit institutions 1,204.2 614.7 of which bound funds constitute; Client funds (insurance brokering) 1.4 1.4 Other bound funds 26.4 16.5 Bound tax withholding funds 4.7 4.7

Note 4 Certificates and bonds

THE BANK’S SECURITIES ARE DISTRIBUTED AS FOLLOWS AS AT 31.12.2020:

NOK million Risk weight Book value Fair value

Government certificates 0% 187.1 187.1 Government certificate funds 0% 851.6 851.6 Bonds with pre-emptive rights 10% 758.4 758.4 Bank certificates 20% 51.0 51.0 Total 1,848.0 1,848.0

THE BANK’S SECURITIES ARE DISTRIBUTED AS FOLLOWS AS AT 31.12.2019:

NOK million Risk weight Book value Fair value

Government certificates 0% 398.2 398.2 Government certificate funds 0% 840.8 840.8 Bonds with pre-emptive rights 10% 90.8 90.8 Bank certificates 20% - - Total 1,329.8 1,329.8

In 2020, the Bank achieved an effective weighted interest income rate of 0.14 per cent (0.74 per cent in 2019). This is calculated based on actual interest income from certificated and bonds the last 12 months divided by the average monthly balance. Komplett Bank Annual Report 2020 85

Note 5 Intangible assets and fixed assets

Fixtures and Office Intangible NOK million fittings machines assets Rigths of use Other Total

Accumulated historical cost at 1.9 1.0 151.0 - 0.2 153.8 01.01.2019 Additions in the period 0.4 0.1 98.6 19.4 - 118.6 Disposals in the period ------Historical cost at 31.12.2019 2.3 1.1 249.6 19.4 0.2 272.6

Accumulated depreciations at 1.0 0.4 55.0 - - 56.4 01.01.2019 Annual depreciations 2019 0.3 0.2 51.3 3.8 - 55.6 Accumulated depreciations at 1.3 0.6 106.3 3.8 - 111.9 31.12.2019 Book value at 31.12.2019 1.0 0.5 143.4 15.6 0.2 160.6

Accumulated historical cost at 2.3 1.1 249.6 19.4 0.2 272.6 01.01.2020 Additions in the period 0.2 0.1 78.5 0.7 - 79.5 Disposals in the period ------Historical cost at 31.12.2020 2.5 1.2 328.2 20.1 0.2 352.1

Accumulated depreciations at 1.3 0.6 106.3 3.8 - 111.9 01.01.2020 Annual depreciations 2020 0.8 0.0 67.7 3.6 - 72.1 Accumulated depreciations at 2.1 0.6 173.9 7.4 - 184.5 31.12.2020 Book value at 31.12.2020 0.4 0.5 154.2 12.1 0.2 167.4

No Economic life 5 years 3 years 5 years See below deprecation

Other intangible assets and fixed assets are depreciated on a straight-line basis over their lifetime. Intangible assets consist to a high degree of IT systems and rights acquired and developed in-house. The rights of use assets relates to the Bank’s leasing agreements and are depreciated over the length of the leasing agreement. No impairments have been recognised for other intangible assets or fixed assets either in the previous or current period. 86 Notes to the financial statements

Note 6 Shareholders

The face value of the company’s shares is NOK 1.00. All shares have the same share class and voting rights.

20 LARGEST SHAREHOLDERS AS AT 31.12.2020

Shareholder Number of shares Ownership in % structure Country

Kistefos AS 35,747,285 19.2% NOR State Street Bank and Trust Comp 17,243,753 9.2% NOM USA Alfab Holding AS 9,111,492 4.9% NOR DnB NOR Bank ASA 8,545,926 4.6% NOR The Bank of New York Mellon SA/NV 5,245,485 2.8% NOM GBR Macama AS 4,912,668 2.6% NOR Sanden AS 4,706,334 2.5% NOR SEB Prime Solutions Sissenes Canop 4,500,000 2.4% LUX OM Holding AS 4,269,465 2.3% NOR Directmarketing Invest AS 3,415,043 1.8% NOR Sniptind Invest AS 3,239,699 1.7% NOR Christiania Skibs AS 3,100,897 1.7% NOR Melesio Invest AS 3,085,068 1.7% NOR Obligasjon 2 AS 2,580,000 1.4% NOR Torstein Ingvald Tvenge 2,500,000 1.3% NOR Khaya AS 2,371,403 1.3% NOR Dingja Invest AS 1,959,961 1.1% NOR Laboremus Industrier AS 1,669,534 0.9% NOR Contribute AS 1,621,279 0.9% NOR Ursulf AS 1,421,822 0.8% NOR Total 20 largest shareholders 121,247,114 65.0% Other shareholders 65,366,625 35.0% Total 186,613,739 100.0% Komplett Bank Annual Report 2020 87

20 LARGEST SHAREHOLDERS AS AT 31.12.2019

Shareholder Number of shares Ownership in % structure Country

Canica Invest AS 35,747,285 19.4% NOR State Street Bank and Trust Comp 15,023,405 8.2% NOM USA Alfab Holding AS 10,971,183 6.0% NOR DnB NOR Bank ASA 8,816,656 4.8% NOR UBS AG 5,205,870 2.8% NOM GBR Macama AS 4,912,668 2.7% NOR Norda ASA 4,764,833 2.6% NOR Sanden AS 4,706,334 2.6% NOR Canopus 4,423,635 2.4% LUX Om Holding AS 4,069,465 2.2% NOR BNP Paribas Securities Services 3,437,256 1.9% NOM LUX Directmarketing Invest AS 3,415,043 1.9% NOR Sniptind Invest AS 2,789,699 1.5% NOR Goldman Sachs International 2,698,651 1.5% NOM GBR Torstein Ingvald Tvenge 2,500,000 1.4% NOR Khaya AS 2,371,403 1.3% NOR Fondsavanse AS 2,268,792 1.2% NOR Dingja Invest AS 1,959,961 1.1% NOR Bma Invest AS 1,889,552 1.0% NOR Ursulf AS 1,832,500 1.0% NOR Total 20 largest shareholders 123,804,191 67.2% Other shareholders 60,315,537 32.8% Total 184,119,728 100.0% 88 Notes to the financial statements

Note 7 Specification of debt

NOK million 31.12.2020 31.12.2019

The Bank's other debt consist of Payables to suppliers 27.5 39.0 Remaining other debt: Social secutity tax 8.8 5.3 Other liablilities 106.3 105.2 Total other debt 142.5 149.5

The Bank's subordinated loans consist of Subordinated loans (ISIN NO0010757768) 65.0 64.9 3 months NIBOR + 5.0% interest margin Total subordinated loans 65.0 64.9

Reconciliation of subordinated loans Opening balance 64.9 64.7 Amortisation of transaction costs/change NIBOR interest rate recognised against "interest expenses" 0.1 0.1 Closing balance 65.0 64.9

Reconciliation of senior unsecured bond Opening balance - 399.8 Paid unsecured bond - 400.0 Amortisation of transaction costs/change NIBOR interest rate recognised against "interest expenses" - 0.3 Closing balance - -

The subordinated loan matures 23. February 2026 with the first opportunity for call first time 23. February 2021 and thereafter on each date of interest payment (each quarter). The next date for payment of interest rat is 23 May 2021. The subordinated loan was refinanced on 23. February 2021 with same conditions as the existing subordinated loan.

As at 31 December 2020 and 31 December 2019, the Bank had no unused overdraft facilities or other drawing rights. The Bank’s senior unsecured bond was in its entirety paid back in 2019 in accordance with the term in the bond agreement.

All deposits from the Bank’s customers come from private individuals. The Bank’s average (weighted) offered interest rate in 2020 was 1.72 per cent (1.96 per cent for 2019) for Norwegian deposit customers and 0.44 per cent for German deposit customers (0.59 per cent for 2019). The product was launched in Sweden in Q1 2020 and average (weighted) interest rate in 2020 was 0.90 per cent.

The calculation is based on actual interest costs and average deposit balances per month. Interest rates for deposits and loans are variable. As at 31 December 2020, the Bank did not offer fixed-interest deposits to Norwegian customers, but offered one and year fixed rates to German deposit customers. Deposits from German customers was NOK 2,359.2 million as at 31 December 2020 (2,540.4 million as at 31 December 2019). Komplett Bank Annual Report 2020 89

Note 8 Items not recognised in the balance sheet

There was no known information about significant contingent liabilities or contingent assets as at 31 December 2020 (or 31 December 2019) other than those referred to in the annual reports and note 24. Unused limits and credit facilities as at 31 December 2020 amounted to NOK 2,813.5 million (NOK 2,933.7 million as at 31 December 2019). Approved and offered loans not yet paid out amounted to NOK 270.3 million as at 31 December 2020 (NOK 265.6 million as at 31 December 2019).

Note 9 Capital adequacy

TOTAL CAPITAL

NOK million 31.12.2020 31.12.2019

Share capital 186.6 184.1 Share premium 786.7 786.7 Other equity 1,085.7 834.2 Other equity not included in core capital -78.5 - Phase-in effects of IFRS 9 159.4 194.3 Deductions: Deferred tax assets and other intangible assets and deductions -156.0 -145.4 Common equity Tier 1 including phase-in impact of IFRS 9 1,983.9 1,853.9 Additional Tier 1 capital 244.6 44.6 Core capital including phase-in impact of IFRS 9 2,228.4 1,898.4 Subordinated loans (Tier 2) 65.0 64.9 Total capital including phase-in impact of IFRS 9 2,293.4 1,963.3

CAPITAL EXCLUDING PHASE-IN IMPACTS OF IFRS 9 NOK million 31.12.2020 31.12.2019

Common equity Tier 1 excluding phase-in impact of IFRS 9 1,824.5 1,659.6 Core capital excluding phase-in impact of IFRS 9 2,069.0 1,704.1 Total capital excluding phase-in impact of IFRS 9 2,134.0 1,769.0 90 Notes to the financial statements

CALCULATION BASIS

NOK million 31.12.2020 31.12.2019

Loans and deposits with credit institutions 240.8 122.9 Loans to customers and IFRS 9 phase-in effects 6,721.4 6,745.2 Certificates and bonds 92.8 9.1 Other assets 18.7 36.2 Calculation basis credit risk 7,073.7 6,913.4 Calculation basis operational risk 1,653.7 1,822.6 Total calculation basis including phase-in impact of IFRS 9 8,727.3 8,735.9 Total calculation basis excluding phase-in impact of IFRS 9 8,578.9 8,560.2

Capital ratios including phase-in impact of IFRS 9 Common equity tier 1 (%) 22.7% 21.2% Core capital (%) 25.5% 21.7% Total capital (%) 26.3% 22.5%

Capital ratios excluding phase-in impact of IFRS 9 Common equity tier 1 (%) 21.3% 19.4% Core capital (%) 24.0% 19.9% Total capital (%) 24.9% 20.7%

The Bank had a liquidity capital ratio (LCR) of 774 per cent as at 31 December 2020 (716 per cent as at 31 December 2019) and a net stable funding ratio (NSFR) of 197 per cent as at 31 December 2020 (177 per cent as at 31 December 2019). The Bank’s leverage ratio was 16.6 per cent as at 31 December 2019 (17.3 per cent as at 31 December 2019). The Bank’s internal objective is to have an LCR and NSFR of respectively minimum 125 per cent and 115 per cent.

The Bank’s regulatory Pillar 1 minimum for capital adequacy is 17.0 per cent for common equity tier 1, 18.5 per cent for core capital and 20.5 per cent for total capital. Included in these capital requirements is a Pillar 2 requirement of 6.5 per cent and a counter cyclic requirement of 0.49 per cent. The Bank’s regulatory minimum for leverage ratio equals 5.0 per cent.

Komplett Bank has made the decision to change the approach used for measuring operational risk when calculating capital adequacy. Starting from December 2020 Komplett Bank will utilise the Standardised Approach, which will replace the Basic Indicator Approach used previously.

Komplett Bank has a capital adequacy objective of 21.5 per cent, including a common equity tier 1 adequacy of 18.0 per cent to provide leverage for the Bank’s growth strategy. In 2019, the Bank received a report by the FSA in conjunction with their review of the Bank’s risks and capital needs (SREP), determining the Pillar 2 requirement to 6.5 per cent.

. Komplett Bank Annual Report 2020 91

Note 10 Specification of interest and commission and fees

INTEREST INCOME

NOK million 2020 2019 1)

Interest income from loans to customers 1,167.4 1,232.5 Interest from certificates and bonds 4.4 20.3 Interest income from loans and deposits with credit institutions 0.1 1.4 Total interest income 1,171.9 1,254.2

INTEREST EXPENSES

NOK million 2020 2019 1)

Interest expense from deposit from customers 109.7 140.2 Interest expense from subordinated loans and senior unsecured bond 4.0 9.9 Other interest expenses 31.1 17.1 Total interest expenses 144.8 167.2

INCOME COMMISSIONS AND FEES

NOK million 2020 2019 1)

Insurance services 48.2 58.4 Fees 62.8 67.0 Total income commisions and fees 111.0 125.4

EXPENSES COMMISSIONS AND FEES

NOK million 2020 2019 1)

Provisions to other bank connections 6.0 5.8 Other expenses commissions and fees 43.2 32.8 Total expenses commissions and fees 49.3 38.6

SPESIFICATION OF INTEREST INCOME THAT ARE CALCULATED USING THE EFFECTIVE INTEREST METHOD

NOK million 2020 2019 1)

Interest income from loans to customers 1,167.4 1,232.5 Interest income from loans and deposits with credit institutions 0.1 1.4 Total interest income calculated using the effective interest method 1,167.5 1,233.9

1) The 2019 numbers are reworked. See note 23. 92 Notes to the financial statements

Note 11 Payments to employees and remuneration to trustees

SALARIES AND OTHER PERSONELL EXPENSES

NOK million 2020 2019

Salaries 111.9 103.0 Social security tax 17.7 16.2 Pension premiums 6.5 5.7 Social benefits 7.3 7.2 Other wage costs 1) 0.3 3.3 Total 143.8 135.4

1) Applies to costs of hired manpower.

No security was provided to any of the Bank’s employees or any of their related parties in 2020. Some employees have credit card debts to and deposits in the Bank as at 31 December 2020. All employees and their related parties that have the Bank’s credit card and deposit products have these with the ordinary terms and conditions.

All permanent employees, a total of 148 people as at 31 December 2020 (140 as at 31 December 2019), are covered by the Bank’s pension plan. The plan is a defined-contribution plan and is covered by Storebrand. The Bank is obliged to have an occupational pension plan in accordance with the Compulsory Occupational Pension Plan Act. The plan satisfies the requirements in the act.

Please refer to Note 14 for information on variable remuneration.

FEES PAID TO THE BOARD OF DIRECTORS

NOK million 2020 2019

Stig Eide Sivertsen (Chair) 1) 0.9 0.5 Bodil Palma Hollingsæter (Vice Chair) 0.7 0.4 Casper Wakefield (board member)2) - 0.1 Live Bertha Haukvik (board member) 3) 0.4 0.4 Jan Ole Stangeland (board member) 7) 0.4 0.4 Harald Hjorthen (board member) 4) 0.4 0.2 Nishant Fafalia (board member) 6) 0.1 - Kristian Tovsen (employee representative) 5) 0.1 - Jonna Kyllönen (employee representative) 5) 0.1 - Nojanaj Pongsupaht (employee representative) 5) 0.0 - Nils Erik Markus Hellqvist (employee representative) 5) 0.0 - Morten Fredrik Petterøe (employee representative) - 0.1 Hilde Berge Aasen (employee representative) - 0.1 Pål Røland (employee representative) - 0.0 Silje Christoffersen (employee representative) - 0.0 Total fees paid to the Board of Directors 3.2 2.2

1) New chair after extraordinary general meeting 2019 2) Board member until extraordinary general meeting 2019 3) Chair of the board until extraordinary general meeting 2019 4) New board member from 2019 5) New board member from 2020 6) New board member from 2021 7) Board member till extraordinary general meeting in 2021 Komplett Bank Annual Report 2020 93

AUDITOR FEES (INCL. VAT)

NOK million 2020 2019

Statutory auditing 1.8 1.5 Other certification services 0.4 1.2 Other services 0.0 0.0 Total 2.1 2.7

Information about the company’s remuneration plan The Regulation on Remuneration Plans in Financial Institutions etc., states that the company shall publish information regarding the main principles for establishing remuneration, criteria for establishing any variable remuneration and quantitative information about remuneration to senior employees, to employees with duties of considerable importance for the company’s exposure to risk, to employees with control duties and staff representatives with equivalent remuneration. The information below in this note, including the Board’s declaration on the establishment of salaries and other remuneration constitutes this kind of information. The declaration and guidelines apply in relation to all employees, including the CEO and other members of the management.

WAGES AND REMUNERATIONS TO KEY PERSONELL 2020 Fixed salary Other remunerations Value of share Variable Other NOK million Salary options 1) salary 2) remunerations Pension Total

Chief Executive Officer 2.7 1.2 0.6 0.0 0.1 4.6 Chief Financial Officer 1.5 0.3 0.3 0.0 0.1 2.2 Director Credit Risk & Collections 2.0 0.4 0.3 0.0 0.1 2.8 Chief Operations Officer 1.6 0.3 0.3 0.0 0.1 2.3 Chief Marketing Officer/ Chief 1.6 0.8 0.3 0.0 0.1 2.8 Information Officer Director Legal & HR 1.9 0.3 0.3 0.0 0.1 2.6 Director Credit Cards 1.7 0.3 0.3 0.0 0.1 2.4 Director Consumer loans & POS 1.4 0.7 0.3 0.0 0.1 2.5 Chief Compliance Officer 1.1 0.4 0.2 0.0 0.1 1.8 Chief Risk Officer1) 0.4 0.0 - 0.0 0.0 0.5 Total 15.9 4.8 2.8 0.1 0.8 24.4

1) From 1 September 2020

WAGES AND REMUNERATIONS TO KEY PERSONELL 2019 Fixed salary Other remunerations Value of share Variable Other NOK million Salary options 1) salary 2) remunerations Pension Total

Chief Executive Officer 2.8 0.3 1.4 0.0 0.1 4.6 Chief Financial Officer 1.2 0.3 0.2 0.0 0.1 1.8 Director Credit Risk & Collections 1.7 - 0.6 0.0 0.1 2.4 Chief Operations Officer 1.4 - 0.5 0.0 0.1 2.0 Chief Marketing Officer/ Chief 1.7 0.2 0.8 0.0 0.1 2.8 Information Officer Director Legal & HR 1.8 - 0.6 0.0 0.1 2.5 Director Credit Cards 1.6 - 0.5 0.0 0.1 2.2 Director Consumer loans & POS 1.3 0.3 0.5 0.0 0.1 2.2 Chief Compliance and Risk Officer 1.0 0.1 0.2 0.0 0.1 1.4 Total 14.4 1.1 5.3 0.1 0.8 21.8

1) The stated value is based on market value at the grant date. 2) The stated value relates to the value of granted bonus options vested based on the previous year’s work efforts. Only some of the value stated in this note applies to vested options. See Note 14 for further details. 94 Notes to the financial statements

The Board of Directors will submit the following remuneration cooperation with the CEO, CFO and HR Director. guidelines for voting at the Annual General Meeting, in accordance with Section 6-16a of the Norwegian Act relating to Public Liability Komplett Bank’s remuneration framework is linked to the Companies: Company’s strategy and values. Performance is evaluated in two dimensions; “What” we deliver and “How” we deliver. This is at the “The Board of Directors’ guidelines for determination heart of our value-based performance culture, and means that of remuneration to senior management delivery (“What”) and behaviour (“How”) are weighted equally when Changes to this year’s guidelines we recognize and reward individual performance.

No significant changes have been made to this year’s guidelines “What” we deliver (business delivery) is defined through the compared to last year. Company’s performance framework. For the quantitative part of variable allowances, clear criteria have been set for what is minimum 1. Guidelines for the next fiscal year objective achievement and when the objectives are met based on The Board of Directors proposes the following guidelines for a given matrix. For performance and balance sheet goals, there is processing at the Annual General Meeting 2021. a clear correlation with the Company’s plans and objectives. The sustainability goals support the Bank’s plans and clear criteria have The Company’s overall remuneration scheme is intended to promote been set for attainment of objectives. a behaviour that is based on a desired performance- and results oriented culture. The overall remuneration scheme is intended to The objectives for “How” we deliver are based on Komplett Bank’s attract and retain employees who have the desired attributes, com- values and management principles and address the behaviour petence and experience. The remuneration scheme will contribute required and expected to achieve the delivery objectives. We want to promoting and incentivising good management and control of the to develop a strong leadership and a culture recognised by our Company’s risk, discourage excessive risk-taking, assist in avoiding values, which drives the Company’s long-term and sustainable conflicts of interest and maintain profitability over time. success. The objectives are discretionary and basically consist of an assessment of the achievement of the manager’s personal Consideration should be given to the Company’s financial situation objectives. when determining management salaries. We should not offer the highest salaries, but should nonetheless be competitive. The pay 1.1 Decision-making process system should be easy to explain and administrate and be flexible The guidelines shall be processed and approved by the Annual so that it can be adapted to suit changing needs. The pay system General Meeting in the event of any significant change and at least shall comply with, among other things, the Company’s pay policy every four years pursuant to Section 5-6 cf. Section 6-16a of the and ethical guidelines. The remuneration policy is designed to: Public Limited Companies Act.

Ǵ Contribute to the business strategy, long-term interests and On 11 February 2020, the Board of Directors decided to establish sustainability of the Company a remuneration committee. The Remuneration Committee is Ǵ Strengthen the common interests of employees of Komplett responsible for preparing and proposing to the Board of Directors Bank and its shareholders Komplett Bank’s remuneration scheme and shall ensure that this Ǵ Reflect the company’s overall performance and financial results helps to promote and offer incentives for good management and Ǵ Be competitive and adapted to local markets control of the Bank’s risks, discourage excessive risk-taking and avoid conflicts of interest. The remuneration scheme is formulated The Company’s remuneration schemes shall be adapted within the in accordance with the statutory and regulatory requirements provisions pursuant to Chapter 15 of the Norwegian Act relating to applicable to financial undertakings. The Remuneration Committee Financial Institutions with regulations applicable at all times, the Public recommends criteria and the Board of Directors decides criteria for Limited Companies Act Section 6-16 a and b, Regulations on guide- variable remuneration lines and reports on remuneration for senior management as well as other applicable regulations for remuneration schemes in banks. 2. Remuneration to senior management 2.1 Composition of remuneration The Board of Directors determines the remuneration to the CEO. Remuneration to senior management consists of fixed salary, The CEO determines the remuneration to the other managers variable remuneration up to 50% of fixed salary – but half of which is in consultation with the Chairman of the Board. Management granted in the form of share options with a contract period, benefits includes the Company’s management group, employees who are in kind and pension and insurance schemes. members of the Board of Directors and the corporate assembly. For other employees, the area director determines remuneration in Komplett Bank Annual Report 2020 95

Composition of total Remuneration item Objective Allocation and level Criteria remuneration

The Company’s management team

Fixed salary Attract and retain the We offer basic salary levels that The basic salary is normally 62% right people by offering are adapted and differentiated subject to annual review competitive but not according to the individual’s based on an evaluation of the market-leading conditions. responsibilities, performance individual’s performance and and contribution to the contribution to the Company’s Company’s objectives. The objectives. level is competitive in the markets in which we operate.

Variable remuneration Ensure that employees Variable remuneration shall The remuneration shall be 31% (Share options) and shareholders have not exceed 50% of the fixed calculated on the basis of the same interests, and remuneration for senior assessments of financial and reward long-term value management*. Half of the non-financial performance over creation. variable remuneration is two consecutive years, so that awarded as share options that the bonus level (in relation to are released evenly over a the maximum bonus) for a year period of 3 years. shall constitute the average of the bonus level calculated for these two years in isolation.

One-time allowances One-time allowances may Such one-time allowances can Individual cases in 0% be decided in individual be based on share options, in connection with recruitment cases, for example which case they will comply or as compensation for in connection with with the rules for such benefits individual achievements or recruitment (“sign on fee”) where appropriate. In each efforts. If awarded to senior or as compensation for case, the Board of Directors management, they are individual achievements decides on any deviant processed in accordance or efforts. provisions for share option- with the requirements of based one-time allowances. the Financial Institutions Regulations. Share option-based one-time allowances are decided by the Board of Directors.

Pension and insurance Attract and retain the All employees are covered by Non-performance-based 6% right people by offering a defined contribution pension competitive but not scheme with 6% of salary from market-leading conditions. 1-7.1 G and with 12% of salary from 7.1-12 G. No other pension schemes have been agreed for any employees.

Benefits in kind and Attract and retain the Benefits in kind that are not Non-performance-based 1% insurance right people by offering significant in relation to fixed competitive but not salary are determined for market-leading conditions. all employees by the CEO. Benefits in kind are granted in accordance with general practice and to promote physical activity among employees.

Board of Directors

Directors’ remuneration Attract and retain people The board members have an Non-performance-based 100% who have competence annual, fixed remuneration. related to the Bank’s risk management and internal Separate rates are set for the control. Chairman of the Board, external board members, employee- elected board members and employee-elected deputies. The Board of Directors receives the remuneration in the form of cash payment. 96 Notes to the financial statements

2.2 Guidelines for remuneration in the form of shares, subscription Ǵ Balance sheet development (20%) rights, options etc. for the next fiscal year Ǵ Sustainability Goals (40%) The Company’s variable remuneration schemes shall be intended to reward behaviour and influence culture that ensures long-term However, the awarded bonus cannot exceed 50% of fixed salary value creation and sensible risk-taking. The Board of Directors even if the target achievement may be higher for some criteria. makes an annual assessment of the maximum level of variable remuneration. In addition, one-time allowances may be used, for The specific circumstances emphasised shall be adapted to the example, if this is deemed necessary to attract or retain employees. individual’s function and area of responsibility. The assessment must be based on a combination of assessment of the person 2.2.1 Komplett Bank’s remuneration framework and the connec- concerned, the business unit concerned and the Company as a tion with business strategy, long-term interests and sustainability whole. When measuring results, risks to the Company and costs of the Company related to capital and liquidity shall be taken into account. Senior management receive variable remuneration based on an assessment of both quantitative and qualitative conditions based The basis for variable remuneration related to the Company’s on a two-year period. Variable remuneration to senior manage- results shall be a period of at least two years. ment cannot exceed 50% of fixed salary and half is granted in the form of share options that are postponed over a three-year period. 2.2.3 Decision process for variable remuneration to senior This provides incentives for good governance and counteracts management excessive risk-taking among management. The Board of Directors decides the allocation of variable remuneration and the level thereof. Half of the variable remuneration 2.2.2 Variable remuneration to senior management for senior management will be given in the form of share options For senior management, employees who have a significant with a contract period (exposed and conditional) so that they are impact on the Company’s risk exposure, employees with control released regularly over a three-year period (i.e. release of 1/3 the responsibilities and employees’ representatives,the remuneration first time 12 months after award) and may be reduced through is determined on the basis of an overall assessment, with the established malus/clawback arrangements should the perfor- emphasis in the variable component of the remuneration being mance development in the Company allow this. based on results achieved, balance sheet management (including asset-liability management and liquidity management), imple- The Board of Directors may, at its sole discretion, grant an mentation of the Company’s strategy plan and compliance with extension for up to 3 years (max. 8 years from the date of award) the adopted framework for risk tolerance. The assessment takes subject to the approval of the participant. In the event of such an into consideration overall goal attainment, trends over time and extension of the term, the fixed strike of the option shall increase the Bank’s long-term interests. The overall assessment must be to reflect the market value of the extension. based on both quantitative and qualitative factors. 2.3 Pay and employment conditions in relation to other employees Qualitative factors (comprise 50% of awarded bonus): Senior management’s average remuneration compared to the rest The qualitative part is discretionary and basically consists of of the employees is 2.9:1. The sample for which the calculation an assessment of the achievement of the manager’s personal is made is the average of the senior management’s remunera- objectives. Examples of qualitative factors are: tion compared with full-time employees’ remuneration. Senior Ǵ Compliance with internal and external regulations management has the competence necessary to manage the Ǵ Strategic objectives/KPI within the manager’s area Company and have more responsibility. As a consequence, it is Ǵ Contribution to the Company’s activities as a whole. natural that this is reflected in their remuneration.

Quantitative factors (comprise 50% of awarded bonus): 2.4 Severance pay and termination of employment For the quantitative part of variable remuneration, clear criteria Generally, senior management have a 6 month notice period, and have been set for what is minimum objective achievement and only 12 months’ severance pay has been agreed for the CEO. when the objectives are met. For performance and balance sheet targets, there is a clear correlation with the Company’s plans and 3. Remuneration to other employees objectives, where performance achievement is assessed based Remuneration to other employees comprises fixed salary, benefits on a 5-step matrix between 0-125%. Specific criteria have been in kind, variable remuneration up to 20% of fixed salary, and set for the different steps in the matrix. The sustainability goals pension and insurance schemes. support the Bank’s plans, with clear goals, so that bonus allocation depends on whether the criterion has been achieved. 3.1 Fixed salary Ǵ Risk adjusted results (40%) Fixed salary shall be reviewed at least annually and is set on the Komplett Bank Annual Report 2020 97

basis of pay development in society in general, and in the finance scheme with 6% of salary from 1-7.1 G and with 12% of salary industry in particular. from 7.1-12 G. No other pension schemes have been agreed for any employees. 3.2 One-time allowances Any one-time allowances can be share-option based. 3.4 Benefits in kind Benefits in kind that are not significant in relation to fixed salary Share options awarded under these schemes shall be at full are determined for all employees by the CEO. Benefits in kind market value. The contract period shall be five years, however so are granted in accordance with general practice and to promote that the contract period for two-piece options can be extended by physical activity among employees. a further three years provided that an adjustment to the subscription price (strike) is made at the same time to compensate for the 3.5 Share-based fixed salary market value of the extension. The Board of Directors determines Employees may, upon further agreement, be given the opportunity more detailed guidelines and criteria for these schemes. to receive up to 33% of fixed salary in the form of shares or share- based instruments in exchange for a corresponding reduction of 3.3 Pension the ordinary salary benefits. All employees are covered by a defined contribution pension

SHARES OWNED 1) BY THE MANAGEMENT OR BY THE BOARD OF DIRECTORS AS AT 31.12.2020

Name Number of shares Ownership in %

Chief Executive Officer Jan Olov Haglund 600,000 0.32% Chief Financial Officer Henning Fagerbakke 202,861 0.11% Director Credit Risk & Collections Annika Johanna Ramstedt 90,008 0.05% Chief Operations Officer Christina Heskestad Pedersen 205,462 0.11% Chief Marketing Officer/ Chief Information Steffen Ryengen 1,767,724 0.95% Officer Director Legal & HR Wilhelm Bruun Thomassen 2,018,053 1.08% Director Credit Cards Eirik Holtedahl 849,856 0.46% Director Consumer loans & POS Enok Johan Söderberg Hanssen - 0.00% Chief Compliance Officer Eivind Bagås 39,619 0.02% Chief Risk Officer Ove Holstangen - 0.00% Board of Directors - 869,460 0.47% Related parties to all mentioned above - 0.00% Total 6,643,043 3.56%

SHARES OWNED 1) BY THE MANAGEMENT OR BY THE BOARD OF DIRECTORS AS AT 31.12.2019

Name Number of shares Ownership in %

Chief Executive Officer Jan Olov Haglund 560,000 0.30% Chief Financial Officer Henning Fagerbakke 117,661 0.06% Director Credit Risk & Collections Annika Johanna Ramstedt 50,008 0.03% Chief Operations Officer Christina Heskestad Pedersen 32,000 0.02% Chief Marketing Officer/Chief Information Steffen Ryengen 1,549,583 0.84% Officer Director Legal & HR Wilhelm Bruun Thomassen 1,959,961 1.06% Director Credit Cards Eirik Holtedahl 640,502 0.35% Director Consumer loans & POS Enok Johan Söderberg Hanssen 107,574 0.06% Chief Compliance Officer Eivind Bagås 1,223 0.00% Board of directors - 805,049 0.44% Related parties to all mentioned above - - 0.00% Total 5,823,561 3.16%

1) Either owned directly or through ownership of a legal company, including shares owned indirectly through companies where the person in questions controls the majority of shares. 98 Notes to the financial statements

Note 12 Specification of costs

SPECIFICATION OF GENERAL ADMINISTRATIVE EXPENSES

NOK million 2020 2019

Direct marketing expenses 22.7 84.0 IT-expenses 74.0 33.5 Other general administrative expenses 32.2 54.9 Total general administrative expenses 128.9 172.4

SPECIFICATION OF OTHER OPERATING EXPENSES

2020 2019

Insurance 2.1 1.1 Other consultants 13.6 27.2 Other costs 23.0 47.1 External audit and related services 4.2 3.7 Total other operating expenses 42.8 79.0

Note 13 Tax

TAX EXPENSE

NOK million 2020 2019

Profit before tax 348.5 279.6 Effect of temporary differences not affecting tax payable -1.3 6.3 Amount tax payable correction previous year 6.3 - Permanent differences -10.7 21.0 Basis for tax expense 342.8 306.8 Tax rate 25% 25% Tax expense 85.7 76.7 Komplett Bank Annual Report 2020 99

CALCULATIONS OF TAXABLE INCOME

NOK million 2020 2019

Profit before tax 348.5 279.6 Permanent differences recognised in the statement of comprehensive income 6.1 21.0 Permanent differences recognised in equity -16.8 -3.8 Change in temporary differences which affect tax payable -6.5 -148.8 Basis for tax payable 331.2 147.9 Tax rate 25% 25% Tax payable 82.9 37.0

DEFERRED TAX OF ASSETS / LIABILITIES

NOK million 2020 2019

Deferred tax of assets which affect tax payable Fixed assets -0.9 -0.9 Rental agreement -0.9 0.6 Other assets -0.8 -0.4 Deferred tax of assets which affect tax payable -2.6 -0.6

Deferred tax of liabilities which affect tax payable Provisions - -8.5 Deferred tax of liabilities which affect tax payable - -8.5 Net differences which affect tax payable -2.6 -9.1

Change in differences which affect tax payable 6.5 148.8

Deferred tax of assets not affecting tax payable Securities and bonds measured at fair value 4.8 6.0 Basis for deferred tax assets 2.2 -3.1 Tax rate 25% 25% Deferred tax assets -0.5 0.8

EXPLANATION WHY THE TAX EXPENSE FOR THE YEAR DOES NOT AMOUNT TO 25 PER CENT OF PROFIT BEFORE TAX

NOK million 2020 2019

Profit before tax 348.5 279.6 25% of profit before tax 87.1 69.9 25% of permanent differences recognised in the statement of comprehensive income -2.7 4.2 25% of interest expenses AT1 capital 3.1 1.0 25% effect of temporary differences not affecting tax payable -0.3 1.6 Tax effect provisions made previous years -1.6 - Calculated tax expense 85.7 76.7 100 Notes to the financial statements

Note 14 Share option programme

The Bank has in 2020 and previous periods established a share option programme for all employees. The plan applies to both employee’s fixed and any variable salary.

The option value for the granted options is established based on the full market value calculated using observed trading prices at the grant date and Black & Scholes’s option pricing model. Risk-free interest, using 5-year government bonds, is used as a prerequisite in the calculation. The fixed price for exercising the positions is NOK 1 for all outstanding options. In the case of options granted in 2015 and later, there is also a variable price for exercising the positions, which is equivalent to the social security tax at the date of exercise. The value of vested options is recognised in other paid-in equity.

The Bank has a bonus programme for all employees assessed as satisfying the requirements for variable remuneration plans. The company’s variable salaries related to share options releases the options in accordance with Chapter 15 of the Act on financial institutions and financial groups, with regulations and other applicable regulations for bank remuneration plans.

OVERVIEW OF GRANTED, EXERCISED AND OUTSTANDING OPTIONS

2020 2020

Outstanding options Outstanding options beginning of period 4,145,179 5,021,801 Adjustment of incoming balance - - + Granted options 2,117,533 630,969 - Exercised options -2,494,011 -1,507,591 - Lost options - - - Expired options - - Outstanding options end of period 3,768,701 4,145,179

Number of options

Expiration date options 2021 804,674 2022 266,934 2023 186,438 2024 462,799 2025 2,047,856 Total 3,768,701 Komplett Bank Annual Report 2020 101

In 2020, 2,494,011 options were exercised (1,507,591 options in 2019). The weighted average share price at the time when exercised in 2020 is NOK 4.63 (9.88 NOK in 2019). The Board are eligible to extend the exercise period for previous granted options in accordance with note 11 and the Board’s declaration on the determination of salaries and other remuneration for members of the management. It is expected that all options will be exercised.

Fair value of the options are estimated by using the Black & Scholes option pricing model. Average fair value of granted options in 2020 is NOK 5.5 million (7.0 million in 2019).

No share options connected to the variable remuneration as of today is granted based on employee performance in 2020. In accordance with the Bank’s guidelines on variable remuneration such grant will potentially first happen later in 2021, subsequently to the annual report for 2020 being set by the general meeting. The cost for variable remuneration for 2020 equals NOK 12.6 million (NOK 16.8 million for 2019). The exact number of potentially granted options is dependent on the market value at the time of the grant and other factors described in this note.

Assumptions used in the calculation:

Share price at the time of the grant The share price used equals the listed price at Oslo Børs at the time of the grant.

Volatility Historical volatility is used as an indication of future volatility. Expected volatility is therefore using historic volatility equaling a volatility of 35 per cent in 2020 and 35 per cent in 2019.

Expiration of the option The option’s expecting maturity is 5 years.

Risk-free rate Risk free rate used in the calculation of the options equals the interest rate on 5 year government bonds equaling 1.22 per cent for 2020 and 1.28 per cent for 2019. 102 Notes to the financial statements

Note 15 Liquidity and interest rate risk

The Board of Directors has established guidelines that sets the limit for maximum interest rate risk. Monitoring and reporting of liquidity and interest rate risk happens continuously according to provided instructions.

Liquidity risk Different maturity for the Bank’s assets and liabilities have the potential to result in a liquidity risk for the Bank. Below is an overview of different time interval as to when the Bank’s assets and liabilities have maturity.

LIQUIDITY RISK AS AT 31.12.2020

Without 3 months 1 year 5 year NOK million any term < 3 months < 1 year < 5 years < 10 years Total

Assets Loans and deposits with credit institutions 1,204.2 - - - - 1,204.2 Loans to customers 5,495.1 0.0 164.5 2,839.3 - 8,498.9 Certificates and bonds 1,555.4 26.1 47.5 219.0 - 1,848.0 Other assets without specified maturity 172.9 - - - - 172.9 term Total assets 8,427.5 26.1 212.1 3,058.3 - 11,724.0

Liabilities Deposits from and debt to customers 8,374.4 12.6 497.7 110.6 - 8,995.3 Subordinated loans - 0.5 2.7 84.7 - 87.9 Other debt 0.5 17.7 207.7 - - 225.9 Total liabilities 8,374.9 30.8 708.1 195.2 - 9,309.1

Certificates and bonds, senior unsecured bons and subordinated loans includes expected interests in the liquidity overview above.

LIQUIDITY RISK AS AT 31.12.2019

Without 3 months 1 year 5 year NOK million any term < 3 months < 1 year < 5 years < 10 years Total

Assets Loans and deposits with credit institutions 614.7 - - - - 614.7 Loans to customers 8,394.3 7.2 18.8 89.5 0.4 8,510.2 Certificates and bonds 840.8 250.2 100.1 30.8 89.1 1,311.0 Other assets without specified maturity 180.2 - - - - 180.2 term Total assets 10,030.0 257.4 118.9 120.3 89.5 10,616.1

Liabilities Deposits from and debt to customers 7,450.3 - 663.5 422.7 - 8,536.5 Subordinated loans - - 4.5 89.6 - 94.0 Other debt - 39.0 147.5 - - 186.5 Total liabilities 7,450.3 39.0 815.5 512.3 - 8,817.0

Certificates and bonds, senior unsecured bons and subordinated loans includes expected interests in the liquidity overview above.

The Bank had no financial instruments that have not been recognised in the balance sheet as at 31 December 2020 (none as at 31 December 2019). All items are in Norwegian kroner (NOK). See also the Report from the Board of Directors for further information and a discussion of the Bank’s liquidity risk. Komplett Bank Annual Report 2020 103

Interest rate risk Different fixed-rate periods for assets and liabilities will lead to an interest rate risk for the Bank. A summary of the remaining period for agreed/probable interest rate adjustments for assets and liabilities is provided below:

INTEREST RATE RISK AS AT 31.12.2020

0 month Without any NOK million < 3 months interest term Total

Assets Loans and deposits with credit institutions 1,204.2 - 1,204.2 Loans to customers 8,361.2 - 8,361.2 Certificates and bonds 1,848.0 - 1,848.0 Other assets without specified maturity term - 172.9 172.9 Total assets 11,413.4 172.9 11,586.3

Liabilities Subordinated loans 65.0 - 65.0 Deposits from and debt to customers 8,991.8 - 8,991.8 Other debt, not interest-bearing - 225.9 225.9 Total liabilities 9,056.8 225.9 9,282.7

INTEREST RATE RISK AS AT 31.12.2019

0 month Without any NOK million < 3 months interest term Total

Assets Loans and deposits with credit institutions 614.7 - 614.7 Loans to customers 8,495.8 - 8,495.8 Certificates and bonds 1,329.8 - 1,329.8 Other assets without specified maturity term - 180.2 180.2 Total assets 10,440.3 180.2 10,620.4

Liabilities Subordinated loans 64.9 - 64.9 Deposits from and debt to customers 8,519.5 - 8,519.5 Other debt, not interest-bearing - 186.5 186.5 Total liabilities 8,584.4 186.5 8,770.9 104 Notes to the financial statements

INTEREST RATE RISK - SENSITIVITY OF 1% POINT CHANGE IN THE YIELD CURVE

NOK million 31.12.2020 31.12.2019

Loans and deposits with credit institutions 0.5 0.2 Loans to customers 13.9 14.2 Certificates and bonds 4.8 2.8 Other assets without specified maturity term - - Total assets 19.2 17.2

Deposits from and debt to customers -15.0 -14.2 Subordinated loans -0.4 -0.2 Other debt, not interest-bearing - - Total liabilities -15.4 -14.4

Total interest rate risk 3.8 2.8

Interest rate risk is calculated as the cash flow effect of changing interest rate with 1 per cent point, adjusted for the assets/liabilities interest durations.

CURRENCY RISK - SENSITIVITY OF CHANGING EXCHANGE RATES END OF THE YEAR

NOK million 31.12.2020 31.12.2019

Effect in profit or loss of changing 1% 0.4 1.1 Effect in profit or loss of changing 2% 0.9 2.1 Effect in profit or loss of changing 5% 2.2 5.3 Komplett Bank Annual Report 2020 105

Note 16 Earnings per share and key figures

EARNINGS PER SHARE

2020 2019

Number of shares 01.01. 184,119,728 172,712,137 Number of issued shares 03.04.2020 2,017,966 - Number of issued shares 19.06.2020 230,804 - Number of issued shares 07.09.2020 169,571 - Number of issued shares 08.12.2020 75,670 - Number of issued shares 18.03.2019 - 9,900,000 Number of issued shares 11.04.2019 - 75,429 Number of issued shares 26.06.2019 - 81,300 Number of issued shares 11.10.2019 - 1,078,383 Number of issued shares 11.12.2019 - 272,479 Number of shares 31.12. 186,613,739 184,119,728

Average number of shares 185,800,424 180,874,319

Profit after tax (amount in NOK) 262,795,547 202,873,511 Paid interest on Tier 1 capital in amount NOK (after tax) -9,285,104 -2,886,441 Adjusted profit after tax (amount in NOK) 253,510,444 199,987,070

Earning per share Adjusted profit after tax (amount in NOK) 253,510,444 199,987,070 Average number of shares 185,800,424 180,874,319 Earnings per share based on average number of shares in the period (NOK) 1.36 1.11

Adjusted profit after tax (amount in NOK) 253,510,444 199,987,070 Number of shares, outstanding share options and warrants end of period 189,757,364 188,264,907 Earnings per share based on number of shares, share options and warrants end of period (NOK) 1.34 1.06

The profit after tax for 2020 represented 2.3 per cent (2.0 per cent for 2019) of average total assets throughout the year. The average total assets are calculated based on quarterly figures. 106 Notes to the financial statements

Note 17 Related parties and other information

Komplett Bank is financially and operationally independent of Komplett AS and its affiliated companies (the “Komplett Group”).

Komplett AS and the Bank have entered into a cooperation agreement in relation to IP rights, marketing cooperation and other services. The agreement aims to give the Bank the right to use “Komplett Bank” as its name, and the profile and graphic design of www.komplett.no. The agreement gives the Bank the right to use all the intellectual property rights of Komplett AS that are necessary to achieving this purpose.

As an extension to the cooperation agreement, Komplett AS and the Bank have entered into an agreement on product cooperation in relation to the credit card of the Bank and the credit card’s ancillary customer loyalty bonus programme. The agreement aims to promote sales and the use of the credit card, as well as contributing to promote sales for Komplett AS. Pursuant to this agreement, the parties shall arrange for customer loyalty bonus in relation to the use of the Bank’s credit card on, among other, purchases from Komplett AS. The product cooperation agreement for credit cards was prolonged Q2 2018 for another 5 years. Komplett Bank recognised a cost of NOK 12.1 million (NOK 11.9 million in 2019) relating to this agreement in 2020. Balances (receivables (+)/liabilities (-)) as at 31 December 2020 with Komplett AS totalled NOK -7.6 million (NOK -7.5 million in 2019).

Furthermore, the Bank is engaged in a cooperation with the Komplett Group, in particular in connection with its credit card product as well as its payment solutions and distribution of Point-of-sales finance products, which enables the Bank to distribute its products towards customers on Komplett’s web shop platforms.

With reference to the stock exchange notice 23 November 2020 Kistefos AS was granted a permission by the Financial Supervisory Authority of Norway to acquire Canica Invest AS`s shares in Komplett Bank ASA. Kistefos AS is the Bank`s largest shareholder with an ownership of 24 per cent. There have been no transactions between Komplett Bank ASA and Kistefos AS.

Note 18 Risk management

General The Board has established various policies for management and control of key risks. The policies, which are updated regularly, describe both quantitative risk limits and relevant qualitative guidelines.

The Board receives compliance and risk control reports relating to the established policies, from the administration regularly and as required.

The Bank is exposed to different types of business risk. Operational risk and credit risk are two key risks discussed in greater detail below.

Operational risk The Bank’s strategy for operational risk is defined in the Bank’s policy for operational risk. According to the Bank’s general principles, there shall be procedures for identifying and reporting operational risk. Operational risk shall be measured and managed based on systematic assessments of operational risk factors and operational risk assessments. This shall be included as an integral part of the decision-making process in the Bank. The measurement methods applied shall fulfil the measurement methods for main categories of risk.

Credit risk The Bank’s general strategy for credit risk is defined in the Bank’s credit policy. The general principles stipulate, among other things, the following Ǵ The Bank’s loans shall only be to private individuals. Ǵ The Bank’s loans shall be well diversified. Ǵ All customers shall be subject to a credit assessment. Ǵ In addition to credit score rules, the customer must also be accepted in accordance with the Bank’s policy rules and the Bank’s requirements for ability and willingness to pay Komplett Bank Annual Report 2020 107

Note 19 Classification of financial instruments

Financial instruments (held for trading) Financial instruments measured at at fair value through profit or loss amortised cost NOK million 31.12.2020 31.12.2019 31.12.2020 31.12.2019

Assets Loans and deposits with credit institutions - - 1,204.2 614.7 Other recevables - - 5.5 18.8 Loans to customers - - 8,361.2 8,495.8 Certificates and bonds 1,848.0 1,329.8 - - Total financial assets 1,848.0 1,329.8 9,570.8 9,129.2

Liabilities Deposits from and debt to customers - - 8,991.8 8,519.5 Other debt - - 142.5 149.5 Subordinated loans - - 65.0 64.9 Total financial liabilities - - 9,199.3 8,733.9

Fair value of financial assets and liabilities assessed at amortised cost

Loans and deposits with credit institutions Fair value is estimated as corresponding to amortised cost.

Other receivables Fair value is estimated as corresponding to amortised cost.

Loans to customers Loans to customers are highly exposed to market competition so that any additional values in the loan balance will not be able to be maintained over time. At the same time, an impairment is recognised for this accounting item if observable events occur that indicate a fall in value. The impairments are based on an assessment of the future cash flow, discounted by the effective rate of interest. The fair value is therefore essentially regarded as corresponding to amortised cost.

Deposits from and debt to customers Fair value is estimated as corresponding to amortised cost.

Other debt Fair value is estimated as corresponding to amortised cost.

Subordinated loans and senior unsecured bond The Bank’s subordinated loans and senior unsecured bond is traded in a market place, but the sale of the instrument takes place relatively infrequently. As compensation for the observable prices, it is assessed that the amortised cost can be used as an approximation of the fair value. 108 Notes to the financial statements

Credit quality 31.12.2020 Credit quality 31.12.2019 NOK million Low Medium High Low Medium High

Assets Loans and deposits with credit institutions - - 1,204.2 - - 614.7 Other receivables - - 5.5 - - 18.8 Loans to customers 1,209.6 7,151.6 - 791.3 7,704.5 - Certificates and bonds - - 1,848.0 - - 1,329.8 Total financial assets 1,209.6 7,151.6 3,057.7 791.3 7,704.5 1,963.3

Liabilities Deposits from and debt to customers - - 8,991.8 - - 8,519.5 Other debt - - 142.5 - - 149.5 Subordinated loans - - 65.0 - - 64.9 Total financial liabilities - - 9,199.3 - - 8,733.9

Credit quality is defined as the financial instrument’s ability to deliver agreed cash flows. A deterioration in the quality of credit means that one or more events are taking place that have an undesired effect on the expected future cash flows for the financial instrument. The credit quality is grouped in the following intervals of credit risk:

Ǵ Low credit quality: 100 per cent risk of default Ǵ Medium credit quality: 9.2-100 per cent risk of default Ǵ High credit quality: 0-9.2 per cent risk of default

Note 20 Financial instruments assessed at fair value

Financial instruments at fair value are placed in the different levels below based on the quality of market data for the individual type of instrument.

Level 1: Valuation based on listed prices in an active market Financial instruments valued using listed prices in active markets for identical assets or liabilities are placed in level 1. This category includes government bonds and investments in bonds with pre-emption rights traded in active markets.

Level 3 Valuation based on non-observable market data If a valuation cannot be established in levels 1 or 2, valuation methods are used that are based on non-observable market data.

Financial instruments measured at fair value 31.12.2020 31.12.2019 NOK million Level 1 Level 2 Level 3 Level 1 Level 2 Level 3

Assets Certificates and bonds 292.6 1,555.4 - 489.0 840.8 - Total financial instruments measured at fair value 292.6 1,555.4 - 489.0 840.8 - Komplett Bank Annual Report 2020 109

Note 21 Alternative performance measures

Alternative performance measures are often used by investors, financial analysts and others for decision-making purposes by contributing to a deeper insight into the operational and financial aspects of a company. Alternative performance measures can provide reinforc- ing information on the company’s historical and present situation, and the company’s future prospects.

The Bank has defined “return on equity” (ROE), cost percentage and loss ratio as the company’s alternative performance measures and these are presented in the Report from the Board of Directors. All the alternative performance measures refer to events that have occurred and are recognised in the Bank’s annual financial statements.

Return on equity (ROE) is defined as the annual profit/average quarterly equity expressed as a percentage. This is one of the company’s most important target figures and provides information on the Bank’s ability to generate a surplus from the shareholders’ investments.

The cost percentage is defined as the total operating expenses, excluding marketing costs and losses on loans/net interest income and net commissions and fees. The target figure is presented to give investors, financial analysts and others an insight into how the costs correlate to revenues and to give users of the financial reporting information on developments in the Bank’s operational effectiveness.

Loss ratio is defined as losses on loans/average yearly net loans in percent. Losses on loans is among the most significant elements in the profit and loss statement. The development in loss ratio is an important key measure amongst investors, financial analytics and other to assess the be able to assess the underlying credit risk in the Bank’s loans to customers.

Adjusted return on equity is defined as adjusted profit after tax/average yearly adjusted equity net of tier 1 capital. The adjusted one- offs relate to losses on loans. The number is presented as a percentage. Losses on loans is among the most significant elements in the profit and loss statement. This is one of the company’s most important target figures and provides information on the Bank’s ability to generate a surplus from the shareholders’ investments.

Adjusted loss ratio is defined as adjusted losses on loans/average yearly adjusted net loans in percent. Losses on loans is among the most significant elements in the profit and loss statement. The development in loss ratio is an important key measure amongst investors, financial analytics and other to assess the be able to assess the underlying credit risk in the Bank’s loans to customers.

Reconciliation from alternative performance measures to financial reporting In the tables below where marked N/A it is considered not relevant to calculate in order to explain the calculation of the alternative performance measure.

RETURN ON EQUITY (ROE)

NOK million 31.12.2020 31.12.2019 2020 Average

Profit after tax1) I/A I/A 262.8 I/A Total equity 2) 2,059.0 1,805.0 I/A 1,932.0

Return on equity (ROE) 2020: 262.8 / 1,932.0 = 13.6% Return on equity (ROE) 2019 : 202.9 /1,690.1 = 12.0%

1) Profit after tax can be found in the statement of profit or loss and other comprehensive income for the period in the accounting item “profit after tax”. 2) It is referred to the Bank’s published annual report 2020 for an overview of the Bank’s yearly equity. 110 Notes to the financial statements

COST PERCENTAGE

NOK million 2020 2019

Total operating expenses excluding losses on loans 1) 387.6 441.7 ‘- Direct marketing expenses 1) -7.4 -84.0 = Total operating expenses excluding losses on loans and direct marketing expenses 380.2 357.7

NOK million 2020 2019

Net interest income 1) 1,027.1 1,087.0 + Net commissions and fees 1) 61.8 86.8 = Net interest income and commissions and fees 1,088.8 1,173.8

Cost percentage 2020: 364.9 / 1,088.8 = 33.5% Cost percentage 2019: 357.7 / 1,173.8 = 30.5%

1) The basis for the calculation can be read directly from the statement of profit or loss and other comprehensive income for the period 2020.

LOSS PERCENTAGE/LOSS RATIO

NOK million 31.12.2020 31.12.2019 2020 Average

Losses on loan I/A I/A 364.3 I/A Loans to customer 8,361.2 8,495.8 I/A 8,428.5

Loss percentage 2020: 364.3 /8,428.5 = 4.3% Loss percentage 2019: 454.3 /8,170.0 = 5.6%

Losses on loans can be found directly from the statement of profit or loss and other comprehensive income for the period 2020. Loans to customer can be found in the balance sheet.

ADJUSTED RETURN OF EQUITY

NOK million 2020 2019

Profit after tax 262.8 202.9 + One-off cost related to losses on loans, after tax 30.0 78.4 + One-off cost related to money laundering fee, after tax - 18.0 = Adjusted profit after tax 292.8 299.2

NOK million 31.12.2020 31.12.2019 Average

Equity 2,059.0 1,805.0 1,932.0 + Adjusted one-off cost, after tax 30.0 78.4 I/A + Adjusted for one-off cost, money laundering fee, after tax I/A 18.0 I/A = Adjusted equity 2,089.0 1,901.4 1,995.2

ROE adjusted 2020: 292.8/ 1,995.2 = 14.7% ROE adjusted 2019 : 299.2/1,738.3 = 17.2%

Tier 1 capital to be subtracted from total equity in the balance sheet. Profit after tax can be found in the profit and loss. Komplett Bank Annual Report 2020 111

ADJUSTED LOSS PERCENTAGE/LOSS RATIO

NOK million 2020 2019

Losses on loan 364.3 454.3 - One-off cost related to losses on loans, after tax 40.0 104.5 = Adjusted losses on loan 324.3 349.8

NOK million 31.12.2020 31.12.2019 Average

Loans to customer 8,361.2 8,495.8 8,428.5 + Adjusted loans to customer 40.0 104.5 72.3 = Adjusted loans to customer 8,401.2 8,600.3 8,500.7

Adjusted loss percentage 2020: 324.3/8,500.7 = 3.8% Adjusted loss percentage 2019: 349.8/8,222.3 = 4.3%

Losses on loans and loans to customers can be found in the annual report for 2020

Note 22 Leasing agreements

The Bank has agreed to lease premises in Vollsveien 2A and 2B, 1366 Lysaker, as well as parking spaces related to the location. The leasing agreement expires 31 December 2023. All the Bank’s right of use assets is classified as the same class of underlying assets. The Bank has no short term leasing agreements or any leasing with low value that could have been classified as operational leasing according to the accounting standard.

Office location NOK million and parking spaces

Accumulated historical cost as of 01.01.2019 17.2 Additions in the period 2.2 Disposals in the period - Accumulated historical cost as of 31.12.2019 19.4

Accumulated depreciations as of 01.01.2019 - Depreciations 2019 3.8 Accumulated depreciations as of 31.12.2019 3.8 Book value as of 31.12.2019 15.6

Accumulated historical cost as of 01.01.2020 19.4 Additions in the period - Disposals in the period - Accumulated historical cost as of 31.12.2020 19.4

Accumulated depreciations as of 01.01.2020 3.8 Depreciations 2020 3.9 Accumulated depreciations as of 31.12.2020 7.7 Book value as of 31.12.2020 11.7 112 Notes to the financial statements

OTHER INFORMATION ON LEASING AGREEMENTS

NOK million 2020 2019

Interest expenses 1.0 1.1 Total outgoing cash flows 4.5 4.4 Profit or loss from sale or leaseback transactions - - Cost related to variable leasing payments - - Income from sublease - - Liabilities in the statement of financial position at the end of the period 12.6 16.2

CASH FLOW ANALYSIS

NOK million 2021 2022 2023 Total

Outgoing cash flows for lesaing agreements 4.5 4.5 4.5 13.5 Total 4.5 4.5 4.5 13.5

Note 23 Reworked comparable numbers

The Bank has changed their accounting practices of sales commission to agents and establishment fees in Q4 2020. Sales commissions to agents were previously booked against expenses commission, and fees and establishment fees against income commission and fees. From Q4 2020 both of these are booked against interest income. The following table illustrates the changes in the comparable numbers in Q4 2019 and the financial year 2019 in total. The total income is not affected by these changes.

2019 NOK million 2019 original Change

Interest income 1,254.2 1,282.5 -28.3 Interest expenses -167.2 -167.2 - Net interest income 1,087.0 1,115.3 -28.3

Income commision and fees 125.4 172.4 -47.0 Expenses commisions and fees -38.6 -113.8 75.2 Net commision and fees 86.8 58.6 28.3

Net gains / losses (-) on certificates and bonds, and currency 1.7 1.7 - Total income 1,175.6 1,175.6 0.0 Komplett Bank Annual Report 2020 113

Note 24 Contingent liabilities

The tax authorities disagree with the Bank`s treatment of reverse charge of VAT for certain services after their local control for the period January 2017 to April 2018. Komplett Bank disagrees with the provisional conclusion, and there is no provision recognized in the interim statement for the period ending on December 31, 2020.

The timing of the final conclusion by the tax authorities and the conclusion itself, are uncertain. If the Bank elects to accept the tax authority`s conclusion or the case goes to a court with a negative outcome for the Bank, the estimated negative cash flow impact based on the above amounts to a total of NOK 2.2 million.

Note 25 Covid 19 update

The board of directors pointed out the Covid-19 pandemic as a risk factor for growth in the beginning of 2020.

Through the first quarter the signs were that this crisis would have global impact and 12 March the government notified the country of the strongest restrictions in Norway since world war II for private persons and companies. Through the second quarter there was a nor- malization of the Norwegian economy. The financial industry in Norway showed a historical fast return to previous levels. The restrictions were eased.

After the summer with travelling in Europe and Norway the pandemic was on its return and the government made new restrictions throughout the autumn and in the beginning of 2021.

The activity level in the bank has been high through the period, and there are still not any significant large consequences for the business in the bank.

The experience so far indicates that the impact the crisis has on private persons seems less pervasive then first feared in the first quarter of 2020.

Throughout the year the bank has showed great strength and build a competent organization further on.

Note 26 Events after the reporting period

The Board is not aware of events after the balance sheet date that are of material importance to the annual financial statements except the descriptions in note 25 related to the ongoing Covid-19 pandemic. 114 Auditor’s report

Auditor’s report

To the General Meeting of Komplett Bank ASA Independent auditor’s report Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of Komplett Bank ASA, which comprise statement of financial position as at the end of the period as at 31 December 2020, statement of profit or loss and other comprehensive income for the period, comprehensive income, statement of changes in equity for the period and statement of cash flows for the period for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements are prepared in accordance with law and regulations and give a true and fair view of the financial position of the Company as at 31 December 2020, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by EU.

Basis for Opinion

We conducted our audit in accordance with laws, regulations, and auditing standards and practices generally accepted in Norway, including International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company as required by laws and regulations, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The Company's business activities are mainly unchanged compared to last year. We have not identified regulatory changes, transactions or other events that qualified as new Key audit matters for our audit. The area The value of loans to customers has the same characteristics and risks as last year and has therefore been an important area of focus in our audit also in 2020.

Key Audit Matter How our audit addressed the Key Audit Matter

The value of loans to customers

Loans to customers represents a We have evaluated and tested the design and considerable part of the Company’s total effectiveness of controls related to the loan loss provision assets. The assessment of loan loss models. Testing of these controls, focusing on the risk

PricewaterhouseCoopers AS, Postboks 748 Sentrum, NO-0106 Oslo T: 02316, org. no.: 987 009 713 VAT, www.pwc.no State authorised public accountants, members of The Norwegian Institute of Public Accountants, and authorised

accounting firm

Komplett Bank Annual Report 2020 115

tos pot ompltt an

posons s a molas amo lassaton o t loans pom to y t nls assssmnts t lmnts models’ input parameters to y tat t mol ma o manamnt mnt amo matmatally aat allatons an to tst s ompl nls onsal olms lmnts o t aptal aay latons o ata an mntal paamts onl tat ol as o at on ts s t ass o a s lassaton o loans ontols

Company’s s lassaton an t aay o t ata s n t ntnal ontols lat to t allaton o t loan loss poson y tan ata a ntaton o loans t a tn to staton n t systms on a sampl ass also t s s ntal o t alaton o tst t t mols ma matmatally loans to stoms amo an aat allatons o t potolo o loans o t s o manamnt mnt at o tstn as not as on tst o ontols t pot o t po an s mpotant o t omplan t t aptal o ns tat t sttn o paamts lat to t aay latons poalty o alt appopat nt manamnt an alln t lan an t n ln t t losss sol mtos appl as on mo oaloon nomaton so tat t lts pt tst slts so tat manamnt a s losss appopat assmptons n t alaton o paamts s o mols to tmn pt otan a tal nstann o t posss t losss ntals mnt n o an tst t ontols assoat t at a os on • t allaton an mtoolos s • anamnts poss o ntaton o loans • t t mols s n aoan psnt a snant nas n t t applal amo an o as t s ntn

• ssmptons an mnts ma • t lalty an aay o t ata s o y manamnt nlyn t allaton pposs n t mols paamts s as t poalty o alt an loss n tstn o ntnal ontols not nat matal alt an allatons os n t molln o atons om ma tst t t mols lass loans n t • lassaton o t aos loans ot sta an t t loans st to y s snant nas t s y sampl s tstn o loans aanst at an paymnt stoy st n • o t loans a lass nto the Company’s system. nt stas r work also included tests of the Company’s financial The Company’s business is concentrated potn systms lant to nanal potn on onsm loans t as an pont ompany ss tnal s oanatons o sppot o sals ts ntnal mols a sn to t t systms at tam pom tal ta nto aont t sp sstant tstn o lant pots atomat aatsts o a o ts pots an ontols an nal ontols o t tnal s nal t ompany to stmat loan loss oanaton an t ompany tsl s allo s to mpamnt posons o a o ts satsy osls t a to t ompltnss an pots aay o ata n t an paymnt systms lant

116 Auditor’s report

uditors eport omplett ank

to financial reportin.

ur testin included amon other thins whether the key calculations made by the core systems were performed in line with epectations includin interest rate calculations. urther we performed tests on the access controls to the T systems and sereation of duties where it was releant for our audit.

ee notes . and for the description of the Company’s models and processes to estimate loanloss impairment proisions in accordance with . e hae read the notes and found them to be adeuate and to ie a balanced oeriew of the models parameters and udmental assumptions used.

ter inforation

anaement is responsible for the other information. The other information comprises information in the annual report ecept the financial statements and our auditors report thereon.

ur opinion on the financial statements does not coer the other information and we do not epress any form of assurance conclusion thereon.

n connection with our audit of the financial statements our responsibility is to read the other information and in doin so consider whether the other information is materially inconsistent with the financial statements or our knowlede obtained in the audit or otherwise appears to be materially misstated.

f based on the work we hae performed we conclude that there is a material misstatement of this other information we are reuired to report that fact. e hae nothin to report in this reard.

Responsibilities of te oard of iretors and te anain iretor for te inanial tateents

The oard of irectors and the anain irector manaement are responsible for the preparation in accordance with law and reulations includin fair presentation of the financial statements in accordance with nternational inancial eportin tandards as adopted by the and for such internal control as manaement determines is necessary to enable the preparation of financial statements that are free from material misstatement whether due to fraud or error.

n preparin the financial statements manaement is responsible for assessing the Company’s ability to continue as a oin concern disclosin as applicable matters related to oin concern and usin the oin concern basis of accountin unless manaement either intends to liuidate the Company or to cease operations or has no realistic alternatie but to do so.

Komplett Bank Annual Report 2020 117

ditors eport omplett an

Auditor’s Responsibilities for the Audit of the Financial Statements

r obecties are to obtain reasonable assrance abot hether the financial statements as a hole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that incldes or opinion easonable assrance is a high leel of assrance bt is not a garantee that an adit condcted in accordance ith las reglations and aditing standards and practices generally accepted in oray inclding s ill alays detect a material misstatement hen it eists isstatements can arise from frad or error and are considered material if indiidally or in aggregate they cold reasonably be epected to inflence the economic decisions of sers taen on the basis of these financial statements

s part of an adit in accordance ith las reglations and aditing standards and practices generally accepted in oray inclding s e eercise professional dgment and maintain professional septicism throghot the adit e also

• identify and assess the riss of material misstatement of the financial statements hether de to frad or error e design and perform adit procedres responsie to those riss and obtain adit eidence that is sfficient and appropriate to proide a basis for or opinion he ris of not detecting a material misstatement reslting from frad is higher than for one reslting from error as frad may inole collsion forgery intentional omissions misrepresentations or the oerride of internal control

• obtain an nderstanding of internal control releant to the adit in order to design adit procedres that are appropriate in the circmstances bt not for the prpose of epressing an opinion on the effectiveness of the Company’s internal control.

• ealate the appropriateness of acconting policies sed and the reasonableness of acconting estimates and related disclosres made by management

• conclude on the appropriateness of management’s use of the going concern basis of accounting and based on the adit eidence obtained hether a material ncertainty eists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern f e conclde that a material ncertainty eists e are reired to dra attention in our auditor’s report to the related disclosures in the financial statements or if sch disclosres are inadeate to modify or opinion r conclsions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may case the Company to cease to contine as a going concern

• ealate the oerall presentation strctre and content of the financial statements inclding the disclosres and hether the financial statements represent the nderlying transactions and eents in a manner that achiees fair presentation

e commnicate ith the oard of irectors regarding among other matters the planned scope and timing of the adit and significant adit findings inclding any significant deficiencies in internal control that e identify dring or adit

e also proide the oard of irectors ith a statement that e hae complied ith releant ethical reirements regarding independence and to commnicate ith them all relationships and other matters that may reasonably be thoght to bear on or independence and here applicable related safegards

118 Auditor’s report

uditors eport omplett an

rom the matters communicated with the oard of irectors, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in etremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse conseuences of doing so would reasonably be epected to outweigh the public interest benefits of such communication.

Report on ther eal and Reulator Reuirements

Opinion on the Board of Directors’ report

ased on our audit of the financial statements as described above, it is our opinion that the information presented in the Board of Directors’ report concerning the financial statements and in the statement on Corporate overnance and Corporate ocial esponsibility eclaration, the going concern assumption and the proposed allocation of profit for the year is consistent with the financial statements and complies with the law and regulations.

pinion on Reistration and ocumentation

ased on our audit of the financial statements as described above, and control procedures we have considered necessary in accordance with the nternational tandard on ssurance ngagements SA Assurance naements ther than Audits or Reies of istorical Financial nformation, it is our opinion that management has fulfilled its duty to produce a proper and clearly set out registration and documentation of the Company’s accounting information in accordance with the law and booeeping standards and practices generally accepted in orway.

slo, arch PricewaterhouseCoopers AS

ri ndersen tate uthorised ublic ccountant

ote his translation from oreian has been prepared for information purposes onl

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