Hello everyone, I am Kjetil Barli, Acting CEO of Aprila Bank. I am Espen Engelberg, Acting CFO at Aprila Bank. Welcome to Aprila Bank's fourth quarter presentation. I will start by presenting the highlights of the quarter. Espen will present the financials in more detail, and I will conclude by presenting our top priorities and guiding for 2025. We are live from Ny Dalen today, and we will have a Q&A session at the end of this presentation. If you have any questions during or after the presentation, please post them in the webcast chat, and we will address them in the Q&A session. First, a quick recap on Aprila. Aprila is a digital bank that provides credit to a large and underserved market of small and medium-sized businesses. We have built a highly scalable banking platform that serves more than 5,000 business customers today, and it's designed to serve a significantly larger customer base. We use our own proprietary credit models to predict outcomes and price risk. Now, with around six years of history, these models have become very accurate. To the customer, Aprila represents speed, convenience, and simplicity. Or as we say in our Norwegian tagline, "Bedriftslån, enkelt og greit." Now let's have a look at the numbers from the fourth quarter. The lending growth in the fourth quarter was quite soft: 18% year-on-year and a decline of 4% in the quarter. The decline was caused by the NPL divestment in December. Adjusted for this transaction, gross lending grew by NOK 53 million in the quarter. Total income increased 11% year-on-year and declined 4% in the quarter. The decline was caused by the NPL divestment and some interest income one-offs, and I will revert to this later. Pre and post tax profit came in at NOK 9 million. Loan losses amounted to NOK 11.7 million, a level we are very satisfied with. Return on equity was 12.2% in the quarter and 13.9% in 2024. Adjusted for one-offs in December, which I will revert to, pre-tax profit in Q4 was NOK 11.1 million and ROE was 15.1%. In December, the FSA effectively reduced our CET1 requirement by 2.7 percentage points, from 19.4% to 16.7%. They have also said that they intend to perform a new SREP this year, which we appreciate, and we hope that the FSA will conclude with a lower Pillar two requirement after this year's process. As mentioned on the previous slide, our CET1 requirement has been reduced by 2.7 percentage points, from 19.4% to 16.7%. The reduction is a combination of a reduced Pillar two requirement from 5.4% to 4.8% and the change in the required capital composition. From now on, we no longer need to cover the entire Pillar two requirement with CET1 capital, as shown in the chart on the left-hand side. The reduced requirement translates to a CET1 capital relief of NOK 25 million at year-end 2024. I'm not a fan of adjusted numbers. However, in the past two quarters, we have had one-offs that I believe we need to highlight in order for you to understand our underlying performance correctly. In December, we had two categories of one-offs that affected our total income, shown on the left-hand side. In total, these one-offs amounted to NOK 2.5 million. Adjusted for this, our underlying total income was NOK 55.3 million. These one-offs also affected our pre-tax profit, of course, and when we adjust for the loan losses on the NPL portfolio that would have incurred if we had not sold the portfolio, the underlying pre-tax profit is NOK 2.2 million better than the reported NOK 8.9 million. The adjusted numbers imply a total income run rate of NOK 221 million in the quarter and a return on equity of 15.1%. Now, let's try to put these one-offs aside and look at the actuals. Starting with the first key driver of income, gross lending. At the end of the fourth quarter, gross lending had grown 18% year-on-year and declined by 4% quarter on quarter. Adjusted for the NPL divestment, gross lending increased by NOK 53 million in the quarter, which is much softer than our ambitions. We believe that the main reason behind the soft growth is the effect of the current macroeconomic environment on our customers' credit appetite. In 2024, we completed a set of initiatives intended to accelerate growth. We increased the maximum credit limit from NOK 5 million to NOK 15 million in the second quarter. We launched company guarantees in the third quarter. We launched down payment loans in the fourth quarter, and during the year, we increased the sales team from two to six members. The numbers so far in 2025 indicate that we are on the right track. In January, gross lending grew by an all-time high, NOK 55 million, more than three times our growth pace in Q4. Over to the second key driver of income, yield. We delivered a lending yield of 26.4% in Q4 and 27.5% adjusted for one-offs. Going forward, we expect lending yield to trend downwards in a controlled manner, caused by the shift towards larger customers with lower credit risk. Our liquidity portfolio delivered an annualized return of 4.2% in the quarter, and funding costs stood at 4.9%. The interest rate on deposits was not changed in the quarter. The combination of our income-earning assets, the deposit balance, and the yield levels I just presented translated into a total income of NOK 53 million in the fourth quarter. This represents a growth of 11% year-on-year and a decline of 4% in the quarter. Adjusted for one-offs, total income amounted to NOK 55 million, a growth of 16% year-on-year and 0.4% in the quarter. Now let's look at how this translates to profit and return on equity. In 2024, total income adjusted for the Q4 one-offs amounted to NOK 210 million. This represents a growth of 31% compared to 2023. Over the same period, the sum of costs and losses relative to total income has declined from 86% in 2023 to 80% in 2024. In turn, this translates to our last 12 months' underlying pre-tax profit increase from NOK 23 million in 2023 to NOK 42 million in 2024. This represents a return on equity of 15.4%, a number we believe will continue to improve going forward. How much depends first and foremost on how fast we grow. We had a solid capital position at the end of the fourth quarter with a CET1 ratio of 31.7%. As explained in detail, the bank's overall capital requirement is now 22.3%, and the CET1 requirement is 16.7%. We have continued to use retail classification and look forward to seeing FSA's revised circular letter on the topic. Without retail classification, our capital ratio would have been 26.6% at the end of Q4. Now, Espen, can you take us through the remaining part of the key figures from the fourth quarter? Yes, Kjetil. Thank you. Starting with the upper left chart, we had 5,234 unique customers at the end of the quarter. Moving to the middle chart on the top row, gross lending decreased NOK 39 million, bringing total gross lending to NOK 1.072 billion. In the upper right chart, total income for the quarter amounted to NOK 52.8 million, representing a year-on-year growth of 11%. Kjetil has already covered the one-offs and the decline from the previous quarter. Looking at the lower left chart, the cost-income ratio came in at 61%, which is 3 percentage points higher than Q4 last year. Next, loan losses came in at annualized 4.3% of gross lending, and finally, profit before and after tax came in at NOK 8.9 million, equal to an annualized return on equity at 12.2%. Looking closer at the credit line product, we ended the quarter with 5,034 accounts. In December, we sold 475 accounts, so on an adjusted basis, we added net 87 new accounts during the quarter. Moving to the lower left chart, the average balance per account at the quarter end was NOK 207,000, while the average drawdown reached NOK 247,000, as shown in the lower right chart. These figures reflect our continued focus on attracting larger customers, and we expect them to increase steadily over time. In January 2025, we raised the maximum credit limit from NOK 15 million to NOK 25 million, supporting our strategy to grow average balances and drawdowns moving forward. Looking closer at our newest product offering, down payment loan, we launched October 31, and we ended the quarter with 74 accounts. The average balance per account at the end of the quarter was NOK 278,000, and most of the customers select a five-year down payment plan. I must say it has been a strong start for the product, and we have observed several key trends. Increased activity, the overall numbers of applications have increased compared to the same period last year. Credit line and down payment loans serve different needs, and the demand is relatively evenly distributed. Most customers know which product they need; only a small percentage apply for both products. Down payment loans are, on average, larger than credit line loans, and our portfolio shows a good diversity, but we observe that down payment loan applications are more common in industries such as transportation, construction, and real estate, whereas credit line applications are more common in service industries. We booked loan losses of NOK 11.7 million in the quarter, of which negative NOK 56.7 million in loan loss provision and NOK 68.5 million in net realized losses caused by the non-performing loan divestment. In the upper right chart, we see that the overall ratio of overdue claims to total claims decreased from 15.4% to 9.2% in the quarter, and we do have a healthy loan book now. That concludes the presentation of the key figures from the fourth quarter. Kjetil, over to you for the final part of the presentation. Thank you, Espen. I will now outline our priorities for 2025 and present our updated guiding. Our top priority in 2025 is to accelerate growth. We will continue to improve our offering to larger customers. We intend to streamline our sales processes, and we will continue to optimize our loan origination model, the model that decides what customers to approve, how much they can borrow, and at what price. The number two priority is to strengthen competitive advantage. Our key focus under this priority is to enhance the automation of core customer processes, such as onboarding, renewals, and requests for limit or loan increases. In addition, we will continue to optimize our credit models and to streamline the customer experience. On the number three priority to improve long-term profitability, we will continue to automate internal processes, focusing on frequent tasks that are performed manually today, where we can free up capacity through automation. We will continue to improve the accuracy of our marketing spend. When it comes to our guiding for 2024, we just missed the mark on total income run rate to NOK 221 million versus NOK 225 million. Cost income came in at 55%, as expected. On the number of customer counts, we missed our guiding by 91 customers, ending the year with around 5,500 accounts when adjusting for the 475 sold accounts. For 2025, we expect to deliver a total income run rate at year-end of NOK 260-270 million, a cost income of 52%, and 6,000 customer counts on credit line and down payment loan at year-end. This concludes the prepared part of the presentation. Now let's welcome our Q&A host and Chief Product and Tech Officer, Israr Khan, to the table. Thank you, Kjetil, and thank you to both of you for a well-presentation. I just have some reflections before we start. I think it's interesting to see how we're able to deliver on the guidings with such small margins, even though we missed with a few millions on certain parameters and maybe 90 customers below. It's amazing how we're able to actually model out something 12 months ahead and deliver, based on my perspective, so close to it. Yeah, I agree. Let's start with some questions, some interesting questions. We have a question here, which is probably to you, Kjetil, and that is, when will we start paying dividends? Yeah, that's a good question. We also received that before. Simply put, we will start paying a dividend when we're no longer able to grow faster than our return on equity. If we keep all ratios constant, our capital ratio will also remain constant if we grow at the same pace as our return on equity. For example, our return on equity in 2024 was 13.9%. If our loan book and our income also had grown with 13.9%, our capital ratios would have remained constant in a slightly simplified world. We believe that our return on equity will increase somewhat over time. Let's say 20% in the medium term. If we grow faster than 20% over an extended period of time, we will need to raise additional capital. If we grow slower than 20% over an extended period of time, we can start paying dividends. Okay. Basically, Aprila, it's a growth case, and as long as it makes sense to use those funds to further accelerate our growth, we will do so. Exactly. Okay. Thank you, Kjetil. I have a question to you, Espen. And that's related to something we said previously in our last quarterly presentation, and that was that the interest rates on the down payment loans are a bit lower than on credit line. But how does this actually affect our profitability? Kjetil, comment? Yeah, we did say that the last presentation. Everything else equal, we do offer lower interest rates on down payment loans. However, under IFRS 9, we have to recognize loan loss provision when we issue a new loan. That is based on three key factors. It is probability of default, loss given default, and exposure at default. A key difference between our products is exposure at default. Since down payment loans have a payment plan, the outstanding balance will decrease over time, and the exposure at default will be lower, leading to a lower loan loss provision. Exactly. From a profitability perspective, a lower loan loss provision helps offset the lower interest income. That is one of the reasons why we can offer lower interest rates on down payment loans. Thus, since the exposure at default is lower on down payment loans, even though we have lower interest rates, the profitability is equal to or somewhat close to credit line. It brings the profitability closer to the credit line. Okay. You had a comment on the slide that you presented saying that we see actually a difference in what product the customers choose. They already know that they want down payment loans or a credit line. I think on the slide that, for instance, business services typically choose a credit line, while more asset-heavy sectors choose down payment loans. That resonates quite well with me. If you're running a CapEx-like company, you don't probably need a down payment loan. While if you're investing in transportation, which was one of the sectors you mentioned, you probably want a down payment loan, maybe offset it relative to the time you need to have the asset in the balance. Yeah, and it's as expected, and they serve different needs to products. Okay. Perfect. Thank you, Espen. Kjetil, I have another question here. In Q4, we had NOK 53 million in increased lending, which is a bit soft, and that's accounting for the offset as well. However, in January alone, you mentioned that we already have an increase of NOK 55 million. That is quite aggressive. Do you mind sharing some insights on why this is happening now? Of course. We believe it's a result of last year's efforts to build a foundation for accelerated growth. First and foremost, related to the focus on attracting larger customers and the increased sales force. We onboarded quite a lot of large customers during the second half of 2024, and now they are starting to draw on their credit limits. Exactly. I guess it's also a consequence of sales force focusing on larger tickets, and they have typically a longer lead time as well before they actually become customers and draw upon funds. Absolutely. Absolutely. Okay. Thank you. There's another question for you, I guess, Kjetil, and that's related to our CET1 requirements. You mentioned that we have gotten a lowered CET1 requirements and that we have reliefs of NOK 25 million. What does that actually mean from a real-world perspective? With a CET1 relief of NOK 25 million, all else being equal, it means that we can increase our lending balance with around NOK 125 million, so 5x, without any need of new capital. Which in turn means that we can increase our return on equity, or we can, of course, also give the customers better terms or a combination of the two. Exactly. One can just imagine what could happen if our requirements were significantly lower. Yeah, you could imagine that. We can imagine. I see there's some questions coming in regarding that topic. We'll revert to those quite soon. We have some other questions here. This one is actually to you, Espen. And we see that the macro and in general, both in Europe as well as in the U.S., interest rates, they have been trending quite down. However, in Norway, it's been holding back. But given everything the same, most likely we will have an interest rate cut in March. How does an interest rate cut from the central bank in Norway affect Aprila Bank? For Aprila, it's quite straightforward. Our funding cost on deposit will go down while we do not have any loans that are linked to any reference rates. In times when the policy rates go down, in general, that means higher margins for niche banks like Aprila. I will just have to wait until March to see what the central bank decides to do. Yeah. Basically, the spread between our funding cost and the interest that we charge, it increases, which is favorable for us. Yes. Okay. Thank you, Espen. There is another question here for you, Espen, actually. Last presentation, we were discussing cost-income ratio. I think you mentioned that we are not only going to improve our cost-income ratio, but we are aiming for becoming world-class leaders in cost-income ratio. In Q4, it increased. What happened? We have set a bar high, but our goal of achieving a world-class cost-income ratio is still standing. In the quarter, the cost-income ratio was affected by the loan book that generates interest income and the sale of the NPL portfolio. On the cost side, we did have some higher costs in the quarter, mainly due to marketing campaign during the launch of down payment loans. If we look at 2024 as a whole, we delivered a cost-income ratio of 54.58%, and we were guiding for 55%. We delivered on what we guided. That sort of trickles back to just how amazed sometimes I am of how we're able to hit some of these figures almost to the decimal point. Yeah. Okay. There is one question, I think. You touched a bit upon it. These NPL sales, they sort of are a bit tricky. Conceptually, it is easy, but they do some weird things to our key figures. Can you explain what actually happens with our figures when we sell a portfolio? Yeah, it's not that straightforward. As a bank, we must recognize ongoing interest based on the loan's carrying amount. That means that we continue to book interest income after the loan has defaulted. We also book loan losses, but in general, an NPL portfolio has a positive pre-tax profit effect when it's on our books. When we sell an NPL portfolio, our pre-tax profit declines. Rate declines. The rate. The rate declines. Basically, even though it's a non-performing portfolio, from a technical perspective, it's generating income and it's generating a pre-tax profit. In general, yeah. In general. When we divest or sell it, that goes away. Yeah. Okay. Correct. Let's take a look at some of the other questions that are here. I think we have to address the question about re-domiciliation. When is Aprila going to move? I see there's several here. Are we also considering becoming a Swedish or Finnish bank? I think, Kjetil, you will have to talk a bit about re-domiciliation. Yeah. Over the past few years, several Norwegian banks have been acquired by foreign banks, mostly Swedish. Over the past months, we've seen Norwegian banks starting to move their license. Some banks have done it, this one bank, and other banks are in the process of moving their license. We have also started a process to assess whether we should move our license and if so, to what jurisdiction. We will revert with more information once we have something to convey. Yeah. So basically, what you're now saying is that we have now actually started the process of reviewing. Yes, that's correct. Okay. I think that's probably all we can talk about on that topic for now. Let's take a look at some of the other questions here. What is the strategy for increasing shareholder values on par with other smaller banks like Morell, Instabank, and so on? I think this is another way of also probably asking why the shareholder price is not moving, because you already talked about the dividends. Kjetil, comment on this question? Yeah, I can try to comment on others' question there. I can try to answer it by sort of looking at some potential positive share price triggers. For the past two and a half years, there has been uncertainty related to retail classification. I think we are about to get more clarity on that. There was an EBA consultation that ended Wednesday this week. We expect that FSA will issue a revised circular letter on the topic quite soon now. If they adopt EBA's guidelines, Aprila can continue to use retail classification. That might and should be a positive trigger for the share price. We don't have any more visibility in that process, though it's sort of a black box. No more visibility other than that FSA has said that they will issue this revised circular letter once the consultation is completed. The time for that is approaching. Second point I can mention is improved macro. We've seen, we've all seen the headlines over the past year or so pointing to new bankruptcy records in Norway. We've also seen that the number of new businesses is at a record low, hasn't been this low since the global financial year 2009. Statistics Norway's credit indicator is also the C2 in English or quote two in Norwegian, is at its lowest level in 15 years, measuring 12-month growth in lending to non-financial group corporations. Several things are pointing to that we are in sort of an S&B recession. Once that changes, the macro becomes a positive driver. I guess that could also be a positive driver for the share price. The third point I could mention is international expansion. Our ambition has always been to become a large European S&B bank. We have started the bank in Norway, a very small country. I believe once we start lending in a much bigger market, we will achieve high growth rates. I'm quite confident on that. Once we sort of start on our international expansion process, I'm quite, I guess that could also be a positive share price trigger. Reducing uncertainty, international expansion, and also positive macro triggers that will affect us positively. Initially, you also mentioned the dividends. In which other ways do Aprila increase shareholder values? It's dividends and it's removing uncertainty, growth, other ways? Of course. What we do every day. Our ambition is to grow as fast as possible and with as high return on equity as possible. Our profitability is quite good and it is improving. Our growth was too soft in the second half of 2024. We are not satisfied with that. Also, as we have mentioned, the growth so far in 2025 is tremendous. I think we are on the right track. Thank you, Kjetil. There's another question here regarding ownership. I think we can address it, Kjetil and Espen. The question is basically, this is actually a bit related to how the Norwegian FSA governs the ownership structure in the Norwegian banks. Basically, no grouping of owners or single owners can own more than 25% of a bank. What that means is that when we launched Aprila, the founding team had to divest or emit 75% of the ownership of the bank. Thus, we were left with 25%. I think the question here is, how are we ensuring that key players in the bank are sufficiently incentivized? Yeah, I think that's what he means. That's a good question. We have run the bank now for several years without any proper bonus program. We actually developed a new bonus plan in the second half of 2024. The board adopted it in December. We presented it to the staff in January, and it was very well received. I believe that will help quite a lot to incentivize employees in the same way as shareholders. The key measures that decide the size of the bonus are two things. It's our total income growth, and it's our return on equity. Exactly. We are actually completely in line with our shareholders. Yeah. This is also something that's heavily regulated by the FSA. Yeah, as everything. As everything. That sort of also puts some constraints on what we can do and cannot do. I actually read an article, I think it was in The Economist two or three months ago, that the U.K., after they left the EU, has gone quite progressive in regards to bonuses and stock option programs for the finance industry. That is regulated heavily in the EU and also, obviously, in Norway. Yeah. There is another question here about the main priorities for 2025, which is growth. Our guiding says 6,000 clients on year-end for both CL and DL. The question is, that's only an increase of 500 from the year-end or 9%. Does that sound aggressive? I think this is one of the things. This slide can be somewhat confusing, right? Because we're trying to show what we actually delivered relative to what we said we would deliver. The number says 5,509, I think. That is adjusted for the NPL divestment, right? If you look in the footnote, I think the number there is 5,109. We actually need to grow from 5,100 customers to 6,000 customers, which is close to 20%. Exactly. Which I believe is solid growth in terms of number of customers. Please also remember that we are constantly increasing the average balance, and we are attracting and acquiring larger and larger customers. A growth of close to 1,000 customers with a higher average balance could be quite good. Yeah, that's quite aggressive. I think this trickles a bit back to the question about the NPL sales as well that we had to you, Espen, that it does some not an odd thing to our figures, but it creates some extra dimensions that we need to account for and also display. Going forward on the next quarterly presentation, we will sort of start with clean slates and hopefully have less confusion. I agree that an increase of 9% is not aggressive, but we are not there. We are on 20%. That's in terms of customer growth. In regards to balance growth, we are focusing on larger tickets as well. I hope that was a good answer to that question. We have another question regarding interest rate sensitivity on the loans that we have. That is a good question given interest rates are also declining in Europe and Norway. Do we have to do anything about our interest rates? Do customers react to higher or lower interest rates? How is the sensitivity in general? We have done several, we looked at that a lot. For the smaller customers, there is not a very high degree of interest rate sensitivity. The most important thing for the smaller customers is the size of the limit or the loan. When looking at larger customers, interest rate sensitivity becomes a much more relevant topic. We are constantly optimizing our pricing in the segment for the larger customers. Okay. Thank you, Kjetil. I think there's a follow-up question here from Ottar. That is related to our acceptancy rate. I'm not sure if we actually do disclose our acceptancy rates in general, but Espen and Kjetil, care to comment? I think now that we sort of have gotten some more competition compared to what we have before, I think we could, I think we'd rather not comment on the metrics when it comes to our approval rates and the customer's take-up rate. Yeah. Okay. I don't see any other questions here, so I can see. Yeah. I think we can conclude with that. Yes. All right. Until next time. Thank you for attending. Thank you. Thank you.