Bluestep Bank AB (publ) Year-end report 2023

Performance and financial position

The financial performance and financial position is impacted by the acquisition of Bank2, which is fully consolidated from the 31st of October.

• Lending to the public increased by 29% to MSEK 26, 205 (MSEK 20,346). Adjusted for currency effects the increase was 6% excluding Bank2.

• New lending amounted to MSEK 7,009 (MSEK 6.903). Adjusted for currency effects the increase was 4%.

• Net interest income amounted to MSEK 959 (MSEK 921), an increase of 4%.

• Operating profit amounted to MSEK 298 (MSEK 310). Bank2 contributed with MSEK 16.2 to operating profit since the acquisition date. Operating profit was impacted by a continued build-up of net credit loss provisions, amounting to MSEK 26 for the Bluestep Bank portfolio excluding Bank2. The operating profit was marginally impacted by gains on financial transactions.

• Impairment and phasing out of legacy systems amounted to MSEK 6.6 that is in line with the one Nordic approach and the new customer onboarding system. The comparative period was impacted by non-recurring items (MSEK 36) related to the strategic review initiated by the owners of the Group. The current year include restructuring costs following the acquisition of Bank2 amounting to MSEK 22. Directly attributable transaction costs for the acquisition of Bank2 amounted to approximately MSEK 45 on Group level.

• Net credit losses amounted to MSEK 48 (MSEK 28), equivalent to a credit loss level of 0.18% (0.14%).

• The return on equity for the period was 11.7% (13.9%).

• The Common Equity Tier 1 (”CET1”) ratio was 16.9% (17.0%) for the Consolidated situation, which is well above the targeted level of 16%. The total capital ratio was 17.4%
 

Financing and funding

The Group’s long-term strategy is to have a well-diversified funding structure, mainly comprising of retail deposits from the public and the issuance of covered and senior unsecured bonds.

• During the first half of 2023, one of Bluestep Bank’s outstanding covered bonds, amounting to MSEK 1,900 was repaid. During the second half of the year a new covered bond, amounting to MSEK 1,000 was issued. At the end of the period, the Group had an outstanding volume of covered bonds amounting to MSEK 5,000 under Bluestep Bank’s MTCN-programme.

• At the end of the period, the Group had an outstanding volume of MSEK 1,850 and MNOK 550 in senior unsecured bonds under Bluestep Bank’s MTN-programme.

• Furthermore, the Group had an outstanding volume of MNOK 60 in AT1-instruments and MNOK 60 in T2- instruments, issued by Bank2.

• Deposits from the public amounted to MSEK 20,513 (MSEK 13,239). Deposit funding in EUR, via a German deposit platform provided by Raisin GmbH (“Raisin”) was launched during the second half of the year, furthering the diversification of the Group’s funding. The acquisition of Bank2 also entailed an increase in deposits from the general public in Norway.

Strategic development and significant events

• An important milestone in the Group's history was the acquisition of Bank2 ASA (‘Bank2’) on the 31st of October 2023. This strategic move aims to tap into the identified synergies by expanding the current operations of the Group in Norway and thereby strengthening the Group’s position as a specialist mortgage provider in the Nordics. The Group’s lending portfolio grew by approximately MNOK 4,887 through the acquisition.

• Following the notification to the Swedish Financial Supervisory Authority ("SFSA") and the German Federal Financial Supervisory Authority (“BaFin”) in 2022, the Group began offering deposit products in EUR to customers residing in Germany during the second half of 2023. This additional source of funding is a valuable addition for the Group’s Finnish mortgage business.

Comment from Björn Lander, CEO, Bluestep Bank:

"In a year of unprecedented challenges, Bluestep Bank has demonstrated remarkable resilience and adaptability. Our strategic evolution towards digitalization and our commitment to inclusivity have not only strengthened our operations but also enhanced the customer experience. As we look to the future with optimism, we persist in our mission to empower individuals through financial inclusion and the realization of homeownership.”

For further information, please contact:

Björn Lander, CEO, Bluestep Bank
+ 46 (0)73 673 1899
bjorn.lander@bluestep.se

 Juan Navas, Head of Corporate Communication, Bluestep Bank
+46 (0)70 306 2245
juan.navas@bluestep.se

Or visit: www.bluestepbank.com

Bluestep Bank AB (publ) is publishing this information which is obliged to be made publicly available pursuant to the EU Market Abuse Regulation and the Norwegian Securities Trading Act § 5 - 12. The information was submitted for publication, through the agency of the contact person set out above at 08.30 CET on 22nd of February 2024.