Hoist Finance Interim report Q1 2018
A strong start to the year, with growth and expansion into new asset classes
January – March 2018
• Net operating income increased 13 per cent to SEK 684m (603).
• Profit before tax amounted to SEK 185m (185).
• Diluted earnings per share amounted to SEK 1.59 (1.66).
• Return on equity was 18 per cent (21).
• Carrying value of acquired loan portfolios totalled SEK 16,112m (15,024).
• The total capital ratio was 17.15 per cent (17.71) and the CET1 capital ratio was 11.35 per cent (11.70).
(Figures in brackets refer to first quarter 2017 for profit/loss comparisons and to the closing balance at 31 December 2017 for balance sheet items.)
Events during the quarter
• Klaus-Anders Nysteen new CEO of Hoist Finance as of 15 March.
• Hoist Finance introduces a new organisational model to increase growth and improve operational efficiency.
• Hoist Finance continues expansion in new asset classes through the acquisition of portfolios of performing and non-performing secured loans.
Subsequent events
• Christer Johansson appointed as new CFO.
Growth and operational efficiency on top of the agenda
It is truly a great pleasure for me to present my first quarterly report as CEO of Hoist Finance. Since I took office on 15 March 2018, I’ve had the opportunity to meet all parts of our organisation and many of our clients, the leading financial institutions in Europe. I am both proud and enthused by the dedication of our highly skilled staff that demonstrates a strong loyalty for both our customers, our clients and our company.
I am also impressed by the strong reputation our organisation has built with all relevant stakeholders. We add value by reducing tied-up capital for our clients and enable them to focus fully on their core competence. We also play an important role when we help people keep their commitments and enable our customers to re-enter the financial ecosystem.
Evolve to capture market growth
Our industry is currently shaped by three trends; growth, consolidation and market maturation.
Firstly, we estimate that the market will continue to develop favourably, with a growth exceeding 10 per cent per annum up until 2020. This is driven by regulatory changes and changes in accounting principles, but also by the fact that financial institutions see that our industry is becoming more professional. We add value by delivering a service that is both professional, and knowledge based. We prioritise investments in building skills and collection practices that support our target to capture and outpace the market growth that lies ahead of us.
Secondly, the market is consolidating. We have seen several small and large transactions over the last couple of years, and my belief is that this is a process that will continue. Increasing regulation and the need to become more effective and efficient are strong drivers for the industry consolidation. Hoist Finance has the ambition to play an active role in this process.
Finally, the market is maturing at a steady pace. We have seen that prices are up, but also that risks are down. The future winners are those organizations that have the best operations and deliver the value proposition that addresses the clients’ needs. We believe that specialisation is of great importance both for operational excellence and differentiation. Consequently, Hoist Finance will focus on some prioritized European markets with an undivided focus on financial institutions.
Since taking the helm of Hoist Finance, we have reorganized the company, giving it a setup that is more efficient than before. We will increase the level of integration and collaboration and work as One Hoist Finance. The new Executive Management Team is committed to deliver on our growth ambitions, but also to take Hoist Finance to the next level in terms of harmonised best-practices, digitalised processes and organizational design.
New segment reporting and accounting principles
The new and more efficient organisational structure also means that there are some changes to how we report. We will now report our segments based on countries instead of regions. As for our financial reporting it will now be based on IFRS 9. This increases both clarity and transparency, and is also natural since we grow in loans which are not defaulted, meaning that we increase in resemblance to the banking sector in general.
A solid quarter with growth and financial development according to plan
During the quarter we acquired portfolios amounting to SEK 904 million which translates into the best first quarter in our history when it comes to acquisitions. We have also entered into a forward-flow agreement with an Italian financial institution. The agreement is one of the first large forward flow contracts entered in Italy and reaffirms our strong position in the Italian market.
Furthermore we entered into an agreement to acquire a UK mortgage portfolio. The portfolio consists of performing and non-performing secured loans on residential and commercial properties. This acquisition underpins our capability to expand into other asset classes and also our ability to do so in the prudent and disciplined manner, which has become the hallmark of Hoist Finance.
The quarter’s profit before tax amounted to SEK 185 million and return on equity was 18 percent which is broadly in line with our performance same period last year and also in line with our full year plan.
Strong pipeline and roadmap for intense development
Let me use this opportunity to thank Jörgen Olsson for his contribution to developing Hoist Finance into one of the leading institutions of our industry. I am both honoured and excited to take the helm at such an interesting point in the history of our company and our industry.
Looking into the coming year we can see that a solid pipeline of possible NPL portfolio acquisitions and partnerships bodes well for a strong financial performance. While we have an intense roadmap for developing our company and the way we operate further, focus remains fixed on growth and increased efficiency on all levels to reach our financial targets.
Klaus-Anders Nysteen
CEO
Hoist Finance AB (publ)
For further information please contact:
Michel Fischier
Group Head of Investor Relations
Tel: 46 8 555 177 19
Hoist Finance AB (publ) (the “Company” or the “Parent”) is the parent company of the Hoist Finance group of companies (“Hoist Finance”). The Company is a regulated credit market company. Hence, Hoist Finance produces financial statements in accordance with the Swedish Annual Accounts Act for Credit Institutions and Securities Companies.
This information is information that Hoist Finance AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 08:00 AM CET on 15 May 2018.
About Hoist Finance
Hoist Finance is a trusted debt restructuring partner to international banks and financial institutions. We are specialised in serving banks in handling non-performing loans, and supporting individuals in becoming debt free. Through expertise and rigorous compliance we earn the banks’ trust. Through respect, honesty and fairness we earn the trust of our customers. For further information, please visit hoistfinance.com.