Nordax Group Interim Report Jan-Jun 2015
Nordax Group AB (publ)
Interim report January-June 2015
January-June 2015
(Numbers compared with January-June 2014)
- Operating income amounted to 434 MSEK (383), an increase of 13.3%
- Profit before credit losses excluding IPO costs of 75 MSEK was 239 MSEK (197), an increase of 21.3%
- Net credit losses were -78 MSEK (-60), net credit loss level was 1.5% (1.4%)
- Operating profit excluding IPO costs was 161 MSEK (137), an increase of 17.5%
- Net profit was 68 MSEK (107), a decrease of 36.4%
- Net profit excluding IPO costs was 126 MSEK (91), an increase of 38.5% primarily achieved by last year’s strong growth in total lending portfolio and increase of total net interest income
- Earnings per share was 0.61 SEK (0.82), a decrease of 25.6%
- Earnings per share excluding IPO costs was 1.14 (0.82) SEK
- New loan volumes were 1,819 MSEK (1,840), a decrease of 1.1%
- Performance in line with guidance and outlook unchanged
Volumes, capital and funding
(Numbers compared with December 31)
- Lending to the general public was 10,368 MSEK (10,042), an increase of 3.2%. the increase was 4.4% in constant currencies
- Deposits were 6,454 MSEK (6,479), a decrease of 25 MSEK
- Liquidity reserve was 2,988 MSEK (3,246), liquidity coverage ratio 8.15 (8.40)
Other events
- Nordax Group listed on Nasdaq Stockholm main market on June 17, 2015
| KEY FIGURES (definitions on page 32) | Q2 2015 | Q1 2015 | % | Q2 2014 | % | Jan-Jun2015 | Jan-Jun2014 | % | FY2014 |
| Operating income, MSEK | 216 | 218 | -0.9 | 203 | 6.4 | 434 | 383 | 13.3 | 803 |
| Net interest margin, % | 8.6 | 8.4 | - | 8.2 | - | 8.5 | 8.2 | - | 8.5 |
| Profit before credit losses, MSEK | 46 | 119 | -61.3 | 105 | -56.2 | 165 | 197 | -16.2 | 439 |
| Operating profit, MSEK | 13 | 74 | -82.4 | 77 | -83.1 | 87 | 137 | -36.5 | 325 |
| Net profit, MSEK | 10 | 58 | -82.8 | 60 | -83.3 | 68 | 107 | -36.4 | 254 |
| Earnings per share, SEK | 0.08 | 0.53 | -84.9 | 0.46 | -82.6 | 0.61 | 0.82 | -25.6 | 2.29 |
| Lending to the general public, MSEK | 10,368 | 10,312 | 0.5 | 9,354 | 10.8 | 10,368 | 9,354 | 10.8 | 10,042 |
| Deposits, MSEK | 6,454 | 6,524 | -1.1 | 6,390 | 1.0 | 6,454 | 6,390 | 1.0 | 6,479 |
| New loan volumes, MSEK | 898 | 921 | -2.5 | 947 | -5.2 | 1,819 | 1,840 | -1.1 | 3,843 |
| Common Equity Tier 1 capital ratio % | 12.6 | 12.6 | - | 10.6 | - | 12.6 | 10.6 | - | 12.3 |
| Total capital ratio % | 14.6 | 14.6 | - | 12.3 | - | 14.6 | 12.3 | - | 13.9 |
| Return on equity, % | 2.5 | 14.8 | - | 17.9 | - | 8.7 | 15.7 | - | 18.0 |
| Net credit loss level (cost of risk) % | 1.3 | 1.8 | - | 1.2 | - | 1.5 | 1.4 | - | 1.2 |
| Net credit loss level % 12m roll. | 1.3 | 1.3 | - | 1.4 | - | 1.3 | 1.4 | - | 1.2 |
| Cost to income ratio % | 78.7 | 45.4 | - | 48.3 | - | 62.0 | 48.6 | - | 45.3 |
| Adjusted operating profit, MSEK | 100 | 80 | 25.0 | 82 | 22.0 | 180 | 146 | 23.3 | 358 |
| Adjusted cost to income ratio %, 12m roll. | 28.9 | 28.8 | - | 30.7 | - | 28.9 | 30.7 | - | 29.4 |
| Adjusted return on tangible equity % | 26.0 | 25.7 | - | 24.1 | - | 26.0 | 24.1 | - | 25.6 |
| Adjusted return on average net loans %, 12m roll. | 4.0 | 3.9 | - | 3.4 | - | 4.0 | 3.4 | - | 3.9 |
Comments from the CEO
The listing on Nasdaq Stockholm’s main market is a milestone for us and I want to extend a warm welcome to the thousands of new shareholders in Nordax. During the listing process we received strong interest among Swedish and international institutional investors as well as Swedish retail investors. The offering was well over-subscribed and we successfully managed to establish a diversified shareholder base. We are proud of the confidence the investors have shown in us and we are fully focused on continuing to deliver profitable growth.
The performance during the first half of 2015 is in line with our expectations and we continue to deliver stable growth in lending and earnings. One of our key strengths in generating new loans is our efficient use of more than 20 different marketing channels across four markets translating into healthy growth in our loan portfolio of 3.2% since end of 2014 or 4.4% in constant currencies. Our lending to the general public amounted to 10,368 MSEK by the end of June. In the six-month period the total lending portfolio was negatively impacted by foreign exchange rates amounting to 112 MSEK. Our new lending of 1,819 MSEK in the first half-year of 2015 was similar to 1,840 MSEK in 2014 and in line with our outlook. Norway, Finland and Germany showed healthy growth, however Sweden has been somewhat slower than in the past. We do see several opportunities for growth in Sweden going forward.
In the six-month period, we had a non-recurring item of 75 MSEK related to costs for the initial public offering (“IPO”). Excluding IPO costs profit before credit losses increased 21.3% to 239 MSEK compared to the first six months last year. Our adjusted cost to income ratio on a 12-month rolling basis amounted to 28.9%, an improvement by 1.8 percentage points. This has been achieved through leveraging our cost effective, centralized platform and should be seen in the light of our conscious decision last year to increase expenses in order to accommodate the growth in our loan business, and to invest even more in internal governance and control, compliance and risk management of the business.
One of our guiding principles is to be a responsible lender. This, in combination with our thorough, data driven underwriting process, gives us a competitive edge. We target and approve customers who are financially stable and can afford a loan. Net credit loss level for the six-month period amounted to 1.5% which is well in line with our outlook and the slight increase is driven by portfolio maturation. Operating profit excluding the IPO costs amounted to 161 MSEK and increased by 17.5% compared to the six-month period last year. The return on average net loans on a 12-month rolling basis was 4.0% which is above our target of 3%.
An essential part of our strategy is our diversified funding, based on multiple sources; senior unsecured bonds, asset backed securities, warehouse funding facilities and retail deposits offered in Sweden, Norway and Finland. We continue to take a conservative approach to liquidity risk and continuously keep approximately 40% of our deposits as liquidity reserves. Our interest expenses in relation to the average loan portfolio was 3.6%, however, it comes with a lower liquidity risk. This is reflected in our liquidity coverage ratio of 8.15 and a net stable funding ratio of 1.34 in addition to the diversification of funding sources. Our Common Equity Tier 1 ratio was 12.6%. Our target is 12% and the regulatory minimum is 8%.
In order to maximize long term shareholder value we strive to balance all stakeholders’ interests. We work hard to meet our customers’ needs to simplify their every-day life with loans they can afford or with attractive savings products. We strive to be a sound and responsible employer and a tier one corporate citizen. Internal governance and control, risk management and compliance form the basis for our business and with our dedicated and committed employees we are well positioned for the future.
Outlook
There are no changes in the company’s outlook compared to the previous communicated outlook. Nordax’s outlook and financial targets are found on page 9.
Contacts
For more information, please contact
Morten Falch, CEO, +46 8 690 15 07, morten.falch@nordax.se
Camilla Wirth, CFO, +46 8 690 15 07, camilla.wirth@nordax.se
Johanna Clason, treasurer and debt investor relations, +46 8 690 15 07, johanna.clason@nordax.se
Åse Lindskog, media and equity investor relations, +46 730 24 48 72, ase.lindskog@nordax.se
Conference call
Media, analysts and investors are welcome to take part in a conference call on July 15 at 9.00am CET. CEO Morten Falch, CFO Camilla Wirth and deputy CEO/COO Jacob Lundblad will present the results. After the presentation there will be a Q&A session.
Call-in numbers:
Sweden: +46 8 566 426 61
UK: +44 203 428 14 09
US: +1855 753 22 36
Link to audiocast:
http://cloud.magneetto.com/wonderland/2015_0715_Nordax_Q2_Report/view
You can also follow the presentation on http://www.nordaxgroup.com/en/investors/financial-reports/presentations/
About Nordax
Nordax is a leading niche bank in the Nordic region providing unsecured consumer loans and deposit accounts to about 95,000 customers in Sweden, Norway, Finland, Denmark and Germany. Nordax employs about 200 people, all working in its office in Stockholm. Nordax was founded by six entrepreneurs with extensive risk management experience. The underwriting process is Nordax’s core competency; it is thorough, sound and data driven. Nordax’s customers are financially stable people in the prime of life. As of June 30, 2015 lending to the general public amounted to SEK 10.4 billion and deposits amounted to SEK 6.4 billion. Nordax has been supervised by the Swedish Financial Supervisory Authority since 2004 and deposits are covered by the Swedish deposit guarantee scheme. Read more on www.nordaxgroup.com.
Nordax Group AB (publ) announces this information in accordance with the Securities Market Act and/or the Act on Trading in Financial Instruments and/or the Nasdaq Stockholm Rule Book. This information was submitted for announcement on July 15, 2015 at 7.30am CET.
Tags: