Interim report Q2 2019

Continued stable result

April – June 2019

• Total operating income increased 23 per cent to SEK 797m (648).
• Profit before tax increased 63 per cent to SEK 230m (141).
• Earnings per share amounted to SEK 1.83 (1.12).
• Return on equity was 16 per cent (12).
• Carrying value of acquired loan portfolios totalled SEK 22,093m (20,605).
• The total capital ratio was 14.12 per cent (14.14) and the CET1 capital ratio was 9.91 per cent (9.66).

Figures in brackets refer to second quarter 2018 for profit/loss comparisons and to the closing balance at 31 December 2018 for balance sheet items.

Events during the quarter

• Second largest debt collector in the Polish market. Hoist Finance finalised the acquisition of assets totalling PLN 400m from the Polish debt restructuring company GetBack.
• Finalisation of acquisition of Italian debt collection company Maran Group, which complements the current setup perfectly in the ambition to be a market leader.
• Robert Kraal and Lars Wollung were elected as new members of the Board of Directors at the AGM.

Subsequent events

• Hoist Finance has received investor commitment for a securitisation from the global asset manager CarVal.

Continued stable result

The second quarter of 2019 is the all-time high (excluding items affecting comparability) for Hoist Finance, following the last high in the previous quarter. We are pleased to see that our operating model with standardised and harmonised work processes across all markets is delivering as expected. Hoist Finance is becoming more effective, efficient and digital. Our collection performance is strong (104 per cent) and our cost to income ratio is improving (71 per cent).  

Our market remains very attractive with a strong pipeline and reduced price pressure. The availability of low-cost funding remains a challenge for many of the competitors in the industry, and consequently, we see a trend towards capital light models with asset management and servicing becoming more important for a number of companies. At the same time, the change in regulation is increasing the supply of non-performing loans (NPL) across all asset classes. The M&A activity has been quite high in the first six months of the year, and the industry consolidation is continuing. Hence, the market conditions are favourable at this point in time and will most likely continue to develop in a positive direction going forward.

Hoist Finance has been regulated as a bank since 1996, and the credit market license has served us well over time. We have been able to adjust well to regulatory changes, and our business model has proven itself to be resilient. We believe that increased regulation is beneficial for our customers, counterparts and the most professional companies in the industry. However, being regulated as a bank, some of the new regulatory changes have had unintended negative consequences for Hoist Finance. We are now working to address those through implementing mitigating actions, and this is progressing according to plan.

One of our key mitigating actions is to implement a securitisation structure whereby the underlying NPL risks are transferred from Hoist Finance. As a first step, we are very pleased that we have received investor commitment for a securitisation. I am very glad to see the good investor appetite and this is an important step in the right direction towards maintaining a sustainable business model in a post NPL Backstop world.

A key cornerstone of our strategy is “becoming more digital”. Building on a harmonised operating model, we can now develop once, and then deploy standardised solutions across markets. This saves costs and increases speed of execution. We are pleased to have launched our self-service portal in two new markets in the quarter, and our self-service portal is now in production in all markets but one. This provide our customers with more possibilities for self-service and thus higher flexibility, this is also operationally more efficient.

Strengthened capital enables continued growth

During the first half of 2019, our investment volumes remained high and we have made acquisitions of around SEK 2.3bn, all while strengthening our capital (CET1 ratio 9,9 per cent). In the second quarter, we closed the transaction of GetBack, which makes us the second largest player in the Polish market. We continue to grow and our portfolio acquisition guidance in 2019 is SEK 5bn without mitigating actions.

Sustainable business model - Helping people keep their commitments

Our vison is “Helping people keep their commitments”. Our approach to collection is amicable and holistic and being a regulated institution, we have set the highest possible levels of ethics and compliance for ourselves. We are finding a path forward for individuals in a crisis, thus supporting families, communities and the society, in an effort to help people in a sustainable way. What we do is important and relevant and I am very proud of the difference we make every day. With a sustainable business model we are creating long term shareholder value.

Klaus-Anders Nysteen

CEO

Hoist Finance AB (publ)

Hoist Finance AB (publ) (the “Company” or the “Parent”) is the parent company of the Hoist Finance group of companies (“Hoist Finance”).
As a regulated credit market company, 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 Market Act. The information was submitted for publication by Andreas Lindblom at 07:30 AM CET on 30 July 2019.

A teleconference for investors, analysts and media will be held at 09.30 AM (CET), to listen in to the conference live, please dial:

SE: +46850558357 UK: +443333009260 US: +18335268383

The presentation will be held in English and can also be followed live at: https://financialhearings.com/event/11524.

For further information please contact:
Andreas Lindblom
Head of Hoist Finance Investor Relations
Telephone: +46 (0)72 506 14 22

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.