Interim report Q3 2019

A number of significant and strategic initiatives were made during the third quarter, including a first securitisation transaction, site consolidation in France and outsourcing of IT infrastructure. Adjusted for these, the underlying performance is on par with previous quarters this year, and Hoist Finance is well positioned ahead of the seasonally strong fourth quarter.

July – September 2019

• Total operating income decreased –5 per cent to SEK 698m (731).  
• Items affecting comparability before tax amounted to SEK –47m and pertain to restructuring costs for the French operations, to the IT organisation and to interest rate swaps.  
• Profit before tax totalled SEK 146m (243).  
• Profit before tax excluding items affecting comparability totalled SEK 194m (202).  
• Basic and diluted earnings per share amounted to SEK 1.39 (1.87).  
• Return on equity was 12 per cent (20).  
• Return on equity excluding items affecting comparability was 15 per cent (16).  
• Carrying value of acquired loan portfolios amounted to SEK 22,394m (20,605).  
• The total capital ratio was 14.87 per cent (14.14) and the CET1 ratio was 10.29 per cent (9.66).

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

 Events during the quarter

• Site consolidation in France in order to improve efficiency. By closing the contact centre in Bayonne, Hoist Finance will have a streamlined organization with specialist teams in Lille and Paris, enabling continued growth in a promising market. 
• By outsourcing the IT infrastructure to one of the market leaders, Larsen & Toubro Infotech Ltd, Hoist Finance will be able to both deliver on the strategy to become the digital leader in the industry, as well as reduce costs over time.
• Hoist Finance expands its Shared Service Centre in Poland, and completes initial establishment of a nearshoring centre in Romania. 

Subsequent events

• Hoist Finance has received investor commitment for a rated securitisation from the global asset manager CarVal investors, an important step in adapting to the changing regulatory landscape. 

Comments by CEO Klaus-Anders Nysteen

I am proud to have closed yet another busy quarter with significant progress in a number of areas. The focus has been to look beyond the regulatory change and take decisive actions to reduce future cost and improve operational efficiency. This includes outsourcing of IT infrastructure, site consolidation in France to further improve efficiency, initial establishment of a nearshoring centre in Romania, as well as continued live-testing of new payment solutions. The results of the third quarter, however, only show the costs and not the benefits of these investments. Adjusting for this, the quarterly performance is on par with previous quarters.

In addition we took a significant step in implementing a post-NPL backstop business model when closing our first securitisation transaction. I am very proud to have received firm commitment for a second securitisation transaction, this time with an investment grade rating. This represents an important milestone showing that we are a flexible and agile company. I also believe that the positive feedback that we have received from investors and rating agencies is a strong underwriting of the Hoist Finance assets, investment procedures, servicing capabilities and our professional and competent teams. Although these structures increase our average cost of funding somewhat, we are very confident that the banking model still offers the most sustainable and competitive funding model. Our access to low cost funding is simply the best there is in the industry.

The market outlook is positive. There is a strong pipeline across all asset classes, and margins have developed favourably. I am confident we are on the right track to a sustainable and competitive post-NPL backstop business model in which we are able to continue helping people keep their commitments and find a path forward.

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 5 November 2019.

The report will be presented at 09:30 CET at Helio GT30, Grev Turegatan 30 in Stockholm, by Klaus-Anders Nysteen, CEO and Christer Johansson, CFO.

The presentation will also be broadcasted live at:
https://tv.streamfabriken.com/hoist-finance-q3-2019

Dial-in numbers for the conference call:
SE: +46850558368 UK: +443333009263 US: 18446251570

The presentation and the report will be available on www.hoistfinance.com after the publication.

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

About Hoist Finance

Hoist Finance is a trusted debt resolution partner to individuals, companies and banks in eleven European countries. With over 1600 dedicated colleagues, smart digital solutions and a deep understanding of individual financial circumstances, we help over six million customers keep their commitments. This is achieved by agreeing on sustainable repayment plans so that everyone is included within the financial ecosystem. Hoist Finance has a diverse portfolio of asset classes and our online savings platform in Sweden and Germany enables our unique funding model. Hoist Finance was founded in 1994 and is today a public company listed on Nasdaq Stockholm. For more information, please visit hoistfinance.com.