Interim Report January-June 2019 Nordax Bank AB

Highlights January-June 2019

•  Strong development of new lending within private loans, mortgages as well as equity release mortgages.
•  Lending growth was 19% during first 6 months of 2019 and total lending amounted to 22.4 billion SEK.
•  Nordax opened up for mortgage applications in Norway through the web (Q2)
•  First paid out mortgage in Norway (Q2)
•  Decided to stope new lending for private loans in Germany to focus on the nordic markets (Q2)
•  New legal requirements for private loans in Norway implemented (Q2)
•  Attractive savings offering increased deposits from the public with 57% since year-end.
•  MTN-program with a framework amount of 3 billion SEK was established (Q2)
•  Issues of Tier 2 bonds and senior unsecured bonds (Q2)
•  Mortgages in Norway launched through brokers (Q1)
•  Total lending portfolio surpassed 20 billion SEK (Q1)
•  The acquisition of Svensk Hypotekspension (SHP) was finalised (Q1)

Business development personal loans

New lending for personal loans continued to grow strongly. New lending was especially robust in the Swedish market, where a more attractive offer contributed to growth in all channels. In Norway, new personal loan regulations were introduced in the second quarter, which had a slightly negative effect on the quarter’s new lending. A decision was made in the second quarter to discontinue new lending in Germany and focus on the Nordic markets. Lending in Germany accounted for 4% of Nordax’s total lending at the end of the quarter.

Mortgage loans

Nordax began offering mortgages in Sweden in 2018.The main target group is customers with some form of non-traditional employment, i.e. self-employed or temporary employees, including project, part-time or replacement workers. Thanks to thorough credit assessments and personal contacts, more loans are approved for this customer group, which is often denied by the major banks despite being financially stable.Interest in the offer has been high and new lending continues to grow.

At the end of the first quarter, Nordax also began offering mortgage loans in the Norwegian marketthrough loan brokers, and at the end of the second quarter mortgage applications were being accepted directly through Nordax’s website.

Equity release mortgages

New lending grew strongly and the portfolio grew by 14% in the first 6 months of the year. One contributing factor has been increased marketing, which has led to greater awareness of SHP as a brand and equity release mortgages as a product. More applicants also became eligible for an equity release mortgage during the year after the lending limit was changed and the offer was extended to more of the country’s municipalities.

Portfolio development

Total lending amounted to SEK 22.4 billion (SEK 15.1 billion as of 31 December 2018). The acquisition of SHP, expansion of the product offering to include mortgage loans, and strong quarterly performance inthe Swedish market were the most important reasons for the strong growth. Excluding the SHP acquisition,lending grew by 19% in the first 6 months of the year,partly due to positive currency effects. All geographical markets except Germany grew. In the Swedish market, mortgages, personal loans and equity release mortgages all contributed to the strong trend.

Results January-June 2019 (compared to January-June 2018) 

• Operating profit was 228 MSEK (254). Decrease due to higher costs.
• Net interest income amounted to 724 MSEK (647). Higher net interest income due to growing lending portfolio and acquistion of SHP
• Total operating expenses was -416 MSEK (-263). Increased costs as a result of investments in growth initiatives to grow and broaden Nordax’s business but also aquisition costs and other costs related to SHP.
• Credit losses amounted to -122 MSEK (-174), corresponding to a credit loss level of 1.3 percent (2.5).

For more information, please contact 

Andreas Frid, Head of Communication, Nordax

Tel: +46 705 29 08 00

E-mail: ir@nordax.se

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