Quarterly Report January-September 2019 Nordax Bank AB

Highlights January-September 2019

• Strong development of new lending within private loans, mortgages as well as equity release mortgages.
• Lending growth was 23% as per the third quarter of 2019 and total lending amounted to 23.8 billion SEK.
• Mortgage marketing campaigns in Sweden and Norway in the third quarter (Q3)
• Issue of senior unsecured bond as a part of MTN-program (Q3)
• Nordax opened up for mortgage applications in Norway through the web (Q2)
• First paid out mortgage in Norway (Q2)
• Decided to stop 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 in the third quarter. New lending was especially robust in the Swedish market, where a more attractive offer contributed to growth in all channels. In the second quarter, new personal loan regulations were introduced in Norway, which had a slightly negative effect on the third 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 market through loan brokers, and at the end of the second quarter mortgage applications were being accepted through Nordax’s website. Lending in the third quarter developed strongly in connection with a diversification of marketing channels.

Equity release mortgages

New lending has grown strongly during the year. One contributing factor has been increased marketing, which has led to greater awareness of Swedish Hypotekspension (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 23.8 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 in the Swedish market were the most important reasons for the strong growth. Excluding the SHP acquisition, lending grew by 23%, 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-September 2019 (compared to January-September 2018) 

• Operating profit amounted to 388 MSEK (375). Increase due to higher net interest income and lower credit losses.
• Net interest income amounted to 1 093 MSEK (982). Higher net interest income due to a growing lending portfolio and acquisition of SHP.
• Operating expenses amounted to -589 MSEK (-393). 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 -168 MSEK (-276), corresponding 1.2 per cent (2.6) of average lending.

For more information, please contact 

Patrick McArthur, CFO, Nordax

Tel: +46 760 32 69 70

E-mail: ir@nordax.se

About Nordax Bank

Nordax Bank is a leading specialistbank in Northern Europe owned by Nordic Capital Fund VIII and Sampo. The client base today consists of 195.000 private clients in Sweden, Norway, Finland and Germany. We are a specialistbank who through responsible lending help people make informed decisions for a life they can afford. We are a flexible complement to the major banks. Instead of quantity we have specialised in a few selected products like private loans, mortgages, equity release products and savings accounts. Since 2019 Svensk Hypotekspension, which are specialists in equity release products, is a fully-owned susbsidiary to Nordax Bank. Nordax has about 200 employees where almost all employees works from one central office in Stockholm. The credit assessment process is one of Nordax core competencies. It is thorough, sound and datadriven. Nordax customers are financially stable individuals. As of 30 September 2019 the lending to the public amounted to 23.8 bn SEK and deposits from the public amounted to 18.9 bn SEK. Read more about Nordax on www.nordaxgroup.com.

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