YEAR-END REPORT 2019 JANUARY-DECEMBER NORDAX BANK AB

Highlights January-December 2019

• Strong development of new lending within private loans, mortgages as well as equity release mortgages.
• Lending growth was 23% as per the fourth quarter of 2019 and total lending amounted to 23.8 billion SEK.
• In December 9% of the Swedish mortgage challenger Stabelo was acquired.
• Issue of senior unsecured bond as a part of MTN-program (Q3), a further tap on the issue was completed in October
• 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 70% 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 finalized (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 3% 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 fourth quarter developed strongly in connection with a diversification of marketing channels.

In December 9% of the Swedish mortgage challenger Stabelo was acquired. Through the investment in Stabelo, Nordax further strengthens its position as a challenger in the mortgage market Nordax’s vision is to be “The obvious choice for the new everyday”, which means driving change and challenging the traditional banks. Stabelo has the same philosophy, but in another part of the mortgage market, and through this investment Nordax can both support and participate in Stabelo’s success. Given their complementary business models, Nordax and Stabelo also see exciting opportunities to collaborate and drive further product innovation in the mortgage market.

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 25.3 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 31%, partly due to 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-December 2019 (compared to January-December 2018) 

• Operating profit amounted to 463 MSEK (429). Increase due to higher net interest income and lower credit losses.
• Net interest income amounted to 1 507 MSEK (1 325). Higher net interest income due to a growing lending portfolio and acquisition of SHP.
• Credit losses amounted to -286 MSEK (-380), cor­responding 1.4 per cent (2.7) of average lending. The decrease in credit losses is mainly a result of revised model assumptions, reduced credit losses in Germany as a result of a reducing loan book and that credit losses in 2018 were impacted negatively by Nordax terminating its forward flow agreement with Lindorff. Credit losses as percentage of average lending were also positively impacted by the acquisition of SHP and expansion into mortgages as these products have lower credit loss levels.
• Operating expenses amounted to -821 MSEK (-571). Increased costs as a result of investments in growth initiatives to grow and broaden Nordax’s business but also acquisition costs and other costs related to SHP.

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 specialist bank 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 specialist bank 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 specialized 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 subsidiary to Nordax Bank. Nordax has about 200 employees where almost all employees work from one central office in Stockholm. The credit assessment process is one of Nordax core competencies. It is thorough, sound and data driven. Nordax customers are financially stable individuals. As of 31 December 2019, the lending to the public amounted to 25.3 bn SEK and deposits from the public amounted to 19.2 bn SEK. Read more about Nordax on www.nordaxgroup.com.

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