Nordax Group Interim Report Jan-Mar 2016
1st QUARTER 2016
Numbers compared with 1st quarter 2015
• Loan portfolio increased by 13.9% in constant currencies
• Net interest margin increased to 9.3% (8.4%)
• Total operating income amounted to 280 MSEK (218). Adjusted total operating income amounted to 261 MSEK (219)
• Adjusted cost to income ratio improved to 28.6% (28.8%)
• Operating profit amounted to 119 MSEK (74). Adjusted operating profit increased by 24% to 99 MSEK (80)
• Earnings per share were 0.84 (0.53) SEK. Adjusted earnings per share were 0.70 SEK (0.57)
1st QUARTER 2016
Numbers compared with 4th quarter 2015
• Loan portfolio increased by 3.4% (14% annualized) in constant currencies
• Net interest margin was 9.3% (9.4%)
• Total operating income amounted to 280 MSEK (228). Adjusted total operating income amounted to 261 MSEK (254)
• Adjusted cost to income ratio amounted to 28.6% (28.5%)
• Operating profit amounted to 119 MSEK (80). Adjusted operating profit amounted to 99 MSEK (109)
• Earnings per share were 0.84 (0.57) SEK. Adjusted earnings per share were 0.70 SEK (0.76)
CEO COMMENTS
The good momentum from the second half of 2015 continued in the first quarter of 2016 with high growth in all four core markets. New lending was 1.1 billion SEK which is the second best quarter ever and almost at the same high level as in previous quarter.
Compared to the same period last year our adjusted operating profit has grown by approximately 24% and our lending book has grown by 14% in constant currencies. Improved net interest margin and the growth of the lending portfolios have been the drivers behind the increase in profits. Compared to the first quarter last year the net interest margin improved to 9.3% from 8.4%. The increase has been driven mainly by lower funding costs and strong margins on new lending.
The lending portfolios in Sweden, Norway and Germany grew by double-digits in annualised terms. New lending in Norway was record high and the total portfolio in Norway had a annualized growth pace in the quarter of 19 percent, excluding FX. Despite slower growth in Finland this quarter, the portfolio has grown by 17 percent compared to the same period last year.
Germany is our newest and fastest growing market and annualized growth in the quarter in constant currencies was 31 percent. The first quarter continues to demonstrate the possibilities we see in Germany. In the quarter, the net interest margin amounted to 9.1%. Our marketing model and underwriting process have proved to work efficiently in Germany although we are still evaluating the process for recoveries. One sign of our commitment to Germany was that we at the end of the quarter launched deposits in Germany, and we now offer deposits in all our four home markets. The launch supports our diversified funding strategy where we have the ambition to match currencies of assets and liabilities and it will be interesting to monitor the flows going forward.
Our advanced marketing models and thorough underwriting form the basis for our sound credit quality across the markets. The net credit loss level, which usually is seasonally higher in Q1, was 1.6% which is an improvement compared to the same period last year. Credit quality is key to us and an essential part of our business model. Compared to last quarter, the net level was decreased in Norway and increased in Sweden. We continue to monitor the Norwegian economy carefully and stay in close dialogue with our customers who experience problems.
The strengthened NOK and EUR impacted our financial performance positively in the first quarter. The currency fluctuations impacted the operating profit as well as our total portfolio measured in SEK.
During the first quarter, we issued a 3-year senior unsecured bond of 500 MSEK replacing a maturing bond. The transaction was done at favorable terms and further strengthened our diversified funding base.
Our underlying performance confirms the strength of our business model and our customer offering. Nordax’s strengths are our focus on large consumer loans to financially stable individuals, many effective marketing channels, diversified funding, the sound credit underwriting and robust net interest margins. The prerequisite for us to continue to increase lending volumes is that we get the margin and credit quality that we require to continue to build a business model that is sustainable over time. Our aim is to continue to create good returns over a long-period of time and to be able to have a robust business model in all kinds of macro environment.
We will continue to further develop our marketing modeling and enhance internal efficiency by simplifying and digitalizing processes. We also focus on improving customer service and customer utility to keep as well as attract new customers. We act from a position of strength and I believe in our vision to become a leading Northern European niche bank in offering deposits and providing consumer loans to financially stable people.
Morten Falch
CEO
The adjusted numbers are presented in order to show the underlying performance of the business reflecting constant currencies and excluding non-recurring items primarily related to the IPO 2015. A bridge between statutory and adjusted accounts can be found in the report.
Contact
For more information, please contact
Morten Falch, CEO, +46 8 690 15 07, morten.falch@nordax.se
Camilla Wirth, CFO, +46 8 690 15 07, camilla.wirth@nordax.se
Johanna Clason, treasurer and debt investor relations, +46 8 690 15 07, johanna.clason@nordax.se
Andreas Frid, media and equity investor relations, +46 705 29 08 00, andreas.frid@nordax.se
Conference call
Media, analysts and investors are welcome to take part in a conference call on April 28 at 9.00am CET. CEO Morten Falch and CFO Camilla Wirth will present the results. After the presentation there will be a Q&A session.
Call-in numbers:
Sweden: +46 8 566 426 65
UK: +44 203 008 98 13
US: +1 855 753 22 36
Link to audiocast:
https://cloud.magneetto.com/wonderland/2016_0428_Nordax_Q1_Report/view
You can also follow the presentation on
https://www.nordaxgroup.com/en/investors/financial-reports/presentations/
Nordax Group AB (publ) announces this information in accordance with the Securities Market Act and/or the Act on Trading in Financial Instruments and/or the Nasdaq Stockholm Rule Book. This information was submitted for announcement on April 28, 2016, at 07.30am CET.
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