Interim report January–March 2023 Nordax Holding AB

Highlights January – March 2023

(Previous quarter in parenthesis)

• Process initiated to change the name of the company to NOBA Bank Group AB (publ). Approval from the SFSA to change the name obtained in May and the change is expected to be finalized in June
• Solid growth across all products with strong contribution from Bank Norwegian during the quarter, both in terms of growth and in terms of profitability
• Total lending amounted to SEK 94.3 billion (89.4)
• Personal loans and credit cards amounted to SEK 78.3 billion (73.7)
• Mortgage lending (mortgage loans and equity release mortgages) amounted to SEK 16.1 billion (15.7), comprising 17% of total lending
• The savings offering continued to grow and total deposits amounted to SEK 80.1 billion (77.1)
• Reported operating profit amounted to SEK 390 million (48) and the adjusted operating profit amounted to SEK 567 million (451), driven primarily by growing lending, corresponding net interest income growth and an increased operational efficiency with clear positive outcomes from combining Nordax and Bank Norwegian
• The Group has continued to raise interest rates in order to reflect the continuously high interest rate environment

Portfolio development

Total lending as at 31 March 2023 amounted to SEK 94.3 billion (SEK 89.4 billion as at 31 December 2022). Currency adjusted, all products and markets contributed to the increase in volume, with the Norwegian branch Bank Norwegian strongly contributing to the growth.

Business development personal loans and credit cards

During the start of 2023, the portfolio of private loans and credit cards displayed a good growth. The total volume of personal loans and credit cards as at 31 March 2023, amounted to SEK 78.3 billion (SEK 73.7 billion as at 31 December 2022).

Business development mortgage loans

Nordax began offering mortgages in Sweden in 2018. The main target group is customers with a non-traditional form of employment, i.e. those who are self-employed or have fixed-term employment, such as project staff, part-time employees or temporary staff. Through a thorough credit assessment and personal customer contact, Nordax is able to approve more loans for this customer group, which is often rejected by the major banks despite being financially stable. There has been great interest in this offering and new lending continues to grow. At the end of the first quarter of 2019, Nordax also began offering mortgages on the Norwegian market. As in Sweden, the target group in Norway is the non-standard segment, i.e. those customers who fall outside the narrow parameters of the major banks.

New lending during the first quarter has been affected by the continuing generally increasing interest rate levels in society but the portfolio still displays growth, where the total mortgage  portfolio amounted to SEK 7.1 billion as at 31 March 2023 (SEK 6.9 billion as at 31 December 2022).

Business development equity release mortgages

In line with previous historical periods, the portfolio has continued to develop well during the start of 2023 and displays stable new lending. The market for equity release mortgages has a solid development potential and SHP has a strong brand within the customer group, with a continued substantial customer interest. The total volume of equity release mortgages amounted to SEK 9.0 billion as at 31 March 2023 (SEK 8.8 billion as at 31 December 2022).

Result January-March 2023

(Previous quarter in parenthesis)

• Operating profit amounted to MSEK 390 (48). The increase is explained by a continued solid growth and in­creased net interest income, decreased sales costs and by the fourth quarter being substantially negatively affected by transformation costs and impairment of intangible as­sets relating to Lilienthal Finance Ltd.

• Since the Bank’s operating profit currently, to a large extent, is affected by transformational expenses, initial costs related to Continental Europe and accounting effects from intangible assets primarily related to the acquisition of Bank Norwegian, management also monitors the business based on an adjusted operating profit where the effects of these costs, and other non-recurring items, is excluded. The ad­justed operating profit amounted to MSEK 567 MSEK (451).

• Net interest income amounted to MSEK 1 802 (1 753). Net interest income primarily increased by growing lending.

• Operational expenses amounted to MSEK -393 MSEK (-666). Of the expenses, general administrative expenses made up MSEK -369 (-440) whereof MSEK -315 (-345) related to the underlying business and MSEK -54 (-95) related to transformational expenses mostly connected with the integration of Bank Norwegian and the ongoing change of core banking system within Nordax. Operational expenses also include depreciation and impairment of property, plant and equipment and other intangible assets and amounted to MSEK -24 (-226), where the decrease is primarily explained by the impairment of intangible assets relating to Lilienthal Finance Ltd encompassing MSEK -201 in the fourth quarter.

• Other operating expenses is made up of marketing costs and sales costs related to credit cards and amounted to MSEK -266 (-296). The decrease is primarily driven by lower sales costs related to credit cards.  

• Credit losses amounted to MSEK -824 (-856), correspond­ing to 3,7 per cent (3,9) of average lending. The quarter was to a large extent affected by further provisions relating to loans in Stage 1 which increased with MSEK -163 (-114) and provisions for Continental Europe of MSEK -79 (-71).

For questions please contact:

IR:

Mats Benserud, Head of Investor Relations, Nordax

Phone: +47 958 915 39

E-mail: mats.benserud@nordax.se

Media:

Oliver Hofmann, Head of Communications & ESG, Nordax

E-mail: press@nordax.se

About Nordax

Nordax Holding is a holding company that owns Nordax Bank through Nordax Group. Nordax Bank is a leading specialist bank in Northern Europe with strong owners in the form of Nordic Capital Fund IX, Nordic Capital Fund VIII and Sampo. We currently have around 2 million private customers, of which just under 1.2 million are credit card customers, in the Nordic countries, Spain, Germany and the Netherlands. We are a specialist bank that through responsible lending helps 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 that we know best: personal loans, mortgages, equity release mortgages, credit cards and savings accounts. In November 2021, Nordax Bank acquired Bank Norwegian ASA, which brought not only a large number of customers to the Group but also complementary strengths in product expertise, digital distribution and geographical presence. Since 2019, Svensk Hypotekspension, which is a specialist in equity release products, is a wholly owned subsidiary of Nordax Bank. The Group has just over 600 employees, with offices in Stockholm, Malmö, Gothenburg and Fornebu, Oslo. The credit assessment process is one of Nordax’ core competences. It is thorough, sound and data driven. Nordax’ customers are financially stable. As at 31 March 2023, lending to the public amounted to SEK 94.3 billion and deposits to SEK 80.1 billion. 

Read more about Nordax at http://www.nordaxgroup.com

This information was submitted for publication through the contact persons set out above at 07.30 a.m. CEST on 24 May 2023.