Resurs Bank Interim Report January-June 2021

“During the second quarter, a number of sustainable partnerships were entered into, digital wallets were launched and our responsible credit lending generated results. The situation in Norway is improving and society is increasingly opening up. Our lending growth amounted to 3 per cent excluding NPL sales during the year and we are capturing market shares.” Nils Carlsson, CEO Resurs Bank AB

1 January–30 June 2021*

• Lending to the public rose 1% to SEK 31,148 million, up 1% in constant currencies Excluding NPL sales, growth was 3%

• Operating income fell 11% to SEK 1,558 million
• C/I before credit losses was 41.2% (38.1%)
• The credit loss ratio improved to 2.4% (3.0%)
• Operating profit fell 12% to SEK 542 million

Statement by the CEO
A new gear. The first half of the year has passed and the process of transforming Resurs to a more competitive, sustainable and digital player has started to yield effects. During the first half of the year, a number of sustainable partnerships were entered into, digital wallets were launched and our responsible credit lending have generated results. Our credit rating was also raised (BBB, stable outlook) as a result of an improved underlying Nordic consumer credit market and our strong position for attracting new partners. The situation in Norway is improving and society is increasingly opening up, particularly in the Danish and Norwegian markets that were completely closed in the first half-year. Growth in lending excl. NPL sales increased 3 per cent year-on-year.

Operating income for the period declined 11 per cent year-on-year. Expenses were 4 per cent lower than last year, but the cost/income ratio increased as a result of lower income. Enhancing the efficiency of the operations and thus reducing the cost/income ratio is an important part of the ongoing transformation journey. Credit losses improved as a result of responsible credit lending. In total, operating profit fell 12 per cent year-on-year.

Strong in Sweden. The Swedish market reported strong growth in both Consumer Loans and Payment Solutions due to the continuing positive performance of existing partnerships and good utilisation of our customer database. During the first half of the year, more than 85 per cent of new sales in Consumer Loans Sweden were to customers who are already in our database. Using our own database means that we can make better credit assessments by supplementing external data with internal data, which results in lower credit risk and lower acquisition costs and thus contributes to Resurs’s sustainable credit lending.

Positive tendencies in Norway. Lending volumes in the Norwegian market have fallen overall since the introduction of new legislation in the country in 2019. In 2021, we shrank less than the market as a whole in consumer loans – the largest product we offer in Norway.

We continued to report healthy growth in new lending in the first half-year, although we can still see that customers are repaying their loans in advance. To manage this, we are working in a variety of ways to improve the customer journey. For example, we launched Resurs Bank’s app in Norway at the end of the first half-year.

Due to our clear Nordic focus and new agile work methods, we will be able to launch and develop our products and services to all markets at a faster pace moving forward.

Speaking of apps. We continued to see solid growth in the use of our Swedish app, with the number of downloads increasing 31 per cent between the first and second quarter of 2021. We are approaching a quarter of a million downloads since the app was launched in Q4 2020. Launches in Denmark and Finland are planned later this year.

Sustainable partnerships. In line with our strategy of offering sustainable credit solutions, we signed a partner agreement with mortgage institution Hemma, a platform for the transition to sustainable homes.Together with Hemma, we will be able to offer our customers the opportunity of investing in climate-smart solutions, with the condition that the consumer loan from Resurs is used for sustainable energy investments in the home.

During the half-year, we broadened our offering of subscription solutions by entering into a partnership with Fairown in the Swedish and Norwegian markets. Together with Fairown, we can offer customers the option of subscribing for products in different industries, such as home electronics, construction, gardening and watches. The development of various types of subscription solutions involves both offering a smooth customer journey for our customers in addition to sustainability and the development of circular business models where older products can be exchanged and sold on the second-hand market.

During the half-year, we also completed our first comprehensive climate calculations according to the GHG Protocol, and this now forms the basis of our future action on reducing our impact on the environment and climate. We will present more about our updated sustainability strategy at our Capital Market Day in September.

Digital wallets for a smoother customer journey We have rolled out both Google Pay and Apple Pay – two in-demand payment services that make payments smoother and more secure – to our customers in the Nordic market. Adding a MasterCard from Resurs Bank to a digital wallet means that our customers can make secure and contactless payments via, for example, their mobile phone in stores or by verifying their identity on their mobile when they shop online or in apps. Accordingly, Resurs is taking yet another conscious step towards a more digital customer journey and positive customer experience.

High credit quality a condition for sustainable development. Since we actively introduced austerity measures in our credit lending when the pandemic broke out, we have seen a positive development in the underlying credit quality of our portfolios, which can also be observed in the lower credit loss ratio compared with both last year and the preceding period. This positive development is clear in both Payment Solutions and Consumer Loans and in all of our Nordic markets.

During the half-year, we also signed an agreement with PRA Group, a leading international credit management company in non-performing loans to sell parts of our non-performing loans in Norway for a gross carrying amount of approximately NOK 800 million. The sale had a positive impact on Resurs Bank’s capital requirements and liquidity and ultimately had a neutral effect on earnings. The fact that we were able to carry out this type of transaction demonstrates that our underlying assets are of high quality and that we enjoy a high level of confidence in the market.

Long-term diversified financing In line with Resurs’s strategy of long-term diversified financing, Resurs Bank issued senior unsecured bonds of SEK 1 050 million and NOK 600 million in the period. There was very high interest in this issue. Issuing bonds in both Sweden and Norway is proof that we are a Nordic player that intends to continue to maintain diversified financing in the long term. Nordic Credit Rating (NCR) raised our credit rating to BBB, stable outlook, in April, which gives us continuing good conditions to secure financing at favourable terms.

What’s happening in the future? There is a high level of activity across the entire Nordic organisation and we have started to accelerate on several fronts based on our solid transformation work. We are currently evaluating different suppliers of a new hyper-modern and competitive fintech platform. We will present more about our transformation journey and our strategy to become a more sustainable, competitive and digital player at our Capital Market Day on 29 September 2021.

You will not want to miss it!

Nils Carlsson, VD


More information:
Nils Carlsson, CEO, nils.carlsson@resurs.se; +46 42 382000
Sofie Tarring Lindell, CFO & Head of IR, sofie.tarringlindell@resurs.se; +46 736 443395

This information is information that Resurs Bank AB is obliged to make public pursuant to the Securities Markets Act and the Norwegian Securities Trading Act Section 5-12. The information was submitted for publication, at 07:30 CEST on 22th July 2021.

About Resurs Bank
Resurs is a Nordic niche bank that offers leading payment and financing solutions for the retail industry and its customers. We help companies and private individuals with lending, saving and payments. With more than 40 years of experience in the retail sector, we make shopping online and in stores quick, easy and secure. We focus on the customer experience and make good things happen and the hard feel easier. We have a customer base of about 6 million private customers and 666 employees in the Nordics. When we use the term “Group” in this report, we are referring to the Resurs Bank Group.

* Certain performance measures provided in this section have not been prepared in accordance with IFRS or the capital adequacy rules, meaning that they are alternative performance measures. Calculations and reconciliation against information in the financial statements of these performance measures are provided on the website under “Financial Information.” Definitions of performance measures are provided on page 31. In this section, changes and comparative figures refer to the same period in the preceding year.