Resurs Bank Year-end report 2021

“Yet another year in the wake of the pandemic has passed and we can summarise not only an eventful 2021 in general for Resurs but also a second half-year featuring increased growth in lending and a favourable sales trend in all markets.
Nils Carlsson, CEO Resurs Bank AB

1 July–31 December 2021*

• Lending to the public rose 8% to SEK 33,347 million, up 6% in constant currencies.
• Operating income fell 8% to SEK 1,529 million
• C/I before credit losses was 41.4% (42.2%)
• The credit loss ratio improved to 1.7% (2.5%)
• Operating profit increased 10% to SEK 626 million

1 January–31 December 2021*

• Lending to the public rose 8% to SEK 33,347 million, up 6% in constant currencies.
• Operating income fell 9% to SEK 3,086 million
• C/I before credit losses was 41.3% (40.1%)
• The credit loss ratio improved to 2.0% (2.7%)
• Operating profit declined 2% to SEK 1,167 million

The start of a historic transformation journey. We can summarise not only an eventful 2021 in general for Resurs but also a second half-year featuring increased growth in lending and a favourable sales trend in all markets. The launch of our partnership with digital travel giant Nordic Leisure Travel Group AB was begun in the second half of the year. This means that brands such as Ving and Tjäreborg can offer their customers the opportunity to pay both by invoice and by installment now that the travel industry is picking up again. Black Week, which generated more sales for us than ever before, also contributed to an increase in sales across the Nordics.

We launched the Resurs Consumer Report 2021 in the second half of the year. It is based on a Nordic consumer survey carried out by Kantar Sifo and describes how consumers perceive and make use of consumer loans and credits in the form of installment plans and purchases by invoice. The report showed that consumer loans are more used for long-term investments that raise the quality of life than for short-term consumption, which is confirmation that responsible credit lending, which is at the heart of our business, plays a decisive and important role for the individual and the sustainable society at large.

Continuing growth in all markets. We saw healthy growth in both of our segments in the second half of the year and the loan portfolio increased a total of 8 per cent to SEK 33.3 billion. The loan portfolio has increased 7 per cent since 30 June 2021 and we noted positive growth in all of our geographic markets. This was gratifying confirmation that our focused efforts together with the easing of the pandemic restrictions have generated positive results.

Operating income for the second half of the year declined 8 per cent year-on-year to SEK 1,529 million. The relatively lower income was mainly due to lower lending and margin in Norway, lower interest income in Denmark, and mix effects in Payment Solutions. Income for the second half of the year was also negatively impacted by two large items totalling SEK 17 million related to remuneration to a major partner as a result of a correction of past profit sharing and a higher fee to the Swedish National Debt Office for the 2021 deposit insurance scheme.

Expenses excluding nonrecurring effects were 2.5 per cent lower than last year, and the C/I ratio increased as a result of lower income. Enhancing operational efficiency and thus reducing the C/I ratio is an important part of the ongoing transformation journey.

Credit losses improved as a result of healthy underlying credit quality in the loan portfolio and during the second half of the year the Board decided to dissolve the extra credit provision of SEK 75 million that was made at the start of the pandemic. As we previously announced, we did not note any negative trend in customers’ payment patterns. On the contrary, credit quality improved. In total, operating profit increased 10 per cent year-on-year, and excluding nonrecurring effects last year, operating profit fell 13 per cent as a result of lower income.

Focusing on sustainable partnerships and growth. In Payment Solutions we noted a positive sales trend since an increasing number of industries and countries have recovered after the pandemic lockdowns. Black Week, which generated more sales than ever before, also contributed to an increase in sales across the Nordics. We can see that certain industries and our larger partners are continuing to perform very strongly, which negatively impacts our margin trend. 

During the second half of the year, we initiated a partnership with Albie, which provides customers with charging boxes at a fixed package price for charging electric and hybrid cars at home. This is an important example of how we are providing opportunities for more people to make bigger and climate-smart purchases and dividing the cost over time so that it suits their private finances.

Albie selected Resurs as its partner so that it could use our competitive payment solutions to offer its customers more payment options and thus better service from the very beginning.

Growth in Consumer Loans also remained positive in all markets. The growth in lending in the Norwegian market stabilised and increased in the second half of the year. The trend of a large share of customers in Norway ending their loans in advance has started to turn yet remains a high levels. We will also launch loans with collateral at the end of the second half of the year, known as priority loans, up to a maximum of KNOK 600. 

In January 2022, Resurs received a decision from the Danish Financial Supervisory Authority that entailed a correction to the process for collecting data for the “left to live on” calculation. The decision is expected to impact new lending in Denmark, particularly in the first quarter before the new process becomes more automated. Resurs does not share the Financial Supervisory Authority’s assessment and intends to appeal the decision.

First in the Nordic with cloud-based banking platform. We took an important first step in replacing our core banking system and signed an agreement with the global cloud platform provider Intellect Design Arena. The new platform gives us the strength and prerequisites to provide customers and partners with state-of-the-art services, interfaces and products. Our investment will amount to about SEK 500 million and the development process for integrating the cloud-based banking platform will begin now and is planned to be gradually introduced over the next few years.

The implementation will take place country by country and the plan is for Norway to be the first market to receive the new banking system. The next step is initiating the development process ahead of the Norwegian implementation. As previously announced, the investment will mainly be capitalised in the balance sheet, which means that the earnings effect is limited to the implementation phase, after which the net effects will be positive. However, cash flow will be impacted on an ongoing basis.

Customer insight for a more sustainable society. We want to enhance the sustainable customer experience. Together with our industry colleagues, we are a part of society, and influence it. With this, comes responsibility and with the right know-how, understanding and insight we and the industry as a whole can continue to contribute to a more responsible credit market and a more sustainable society. In light of this, we published the Resurs Consumer Report 2021 in the second half of the year. The report describes how consumers in society perceive and make use of consumer loans and credits in the form of installment plans and purchases by invoice. The Resurs Consumer Report 2021 shows that four out of ten consumer loans are used for long-term investments, such as financing education, getting a driving license, buying a property or renovating or investing in the home. The report also showed that nine out of ten consumers see the advantages of the installment payment option, for example, buying something with more sustainable quality for the long term or better managing an unforeseen expense. Paying by installments is an important option both for consumers and for society since it can contribute to more well-founded consumption and a more sustainable everyday life for more people.

Speaking of sustainability. A ranking of Sweden’s most sustainable listed companies (Sustainable Companies 2021) was published by Dagens Industri, Aktuell Hållbarhet and Lund University in October. Resurs Bank came fifth in the category of listed banks and was also the highest ranked niche bank. This is a positive sign that our sustainability activities are on the right path and many things will be happening in 2022 when we activate more tangible measures in Resurs Society.

2021 marked the start of a historic transformation journey for Resurs and we are now on our way to becoming a digital and competitive leading-edge bank. This has been made possible through a new strategy and an ambitious roadmap focusing on creating services and offerings to customers and partners that are tailored to today’s and tomorrow’s Nordic market.

Finally, I would like to express my sincere thanks to all our fantastic and dedicated employees who adapted in 2021 and led the way forward on this exciting journey we have now embarked upon. I am very much looking forward to 2022 which will also involve us heading towards a new position for Resurs. We want even more people to consider us to be the simple, innovative, personal and responsible Resurs that I know we are.

Nils Carlsson, CEO Resurs Bank

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 Norwegian Securities Trading Act Sections 5-12. The information was submitted for publication, at 07:30 CEST on 8^th February 2022.

About Resurs:
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 615 employees in the Nordics. When we use the term “Group” in this report, we are referring to the Resurs Bank Group.

*  Alternative performance measures are performance measures used by management and analysts to assess the Group’s performance and are not defined in International Financial Reporting Standards (IFRS) or in the capital adequacy rules. Management believes that the performance measures make it easier for investors to analyse the Group’s performance. Calculations and reconciliation of these performance measures against information in the financial statements are provided on the website under “Financial information.” Definitions of all performance measures are provided on page 31.