Resurs Holding Interim Report January—March 2018
“All in all a strong start to the year, filling us with hope for a continued strong 2018. We are increasing our market shares in a stably growing market.” Kenneth Nilsson, CEO Resurs Holding AB
1 January—31 March 2018*
- Lending to the public rose 16% to SEK 25,134 million
- Operating income increased 8% to SEK 806 million
- Operating profit increased 7% to SEK 345 million
- Earnings per share rose 7% to SEK 1.33
- C/I before credit losses (excl. Insurance) was 40.7% (42.7%)
- The credit loss ratio was 2.1% (1.9%)
Statement by the CEO
We started 2018 with yet another strong quarter. Lending rose 16 per cent to SEK 25.1 billion. Growth was strong in both our banking segments and in all of our markets. Growth picked up again in Norway, although to date at a slightly slower rate and with lower margins than before the new regulations were introduced.
We operate in the Nordic consumer credit market, which grew 9 per cent in 2017 to approximately SEK 760 billion. All markets and segments reported growth and our assessment is that demand will remain high. We are growing faster than the market, meaning that we are capturing market shares.
New technical solutions led to positive effects
The retail sector is continuing to grow, and is becoming increasingly digital, a trend that has accelerated in recent years. More than 30 per cent of our sales in retail finance were from e-commerce in the first quarter. Many retail finance partners are choosing Resurs Checkout – our e-commerce solution that offers high consumer conversion and has a broad range of different payment options.
As digital advances are made, it is becoming increasingly important to offer payment solutions that can be used regardless of channel. We carried out a test launch of Resurs Checkout in physical stores during the quarter, with excellent results. There is widespread interest for this solution among our retail finance partners. With Resurs Checkout, consumers are able to move easily from a retail finance partner’s physical store to the e-commerce store and the other way round. We will continue to develop our omnichannel platform and further advance our positions in 2018.
Digitising processes creates conditions improved and more cost-efficient customers interact. We launched our proprietary credit engine in Norway and Finland in 2017, which generated positive results in the first quarter. The credit engine enables a simpler and more automated application process for customers and provides us with better conditions to analyse and enhance the efficiency of credit lending.
New partners and merger of yA Bank
We continued to enter into new collaborations with several new retail finance partners during the quarter, most of which operate in the omni-channel. One such new partner is the Danish department store chain Magasin du Nord, which has six stores in Denmark and significant e-commerce. Insurance signed an agreement with Stadium for bicycle insurance, which further strengthens our position in the Swedish bicycle market.
We started work on merging yA Bank during the quarter. The proposed merger enables more efficient utilisation of internal resources, and a broader range of products under the Resurs brand, and optimised capital and liquidity utilisation within the Group. The merger is expected to be completed by the end of 2018.
A sustainable business model with good control over costs and credit losses
We are sometimes asked about the sustainability of our business model: “It’s easy to do good business now, but what will your credit losses be like in a recession?” We have always exercised good control of our credit losses. Our credit losses have been in the range of 2 to 3 per cent since the start of the 1990s and also throughout the two recent financial crises. Credit losses for the quarter amounted to 2.1 per cent. Our customer database of about 5.7 million customers allows for high-quality credit scoring since we hold unique information about customers’ payment capacity.
All in all, we saw a strong start to the year, filling us with hope for a continued strong 2018. Profit after tax increased 7 per cent to SEK 265 million, driven by high lending growth and good control over both costs and credit losses. The NBI margin was adversely affected by negative currency effects and investments to increase growth in Norway.
We are increasing our market shares in a stably growing market and creating new growth opportunities through innovative solutions – and we intend to continue to do so going forward.
CEO Resurs Holding AB
About Resurs Holding:
Resurs Holding (Resurs), which operates through the subsidiaries Resurs Bank and Solid Försäkring, is the leader in retail finance in the Nordic region, offering payment solutions, consumer loans and niche insurance products. Since its start in 1977, Resurs Bank has established itself as a leading partner for sales-driven payment and loyalty solutions in retail and e-commerce, and Resurs has thus built a customer base of approximately 5.7 million private customers in the Nordics. Resurs Bank has had a banking licence since 2001 and is under the supervision of the Swedish Financial Supervisory Authority. The Resurs Group operates in Sweden, Denmark, Norway and Finland. At the end of the first quarter of 2018, the Group had 754 employees and a loan portfolio of SEK 25.1 billion. Resurs is listed on Nasdaq Stockholm.
* 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 29. The figures in parentheses refer to 31 March 2017 in terms of financial position, and to the year-earlier period in terms of profit/loss items.
This information is information that Resurs Holding AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through Sofie Tarring’s, on 25 April at 7:30 a.m CET.