Resurs Holding Interim Report January–March 2019
“Resurs stands strong and continued to grow faster than the market during the quarter and capture market shares.” Kenneth Nilsson, CEO Resurs Holding AB
1 January–31 March 2019*
- Lending to the public rose 16% to SEK 29,182 million
- Operating income increased 11% to SEK 896 million
- Operating profit increased 10% to SEK 378 million
- Earnings per share rose 11% to SEK 1.47
- C/I before credit losses (excl. Insurance) was 40.1% (40.7%)
- The credit loss ratio was 2.2% (2.1%)
Statement by the CEO
The first three months were characterised by continued robust growth in both of our banking segments and in four Nordic markets. Our lending rose 16 per cent to SEK 29,182 million, which meets Resurs’s target of total lending growing organically by over 10 per cent every year by a healthy margin. Operating income in turn increased 11 per cent to SEK 896 million (806) and the cost/income ratio excluding Insurance continued to improve to 40.1 per cent (40.7 per cent). In total, net profit for the quarter increased 11 per cent to SEK 294 million (265).
In other words, Resurs stands strong and continued to grow faster than the market during the quarter and capture market shares.
Performance driven by investments and strategic partnerships
Resurs is working to continuously establish strategic partnerships that further drive the development of innovation in payment and financing solutions. An example is the commercial partnership that was initiated with fintech company Dicopay during the quarter, in parallel with also becoming a part-owner of the company. A strong customer offering is created with Resurs Checkout in Dicopay’s mobile platform, primarily targeted to a new customer segment for us that comprises small businesses that require simple and fast invoicing of services rendered.
Resurs was one of the first to offer its Swedish customers the option of receiving post via Kivra’s digital mailbox. We further strengthened our partnership in the first quarter by investing in Kivra’s new Finnish joint venture. By joining forces with Kivra, we can jointly drive digitisation in the Finnish market while at the same time strengthening our commercial offering. The digital transformation also helps reduce paper consumption and is thus an important part of Resurs’s long-term sustainability efforts.
Intense activities to meet a new market situation in the Norwegian consumer loan market
Payment Solutions and mainly retail finance, which are the core of our business model, continued to stand out in the market during the quarter, with a strong performance in both growth and higher margins. A fundamental strength of Resurs’s business model is its ability to balance and compensate the business segments for changing conditions in the four Nordic markets. In Consumer Loans in Norway, we believe that all players have now adapted their offering to the new regulations that were introduced about a year ago. The intended and expected effects of the rules were also clearly seen during the quarter with a sharp increase in competition for the volumes remaining in the wake of fewer opportunities to grant consumer credit loans. Intensified competition has led to downward pressure on interest margins, and to meet this we will introduce a number of initiatives and measures in the second quarter. Our assessment is that these measures, combined with our well-proven business model will give us the perseverance required to defend a continued strong position in the Norwegian consumer loan market. At the same time, we will focus on increasing the rate of growth in our other markets, which shows the strength of our Nordic business model.
All in all, this led to a negative impact on the Group’s risk-adjusted NBI margin, which was 9.6 per cent (10.4 per cent) for the first quarter. The lower margin was mainly the effect of the new conditions in the Norwegian consumer loan market. We otherwise delivered on or over our financial targets, which Resurs has done every quarter without exception since it was listed.
In-depth experience and cutting-edge digital development
With more than 40 years of experience in the consumer credit market, we know that the profitable way forward involves making continuous adjustments to align with new conditions, customer behaviour patterns and terms. Our robust business model and cutting-edge digital development give us a stable platform for our day-to-day work of improving and developing new, innovative payment and financing solutions that create value for us as well as for our many retail finance partners and customers. We confidently look forward to continued healthy and profitable growth for Resurs’s business in all Nordic markets.
CEO Resurs Holding AB
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 5.9 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 2019, the Group had 732 employees and a loan portfolio of SEK 29.2 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 reports.” Definitions of key ratios are provided on the website under “Financial data.” The figures in parentheses refer to 31 March 2018 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 the agency of the contact person set out above, at 07.30 CET on 24 April 2019.