Resurs Holding Interim Report January–March 2021

“Lockdown restrictions to reduce the rate of infection mainly affected the Danish and Norwegian markets negatively during the first few months of the year. We carried out a number of different activities to turn around the lower level of new lending and we saw positive signs towards the end of the quarter.” Nils Carlsson, CEO Resurs Holding AB

1 January–31 March 2021*

• Lending to the public rose 1% to SEK 31,592 million, up 2% in constant currencies.
• Operating income fell 5% to SEK 850 million
• Operating expenses fell 3% to SEK 354 million
• The credit loss ratio was 2.5% (3.4%). Excluding the extra credit provision of SEK 75 million, that was made in the first quarter of last year due to COVID-19, the comparative figure was 2.4%.
• Operating profit increased 12% to SEK 301 million. Excluding the extra credit provision in the first quarter of last year, operating profit declined 12%.
• Earnings per share rose 12% to SEK 1.14 per share, before and after dilution.

Statement by the CEO

The journey towards our new targets. Our transformation journey is ongoing and the entire Nordic organisation is full of activity. Our focus in the first quarter of 2021 was on transforming Resurs Bank into a significantly more data-driven and tech-oriented financial company in order to be able to offer the Nordic market innovative solutions and services.

Work is being carried out to make a number of important investments in business-driven IT projects and technical solutions, at the same time as we are increasing the share of cloud-based systems in the Group. These changes will make us considerably faster in the development of our new and better services for our customers.

Change from the inside out. We carried out a 360-degree survey during the quarter in which we interviewed investors, customers, partners, employees, the public and opinion makers about their views and expectations of a value-creating Resurs and our industry, today and tomorrow. The insight from the survey provides us with a clear view of the opportunity’s and the business environment’s expectations of us as a bank. This will also form the basis of strategic decisions in our transition to become a more attractive and relevant financial company that is also assuming a clearer and more active role in a sustainable society.

Stable through the pandemic. Lending to the public increased a total of 1 per cent compared with the year-earlier quarter. In constant currencies, the increase was 2 per cent. The more restrictive credit assessment introduced at the start of the pandemic remained in place and restricted growth. Despite the continued pandemic, we see no changes to our customers’ payment patterns and credit losses were stable. However, COVID-19 impacted the operations in the first quarter. Lockdown restrictions to reduce the rate of infection mainly affected the Danish and Norwegian markets negatively during the first few months of the year. We carried out a number of different activities to turn around the lower level of new lending and we saw positive signs towards the end of the quarter. However, a broad diversification in Nordic retail also gives us important resilience and an ability to offset industries with falling demand with other industries that performed relatively better.

Wind of change in Norway. The Norwegian market has shrunk and competition remained high since the introduction of new rules in 2019, which means that new lending was lower and a higher share of customers ended their loans in advance. During the quarter, we saw positive effects in new lending where we used more effective tools and customer marketing to make competitive offerings in the market. Data-driven predictive modelling is one of the tools we use to predict and manage customers who end their loans in advance. 

Continuously growing e-commerce. COVID-19 has completely changed consumption patterns in the market, resulting in an accelerating shift to e-commerce. We can see this also at Resurs where e-commerce sales have increased more than 20 per cent year-on-year, and today 40 per cent of our sales in retail finance come from e-commerce. Our offering combined with flexible financing solutions mean that we are securing many new partnerships in e-commerce.

Digital tools improve the customer experience. During the quarter, we launched a first function where we make use of Open Banking technology, which enables customers to digitally verify their income. Credit applications are quicker and easier for customers, and it makes administration simpler and the precision of our credit assessments even higher. This is only the beginning of the many opportunities that we see with Open Banking and during the year we will launch additional functionality that creates customer and partner value.

During the quarter, we also launched the Partner Success Program in retail finance which means that we are taking the development of cooperation with existing partners to a new, digital and automated level that will give us more opportunities to reach more partners more effectively. For example, we have automated the onboarding process, digitised communication and introduced knowledge sharing in the form of webinars and digital training courses.

Higher credit rating after the end of the quarter. It is gratifying that our credit rating was raised from BBB- to BBB (stable outlook) in April, based on our ability to attract new partners and an improved Nordic consumer credit market. This will mean even better financial options for us in the future.

Save the date. We are putting a first quarter behind us with a strong foothold in our continuing journey towards a more competitive, sustainable and profitable bank. We are planning to hold a Capital Market Day in Stockholm on 29 September where we will explain more about our transformation journey, our strategy and our targets for the future.

More information:
Nils Carlsson, CEO, nils.carlsson@resurs.se +46 766 44 77 00
Claes Wenthzel, interim CFO, claes.wenthzel@resurs.se +46 42 382000
Sofie Tarring Lindell, Head of IR and Group Control, sofie.tarringlindell@resurs.se +46 73 644 33 95

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 27th April 2021.

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 6 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 2021, the Group had 702 employees and a loan portfolio of SEK 31.6 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 performance measures are provided on the website under “Financial data.” In this section, changes and comparative figures refer to the same period in the preceding year. This applies to all other sections of text in this interim report, profit/loss items and cash flow that are compared with the same period in the preceding year. The exception is for financial position for which the comparative figure refers to 31 December 2020.