Resurs Holding Interim Report January—September 2016

1 July—30 September 2016*

• Lending to the public rose 43% to SEK 20,593 million, up slightly more than 5% compared with Q2 2016, resulting in annualised growth of approximately 20%
• Operating income increased by 29% to SEK 717 million
• Operating profit increased 37% to SEK 302 million, and 35% to SEK 337 million excl. nonrecurring costs
• Earnings per share rose 29% to SEK 1.12, and 32% to SEK 1.30 excl. nonrecurring costs
• C/I before credit losses (excl. Insurance) was 44.6% (45.6), and 39.4% (39.9) excl. nonrecurring costs
• The credit loss ratio was 1.9% (2.1)

1 January—30 September 2016*

• Lending to the public rose 43% to SEK 20,593 million, up about 13% from the start of 2016, resulting in an annualised increase of approximately 18%
• Operating income increased 24% to SEK 2,103 million
• Operating profit increased 37% to SEK 864 million, and 36% to SEK 932 million excl. nonrecurring costs
• Earnings per share rose 34% to SEK 3.30, and 35% to SEK 3.61 excl. nonrecurring costs
• The Common Equity Tier 1 ratio was 13.6% (16.1) and the total capital ratio was 14.6% (17.3)
• C/I before credit losses (excl. Insurance) was 45.1% (47.2), and 41.6% (43.8) excl. nonrecurring costs
• The credit loss ratio was 1.9% (2.4)
• Return on equity excl. intangible assets, (RoTE) was 24.5% (23.1), and 26.6% (24.8) excl. nonrecurring costs.

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STATEMENT BY THE CEO:

Our strong growth continues — focus on partners and innovative solutions

Strong growth in lending and earnings 

Strong lending growth continued in the third quarter and our lending now exceeds SEK 20 billion. Growth was driven by both banking segments, Payment Solutions and Consumer Loans, where all of the Nordic countries contributed to the favourable trend. This resulted in annualised growth of 20 per cent, which means we are continuing to surpass our mid-term financial target of about 10 per cent. However, lending was positively impacted by currency effects of about 2 per cent compared with the second quarter. Earnings for the period were strong, up 36 per cent excluding nonrecurring costs, primarily driven by higher business volumes and improved net interest income. This was delivered in parallel with maintaining good control of risks and costs. During the period, we continued as planned to grow at a faster pace than the Nordic market.

Focus on partner development 

In Payment Solutions, we have continued to drive development efforts together with our retail finance partners. The findings of an external study of retail-sector growth in the Nordic region since 2011 showed that our larger retail finance partners reported significantly higher growth rates than the remainder of the market. This confirms the strength of our business model, which makes our partners’ sales growing faster than the market in general. We have welcomed several new retail finance partners during the quarter and we look forward to working and growing together with them. Consumer Loans reported continued growth with the strongest quarter to date, where the largest increases were in Sweden and Norway. In Insurance, efforts have been ongoing for a while to close the unprofitable UK travel insurance operations, which are negatively impacting premium volumes.

Historical reporting 

In 2015, we submitted a report to the Swedish Financial Supervisory Authority regarding inaccurate historical reporting. During the quarter, a penalty fee of
SEK 35 million was imposed on the bank. Under the agreement with our owner, Nordic Capital, we concurrently received an unconditional shareholders’ contribution of SEK 15 million. Accordingly, this case is now closed and has been recognised as a nonrecurring cost in the financial statements.

Sales-promoting solutions in digital and physical environments 

Resurs aims to be at the forefront of developing sales-promoting solutions that work as an inherently natural part of our retail finance partners’ and consumers’ everyday lives, both digitally and in physical environments. For example, we are introducing a new service for our offline stores, “digital application,” which allows the eradication of paper processing at our stores and means that all customers sign using their Mobile Bank ID. Moreover, customers who download our Loyo app, will find their customer loyalty card there just seconds later. Naturally, this means that customers’ future store visits will also be digital, since customers can complete purchases using their mobile phone and Loyo. Implementation is ongoing in Sweden and a Nordic roll-out will take place in the next 12 months.

The third quarter again posted strong profitable growth. We will continue to maintain focus on collaboration with partners and the development of innovative customer-centric solutions.

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About Resurs Holding

The Resurs Group, which operates through the subsidiaries Resurs Bank and Solid Försäkringar, 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 has established collaborations with over 1,200 retail partners with approximately 35,000 stores and built a customer base of approximately 5 million private customers in the Nordics. Resurs Bank has had a bank charter since 2001 and is under the supervision of the Swedish Financial Supervisory Authority. The Resurs Group, with operations in Sweden, Denmark, Norway and Finland, had around 720 employees and a loan portfolio of more than SEK 20.6 billion at the end of the third quarter of 2016. Resurs has been listed on Nasdaq Stockholm since 29 April 2016.

*Certain performance measures provided in this section have not been prepared in accordance with IFRS. Definitions of key ratios are provided on page 30. The reasons for the use of alternative performance measures and reconciliation against information in the financial statements are provided on the website under “Financial information.”
The figures in parentheses refer to 30 September 2015 in terms of financial position, and to the year-earlier period in terms of profit/loss items.

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