Resurs Holding Interim Report January—September 2018

“We delivered yet another quarter of strong profitable growth. We are continuing to develop and launch new and innovative solutions for our retail finance partners and customers.” Kenneth Nilsson, CEO Resurs Holding AB

1 July—30 September 2018*

• Lending to the public rose 18% to SEK 27,470 million
• Operating income increased 15% to SEK 881 million
• Operating profit increased 8% to SEK 394 million
• Earnings per share rose 9% to SEK 1.53
• C/I before credit losses (excl. Insurance) was 39.2% (39.0%)
• The credit loss ratio was 2.1% (1.8%)

1 January—30 September 2018*

• Lending to the public rose 18% to SEK 27,470 million
• Operating income increased 12% to SEK 2,554 million
• Operating profit increased 8% to SEK 1,112 million
• Earnings per share rose 9% to SEK 4.30
• C/I before credit losses (excl. Insurance) was 40.5% (41.3%)
• The credit loss ratio was 2.1% (1.8%)

Statement by the CEO

We continued to deliver strong profitable growth in yet another quarter. The loan portfolio increased 18 per cent year-on-year to SEK 27.5 billion in the third quarter. This strong growth continues to be driven by both the banking segment and all geographic markets. The performance is well in line with our financial target of lending growth of more than 10 per cent. We are growing faster than the market and continuously increasing our market shares.

Profit after tax for the quarter increased 9 per cent to SEK 306 million. As in previous quarters this year, credit losses increased in the third quarter compared with the year-earlier period, mainly as a result of the new reporting standard IFRS 9. We can see that going forward the underlying credit risk is stable for the Group as a whole.

Digitisation — the main competitive tool 

We are continuing to develop and launch new and innovative solutions for our retail finance partners and customers. Digitisation has been the most important tool for many years and we are at the forefront of these advances.

An example is the launch of our Click & Collect service in Payment Solutions during the quarter. This is a digital solution that allows a manufacturer, supplier, franchise group or groups of individual retailers to quickly and easily offer a central e-commerce checkout combined with local management of inventories and store checkout. Click & Collect is an omni-channel solution that provides a seamless customer journey between e-commerce and physical store. For example, Crescent and Monark, that jointly have about 50 independent stores, chose our solution during the quarter.

We are also continuing to develop and digitise our work process and sales tools. Our proprietary credit engine is a robust tool for increasing growth while retaining good control of credit lending. For us, it is a new tool with which to cultivate the market and we are continuously working on integrating it into the operations. As a result, we adjusted our prices in Sweden at the start of the quarter, which led to higher lending growth but margins that were too low according to our targets. For this reason, we have now adjusted the credit engine to manage more flexible pricing for various channels, which creates the conditions for higher margins in Consumer Loans during the fourth quarter.

Credit engine also offers a simpler and more automated application process for customers. Since its launch in Sweden, the percentage of automatic responses to loan applications has risen from 50 to 97 per cent. This is positive for both our customers and us since it reduces manual processing and significantly accelerates the application process. The speed of the application process is just as important a factor as price for customers in their choice of bank.

Further development of sales tools 

We have already introduced machine learning/artificial intelligence (AI) in credit lending and we are now advancing this to strengthen our sales. We launched AI in Supreme Card in the quarter. The algorithms mean that we can more quickly and with better precision identify behaviour patterns among our existing customers and we can thus more effectively tailor attractive activities and offers. We will continue to fine-tune algorithms and work processes in future quarters.

Overall, we delivered another quarter of strong profitable growth. We are continuing to develop our offering to our customers and retail finance partners, and we look forward to continuing to grow and capture market shares in all geographic markets.

Kenneth Nilsson,
CEO Resurs Holding AB

For additional information:
Peter Rosén, CFO & Head of IR, peter.rosen@resurs.se +46 736 56 49 34
Sofie Tarring, IR-Officer, sofie.tarring@resurs.se +46 736 44 33 95

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 5.8 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 third quarter of 2018, the Group had 783 employees and a loan portfolio of SEK 27.5 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 30 September 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 the agency of the contact person set out above, at 07.30 CET on 6 November 2018.

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