Resurs Holding Interim Report January–September 2020

“The transformation journey has begun.” Nils Carlsson, CEO Resurs Holding AB

1 July–30 September 2020*                 

• Lending to the public was stable and totalled SEK 31,188 million, a 4% increase in constant currencies.
• Operating income fell 2% to SEK 908 million
• Operating profit before credit losses was stable, totalling SEK 575 million
• Operating profit fell 8% to SEK 380 million
• C/I before credit losses (excl. Insurance) was 36.8% (37.6%)
• The credit loss ratio was 2.5% (2.0%), as an effect of the previously higher growth in lending.

1 January–30 September 2020*

• Lending to the public was stable and totalled SEK 31,188 million, a 4% increase in constant currencies.
• Operating income was stable, totalling SEK 2,737 million
• Operating profit before credit losses rose 1% to SEK 1,678 million
• Operating profit fell 15% to SEK 1,019 million
• C/I before credit losses (excl. Insurance) was 38.0% (38.9%)
• The credit loss ratio was 2.8% (2.1%), the increase was an effect of the previously higher growth in lending and the extra credit provision of SEK 75 million that was made in the first quarter.

Statement by the CEO

After an eventful start as CEO of Resurs, I can state that the niche bank I have taken over the management of is a well-managed and driven one. I am impressed by the operations that have been built up over 40 years, and by the solid experience in the retail trade combined with innovative power that has made the Resurs success story possible. With the goal of further strengthening our competitiveness and growth in the Nordic market, we are now taking the next step and beginning our transformation journey, which will include becoming more data-driven and tech-oriented. Over the next few years, we will gradually be making investments with a focus on business-driven IT projects and technical solutions that will facilitate scalable, cloud-based solutions. With that, we will strengthen our conditions for a long-term offering of innovative products and services for the Nordic market along with a quick, simple and secure customer experience.

In parallel, the efficiency of the Nordic organisation will be enhanced so as to better leverage synergies among our markets. A number of tangible measures were taken during the quarter, including expanding Group Management with further expertise, and a stage in the decision-making chain was removed for the purpose of creating faster decision-making procedures with a Nordic focus. A review of how we could work more efficiently with the right staffing levels and skills formed the basis of the decision in the fourth quarter to reduce our staff by some 70 positions throughout Resurs Bank’s Nordic operations. The personnel reduction is expected to generate annual savings of approximately SEK 43 million, with full effect starting in the second quarter of 2021. 

Strong growth excluded the Norwegian market
During the quarter, there were positive signs of recovery from the pandemic in all our markets except the Norwegian market, which has been a challenge for some time owing to changes in legislation, the introduction of the Gjeldsregisteret debt information company, and the effects of the pandemic over the last half-year. Lending as a whole was stable year-on-year, totalling SEK 31,188 million; excluding the Norwegian market, the increase was 12 per cent. We believe that since the changes to Norwegian legislation and the introduction of the Gjeldsregisteret in 2019, we have been too restrictive in our credit assessments in Norway and are now reviewing the possibilities for increasing our growth in lending.

Demand in the various Payment Solutions markets and industries varied sharply in the quarter. However, a broad diversification in Nordic retail gave us important resilience and a strong ability to offset industries with falling demand with other industries where demand remained intact, or in some cases even rising. With our strong offering of flexible solutions independent of sales channel to all Nordic markets, the partnership with Mekonomen Group was expanded to now encompass the entire Nordic market. Despite the temporary measures for more restrictive credit assessments introduced during the first quarter of 2020, Consumer Loans performed strongly in all markets except Norway. Insurance continued its positive and stable performance during the quarter with a number of new partners, increased technical result and an improved combined ratio. 

Stable financial development with sustainable credit lending in focus
The third quarter entailed continued stable financial performance overall for Resurs, in which our business model once again demonstrated its strength by providing us with opportunities to accelerate and slow down in pace with changing conditions in the Nordic markets and other industries. Operating profit before credit losses totalled SEK 575 million, and was stable year-on-year. The credit loss ratio for the third quarter was 2.5 per cent, which was in line with the second quarter of 2020. To date, we have not seen any signs that our customers’ payment patterns have been impacted by COVID-19, but as we expect it will take some time before we can fully survey the effects of the pandemic, the extra credit provision of SEK 75 million we made in the first quarter of the year will remain.

During the quarter, Resurs became a partner of Alektum Group’s Shoppa Lagom initiative that aims to spread awareness and raise issues that help more people in society keep their finances balanced. For us, these are issues that are crucial to our core operations and a prioritised area of focus for our sustainability initiatives. With sustainable credit lending, we will lay the foundation for smart and secure loans, and thereby sustainable business for all parties involved.

Resurs’s transformation journey began in earnest during the quarter. The objective is clear, now that we are investing in future-proofed growth, enhanced competitiveness, and offering the best customer experience. Our financial position and capital position remain strong and stable, which makes us well equipped to leverage both growth and healthy profitability along the way.

Nils Carlsson, CEO Resurs Holding AB

More information:
Nils Carlsson, CEO, nils.carlsson@resurs.se +46 766 44 77 00
Jonas Olin, CFO & Head of IR, jonas.olin@resurs.se, +46 766 98 41 76
Sofie Tarring Lindell, IR Officer, sofie.tarringlindell@resurs.se +46 +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 27 October 2020.

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 third quarter of 2020, the Group had 723 employees and a loan portfolio of SEK 31.2 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 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 2019.