Quarterly Report • Oct 30, 2020
Quarterly Report
Open in ViewerOpens in native device viewer
The daily interactions with customers have continued seamlessly, and collection performance is improving and costs are reduced."
Klaus-Anders Nysteen, CEO
» The Swedish FSA has assessed and concluded that Significant Risk Transfer (SRT) is achieved in Hoist Finance's securitisations
» Jarkko Heinonen new Chief Digital Officer and member of Executive Management Team
C/I ratio excluding items affecting comparability
CET1 ratio Return on equity Portfolio growth over the last 12-month period
Target 65% Target > 15%
| SEK m | Quarter 3 2020 |
Quarter 3 2019 |
Change, % |
Jan–Sep 2020 |
Jan–Sep 2019 |
Change, % |
Full-year 2019 |
|---|---|---|---|---|---|---|---|
| Total operating income | 679 | 698 | –3 | 1,720 | 2,269 | –24 | 3,038 |
| Profit/loss before tax | 140 | 146 | –4 | 14 | 602 | –98 | 748 |
| Net profit/loss | 110 | 140 | –21 | –8 | 495 | –102 | 605 |
| Basic and diluted earnings per share, SEK | 0.98 | 1.39 | –29 | –0.81 | 5.01 | –116 | 6.07 |
| Net interest income margin, % | 12 | 13 | –1 pp | 12 | 13 | –1 pp | 13 |
| C/I ratio, % | 80 | 80 | 0 pp | 99 | 74 | 25 pp | 76 |
| Return on equity, % | 9 | 12 | –3 pp | –2 | 15 | –17 pp | 13 |
| Portfolio acquisitions | 264 | 689 | –62 | 871 | 2,964 | –71 | 5,952 |
| EBITDA, adjusted | 1,039 | 1,029 | 1 | 3,156 | 3,298 | –4 | 4,414 |
| SEK m | 30 Sep 2020 |
31 Dec 2019 |
Change, % |
|---|---|---|---|
| Acquired loans | 22,432 | 24,513 | –8 |
| Gross 180-month ERC | 34,717 | 38,874 | –11 |
| Total capital ratio, % | 16.14 | 14.01 | 2.13 pp |
| CET1 ratio, % | 10.44 | 9.94 | 0.50 pp |
| Liquidity reserve | 7,652 | 8,024 | –5 |
| Number of employees (FTEs) | 1,630 | 1,575 | 3 |
| 1) See Definitions. | |
|---|---|
| --------------------- | -- |
Statement by the CEO
The terms resilient and robust characterise the third quarter. Dealing with the pandemic has continued to be a very high priority, and around 70 per cent of our colleagues are still working remotely. Despite this, the daily interactions with customers have continued through digital and analogue channels, and I am very proud of the work that we have done to help people keep their commitments. On a monthly basis, we have around 500,000 customer interactions and, according to feedback from our customers, they are receiving important and relevant support from us. After a peak in May, the number of conversations including the topic of Covid-19 have declined steadily.
Since implementing the mitigating actions aimed to address regulatory changes that were introduced in late 2018 and early 2019, we have moved into secured NPLs as well as performing loans. This has helped us in these unpredictable times. The performing and secured non-performing loans are characterised by low risk and stable cash flows, and the secured collections were very strong during the quarter. For our unsecured NPL portfolios, there are some differences between markets, but overall the performance is at or above forecast. All markets have improved since the previous quarter and the total collection performance was 108 per cent in the third quarter. I am happy to see collection performance improving in the quarter, but we are mindful of the uncertainties from the second wave of Covid-19 and new potential lockdowns in our markets.
Our aim to become the digital leader has also proven more important than ever. Not only were we able to quickly adapt to the new environment with most colleagues working from home, but we have also been able to support our customers in a better way through digital channels. Year to date, our chatbot Kai has managed 15,500 customer queries without referring to a human agent, only in the UK. Through our self-service portals and customer oriented market sites, we have also launched new tools to help customers get a better view of their financial health. In the UK, we now have a benefit tracker that enables customers to check if they receive the benefits they are entitled to. They can also conduct a financial health check and manage their household bills in order to reduce expenditures. This functionality will be rolled out to other markets soon. These are some of the ways in which we want to be by our customers' side on their way back to financial inclusion.
We also collaborate with external initiatives that share our values. Our partnerships with Team U in Germany and ONSbank in the Netherlands are particularly important and relevant right now. Team U develops an online portal helping consumers and small and medium-sized businesses in Germany to manage financial difficulties and insolvency. By supporting them, we help increasing their ability to extend their reach. Together with ONSbank in the Netherlands, Hoist Finance is helping young people to regain control of their debts and finances. These partnerships are firmly linked to our mission and strategy, and are an important part of our commitment to support the UN's Sustainability Goals. On behalf of Hoist Finance, I am proud to have submitted our first Communication of Progress reporting to UN Global Compact.
In Hoist Finance, we are committed to our financial targets to deliver above 15 per cent RoE and C/I ratio below 65 per cent. As we are becoming more effective and efficient, we are also growing through investments across asset classes. The baseline for our cost program is 2018 and the cost for running our unsecured NPL business. The SEK 400m in cost savings in 2019-2022 will offset the cost of growth and cost inflation in this period, but will also give real nominal cost reductions measured against our comparable 2018 baseline. Consequently, delivering productivity gains and C/I ratio below 65 per cent. I am happy to see the improvements now materialising, and we will see continued cost savings from our
review
"
We have around 500,000 customer interactions per month through various channels and, according to feedback from our customers, they are receiving important and relevant support from us.
"
Shared Service Centre in Poland, nearshoring capabilities in Romania, a simplified legal structure, outsourcing of IT infrastructure and site consolidation.
Looking ahead, there is little doubt that the number of non-performing exposures in Europe are growing. Banks are increasing their provisioning and we expect this volume to come to the secondary market. The pipeline looks promising and the market outlook is positive. We remain ready to help banks manage their balance sheets and customers to keep their commitments.
To meet future demand, we need to ensure a long-term sustainable and robust business model. We have established a strong team to deliver on an IRB model and implement securitisations. We are also pleased that the Swedish Financial Supervisory Authority has assessed and concluded that Significant Risk Transfer (SRT) is achieved in our securitisations.
I was hoping to be able to travel to our markets to see clients and colleagues after the summer. However, as the second wave of the pandemic has hit Europe, I continue to work either from the Stockholm office or from home. In Hoist Finance we take the challenge of keeping moral and engagement up seriously. Going forward, I am sure that the experiences from the pandemic will add to our skills and capabilities. New ways of working, new digital solutions and more flexibility are some of the takeaways. As with our customers, I look forward to staying engaged with you via old and new channels.
Best regards,
Klaus-Anders Nysteen CEO
Statement by the CEO
Developments Key ratios 2020
Financial statements
Comparative figures for developments during third quarter 2020 pertain to third quarter 2019.
Interest income on acquired loan portfolios decreased during the quarter to SEK 791m (836), driven mainly by the low volume of portfolio acquisitions during the first three quarters of the year. Other interest income totalled SEK 1m (–2). Interest expense for the quarter increased to SEK –146m (–138). The increase is attributable to increased interest expense for deposits from the public following a shift in Germany towards deposit of longer durations, and to higher deposit guarantee scheme costs.
Impairment gains and losses totalled SEK 1m (12) during Q3 and include realised collections against forecast during the period, as well as forward-looking portfolio revaluations. Collections against forecast totalled SEK 107m (20) during the quarter, of which SEK 69m pertains to secured portfolios and SEK 38m to unsecured portfolios. Portfolio revaluations during the quarter totalled SEK –106m (–7), of which SEK –85m pertains to secured portfolios and SEK –21m to unsecured portfolios. With respect to the secured portfolios, the revaluations are mainly attributable to a secured French portfolio for which collections were made ahead of forecast. This contributed to the strong collection performance during the current period, while also reducing the expected future cash flow. The quarter's realised collections correspond to 108 per cent of forecast, whereof 103 per cent relates to unsecured portfolios.
Fee and commission income decreased to SEK 23m (29). The decrease is attributable to the closure of third-party collection services in the UK announced during the second quarter. Net result from financial transactions during the quarter totalled SEK 4m (–45). The bonds in the liquidity portfolio had a positive unrealised value increase during the quarter, while currency effects contributed negatively. Other operating income totalled SEK 5m (8).
Personnel expenses decreased during the quarter to SEK –225m (–236). The decrease is attributable to the success of investments in the shared service centre in Poland and nearshoring in Romania, which enabled a reduction in personnel expenses in line with the cost savings programme. Collection costs decreased SEK 21m during the quarter to SEK –157m (–178), due in part to the impact Covid-19 has had on opportunities to pursue legal claims in court. The cost reduction is also a result of efficiency measures and digital investments.
Administrative expenses increased during the quarter to SEK –138m (–123). The cost increase is primarily related to IT outsourcing and the ongoing Group-wide digitalisation initiative. Change initiatives are expected to reduce collection and personnel cost levels over time. Depreciation and amortisation of tangible and intangible assets totalled SEK –29m (–31).
Share of profit from joint ventures totalled SEK 10m (16). Income tax expense for the period totalled SEK –30m (–6), corresponding to an effective tax rate of 21.3 per cent (4.1). Net profit/loss totalled SEK 110m (140).
Statement by the CEO
Developments 2020
Key ratios Financial
statements
Comparative figures for developments during the January-September 2020 period pertain to January-September 2019.
Interest income on acquired loan portfolios totalled SEK 2,525m (2,494) during the period. The increase is mainly related to portfolio acquisitions of secured loans in France, conducted during Q4 2019. Other interest income totalled SEK 6m (1). Interest expense increased to SEK –444m (–346). The increase is primarily attributable to the securitisation of Italian loan portfolios conducted during Q4 2019, and to increased interest expense for deposits from the public following an increase in deposit volumes in Germany and Sweden for longer duration deposits.
Impairment gains and losses totalled SEK –409m (98), constituting the current period's realised collections against forecast as well as forward-looking portfolio revaluations.
Portfolio revaluations during the period totalled SEK –507 m (–115) and are mainly attributable to the revaluation of portfolios in Spain during Q1 and to revaluations conducted during Q2 related to Covid-19 and its impact on collections. Collections against forecast totalled SEK 100m (213), with collections during Q3 in particular exceeding projected levels.
Fee and commission income decreased to SEK 75m (91). The decrease is attributable to the closure of third-party collection services in the UK announced during the second quarter.
Net result from financial transactions totalled SEK –45m (–80). The result was strongly impacted by falling market rates during the first and second quarters, as Hoist Finance hedges its exposure to rising interest rates. Exchange rate effects of SEK –7m also had a negative impact on the result. Hoist Finance maintains a large liquidity buffer comprised of high credit quality bonds. The market value of this type of bond increased during the year, producing unrealised gains of SEK 8m. Other operating income totalled SEK 13m (17) during the year.
Personnel expenses increased to SEK –673m (–664). The increase is attributable to investments in the shared service centre in Poland and nearshoring in Romania, which initially resulted in cost increases but are expected to lower personnel expenses over time.
Collection costs decreased SEK 37m during the period to SEK –519m (–556), due partly to efficiency measures and digital investments. The cost reduction is also attributable to the impact Covid-19 has had on opportunities to pursue legal claims in court.
Administrative expenses increased during the quarter to SEK –460m (–387). The cost increase is related to IT outsourcing and the Group-wide digitalisation initiative. Change initiatives are expected to reduce collection and personnel cost levels over time. Depreciation and amortisation of tangible and intangible assets totalled SEK –98m (–92).
Profit from participations in joint ventures totalled SEK 44m (32). Income tax expense for the period totalled SEK –22m (–107). The effective tax rate was 153.3 per cent (17.8) and is primarily affected by non-deductible interest expenses for Tier 2 capital included in own funds, non-deductible expenses for fair value hedging of shares in subsidiaries, and a tax amount of SEK –7m attributable to previous years. Net profit totalled SEK –8m (495).
Statement by the CEO
Developments Key ratios 2020 Developments 2020
review
Financial statements
Total assets decreased SEK 2,676m as compared with 31 December 2019 and totalled SEK 31,711m (34,387). The change is primarily attributable to a decrease of SEK –2,058m in acquired loan portfolios, a result of low acquisition volumes as well as exchange rate effects.
Cash and interest-bearing securities decreased SEK –518m, while other assets decreased SEK –100m.
| SEK m | 30 Sep 2020 |
31 Dec 2019 |
Change, % |
|---|---|---|---|
| Cash and interest-bearing securities |
8,055 | 8,573 | –6 |
| Acquired loan portfolios | 22,245 | 24,303 | –8 |
| Other assets1) | 1,411 | 1,511 | –7 |
| Total assets | 31,711 | 34,387 | –8 |
| Deposits from the public | 18,870 | 21,435 | –12 |
| Issued securities | 5,645 | 5,900 | –4 |
| Subordinated debt | 854 | 852 | 0 |
| Total interest-bearing liabilities | 25,369 | 28,187 | –10 |
| Other liabilities1) | 1,149 | 1,302 | –12 |
| Equity | 5,193 | 4,898 | 6 |
| Total liabilities and equity | 31,711 | 34,387 | –8 |
1) This item does not correspond to an item of the same designation in the balance sheet, but to several corresponding items.
Total interest-bearing debt amounted to SEK 25,369m (28,177). The change is mainly attributable to deposits from the public, which decreased SEK –2,565m. The decrease in deposits is due to reduced deposit rates in accordance with the financing plan. Hoist Finance funds its operations through deposits in Sweden and in Germany as well as through the international bond market and the Swedish money market. In Sweden, deposits from the public under the HoistSpar brand amounted to SEK 11,050m (12,243), of which SEK 5,629m (6,400) is attributable to fixed term deposits of one-, two- and three-year durations. In Germany, deposits to retail customers are offered under the Hoist Finance name. At 30 September 2020, deposits from the public in Germany were SEK 7,820m (9,192), of which SEK 7,395m (6,163) is attributable to fixed term deposits on one- to five-year durations.
At 30 September 2020, the outstanding bond debt totalled SEK 6,499m (6,752), of which SEK 5,645m (5,900) was comprised of issued securities. The change in issued securities is mainly attributable to the expiration of commercial paper previously issued by Hoist Finance. Commercial paper totalled SEK 313m at 31 December 2019. Accrued interest also contributed to the reduction in outstanding bond debt. Other liabilities decreased SEK –153m to SEK 1,149m (1,302).
Equity totalled SEK 5,193m (4,898). The increase is mainly due to a capital contribution during the first quarter.
Comparative figures for the Cash flow pertain to third quarter 2019.
| SEK m | Quarter 3 2020 |
Quarter 3 2019 |
Full-year 2019 |
|---|---|---|---|
| Cash flow from operating activities | 646 | 678 | 3,117 |
| Cash flow from investing activities | –23 | –657 | –5,098 |
| Cash flow from financing activities | –1,120 | 5,181 | 3,923 |
| Cash flow for the period | –497 | 5,202 | 1,942 |
Cash flow from operating activities totalled SEK 646m, as compared with SEK 678m during Q3 2019. Amortisation of acquired loan portfolios decreased during the quarter and totalled SEK 652m (713), with the decrease attributable to a reduction in expected collections and interest income and to low portfolio growth during 2020. Cash flow from other assets and liabilities amounted to SEK –159m (–354), the majority of which pertains to realised cash flows for FX hedging.
Cash flow from investing activities totalled SEK –23m (–657). Portfolio acquisition activity was low during the quarter due to Covid-19, totalling SEK –264m (–689). Hoist Finance sold bonds and other securities during the quarter for a net total of SEK 252m (509). Other cash flow within investing activities totalled SEK –11m (–16).
Cash flow from financing activities totalled –1,120m (5,181). There is less need for funding due to Covid-19, and Hoist Finance has elected to lower the interest rate on deposits for most products. This resulted in desired outflows during the quarter. Net cash flow from deposits from the public totalled SEK –1,043m (3,123) during the quarter. Buy-back and repayment of issued securities during the quarter totalled –28m (–212) and pertains to repayment of notes in securitisation company Marathon SPV S.r.l. Other cash flow from financing activities totalled SEK –49m (–46) and pertains to interest paid on additional Tier 1 capital instruments and to amortisation of lease liability.
Total cash flow for the period amounted to SEK –497m, as compared with SEK 5,202m for third quarter 2019.
Hoist Finance is exposed to a number of uncertainties through its business operations and as a result of its broad geographical presence. New and amended bank regulations may affect Hoist Finance both directly (e.g. via Basel IV capital and liquidity regulations) and indirectly through the impact of similar regulations on the market's supply of loan portfolios. During the quarter, the SFSA announced proposed amendments in the regulatory framework for calculation of Pillar 2 capital requirements. Hoist Finance's cross-border operations entail consolidated tax issues relating to subsidiaries in several jurisdictions. The Group is, therefore, exposed to potential tax risks arising from varying interpretations and applications of existing laws, treaties, regulations, and guidance.
The impact of Covid-19 on Hoist Finance's operations is outlined in the Development of risks section below. For additional details on the Company's management of significant risks and uncertainties, please refer to the 2019 Annual Report.
Statement by the CEO
review
Credit risk for Hoist Finance's loan portfolios is regularly monitored to assess ways in which the challenging situation caused by Covid-19 is impacting the portfolios' valuation. The value of several loan portfolios was written down during the first and second quarters due to lower collection rates in the wake of Covid-19. Due to uncertainty concerning the duration of the current situation, there is still an increased risk that additional write-downs of loan portfolios will be made in coming quarters. In order to diversify the existing stock of assets in a positive way from a risk perspective, Hoist Finance will continue to assess new opportunities to acquire portfolios of non-performing secured loans as well as portfolios of performing loans.
Credit risk in the liquidity portfolio remains low, as investments are made in government, municipal and covered bonds of high credit quality. Credit spreads increased early in the year, contributing to losses in the liquidity portfolio. Credit spreads in bonds held by Hoist Finance stabilised during the second and third quarters and the risk has returned to more normal levels.
Hoist Finance has an internal framework which serves as the foundation for follow-up and oversight of the Group's operational risks. The Group is committed to continuously improving the quality of its internal procedures to minimise operational risks. A significant number of Hoist Finance employees continued to work remotely during the quarter. This is not deemed to have any material impact on operational risks. The level of operational risks is therefore deemed to be unchanged from the previous quarter.
Market risks remain low, as Hoist Finance continuously hedges interest rate and FX risks in the short and medium term.
During the summer the Swedish FSA presented a new method for Pillar 2 risks to calculate market risks in the banking book. The proposed method may have a negative impact on Hoist Finance, with higher capital requirements for these risks. Hoist Finance has, together with other financial institutions, answered the request from SFSA in August, with data and feedback on the method. Hoist Finance has since then a continuous dialogue with SFSA regarding the method and its effects.
Liquidity risk was low during the quarter. Hoist Finance's liquidity reserve exceeds Group targets by a healthy margin.
In parallel with its work to develop capital market instruments for risk transfer to external counterparties, Hoist Finance is pursuing its application for a permit to apply an internal ratings-based (IRB) approach to calculate risk-weighted assets with regard to credit risk.
Net interest income for the Parent Company totalled SEK 271m (331) during the third quarter. The decrease is mainly attributable to reduced interest income from intra-group loans, resulting from external financing of Italian loan portfolios through the securitisation conducted last year. Interest expense increased SEK –7m due mainly to greater deposit volumes in the German market and higher deposit guarantee scheme costs.
Net operating income totalled SEK 341m (319). Net result from financial transactions amounted to SEK 3m (–75) and was mainly attributable to exchange rate fluctuations for assets and liabilities in foreign currencies and to market value fluctuations for bonds. Other operating income totalled SEK 66m (54) and is mainly attributable to management fees invoiced to subsidiaries.
Operating expenses totalled SEK –292m (–320). The decrease is attributable to personnel expenses, which were impacted by restructuring costs in the French operations during the comparative period, and to lower collection costs resulting from the impact Covid-19 has had on acquisition levels and opportunities to pursue legal claims in court. Profit before credit losses totalled SEK 49m (–1).
Impairment losses of SEK 0m (6) are attributable to the difference between actual and projected collections, to portfolio revaluations and to loss allowances for performing loans. Share of profit from joint ventures totalled SEK 13m (17).
Net profit for the period totalled SEK 48m (28). Tax expense for the period totalled SEK –14m (6) and was positively affected by a tax amount of SEK 2m attributable to previous years.
The nature and scope of related-party transactions remain unchanged from 31 December 2019 and are described in the Annual Report.
Hoist Finance AB (publ), corporate identity number 556012-8489, is the Parent Company in the Hoist Finance Group. Hoist Finance is a Swedish publicly traded limited liability company headquartered in Stockholm, Sweden. Hoist Finance AB (publ) has been listed on NASDAQ Stockholm since March 2015.
Hoist Finance AB (publ) is a credit market company under the supervision of the Swedish FSA. The operating Parent Company, including its subgroup, acquires and holds loan portfolios, which are managed by the Group's subsidiaries or foreign branch offices. These units also provide commission-based administration services to third parties.
The remaining 80 per cent of the Romanian company Maran CSRO S.r.l was acquired during the first quarter, as part of the establishment of a nearshoring office in Romania. The company is fully consolidated in the consolidated financial statements. The acquisition price totalled SEK 7m.
Italian subsidiaries Nouva Maran S.r.l and Hoist Italia S.r.l merged during third quarter 2020. Two branch offices were opened during the quarter, with Romanian operations conducted through branch office Hoist Finance AB (publ) Romania and Polish operations through Hoist Finance AB (publ) Poland. Both the subsidiary and the branches are fully consolidated in the Hoist Finance Group financial statements.
For a more detailed description of the Group's legal structure, please refer to the 2019 Annual Report.
The number of shares totalled 89,303,000 at 30 September 2020, unchanged from 31 December 2019.
The share price closed at SEK 31.56 on 30 September 2020. A breakdown of the ownership structure is presented in the table below. As at 30 September 2020 the Company had 7,633 shareholders, compared with 7,429 at 31 December 2019.
| Ten largest shareholders, 30 September 2020 |
Share of capital and votes, % |
|---|---|
| Erik Selin Fastigheter AB | 14.0 |
| Swedbank Robur Funds | 9.1 |
| Avanza Pension | 7.8 |
| Per Arwidsson privately and through companies | 6.8 |
| C WorldWide Asset Management | 4.9 |
| Confederation of Swedish Enterprise | 3.4 |
| Jörgen Olsson privately and through companies | 2.9 |
| Dimensional Fund Advisors | 2.9 |
| BlackRock | 2.6 |
| Per Josefsson privately and through companies | 2.2 |
| Ten largest shareholders | 56.6 |
| Other shareholders | 43.4 |
| Total | 100.0 |
Source: Modular Finance AB per 30 September 2020; ownership statistics from Holdings, Euroclear Sweden AB; and changes confirmed and/or registered by the Company.
In accordance with established instructions, the Nomination Committee shall be comprised of the three largest shareholders along with the Chairman of the Hoist Finance Board. The Nomination Committee is currently comprised of the Chairman of the Board in Hoist Finance and members appointed by Swedbank Robur Funds, Erik Selin Fastigheter AB and Arwidsro. The term of office for Committee members runs until a new committee is appointed. Ahead of the 2021 Annual General Meeting, Nomination Committee members have been appointed based on the ownership structure as per 31 August 2020.
This interim report has not been reviewed by the Company's auditors.
The Swedish FSA has assessed and concluded that SRT is achieved in our securitisations.
Jarkko Heinonen new Chief Digital Officer and member of Executive Management Team.
Statement by the CEO
2020 2020
Developments
review
Developments Key ratios
| SEK million | Quarter 3 2020 |
Quarter 2 2020 |
Quarter 1 2020 |
Quarter 4 2019 |
Quarter 3 2019 |
|---|---|---|---|---|---|
| Interest income acquired loan portfolios | 791 | 842 | 892 | 865 | 836 |
| Other interest income | 1 | 4 | 1 | –3 | –2 |
| Interest expense | –146 | –134 | –164 | –149 | –138 |
| Net interest income | 646 | 712 | 729 | 713 | 696 |
| Impairment gains and losses | 1 | –232 | –178 | 22 | 12 |
| Fee and commission income | 23 | 27 | 26 | 30 | 29 |
| Net result from financial transactions | 4 | 4 | –53 | 1 | –45 |
| Derecognition gains and losses | 0 | 0 | –1 | –3 | –2 |
| Other operating income | 5 | 2 | 6 | 5 | 8 |
| Total operating income | 679 | 513 | 529 | 768 | 698 |
| General and administrative expenses | |||||
| Personnel expenses | –225 | –229 | –219 | –211 | –236 |
| Collection costs | –157 | –157 | –205 | –231 | –178 |
| Other administrative expenses | –138 | –170 | –153 | –180 | –123 |
| Depreciation and amortisation of tangible and intangible assets | –29 | –38 | –30 | –29 | –31 |
| Total operating expenses | –549 | –594 | –607 | –651 | –568 |
| Net operating profit/loss | 130 | –81 | –78 | 117 | 130 |
| Share of profit from joint ventures | 10 | 17 | 17 | 30 | 16 |
| Profit/loss before tax | 140 | –64 | –61 | 147 | 146 |
| Income tax expense | –30 | –9 | 17 | –36 | –6 |
| Net profit/loss for the period | 110 | –73 | –44 | 111 | 140 |
Financial statements
| SEK m 2020 2020 2020 2019 Profit/loss before tax 140 –64 –61 147 Items affecting comparability 2) 9 – 153 47 Profit/loss before tax adjusted for items affecting comparability 2) 149 –64 92 194 Net interest income margin, % 12 12 12 12 C/I ratio, % 80 112 111 82 C/I ratio adjusted for items affecting comparability 2), % 78 112 87 76 Return on equity, % 9 –9 –6 9 Return on equity adjusted for items affecting comparability 3), % 9 –9 4 12 Portfolio acquisitions 264 62 545 2,988 EBITDA adjusted 4) 1,039 812 1,304 1,116 30 Sep 30 Jun 31 Mar 31 Dec SEK m 2020 2020 2020 2019 Acquired loans 22,432 22,765 24,906 24,513 Gross 180-month ERC 34,717 35,642 39,305 38,874 Total capital ratio, % 16.14 15.64 14.83 14.01 CET1 ratio, % 10.44 10.05 9.52 9.94 Liquidity reserve 7,652 8,385 9,437 8,024 Number of employees (FTEs) 1,630 1,649 1,655 1,575 1,544 1) See Definitions. 2) Items affecting comparability, excluding tax, amounting to SEK –9m and relate to restructuring costs in Italy and Great Britain. 3) Return on equity has been adjusted for items affecting comparability amounting to SEK –7m, including tax. 4) As of 2020 we will present this key ratio on a quarterly basis. The financial fact book, available on hoistfinance.com/investors/financial-information/, provides details on items affecting comparability for comparative periods. |
|||
|---|---|---|---|
| 2019 146 |
|||
| 47 | |||
| 193 | |||
| 13 | |||
| 80 | |||
| 73 | |||
| 12 | |||
| 15 | |||
| 689 | |||
| 1,029 | |||
| 30 Sep | |||
| 2019 | |||
| 22,604 | |||
| 36,595 | |||
| 14.87 | |||
| 10.29 | |||
| 12,671 | |||
| SEK m | 30 Sep 2020 |
30 Jun 2020 |
31 Mar 2020 |
31 Dec 2019 |
30 Sep 2019 |
|---|---|---|---|---|---|
| Acquired loans | 22,432 | 22,765 | 24,906 | 24,513 | 22,604 |
| Gross 180-month ERC | 34,717 | 35,642 | 39,305 | 38,874 | 36,595 |
| Total capital ratio, % | 16.14 | 15.64 | 14.83 | 14.01 | 14.87 |
| CET1 ratio, % | 10.44 | 10.05 | 9.52 | 9.94 | 10.29 |
| Liquidity reserve | 7,652 | 8,385 | 9,437 | 8,024 | 12,671 |
| Number of employees (FTEs) | 1,630 | 1,649 | 1,655 | 1,575 | 1,544 |
2020
| SEK m | Note | Quarter 3 2020 |
Quarter 3 2019 |
Jan–Sep 2020 |
Jan–Sep 2019 |
Full-year 2019 |
|---|---|---|---|---|---|---|
| Interest income acquired loan portfolios 1) | 791 | 836 | 2,525 | 2,494 | 3,359 | |
| Other interest income 2) | 1 | –2 | 6 | 1 | –2 | |
| Interest expense | –146 | –138 | –444 | –346 | –494 | |
| Net interest income | 646 | 696 | 2,087 | 2,149 | 2,863 | |
| Impairment gains and losses | 1 | 12 | –409 | 98 | 120 | |
| Fee and commission income | 23 | 29 | 75 | 91 | 121 | |
| Net result from financial transactions | 4 | –45 | –45 | –80 | –79 | |
| Derecognition gains and losses | 0 | –2 | –1 | –6 | –9 | |
| Other operating income | 5 | 8 | 13 | 17 | 22 | |
| Total operating income | 3 | 679 | 698 | 1,720 | 2,269 | 3,038 |
| Personnel expenses | –225 | –236 | –673 | –664 | –875 | |
| Collection costs | –157 | –178 | –519 | –556 | –787 | |
| Other administrative expenses | –138 | –123 | –460 | –387 | –568 | |
| Depreciation and amortisation of tangible and intangible assets | –29 | –31 | –98 | –92 | –122 | |
| Total operating expenses | 3 | –549 | –568 | –1,750 | –1,699 | –2,352 |
| Net operating profit/loss | 130 | 130 | –30 | 570 | 686 | |
| Share of profit from joint ventures | 3 | 10 | 16 | 44 | 32 | 62 |
| Profit/loss before tax | 3 | 140 | 146 | 14 | 602 | 748 |
| Income tax expense | –30 | –6 | –22 | –107 | –143 | |
| Net profit/loss | 110 | 140 | –8 | 495 | 605 | |
| Profit/loss attributable to: | ||||||
| Owners of Hoist Finance AB (publ) | 87 | 124 | –73 | 447 | 542 | |
| Additional Tier 1 capital holders | 23 | 16 | 65 | 48 | 63 | |
| Basic and diluted earnings per share SEK | 0.98 | 1.39 | –0.81 | 5.01 | 6.07 |
1) Interest income from acquired loan portfolios are in total calculated using the effective interest method for all viewed periods.
2) Of which interest income calculated using the effective interest method amounted to SEK 0.1m (1.6) during quarter 3, SEK 1.7m (3.9) during Jan–Sep and SEK 5.5m during full-year.
Statement by the CEO
review
Financial statements Financial statements
| SEK m | Quarter 3 2020 |
Quarter 3 2019 |
Jan–Sep 2020 |
Jan–Sep 2019 |
Full-year 2019 |
|---|---|---|---|---|---|
| Net profit/loss for the period | 110 | 140 | –8 | 495 | 605 |
| OTHER COMPREHENSIVE INCOME | |||||
| Items that will not be reclassified to profit or loss | |||||
| Revaluation of defined benefit pension plan | – | – | – | – | –3 |
| Revaluation of remuneration after terminated | – | – | 1 | – | –1 |
| Tax attributable to items that will not be reclassified to profit or loss | – | – | – | – | 1 |
| Total items that will not be reclassified to profit or loss | – | – | 1 | – | –3 |
| Items that may be reclassified subsequently to profit or loss | |||||
| Translation difference, foreign operations | –4 | 6 | –51 | 34 | 32 |
| Translation difference, joint ventures | –2 | –4 | –11 | 1 | –1 |
| Hedging of currency risk in foreign operations | 3 | –31 | 4 | –77 | –114 |
| Hedging of currency risk in joint ventures | 2 | 2 | 6 | –7 | –8 |
| Transferred to the income statement during the year | 1 | 2 | 5 | 7 | 9 |
| Tax attributable to items that may be reclassified to profit or loss | –1 | 6 | –2 | 18 | 26 |
| Total items that may be reclassified subsequently to profit or loss | –1 | –19 | –49 | –24 | –56 |
| Other comprehensive income for the period | –1 | –19 | –48 | –24 | –59 |
| Total comprehensive income for the period | 109 | 121 | –56 | 471 | 546 |
| Profit/loss attributable to: | |||||
| Owners of Hoist Finance AB (publ) | 86 | 105 | –121 | 423 | 483 |
| Additional Tier 1 capital holders | 23 | 16 | 65 | 48 | 63 |
2020
Financial statements Financial statements
Quarterly Notes Assurance Definitions
| SEK m | Note | 30 Sep 2020 |
31 Dec 2019 |
30 Sep 2019 |
|---|---|---|---|---|
| ASSETS | ||||
| Cash | 0 | 0 | 0 | |
| Treasury bills and Treasury bonds | 5 | 2,077 | 2,729 | 7,436 |
| Lending to credit institutions | 5 | 2,358 | 3,075 | 2,397 |
| Lending to the public | 5 | 8 | 10 | 12 |
| Acquired loan portfolios | 3,4 | 22,245 | 24,303 | 22,394 |
| Bonds and other securities | 5 | 3,620 | 2,769 | 3,077 |
| Shares and participations in joint ventures | 3 | 179 | 201 | 201 |
| Intangible assets | 370 | 382 | 382 | |
| Tangible assets | 289 | 269 | 295 | |
| Other assets | 376 | 511 | 496 | |
| Deferred tax assets | 89 | 32 | 29 | |
| Prepayments and accrued income | 100 | 106 | 115 | |
| Total assets | 31,711 | 34,387 | 36,834 | |
| LIABILITIES AND EQUITY | ||||
| Liabilities | ||||
| Deposits from the public | 5 | 18,870 | 21,435 | 21,925 |
| Tax liabilities | 122 | 86 | 143 | |
| Other liabilities | 609 | 823 | 728 | |
| Deferred tax liabilities | 140 | 150 | 204 | |
| Accrued expenses and deferred income | 208 | 154 | 184 | |
| Provisions | 70 | 89 | 92 | |
| Debt securities issued | 5 | 5,645 | 5,900 | 7,868 |
| Subordinated debts | 854 | 852 | 868 | |
| Total liabilities | 26,518 | 29,489 | 32,012 | |
| Equity | ||||
| Additional Tier 1 capital holders | 1,106 | 690 | 690 | |
| Share capital | 30 | 30 | 30 | |
| Other contributed equity | 1,883 | 1,883 | 1,883 | |
| Reserves | –307 | –258 | –226 | |
| Retained earnings including profit/loss for the period | 2,481 | 2,553 | 2,445 | |
| Non-controlling interest | – | 0 | 0 | |
| Total equity | 5,193 | 4,898 | 4,822 | |
| Total liabilities and equity | 31,711 | 34,387 | 36,834 |
Statement by the CEO
review
Financial statements Financial statements
| SEK m | Additional Tier 1 capital holders |
Share capital |
Other contributed equity |
Reserves | Retained earnings including profit/loss for the period |
Total equity |
|---|---|---|---|---|---|---|
| Opening balance 1 Jan 2020 | 690 | 30 | 1,883 | –258 | 2,553 | 4,898 |
| Comprehensive income for the period | ||||||
| Loss for the period | –8 | –8 | ||||
| Other comprehensive income | –49 | 1 | –48 | |||
| Total comprehensive income for the period | –49 | –7 | –56 | |||
| Transactions reported directly in equity | ||||||
| Additional Tier 1 capital instrument | 4141) | 414 | ||||
| Interest paid on capital contribution | –60 | –60 | ||||
| Share-based payments | 32) | 3 | ||||
| Acquisition agreement for treasury shares | –83) | –8 | ||||
| Tax effect on items reported directly in equity | 2 | 2 | ||||
| Total transactions reported directly in equity | 416 | 0 | 0 | 0 | –65 | 351 |
| Closing balance 30 Sep 2020 | 1,106 | 30 | 1,883 | –307 | 2,481 | 5,193 |
1) Nominal amount of SEK 423m was reduced by transaction costs of SEK 9m.
2) For more information on Share-based payment, see Hoist Finance Annual report 2019.
3) To secure the delivery of treasury shares in the LTIP program.
| SEK m | Additional Tier 1 capital holders |
Share capital |
Other contributed capital |
Reserves | Retained earnings including profit/loss for the period |
Non controlling interest |
Total equity |
|---|---|---|---|---|---|---|---|
| Opening balance 1 Jan 2019 | 690 | 30 | 1,883 | –202 | 2,012 | 4,413 | |
| Comprehensive income for the period | |||||||
| Profit for the period | 605 | 605 | |||||
| Other comprehensive income | –56 | –3 | –59 | ||||
| Total comprehensive income for the period | –56 | 602 | 546 | ||||
| Transactions reported directly in equity | |||||||
| Interest paid on capital contribution | –62 | –62 | |||||
| Share-based payments | 1 | 1 | |||||
| Change in non-controlling interests1) | 0 | 0 | |||||
| Total transactions reported directly in equity | –61 | 0 | –61 | ||||
| Closing balance 31 Dec 2019 | 690 | 30 | 1,883 | –258 | 2,553 | 0 | 4,898 |
1) Attributable to securitisation of Italian loan portfolios. Pinzolo SPV S.r.l is liquidated.
| SEK m | Additional Tier 1 capital holders |
Share capital |
Other contributed capital |
Reserves | Retained earnings including profit/loss for the period |
Non controlling interest |
Total equity |
|---|---|---|---|---|---|---|---|
| Opening balance 1 Jan 2019 | 690 | 30 | 1,883 | –202 | 2,012 | 4,413 | |
| Comprehensive income for the period | |||||||
| Profit for the period | 495 | 495 | |||||
| Other comprehensive income | –24 | –24 | |||||
| Total comprehensive income for the period | –24 | 495 | 471 | ||||
| Transactions reported directly in equity | |||||||
| Interest paid on capital contribution | –62 | –62 | |||||
| Total transaction reported directly in equity | 0 | 0 | |||||
| Closing balance 30 Sep 2019 | 690 | 30 | 1,883 | –226 | 2,445 | 0 | 4,822 |
1) Attributable to securitisation of Italian loan portfolios. Pinzolo SPV S.r.l is liquidated.
Statement by the CEO
2020
Q2
| SEK m | Quarter 3 2020 |
Quarter 3 2019 |
Jan–Sep 2020 |
Jan–Sep 2019 |
Full-year 2019 |
|---|---|---|---|---|---|
| Profit/loss before tax | 140 | 146 | 14 | 602 | 748 |
| – of which, paid-in interest | 798 | 842 | 2,539 | 2,510 | 3,365 |
| – of which, interest paid | –84 | –52 | –330 | –193 | –374 |
| Adjustment for other items not included in cash flow | 84 | 245 | 617 | 354 | 208 |
| Realised result from divestment of shares and participations in joint ventures |
–13 | –16 | –43 | –45 | –60 |
| Income tax paid/received | –58 | –56 | –62 | –82 | –190 |
| Total | 153 | 319 | 526 | 829 | 706 |
| Amortisations on acquired loan portfolios | 652 | 713 | 2,159 | 2,235 | 3,040 |
| Increase/decrease in other assets and liabilities | –159 | –354 | 452 | –578 | –629 |
| Cash flow from operating activities | 646 | 678 | 3,137 | 2,486 | 3,117 |
| Acquired loan portfolios | –264 | –689 | –871 | –2,964 | –5,952 |
| Investments in/divestments of bonds and other securities | 252 | 48 | –852 | 557 | 866 |
| Other cash flows from investing activities | –11 | –16 | –31 | –21 | –12 |
| Cash flow from investing activities | –23 | –657 | –1,754 | –2,428 | –5,098 |
| Deposits from the public | –1,043 | 3,123 | –2,709 | 4,428 | 4,204 |
| Debt securities issued | – | 2,316 | – | 2,942 | 3,450 |
| Repurchase and repayment of Debt securities issued | –28 | –212 | –408 | –1,393 | –3,629 |
| Additional Tier 1 capital | – | – | 414 | – | – |
| Other cash flows from financing activities | –49 | –46 | –104 | –91 | –102 |
| Cash flow from financing activities | –1,120 | 5,181 | –2,807 | 5,886 | 3,923 |
| Cash flow for the period | –497 | 5,202 | –1,424 | 5,944 | 1,942 |
| Cash at beginning of the period | 4,905 | 4,614 | 5,804 | 3,840 | 3,840 |
| Translation difference | 27 | 17 | 55 | 49 | 22 |
| Cash at end of the period1) | 4,435 | 9,833 | 4,435 | 9,833 | 5,804 |
1) Comprised of Cash, Treasury bills and Treasury bonds and Lending to credit institutions.
Statement by the CEO
2020
Financial statements Financial statements
| SEK m | Quarter 3 2020 |
Quarter 3 2019 |
Jan–Sep 2020 |
Jan–Sep 2019 |
Full-year 2019 |
|---|---|---|---|---|---|
| Interest income | 402 | 455 | 1,281 | 1,375 | 1,813 |
| Interest expense | –131 | –124 | –397 | –331 | –458 |
| Net interest income | 271 | 331 | 884 | 1,044 | 1,355 |
| Dividends received | – | 10 | – | 10 | 10 |
| Fee and commission income | 1 | 1 | 3 | 4 | 5 |
| Net result from financial transactions | 3 | –75 | –93 | –119 | –147 |
| Derecognition gains and losses | 0 | –2 | –1 | –6 | –8 |
| Other operating income | 66 | 54 | 224 | 173 | 232 |
| Total operating income | 341 | 319 | 1,017 | 1,106 | 1,447 |
| Personnel expenses | –95 | –117 | –291 | –307 | –393 |
| Other administrative expenses | –185 | –190 | –598 | –535 | –767 |
| Depreciation and amortisation of tangible and intangible assets | –12 | –13 | –43 | –38 | –49 |
| Total operating expenses | –292 | –320 | –932 | –880 | –1,209 |
| Profit before credit losses | 49 | –1 | 85 | 226 | 238 |
| Impairment gains and losses | 0 | 6 | –71 | 41 | 56 |
| Share of profit from joint ventures | 13 | 17 | 49 | 45 | 71 |
| Net operating profit/loss | 62 | 22 | 63 | 312 | 365 |
| Appropriations | – | – | – | – | –47 |
| Taxes | –14 | 6 | –42 | –52 | –121 |
| Net profit/loss | 48 | 28 | 21 | 260 | 197 |
| SEK m | Quarter 3 2020 |
Quarter 3 2019 |
Jan–Sep 2020 |
Jan–Sep 2019 |
Full-year 2019 |
|---|---|---|---|---|---|
| Net profit/loss | 48 | 28 | 21 | 260 | 197 |
| OTHER COMPREHENSIVE INCOME | |||||
| Items that may be reclassified subsequently to profit or loss | |||||
| Translation difference, foreign operations | 0 | 0 | 0 | 0 | 0 |
| Tax attributable to items that may be reclassifed to profit or loss | 0 | – | 0 | – | – |
| Total items that may be reclassified subsequently to profit or loss | 0 | 0 | 0 | 0 | 0 |
| Other comprehensive income for the period | 0 | 0 | 0 | 0 | 0 |
| Total comprehensive income for the period | 48 | 28 | 21 | 260 | 197 |
| Profit/loss attributable to: | |||||
| Owners of Hoist Finance AB (publ) | 25 | 12 | –44 | 212 | 134 |
| Additional Tier 1 capital holders | 23 | 16 | 65 | 48 | 63 |
Statement by the CEO
Developments Key ratios review
2020
Q2
Financial statements Financial statements
| SEK m | 30 Sep 2020 |
31 Dec 2019 |
30 Sep 2019 |
|---|---|---|---|
| ASSETS | |||
| Cash | |||
| Treasury bills and Treasury bonds | 0 | 0 | 0 |
| Lending to credit institutions | 2,077 | 2,729 | 7,436 |
| Lending to the public | 1,382 | 1,455 | 1,251 |
| Acquired loan portfolios | 8 | 13 | 15 |
| Receivables, Group companies | 6,856 | 7,394 | 5,764 |
| Bonds and other securities | 15,449 | 17,432 | 15,334 |
| Shares and participations in subsidiaries | 3,620 | 2,769 | 3,077 |
| Shares and participations in joint ventures | 900 | 807 | 779 |
| Intangible assets | 13 | 16 | 17 |
| Tangible assets | 186 | 186 | 182 |
| Other assets | 40 | 29 | 31 |
| Deferred tax assets | 267 | 290 | 334 |
| Prepayments and accrued income | 2 | 2 | 0 |
| 40 | 55 | 52 | |
| Total assets | 30,840 | 33,177 | 34,272 |
| LIABILITIES AND EQUITY | |||
| Liabilities Deposits from the public |
|||
| Tax liabilities | 18,870 | 21,435 | 21,925 |
| Other liabilities | 89 | 33 | 90 |
| Deferred tax liabilities | 917 | 912 | 1,099 |
| Accrued expenses and deferred income | 2 | 2 | 3 |
| Provisions | 81 | 60 | 86 |
| Debt securities issued | 41 | 53 | 58 |
| Subordinated debts | 5,219 | 5,431 | 5,730 |
| 854 | 852 | 868 | |
| Total liabilities and provisions | 26,073 | 28,778 | 29,859 |
| Untaxed reserves | 268 | 268 | 221 |
| Equity | |||
| Restricted equity | |||
| Share capital | 30 | 30 | 30 |
| Statutory reserve | 13 | 13 | 13 |
| Revaluation reserve | 72 | 74 | 74 |
| Development expenditure fund | 3 | 5 | 5 |
| Total restricted equity | 118 | 122 | 122 |
| Non-restricted equity | |||
| Additional Tier 1 capital holders | 1,106 | 690 | 690 |
| Share premium | 1,883 | 1,883 | 1,883 |
| Reserves | 3 | 3 | 3 |
| Retained earnings | 1,368 | 1,236 | 1,235 |
| Profit/loss for the period | 21 | 197 | 260 |
| Total unrestricted equity | 4,381 | 4,009 | 4,071 |
| Total equity | 4,499 | 4,131 | 4,193 |
| Total liabilities and equity | 30,840 | 33,177 | 34,272 |
Statement by the CEO
2020
Financial statements Financial statements
Contact & Calendar
Note 1 Accounting principles
This interim report was prepared in accordance with IAS 34, Interim Financial Reporting. The consolidated accounts were prepared in accordance with the International Financial Reporting Standards (IFRS) and interpretations thereof as adopted by the European Union. The accounting follows the Swedish Annual Accounts Act for Credit Institutions and Securities Companies (1995:1559) and the regulatory code issued by the Swedish Financial Supervisory Authority on Annual Reports in Credit Institutions and Securities Companies (FFFS 2008:25), including applicable amendments. The Swedish Financial Reporting Board's RFR 1, Supplementary Accounting Rules for Groups, has also been applied.
The Parent Company Hoist Finance AB (publ) prepares its interim reports in accordance with the Swedish Annual Accounts Act for Credit Institutions and Securities Companies (1995:1559) and the regulatory code issued by the Swedish Financial Supervisory Authority on Annual Reports in Credit Institutions and Securities Companies (FFFS 2008:25), including applicable amendments. The Swedish Financial Board's RFR 2, Accounting for Legal Entities, is also applied.
As from 1 January 2020 the amendments to IAS 39, IFRS 9 and IFRS 7 came into effect, which were made due to uncertainty arising from the ongoing interest rate benchmark reform (IBOR reform).
The amendments that are made and planned to be carried out have no effect on Hoist Finance's accounting principles as the risks that Hoist Finance elects to apply hedge accounting for do not include interest rate exposed cash flows.
No other IFRS or IFRIC Interpretations that came into effect in 2020 had any significant impact on the Group's financial reports or capital adequacy.
As regards equity in the balance sheet, Hoist Finance have accounted separately for additional Tier 1 capital and have moved shareholders' contributions from other contributed capital to retained earnings in order to improve transparency. Comparative figures have been adjusted.
In all other material respects, the Group's and Parent Company's accounting principles, bases for calculation and presentation remain unchanged from those applied in the 2019 annual report.
Hoist Finance continuously monitors the development of the Group's loan portfolios and markets and the ways in which these are impacted by Covid-19. In terms of performing loans, Hoist Finance has not found any reason to adjust our model assumptions due to Covid-19.
In terms of credit-impaired loans, new assumptions have been made based on lower expected collection performance during the next few quarters. This decrease is expected to be recovered in part through increased collections in later quarters, and to some degree constitute a permanent loss.
See Developments during the January – September 2020 period for more information.
There have been no other changes to the previous estimates, assumptions and assessments presented in the 2019 Annual Report.
| Quarter 3 2020 |
Quarter 3 2019 |
Full-year 2019 |
|---|---|---|
| 10.5569 | 10.5646 | 10.5850 |
| 10.5410 | 10.7287 | 10.4336 |
| 11.9450 | 11.9670 | 12.0706 |
| 11.5204 | 12.0696 | 12.2145 |
| 2.3886 | 2.4561 | 2.4628 |
| 2.3297 | 2.4517 | 2.4445 |
| 2.1872 | – | 2.2305 |
| 2.1634 | – | 2.1814 |
2020
Financial statements
Segment reporting has been prepared based on the manner in which executive management monitors operations. This follows statutory account preparation, with the exception of internal funding cost. The internal funding cost is included in net interest income and allocated to the segments based on acquired loan portfolio assets in relation to a fixed internal monthly interest rate for each portfolio. The difference between the external financing cost and the internal funding cost is reported in
Central Functions. This Central Functions item pertains to the net income for intra-group financial transactions.
Group costs for central and supporting functions are not allocated to the operating segments but are reported as Central Functions.
With respect to the balance sheet, only acquired loan portfolios are monitored. Other assets and liabilities are not monitored on a segment-by-segment basis.
| Income statement, Quarter 3, 2020 SEK m |
United Kingdom |
Italy | Germany | Poland | France | Other countries |
Central | Functions Eliminations | Group |
|---|---|---|---|---|---|---|---|---|---|
| Total operating income | 134 | 178 | 63 | 95 | 87 | 102 | 19 | 1 | 679 |
| of which, internal funding costs | –50 | –34 | –14 | –37 | –11 | –15 | 161 | – | 0 |
| Total operating expenses | –78 | –114 | –52 | –42 | –44 | –57 | –162 | 0 | –549 |
| Share of profit from joint ventures | – | – | – | – | – | –2 | 12 | – | 10 |
| Profit before tax | 56 | 64 | 11 | 53 | 43 | 43 | –131 | 1 | 140 |
| SEK m | United Kingdom |
Italy | Germany | Poland | France | Other countries |
Central | Functions Eliminations | Group |
|---|---|---|---|---|---|---|---|---|---|
| Total operating income | 132 | 255 | 87 | 132 | 30 | 73 | 61) | –17 | 698 |
| of which, internal funding costs | –57 | –29 | –16 | –42 | –6 | –18 | 168 | – | 0 |
| Total operating expenses | –87 | –127 | –56 | –49 | –56 | –62 | –136 | 5 | –568 |
| Share of profit from joint ventures | – | – | – | – | – | 1 | 15 | – | 16 |
| Profit before tax | 45 | 128 | 31 | 83 | –26 | 12 | –115 | –12 | 146 |
1) Dividend from subsidiaries SEK 10m.
| SEK m | United Kingdom |
Italy | Germany | Poland | France | Other countries |
Central | Functions Eliminations | Group |
|---|---|---|---|---|---|---|---|---|---|
| Total operating income | 349 | 526 | 221 | 264 | 210 | 112 | 39 | –1 | 1,720 |
| of which, internal funding costs | –162 | –112 | –44 | –120 | –33 | –47 | 518 | – | 0 |
| Total operating expenses | –247 | –352 | –161 | –136 | –130 | –205 | –519 | 0 | –1,750 |
| Share of profit from joint ventures | – | – | – | – | – | 6 | 38 | – | 44 |
| Profit before tax | 102 | 174 | 60 | 128 | 80 | –87 | –442 | –1 | 14 |
| Income statement, Jan–Sep, 2019 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| SEK m | United Kingdom |
Italy | Germany | Poland | France | Other countries |
Central | Functions Eliminations | Group |
| Total operating income | 428 | 710 | 258 | 338 | 83 | 354 | 1181) | –20 | 2,269 |
| of which, internal funding costs | –173 | –107 | –47 | –118 | –19 | –54 | 518 | – | 0 |
| Total operating expenses | –280 | –381 | –166 | –133 | –123 | –196 | –430 | 10 | –1,699 |
| Share of profit from joint ventures | – | – | – | – | – | – | 32 | – | 32 |
| Profit before tax | 148 | 329 | 92 | 205 | –40 | 158 | –280 | –10 | 602 |
1) Dividend from subsidiaries SEK 10m.
2020
Statement by the CEO
| Income statement, Full-year, 2019 | |
|---|---|
| Income statement, Full-year, 2019 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| SEK m | United Kingdom |
Italy | Germany | Poland | France | Other countries |
Central | Functions Eliminations | Group |
| Total operating income | 590 | 931 | 350 | 446 | 125 | 469 | 1531) | –26 | 3,038 |
| of which, internal funding costs | –233 | –156 | –63 | –161 | –28 | –71 | 712 | – | 0 |
| Total operating expenses | –375 | –506 | –221 | –192 | –162 | –281 | –631 | 16 | –2,352 |
| Share of profit from joint ventures | – | – | – | – | – | 9 | 53 | – | 62 |
| Profit before tax | 215 | 425 | 129 | 254 | –37 | 197 | –425 | –10 | 748 |
1) Dividend from subsidiaries SEK 10m.
| Acquired loans, 30 Sep 2020 | ||||
|---|---|---|---|---|
| -- | -- | ----------------------------- | -- | -- |
| Acquired loans, 30 Sep 2020 | United | Other | Central | |||||
|---|---|---|---|---|---|---|---|---|
| SEK m | Kingdom | Italy | Germany | Poland | France | countries | Functions | Group |
| Run-off consumer loan portfolio | – | – | 8 | – | – | – | – | 8 |
| Acquired loan portfolios | 5,500 | 5,908 | 2,094 | 3,509 | 2,653 | 2,581 | – | 22,245 |
| Shares and participations in joint ventures1) | – | – | – | – | – | – | 179 | 179 |
| Acquired loans | 5,500 | 5,908 | 2,102 | 3,509 | 2,653 | 2,581 | 179 | 22,432 |
1) Refers to the value of shares and participations in joint ventures in Poland with acquired loan portfolios and is therefore not equivalent to corresponding item in the balance sheet.
| Acquired loans, 31 Dec 2019 | United | Other | Central | ||||||
|---|---|---|---|---|---|---|---|---|---|
| SEK m | Kingdom | Italy | Germany | Poland | France | countries | Functions | Group | |
| Run-off consumer loan portfolio | – | – | 10 | – | – | – | – | 10 | |
| Acquired loan portfolios | 6,303 | 6,165 | 2,172 | 3,865 | 2,827 | 2,971 | – | 24,303 | |
| Shares and participations in joint ventures1) | – | – | – | – | – | – | 200 | 200 | |
| Acquired loans | 6,303 | 6,165 | 2,182 | 3,865 | 2,827 | 2,971 | 200 | 24,513 |
1) Refers to the value of shares and participations in joint ventures in Poland with acquired loan portfolios and is therefore not equivalent to corresponding item in the balance sheet.
| Acquired loans, 30 Sep 2019 | ||||||||
|---|---|---|---|---|---|---|---|---|
| SEK m | United Kingdom |
Italy | Germany | Poland | France | Other countries |
Central Functions |
Group |
| Run-off consumer loan portfolio | – | – | 12 | – | – | – | – | 12 |
| Acquired loan portfolios | 6,143 | 6,195 | 2,233 | 3,667 | 1,164 | 4,156 | – | 22,394 |
| Shares and participations in joint ventures1) | – | – | – | – | – | – | 198 | 198 |
| Acquired loans | 6,143 | 6,195 | 2,245 | 3,667 | 1,164 | 4,156 | 198 | 22,604 |
1) Refers to the value of shares and participations in joint ventures in Poland with acquired loan portfolios and is therefore not equivalent to corresponding item in the balance sheet.
| SEK m | GROUP | PARENT CO M PANY | ||||||
|---|---|---|---|---|---|---|---|---|
| 30 Sep 2020 |
31 Dec 2019 |
30 Sep 2019 |
30 Sep 2020 |
31 Dec 2019 |
30 Sep 2019 |
|||
| Gross carrying amount | 22,312 | 23,921 | 22,027 | 6,799 | 7,267 | 5,649 | ||
| Loss allowance | –67 | 382 | 367 | 57 | 127 | 115 | ||
| Net carrying amount | 22,245 | 24,303 | 22,394 | 6,856 | 7,394 | 5,764 |
| 30 Sep 2020 | GROUP | PARENT COM PANY | |||||
|---|---|---|---|---|---|---|---|
| SEK m | Gross carrying amount |
Loss allowance |
Net carrying amount |
Gross carrying amount |
Loss allowance |
Net carrying amount |
|
| Opening balance 1 Jan 2020 | 23,009 | 387 | 23,396 | 6,922 | 130 | 7,052 | |
| Acquisitions | 871 | – | 871 | 277 | – | 277 | |
| Interest income | 2,476 | – | 2,476 | 773 | – | 773 | |
| Gross collections | –4,577 | – | –4,577 | –1,546 | – | –1,546 | |
| Impairment gains and losses | – | –408 | –408 | – | –71 | –71 | |
| Disposals | 40 | –40 | 0 | – | – | – | |
| Translation differences | –322 | –1 | –323 | 71 | 1 | 72 | |
| Closing balance 30 Sep 2020 | 21,497 | –62 | 21,435 | 6,497 | 60 | 6,557 |
| 31 Dec 2019 | GROUP | PARENT COM PANY | |||||
|---|---|---|---|---|---|---|---|
| SEK m | Gross carrying amount |
Loss allowance |
Net carrying amount |
Gross carrying amount |
Loss allowance |
Net carrying amount |
|
| Opening balance 1 Jan 2019 | 19,334 | 262 | 19,596 | 5,133 | 63 | 5,196 | |
| Acquisitions | 5,952 | – | 5,952 | 2,647 | – | 2,647 | |
| Interest income | 3,271 | – | 3,271 | 936 | – | 936 | |
| Gross collections | – 6,179 | – | – 6,179 | –1,877 | – | –1,877 | |
| Impairment gains and losses | – | 122 | 122 | – | 67 | 67 | |
| Disposals | 0 | – | 0 | – | – | – | |
| Translation differences | 631 | 3 | 634 | 83 | 0 | 83 | |
| Closing balance 31 Dec 2019 | 23,009 | 387 | 23,396 | 6,922 | 130 | 7,052 |
review
| Sep 2019 | GROUP | PARENT COM PANY | |||||
|---|---|---|---|---|---|---|---|
| SEK m | Gross carrying amount |
Loss allowance |
Net carrying amount |
Gross carrying amount |
Loss allowance |
Net carrying amount |
|
| Opening balance 1 Jan 2019 | 19,334 | 262 | 19,596 | 5,133 | 63 | 5,196 | |
| Acquisitions | 2,964 | – | 2,964 | 627 | – | 627 | |
| Interest income | 2,426 | – | 2,426 | 690 | – | 690 | |
| Gross collections | –4,557 | – | –4,557 | –1,386 | – | –1,386 | |
| Impairment gains and losses | – | 100 | 100 | – | 52 | 52 | |
| Translation differences | 917 | 9 | 926 | 227 | 3 | 230 | |
| Closing balance 30 Sep 2019 | 21,084 | 371 | 21,455 | 5,291 | 118 | 5,409 |
| 30 Sep 2020 | GROUP | |||||||
|---|---|---|---|---|---|---|---|---|
| SEK m | Gross carrying amount |
Stage 1 12M ECL |
Stage 2 LECL |
Stage 3 LECL |
Loss allowance |
Net carrying amount |
||
| Opening balance 1 Jan 2020 | 912 | –1 | 0 | –4 | –5 | 907 | ||
| Interest income | 49 | – | – | – | – | 49 | ||
| Amortisations and interest payments | –106 | – | – | – | – | –106 | ||
| Changes in risk parameters | – | 0 | 0 | –1 | –1 | –1 | ||
| Derecognitions | –1 | – | – | – | – | –1 | ||
| Translation differences | –38 | 0 | 0 | 0 | 0 | –38 | ||
| Closing balance 30 Sep 2020 | 816 | –1 | 0 | –5 | –6 | 810 |
| 31 Dec 2019 | GROUP | |||||||
|---|---|---|---|---|---|---|---|---|
| SEK m | Gross carrying amount |
Stage 1 12M ECL |
Stage 2 LECL |
Stage 3 LECL |
Loss allowance |
Net carrying amount |
||
| Opening balance 1 Jan 2019 | 1,012 | –2 | 0 | –1 | –3 | 1,009 | ||
| Interest income | 88 | – | – | – | – | 88 | ||
| Amortisations and interest payments | –220 | – | – | – | – | –220 | ||
| Changes in risk parameters | – | 1 | 0 | –3 | –2 | –2 | ||
| Derecognitions | –9 | – | – | – | – | –9 | ||
| Translation differences | 41 | 0 | 0 | 0 | 0 | 41 | ||
| Closing balance 31 Dec 2019 | 912 | –1 | 0 | –4 | –5 | 907 |
2020
| 30 Sep 2019 | GROUP | |||||||
|---|---|---|---|---|---|---|---|---|
| SEK m | Gross carrying amount |
Stage 1 12M ECL |
Stage 2 LECL |
Stage 3 LECL |
Loss allowance |
Net carrying amount |
||
| Opening balance 1 Jan 2019 | 1,012 | –2 | 0 | –1 | –3 | 1,009 | ||
| Interest income | 69 | – | – | – | – | 69 | ||
| Amortisations and interest payments | –172 | – | – | – | – | –172 | ||
| Changes in risk parameters | – | 1 | 0 | –2 | –1 | –1 | ||
| Derecognitions | –7 | – | – | – | – | –7 | ||
| Translation differences | 41 | 0 | 0 | 0 | 0 | 41 | ||
| Closing balance 30 Sep 2019 | 943 | –1 | 0 | –3 | –4 | 939 |
| 30 Sep 2020 | PARENT COM PANY | |||||
|---|---|---|---|---|---|---|
| SEK m | Gross carrying amount |
Stage 1 12M ECL |
Stage 2 LECL |
Stage 3 LECL |
Loss allowance |
Net carrying amount |
| Opening balance 1 Jan 2020 | 345 | 0 | 0 | –3 | –3 | 342 |
| Interest income | 15 | – | – | – | – | 15 |
| Amortisations and interest payments | –40 | – | – | – | – | –40 |
| Changes in risk parameters | – | 0 | 0 | – | 0 | 0 |
| Derecognitions | –1 | – | – | – | – | –1 |
| Translation differences | –18 | 0 | 0 | 0 | 0 | –18 |
| Closing balance 30 Sep 2020 | 301 | 0 | 0 | –3 | –3 | 298 |
| 31 Dec 2019 | PARENT COM PANY | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| SEK m | Gross carrying amount |
Stage 1 12M ECL |
Stage 2 LECL |
Stage 3 LECL |
Loss allowance |
Net carrying amount |
|||
| Opening balance 1 Jan 2019 | 399 | –1 | 0 | –1 | –2 | 397 | |||
| Interest income | 34 | – | – | – | – | 34 | |||
| Amortisations and interest payments | –107 | – | – | – | – | –107 | |||
| Changes in risk parameters | – | 1 | 0 | –2 | –1 | –1 | |||
| Derecognitions | –8 | – | – | – | – | –8 | |||
| Translation differences | 27 | 0 | 0 | 0 | 0 | 27 | |||
| Closing balance 31 Dec 2019 | 345 | 0 | 0 | –3 | –3 | 342 |
| SEK m | Gross carrying amount |
Stage 1 12M ECL |
Stage 2 LECL |
Stage 3 LECL |
Loss allowance |
Net carrying amount |
|---|---|---|---|---|---|---|
| Opening balance 1 Jan 2019 | 399 | –1 | 0 | –1 | –2 | 397 |
| Interest income | 27 | – | – | – | – | 27 |
| Amortisations and interest payments | –87 | – | – | – | – | –87 |
| Changes in risk parameters | – | 1 | 0 | –2 | –1 | –1 |
| Derecognitions | – 6 | – | – | – | – | – 6 |
| Translation differences | 25 | 0 | 0 | 0 | 0 | 25 |
| Closing balance 30 Sep 2019 | 358 | 0 | 0 | –3 | –3 | 355 |
Statement by the CEO
review
Note 5 Financial instruments
| G R O U P, 3 0 S E P 2 0 2 0 | ||||||
|---|---|---|---|---|---|---|
| Assets/liabilities recognised at fair value through profit or loss |
||||||
| SEK m | Held for trading |
Mandatorily | Hedging instrument |
Amortised cost |
Total carrying amount |
Fair value |
| Cash | – | – | – | 0 | 0 | 0 |
| Treasury bills and treasury bonds | – | 2,077 | – | – | 2,077 | 2,077 |
| Lending to credit institutions | – | – | – | 2,358 | 2,358 | 2,358 |
| Lending to the public | – | – | – | 8 | 8 | 8 |
| Acquired loan portfolios | – | – | – | 22,245 | 22,245 | 23,135 |
| Bonds and other securities | – | 3,620 | – | – | 3,620 | 3,620 |
| Derivatives | – | – | 981) | – | 98 | 98 |
| Other financial assets | – | – | – | 253 | 253 | 253 |
| Total | – | 5,697 | 98 | 24,864 | 30,659 | 31,549 |
| Deposits from the public | – | – | – | 18,870 | 18,870 | 18,870 |
| Derivatives | 42 | – | 81) | – | 50 | 50 |
| Debt securities issued | – | – | – | 5,645 | 5,645 | 5,668 |
| Subordinated debt | – | – | – | 854 | 854 | 721 |
| Other financial debts | – | – | – | 741 | 741 | 741 |
| Total | 42 | – | 8 | 26,110 | 26,160 | 26,050 |
1) Derivatives recognised as hedging instruments is valued at fair value through other comprehensive income.
| G R O U P, 3 1 D EC 2 0 1 9 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Assets/liabilities recognised at fair value through profit or loss |
||||||||
| SEK m | Held for trading |
Mandatorily | Hedging instrument |
Amortised cost |
Total carrying amount |
Fair value |
||
| Cash | – | – | – | 0 | 0 | 0 | ||
| Treasury bills and treasury bonds | – | 2,729 | – | – | 2,729 | 2,729 | ||
| Lending to credit institutions | – | – | – | 3,075 | 3,075 | 3,075 | ||
| Lending to the public | – | – | – | 10 | 10 | 10 | ||
| Acquired loan portfolios | – | – | – | 24,303 | 24,303 | 25,820 | ||
| Bonds and other securities | – | 2,769 | – | – | 2,769 | 2,769 | ||
| Derivatives | 41 | – | 661) | – | 107 | 107 | ||
| Other financial assets | – | – | – | 367 | 367 | 367 | ||
| Total | 41 | 5,498 | 66 | 27,755 | 33,360 | 34,877 | ||
| Deposits from the public | – | – | – | 21,435 | 21,435 | 21,435 | ||
| Derivatives | 29 | – | 61) | – | 35 | 35 | ||
| Debt securities issued | – | – | – | 5,900 | 5,900 | 6,209 | ||
| Subordinated debt | – | – | – | 852 | 852 | 840 | ||
| Other financial debts | – | – | – | 896 | 896 | 896 | ||
| Total | 29 | 6 | 29,083 | 29,118 | 29,415 |
1) Derivatives recognised as hedging instruments is valued at fair value through other comprehensive income.
Statement by the CEO
review
Financial statements
Note 5 Financial instruments, cont.
| G R O U P, 3 0 S E P 2 0 1 9 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Assets/liabilities recognised at | fair value through profit or loss | |||||||||
| SEK m | Held for trading |
Mandatorily | Hedging instrument |
Amortised cost |
Total carrying amount |
Fair value |
||||
| Cash | – | – | – | 0 | 0 | 0 | ||||
| Treasury bills and treasury bonds | – | 7,436 | – | – | 7,436 | 7,436 | ||||
| Lending to credit institutions | – | – | – | 2,397 | 2,397 | 2,397 | ||||
| Lending to the public | – | – | – | 12 | 12 | 12 | ||||
| Acquired loan portfolios | – | – | – | 22,394 | 22,394 | 23,976 | ||||
| Bonds and other securities | – | 3,077 | – | – | 3,077 | 3,077 | ||||
| Derivatives | 32 | – | – | – | 32 | 32 | ||||
| Other financial assets | – | – | – | 366 | 366 | 366 | ||||
| Total | 32 | 10,513 | – | 25,169 | 35,714 | 37,296 | ||||
| Deposits from the public | – | – | – | 21,925 | 21,925 | 21,925 | ||||
| Derivatives | 83 | – | 641) | – | 147 | 147 | ||||
| Debt securities issued | – | – | – | 7,868 | 7,868 | 8,088 | ||||
| Subordinated debt | – | – | – | 868 | 868 | 858 | ||||
| Other financial debts | – | – | – | 802 | 802 | 802 | ||||
| Total | 83 | – | 64 | 31,463 | 31,610 | 31,820 |
1) Derivatives recognised as hedging instruments is valued at fair value through other comprehensive income.
| PA R E N T C O M PA N Y, 3 0 S E P 2 0 2 0 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Assets/liabilities recognised at | fair value through profit or loss | ||||||||
| SEK m | Held for trading |
Mandatorily | Hedging instrument |
Amortised cost |
Total carrying amount |
Fair value |
|||
| Cash | – | – | – | 0 | 0 | 0 | |||
| Treasury bills and treasury bonds | – | 2,077 | – | – | 2,077 | 2,077 | |||
| Lending to credit institutions | – | – | – | 1,382 | 1,382 | 1,382 | |||
| Lending to the public | – | – | – | 8 | 8 | 8 | |||
| Acquired loan portfolios | – | – | – | 6,856 | 6,856 | 7,230 | |||
| Receivables, Group companies | – | 11 | – | 15,438 | 15,449 | 15,468 | |||
| Bonds and other securities | – | 3,620 | – | – | 3,620 | 3,620 | |||
| Derivatives | – | – | 981) | – | 98 | 98 | |||
| Other financial assets | – | – | – | 155 | 155 | 155 | |||
| Total | – | 5,708 | 98 | 23,839 | 29,645 | 30,038 | |||
| Deposits from the public | – | – | – | 18,870 | 18,870 | 18,870 | |||
| Derivatives | 42 | – | 81) | – | 50 | 50 | |||
| Debt securities issued | – | – | – | 5,219 | 5,219 | 5,209 | |||
| Subordinated debt | – | – | – | 854 | 854 | 721 | |||
| Other financial debts | – | – | – | 929 | 929 | 929 | |||
| Total | 42 | – | 8 | 25,872 | 25,922 | 25,779 |
1) Derivatives recognised as hedging instruments is valued at fair value through other comprehensive income.
Statement by the CEO
2020
Note 5 Financial instruments, cont.
| PA R E N T C O M PA N Y, 3 1 D EC 2 0 1 9 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Assets/liabilities recognised at fair value through profit or loss |
|||||||||||
| SEK m | Held for trading |
Mandatorily | Hedging instrument |
Amortised cost |
Total carrying amount |
Fair value |
|||||
| Cash | – | – | – | 0 | 0 | 0 | |||||
| Treasury bills and treasury bonds | – | 2,729 | – | – | 2,729 | 2,729 | |||||
| Lending to credit institutions | – | – | – | 1,455 | 1,455 | 1,455 | |||||
| Lending to the public | – | – | – | 13 | 13 | 13 | |||||
| Acquired loan portfolios | – | – | – | 7,394 | 7,394 | 7,940 | |||||
| Receivables, Group companies | – | 9 | – | 17,423 | 17,432 | 17,432 | |||||
| Bonds and other securities | – | 2,769 | – | – | 2,769 | 2,769 | |||||
| Derivatives | 41 | – | 661) | – | 107 | 107 | |||||
| Other financial assets | – | – | – | 173 | 173 | 173 | |||||
| Total | 41 | 5,507 | 66 | 26,458 | 32,072 | 32,618 | |||||
| Deposits from the public | – | – | – | 21,435 | 21,435 | 21,435 | |||||
| Derivatives | 29 | – | 61) | – | 35 | 35 | |||||
| Debt securities issued | – | – | – | 5,431 | 5,431 | 5,703 | |||||
| Subordinated debt | – | – | – | 852 | 852 | 840 | |||||
| Other financial debts | – | – | – | 911 | 911 | 911 | |||||
| Total | 29 | – | 6 | 28,629 | 28,664 | 28,924 |
1) Derivatives recognised as hedging instruments is valued at fair value through other comprehensive income.
| PA R E N T C O M PA N Y, 3 0 S E P 2 0 1 9 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Assets/liabilities recognised at fair value through profit or loss |
|||||||||||
| SEK m | Held for trading |
Mandatorily | Hedging instrument |
Amortised cost |
Total carrying amount |
Fair value |
|||||
| Cash | – | – | – | 0 | 0 | 0 | |||||
| Treasury bills and treasury bonds | – | 7,436 | – | – | 7,436 | 7,436 | |||||
| Lending to credit institutions | – | – | – | 1,251 | 1,251 | 1,251 | |||||
| Lending to the public | – | – | – | 15 | 15 | 15 | |||||
| Acquired loan portfolios | – | – | – | 5,764 | 5,764 | 6,259 | |||||
| Receivables, Group companies | – | 113 | – | 15,221 | 15,334 | 15,334 | |||||
| Bonds and other securities | – | 3,077 | – | – | 3,077 | 3,077 | |||||
| Derivatives | 32 | – | – | – | 32 | 32 | |||||
| Other financial assets | – | – | – | 224 | 224 | 224 | |||||
| Total | 32 | 10,626 | – | 22,475 | 33,133 | 33,628 | |||||
| Deposits from the public | – | – | – | 21,925 | 21,925 | 21,925 | |||||
| Derivatives | 83 | – | 641) | – | 147 | 147 | |||||
| Debt securities issued | – | – | – | 5,730 | 5,730 | 5,953 | |||||
| Subordinated debt | – | – | – | 868 | 868 | 858 | |||||
| Other financial debts | – | – | – | 1,089 | 1,089 | 1,089 | |||||
| Total | 83 | – | 64 | 29,612 | 29,759 | 29,972 |
1) Derivatives recognised as hedging instruments is valued at fair value through other comprehensive income.
Statement by the CEO
2020
The Group uses observable data to the greatest possible extent when determining the fair value of an asset or liability. Fair values are categorised in different levels based on the input data used in the measurement approach, as per the following:
on markets that are not active, or other valuation techniques in which all important input data is directly or indirectly observable in the market.
Level 3) According to inputs that are not based on observable market data. This category includes all instruments for which the valuation technique is based on data that is not observable and has a substantial impact on the valuation.
| G R O U P, 3 0 S E P 2 0 2 0 | PA R E N T C O M PA N Y, 3 0 S E P 2 0 2 0 | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| SEK m | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |
| Treasury bills and Treasury bonds | 2,077 | – | – | 2,077 | 2,077 | – | – | 2,077 | |
| Bonds and other securities | 3,620 | – | – | 3,620 | 3,620 | – | – | 3,620 | |
| Receivables, Group companies1) | – | – | – | – | – | – | 11 | 11 | |
| Derivatives | – | 98 | – | 98 | – | 98 | – | 98 | |
| Total assets | 5,697 | 98 | – | 5,795 | 5,697 | 98 | 11 | 5,806 | |
| Derivatives | – | 50 | – | 50 | – | 50 | – | 50 | |
| Total liabilities | – | 50 | – | 50 | – | 50 | – | 50 |
1) Receivables from Group companies pertain junior notes issued by the subsidiary Marathon SPV S.r.l valued at fair value.
| G R O U P, 3 1 D EC 2 0 1 9 | PA R E N T C O M PA N Y, 3 1 D EC 2 0 1 9 | |||||||
|---|---|---|---|---|---|---|---|---|
| SEK m | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total |
| Treasury bills and Treasury bonds | 2,729 | – | – | 2,729 | 2,729 | – | – | 2,729 |
| Bonds and other securities | 2,769 | – | – | 2,769 | 2,769 | – | – | 2,769 |
| Receivables, Group companies1) | – | – | – | – | – | – | 9 | 9 |
| Derivatives | – | 107 | – | 107 | – | 107 | – | 107 |
| Total assets | 5,498 | 107 | – | 5,605 | 5,498 | 107 | 9 | 5,614 |
| Derivatives | – | 35 | – | 35 | – | 35 | – | 35 |
| Total liabilities | – | 35 | – | 35 | – | 35 | – | 35 |
1) Receivables from Group companies pertain junior notes issued by the subsidiary Marathon SPV S.r.l valued at fair value.
| G R O U P, 3 0 S E P 2 0 1 9 | PA R E N T C O M PA N Y, 3 0 S E P 2 0 1 9 | |||||||
|---|---|---|---|---|---|---|---|---|
| SEK m | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total |
| Treasury bills and Treasury bonds | 7,436 | – | – | 7,436 | 7,436 | – | – | 7,436 |
| Bonds and other securities | 3,077 | – | – | 3,077 | 3,077 | – | – | 3,077 |
| Receivables, Group companies1) | – | – | – | – | – | – | 113 | 113 |
| Derivatives | – | 32 | – | 32 | – | 32 | – | 32 |
| Total assets | 10,513 | 32 | – | 10,545 | 10,513 | 32 | 113 | 10,658 |
| Derivatives | – | 147 | – | 147 | – | 147 | – | 147 |
| Total liabilities | – | 147 | – | 147 | – | 147 | – | 147 |
1) Receivables from Group companies pertain junior notes issued by the subsidiary Pinzolo SPV S.r.l valued at fair value.
Statement by the CEO
2020
Financial statements
The information in this Note includes information that is required to be disclosed pursuant to FFFS 2008:25, including applicable amendments, regarding annual reports for credit institutions and FFFS 2014:12, including applicable amendments, concerning supervisory requirements and capital buffers. The information refers to the Hoist Finance AB (publ) consolidated situation ("Hoist Finance") and Hoist Finance AB (publ), the regulated entity.
The Company's statutory capital requirements are determined primarily by Regulation (EU) No 575/2013 of the European Parliament and of the Council and the Capital Buffers Act (SFS 2014:966).
The difference between the consolidated accounts and the consolidated situation for capital adequacy purposes is as follows. Joint ventures are consolidated with the equity method in the consolidated accounts, whereas the proportional method is used for the consolidated situation. Securitised assets are recognised in the consolidated accounts but are
removed from the accounting records for the consolidated situation. Hoist Finance's participating interest in the securitised assets is always covered.
After obtaining FSA approval, Hoist Finance has decided to apply the transitional rules regarding IFRS 9 for the period 30 April 2018 through 31 December 2022. Application of these transitional rules allow the gradual phase-in of expected credit losses to capital adequacy.
The table below shows own funds used to cover the capital requirements for Hoist Finance consolidated situation and the regulated entity Hoist Finance AB (publ).
| HOIST FINANCE C O N S O L I DAT E D S I T UAT I O N |
HOIST FINANCE AB (PUBL) | ||||||
|---|---|---|---|---|---|---|---|
| SEK m | 30 Sep 2020 |
31 Dec 2019 |
30 Sep 2019 |
30 Sep 2020 |
31 Dec 2019 |
30 Sep 2019 |
|
| Capital instruments and related share premium accounts | 1,913 | 1,913 | 1,913 | 1,913 | 1,913 | 1,913 | |
| Retained earnings | 2,073 | 1,534 | 1,547 | 948 | 819 | 832 | |
| Accumulated comprehensive income and other reserves | 74 | 133 | 168 | 693 | 694 | 658 | |
| Independently reviewed interim profits net of any foreseeable charge or dividend1) |
–3 | 605 | 392 | 21 | 197 | 260 | |
| Intangible assets (net of related tax liability) | –370 | –382 | –382 | –186 | –186 | –182 | |
| Deferred tax assets that rely on future profitability | –84 | –27 | –26 | –2 | –2 | 0 | |
| Exposure amount of securitisation positions which qualify for a RW of 1.250 %, where the institution opts for the deduction alternative |
–9 | –9 | –113 | –9 | –9 | – | |
| Other transitional arrangements | 4 | 4 | 4 | 2 | 2 | 2 | |
| Common Equity Tier 1 | 3,598 | 3,771 | 3,503 | 3,380 | 3,428 | 3,483 | |
| Capital instruments and the related share premium accounts | 1,106 | 690 | 690 | 1,106 | 690 | 690 | |
| Additional Tier 1 capital | 1,106 | 690 | 690 | 1,106 | 690 | 690 | |
| Tier 1 capital | 4,704 | 4,461 | 4,193 | 4,486 | 4,118 | 4,173 | |
| Capital instruments and the related share premium accounts | 854 | 852 | 868 | 854 | 852 | 868 | |
| Tier 2 capital | 854 | 852 | 868 | 854 | 852 | 868 | |
| Total own funds | 5,558 | 5,313 | 5,061 | 5,340 | 4,970 | 5,041 |
1) The Board of Directors will recommend to the Annual General Meeting not to pay any dividend for the financial year 2020. Therefore no dividend deduction has been included.
The tables below show the risk-weighted exposure amounts and own funds requirements per risk category for Hoist Finance and the regulated entity Hoist Finance AB (publ).
| HOIST FINANCE Risk-weighted exposure amounts C O N S O L I DAT E D S I T UAT I O N |
HOIST FINANCE AB (PUBL) | |||||||
|---|---|---|---|---|---|---|---|---|
| SEK m | 30 Sep 2020 |
31 Dec 2019 |
30 Sep 2019 |
30 Sep 2020 |
31 Dec 2019 |
30 Sep 2019 |
||
| Exposures to central governments or central banks | 0 | 0 | 0 | 0 | 0 | 0 | ||
| Exposures to regional governments or local authorities | 0 | 0 | 0 | 0 | 0 | 0 | ||
| Exposures to institutions | 620 | 752 | 559 | 332 | 363 | 311 | ||
| of which, counterparty credit risk | 44 | 60 | 34 | 44 | 60 | 34 | ||
| Exposures to corporates | 211 | 319 | 248 | 13,316 | 14,565 | 15,462 | ||
| Retail exposures | 30 | 38 | 46 | 25 | 33 | 40 | ||
| Exposures secured by mortgages on immovable property | 379 | 368 | 378 | 88 | 101 | 104 | ||
| Exposures in default | 26,224 | 28,746 | 28,433 | 9,221 | 10,043 | 8,203 | ||
| Exposures in the form of covered bonds | 362 | 277 | 308 | 362 | 277 | 308 | ||
| Equity exposures | – | – | – | 900 | 807 | 779 | ||
| Other items | 398 | 382 | 416 | 80 | 84 | 84 | ||
| Credit risk (standardised approach) | 28,224 | 30,882 | 30,388 | 24,324 | 26,273 | 25,291 | ||
| Securitisation positions in the banking book (external ratings-based approach) | 2,237 | 2,984 | – | 2,237 | 2,984 | – | ||
| Market risk (foreign exchange risk – standardised approach) | 0 | 78 | 77 | 0 | 78 | 77 | ||
| Operational risk (standardised approach) | 3,935 | 3,935 | 3,542 | 1,916 | 1,916 | 1,476 | ||
| Credit valuation adjustment (standardised approach) | 42 | 48 | 31 | 42 | 48 | 31 | ||
| Total risk-weighted exposure amount | 34,438 | 37,927 | 34,038 | 28,519 | 31,299 | 26,875 |
| HOIST FINANCE Capital requirements C O N S O L I DAT E D S I T UAT I O N |
HOIST FINANCE AB (PUBL) | ||||||
|---|---|---|---|---|---|---|---|
| SEK m | 30 Sep 2020 |
31 Dec 2019 |
30 Sep 2019 |
30 Sep 2020 |
31 Dec 2019 |
30 Sep 2019 |
|
| Pillar 1 | |||||||
| Exposures to central governments or central banks | 0 | 0 | 0 | 0 | 0 | 0 | |
| Exposures to regional governments or local authorities | 0 | 0 | 0 | 0 | 0 | 0 | |
| Exposures to institutions | 50 | 60 | 45 | 27 | 29 | 25 | |
| of which, counterparty credit risk | 4 | 5 | 3 | 4 | 5 | 3 | |
| Exposures to corporates | 17 | 26 | 20 | 1,065 | 1,165 | 1,237 | |
| Retail exposures | 2 | 3 | 4 | 2 | 3 | 3 | |
| Exposures secured by mortgages on immovable property | 30 | 29 | 30 | 7 | 8 | 8 | |
| Exposures in default | 2,098 | 2,300 | 2,275 | 738 | 803 | 656 | |
| Exposures in the form of covered bonds | 29 | 22 | 25 | 29 | 22 | 25 | |
| Equity exposures | – | – | – | 72 | 65 | 62 | |
| Other items | 32 | 31 | 33 | 6 | 7 | 7 | |
| Credit risk (standardised approach) | 2,258 | 2,471 | 2,432 | 1,946 | 2,102 | 2,023 | |
| Securitisation positions in the banking book (external ratings-based approach) | 179 | 239 | – | 179 | 239 | – | |
| Market risk (foreign exchange risk – standardised approach) | 0 | 6 | 6 | 0 | 6 | 6 | |
| Operational risk (standardised approach) | 315 | 315 | 283 | 153 | 153 | 118 | |
| Credit valuation adjustment (standardised approach) | 3 | 4 | 3 | 3 | 4 | 3 | |
| Total own funds requirement – Pillar 1 | 2,755 | 3,035 | 2,724 | 2,281 | 2,504 | 2,150 |
Statement by the CEO
review
| SEK m | 30 Sep 2020 |
31 Dec 2019 |
30 Sep 2019 |
30 Sep 2020 |
31 Dec 2019 |
30 Sep 2019 |
|---|---|---|---|---|---|---|
| Pillar 2 | ||||||
| Concentration risk | 226 | 245 | 243 | 288 | 356 | 313 |
| Interest rate risk in the banking book | 126 | 129 | 116 | 88 | 129 | 116 |
| Pension risk | – | 3 | 3 | – | 3 | 3 |
| Other Pillar 2 risks | 29 | 37 | 34 | 29 | 37 | 34 |
| Total own funds requirement – Pillar 2 | 381 | 414 | 396 | 405 | 525 | 466 |
| SEK m | 30 Sep 2020 |
31 Dec 2019 |
30 Sep 2019 |
30 Sep 2020 |
31 Dec 2019 |
30 Sep 2019 |
| Capital buffers | ||||||
| Capital conservation buffer | 861 | 948 | 851 | 713 | 783 | 672 |
| Countercyclical buffer | 0 | 128 | 121 | 0 | 94 | 87 |
| Total own funds requirement – Capital buffers | 861 | 1,076 | 972 | 713 | 877 | 759 |
| Total own funds requirements | 3,997 | 4,525 | 4,092 | 3,399 | 3,906 | 3,375 |
Regulation (EU) No 575/2013 of the European Parliament and the Council requires credit institutions to maintain Common Equity Tier 1 capital of at least 4.5 per cent, Tier 1 capital of at least 6 per cent and a total capital ratio (capital in relation to risk-weighted exposure amount) of 8 per cent. Credit institutions are also required to maintain specific capital buffers. Hoist Finance is currently required to maintain a capital conservation buffer of 2.5 per cent of the total risk-weighted exposure amount and an institutional specific countercyclical buffer of 0 per cent of the total risk-weighted exposure amount.
The table below shows CET1 capital, Tier 1 capital and the total capital ratio in relation to the total risk-weighted exposure amount for Hoist Finance and for the regulated entity Hoist Finance. It also shows the total regulatory requirements under each pillar and the institution-specific CET1 capital requirements. All capital ratios exceed the minimum requirements and capital buffer requirements.
| HOIST FINANCE C O N S O L I DAT E D S I T UAT I O N |
HOIST FINANCE AB (PUBL) | ||||||
|---|---|---|---|---|---|---|---|
| Capital ratios and capital buffers, % | 30 Sep 2020 |
31 Dec 2019 |
30 Sep 2019 |
30 Sep 2020 |
31 Dec 2019 |
30 Sep 2019 |
|
| Common Equity Tier 1 capital ratio | 10.44 | 9.94 | 10.29 | 11.84 | 10.95 | 12.96 | |
| Tier 1 capital ratio | 13.66 | 11.76 | 12.32 | 15.73 | 13.16 | 15.53 | |
| Total capital ratio | 16.14 | 14.01 | 14.87 | 18.72 | 15.88 | 18.76 | |
| Institution-specific buffer requirements for CET1 capital | 7.00 | 7.34 | 7.35 | 7.00 | 7.30 | 7.32 | |
| of which, capital conservation buffer requirement | 2.50 | 2.50 | 2.50 | 2.50 | 2.50 | 2.50 | |
| of which, countercyclical capital buffer requirement | 0.00 | 0.34 | 0.35 | 0.00 | 0.30 | 0.32 | |
| Common Equity Tier 1 capital available to meet buffers1) | 5.94 | 5.44 | 5.79 | 7.34 | 6.45 | 8.46 |
1) CET1 ratio as reported, less minimum requirement of 4.5 per cent (excluding buffer requirements) and less any CET1 items used to meet the Tier 1 and total capital requirements.
As per 30 September 2020 the internally assessed capital requirement for Hoist Finance was SEK 3,136m (3,449), of which SEK 381m (414) was attributable to Pillar 2.
Statement by the CEO
Financial statements
This note provides information required to be disclosed under the provisions of FFFS 2010:7, including applicable amendments, regarding the management of liquidity risks in credit institutions and investment firms.
Liquidity risk is the risk of difficulties in obtaining funding, and thus not being able to meet payment obligations at maturity without a significant increase in the cost of obtaining means of payment.
Because the Group's revenues and expenses are relatively stable, liquidity risk is primarily associated with the Group's funding which is based on deposits from the public. By definition this way of funding has a risk of major outflows of deposits at short notice.
The overall objective of the Group's liquidity management is to ensure that the Group maintains control over its liquidity risk situation, with sufficient funds in liquid assets or immediately saleable assets to ensure timely discharge of its payment obligations without incurring high additional costs.
Funding is mainly raised in the form of deposits from the public and through the capital markets through the issuance of senior unsecured debts, own funds instruments and equity. 31 per cent (41) of deposits from the public are payable on demand (current account – "flex"), while 69 per cent (59) of the Group's deposits from the public are locked into longer maturities (fixed-term deposits) ranging from one to five years. About 99 per cent of deposits are is fully covered by the Swedish state deposit guarantee.
Hoist Finance's short-term liquidity coverage ratio (LCR) was 965 per cent as per 30 September 2020 (755 per cent as per 31 December 2019), compared with the regulatory ratio of 100 per cent. The net stable funding ratio (NSFR) was 120 per cent (124).
| Funding | HOIST FINANCE C O N S O L I DAT E D S I T UAT I O N |
HOIST FINANCE AB (PUBL) | ||||
|---|---|---|---|---|---|---|
| SEK m | 30 Sep 2020 |
31 Dec 2019 |
30 Sep 2019 |
30 Sep 2020 |
31 Dec 2019 |
30 Sep 2019 |
| Current account deposits | 5,846 | 8,871 | 9,258 | 5,846 | 8,871 | 9,258 |
| Fixed-term deposits | 13,024 | 12,564 | 12,667 | 13,024 | 12,564 | 12,667 |
| Debt securities issued | 5,645 | 5,900 | 7,868 | 5,219 | 5,431 | 5,730 |
| Convertible debt instruments | 1,106 | 690 | 690 | 1,106 | 690 | 690 |
| Subordinated debts | 854 | 852 | 868 | 854 | 852 | 868 |
| Equity | 4,087 | 4,208 | 4,132 | 3,393 | 3,441 | 3,503 |
| Other | 1,149 | 1,302 | 1,351 | 1,398 | 1,328 | 1,556 |
| Balance sheet total | 31,711 | 34,387 | 36,834 | 30,840 | 33,177 | 34,272 |
The Group's Treasury Policy specifies a limit and a target level for the amount of available liquidity and its nature. Available liquidity totalled SEK 7,652m (8,024) as per 30 September 2020, exceeding the limit and the target level by a significant margin.
Hoist Finance's liquidity reserve, presented below pursuant to the Swedish Banker's Association's template, primarily comprises bonds issued by the Swedish government and Swedish municipalities, as well as covered bonds.
| SEK m | 30 Sep 2020 |
31 Dec 2019 |
30 Sep 2019 |
|---|---|---|---|
| Cash and holdings in central banks | 0 | 0 | 0 |
| Deposits in other banks available overnight | 1,955 | 2,526 | 2,158 |
| Securities issued or guaranteed by sovereigns, central banks or multilateral development banks | 1,296 | 2,207 | 4,712 |
| Securities issued or guaranteed by municipalities or other public sector entities | 781 | 522 | 2,724 |
| Covered bonds | 3,620 | 2,769 | 3,077 |
| Securities issued by non-financial corporates | – | – | – |
| Securities issued by financial corporates | – | – | – |
| Other | – | – | – |
| Total | 7,652 | 8,024 | 12,671 |
Hoist Finance has a liquidity contingency plan for managing liquidity risk. This identifies specific events that may trigger the contingency plan and require actions to be taken.
Statement by the CEO
2020
review
Developments Key ratios
Financial statements
Quarterly Notes Assurance Definitions
| SEK m | GROUP | PARENT COM PANY | ||||
|---|---|---|---|---|---|---|
| 30 Sep 2020 |
31 Dec 2019 |
30 Sep 2019 |
30 Sep 2020 |
31 Dec 2019 |
30 Sep 2019 |
|
| Pledges and comparable collateral for own liabilities and for reported commitments for provisions |
132 | 79 | 68 | 0 | 0 | 0 |
| GROUP | PARENT COM PANY | |||||
|---|---|---|---|---|---|---|
| SEK m | 30 Sep 2020 |
31 Dec 2019 |
30 Sep 2019 |
30 Sep 2020 |
31 Dec 2019 |
30 Sep 2019 |
| Commitments | 263 | 356 | 362 | 259 | 325 | 303 |
The Group's commitments consist of forward flow contracts. In forward flow contracts, a pre-determined volume (fixed or range) of NPLs is acquired at a pre-defined price during a certain time period.
2020
Financial statements
The Board of Directors and the CEO hereby give their assurance that the interim financial statements provide a true and fair view of the business activities, financial position and results of operations of the Group and the Parent Company, and describes the significant risks and uncertainties to which the Parent Company and Group companies are exposed.
Stockholm, 29 October 2020
Ingrid Bonde Chair of the Board
Cecilia Daun Wennborg Malin Eriksson Board member Board member
Liselotte Hjorth Robert Kraal
Board member Board member
Klaus-Anders Nysteen CEO
Board member Board member
Henrik Käll Lars Wollung
Statement by the CEO
Financial statements
Alternative performance measures (APMs) are financial measures of past or future earnings trends, financial position or cash flow that are not defined in the applicable accounting regulatory framework (IFRS), in the Capital Requirements Directive (CRD IV), or in the EU's Capital Requirement Regulation number 575/2013 (CRR). APMs are used by Hoist Finance, along with other financial measures, when relevant for monitoring and describing the financial situation and for providing additional useful information to users of the financial statements. These measures are not directly comparable with similar performance measures that are presented by other companies. C&I ratio, Return on equity, Net interest income margin and Adjusted EBITDA are alternative performance measures that provide information on Hoist Finance's profitability. "Estimated Remaining Collections" is Hoist Finance's estimate of the gross amount that can be collected on acquired loan portfolios. Definitions of alternative performance measures and other key figures are presented below. The financial fact book, available on hoistfinance.com/investors/financial-information/, provides details on the calculation of key figures.
An acquired loan portfolio consists of a number of defaulted and non-defaulted consumer loans and SME loans that arise from the same originator.
Total of acquired loan portfolios, run-off consumer loan portfolios and participations in joint ventures.
Capital instruments and associated share premium accounts that fulfil the requirements of Regulation (EU) 575/2013 of the European Parliament and the Council and that may accordingly be included in the Tier 1 capital.
EBIT (operating earnings), less depreciation and amortisation ("EBITDA"), adjusted for net of collections and interest income from acquired loan portfolios.
Net profit for the period, adjusted for interest on capital instruments recorded in equity, divided by the weighted average number of outstanding shares.
Minimum capital requirements for credit risk, market risk and operational risk.
Capital requirements beyond those stipulated in Pillar 1.
Capital instruments and the related share premium accounts that fulfil the requirements of Regulation (EU) 575/2013 of the European Parliament and the Council, and other equity items that may be included in CET1 capital, less regulatory dividend deduction and deductions for items such as goodwill and deferred tax assets.
CET1 capital in relation to the total risk exposure amount.
Total operating expenses in relation to Total operating income and Profit from shares and participations in joint ventures.
2020
Net profit for the period, adjusted for interest on capital instruments recorded in equity, divided by the weighted average number of outstanding shares after full dilution.
Fees for providing debt management services to third parties.
"Estimated Remaining Collections" – the company's estimate of the gross amount that can be collected on the credit-impaired loan portfolios currently owned by the company. The assessment is based on estimates for each loan portfolio and extends from the following month through the coming 180 months. The estimate for each loan portfolio is based on the company's extensive experience in processing and collecting over the portfolio's entire economic life.
The internal funding cost is determined per portfolio applying the following monthly interest rate: (1+annual interest)^(1/12)-1.
Items that interfere with comparison due to the irregularity of their occurrence and/or size as compared with other items.
Legal collections relate to gross collections following the initiation of Hoist Finance's litigation process. This process assesses customers' solvency and follows regulatory and legal requirements.
A mandatory requirement for banks within the EU, whereby an institution must hold a sufficiently large buffer of liquid assets to be able to withstand actual and simulated cash outflows for a period of 30 days while experiencing heavy liquidity stress.
Hoist Finance's liquidity reserve is a reserve of high-quality liquid assets which is used to carry out planned acquisitions of loan portfolios and to secure the Company's shortterm capacity to meet payment obligations in the event of lost or impaired access to regularly available funding sources.
Net interest income for the period, calculated on a full-year basis, in relation to the period's average Acquired loan portfolios, calculated as the period average based on quarterly values during the period.
Measures an institution's amount of available stable funding to cover its funding requirements under normal and stressed conditions in a one-year perspective.
Non-performing loans (NPL)
An originator's loan is non-performing as at the balance sheet date if it is past due or will be due shortly.
Number of employees at the end of the period converted to full-time posts.
Sum of Tier 1 capital and Tier 2 capital.
Changes in the carrying amount of acquired loan portfolios over the last 12 months (LTM).
Changes in the portfolio value based on revised estimated remaining collections for the portfolio.
Net profit for the period adjusted for accrued unpaid interest on AT1 capital calculated on annualised basis, divided by equity adjusted for AT1 capital reported in equity, calculated as an average for the financial year based on a quarterly basis.
The risk weight of each exposure multiplied by the exposure amount.
A company that employs fewer than 250 people and has either annual sales of EUR 50 million or less or a balance sheet total of EUR 43 million or less.
The sum of CET1 capital and additional Tier 1 capital.
Tier 1 capital as a percentage of the total risk-weighted exposure amount.
Capital instruments and the related share premium accounts that meet the requirements of Regulation (EU) 575/2013 of the European Parliament and the Council and that may accordingly be included in own funds.
Own funds as a percentage of the total risk-weighted exposure amount.
out-standing
Weighted number of shares outstanding plus potential dilutive effect of warrants outstanding.
Statement by the CEO
Financial statements
is our mission and purpose, it is what we do and why we go to work every day.
is how we see ourselves fulfilling our mission, to always be by our customers' side, how we support them to be part of and included in the financial ecosystem.
Uncomplicated, Helpful and Human is our personality.
We strive to be in markets where we are, or can become, one of the top three players. This ensures economies of scale and allows for in-depth trusted relationships with our partners.
Our culture is performance and knowledge driven. We strive for continuous improvement and embrace change, and we always want to be agile and lean, proactive and innovative.
Digital Leader We want to be the digital front-runner and inventor in our industry. Digital By Default is how we execute on this strategic pillar, and means that our digital channels are the preferred choices for us and customers.
Banking Platform Thanks to our credit market license, we can offer a deposit service, which in turn provides cheaper funding for our portfolio investments than that of our peers.
By leveraging on operational efficiency efforts to become more costeffective, we aim to reduce the cost-to-income ratio to 65 per cent in the medium term. By ensuring the right balance between growth, profitability and capital efficiency we aim to achieve a return on equity exceeding 15 per cent in the medium term.
1.75 – 3.75 percentage points above overall CET1 requirements specified by the Swedish Financial Supervisory Authority.
EPS (adjusted for AT1 costs) should by 2021 have grown by an average annual growth rate of 15 per cent compared to 2018, excluding IAC.
Hoist Finance dividend will in the long-term correspond to 25–30 per cent of annual net profit. The dividend will be determined annually, with respect to the company's capital target and the outlook for profitable growth. The Board will recommend to the Annual General Meeting (AGM) not to pay any dividend for the financial year 2020.
Year-end report 2020 9 February 2021
Investor Relations Andreas Lindblom Head of Hoist Finance IR Ph: +46 (0) 72 506 14 22 E-post: [email protected] Hoist Finance AB (publ) Corp. ID no. 556012-8489 Box 7848, 103 99 Stockholm Ph: +46 (0) 8-555 177 90 www.hoistfinance.com
The interim report and investor presentation are available at www.hoistfinance.com
Every care has been taken in the translation of this report. In the event of any discrepancy, the Swedish original will supersede the English translation.
Hoist Finance AB (publ) (the "Company" or the "Parent") is the parent company of the Hoist Finance group of companies ("Hoist Finance"). The company is a regulated credit market company. Hence, Hoist Finance produces financial statements in accordance with the Swedish Annual Accounts Act for Credit Institutions and Securities Companies.
The information in this interim report has been published by Hoist Finance AB (publ) pursuant to the EU Market Abuse Regulation and the Securities Market Act. This information was submitted by Andreas Lindblom for publication on 30 October 2020 at 7:30 AM CET.
Statement by the CEO
Developments Key ratios 2020 review
Financial statements Quarterly Notes Assurance Definitions
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.