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Resurs Holding Interim / Quarterly Report 2021
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Interim / Quarterly Report
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Interim Report
January-June 2021
Resurs Bank
First half of the year
January–June
Significant events
- Resurs sold non-performing loans to leading international investor
- Resurs appointed Sofie Tarring Lindell as the new CFO & Head of IR, focusing on Resurs's continuing profitable growth
+3%
Growth in lending excl. NPL sales
2.4%
Credit loss ratio
BBB
Credit rating from Nordic Credit Rating (April 2021)
17.4%
Total capital ratio (Regulatory requirement 11.6%)
> "During the first half of the year, a number of sustainable partnerships were entered into, digital wallets were launched and our responsible credit lending generated results. The situation in Norway is improving and society is increasingly opening up. Our lending growth amounted to 3 per cent excluding NPL sales during the year and we are capturing market shares."
Nils Carlsson, CEO Resurs Bank AB
January-June 2021
Interim Report 2021
1 January–30 June 2021*
- Lending to the public rose 1% to SEK 31.148 million, up 1% in constant currencies. Excluding NPL sales, growth was 3%.
- Operating income fell 11% to SEK 1.558 million.
- C/I before credit losses was 41.2% (38.1%)
- The credit loss ratio improved to 2.4% (3.0%)
-
Operating profit fell 12% to SEK 542 million.
-
Certain performance measures provided in this section have not been prepared in accordance with IFRS or the capital adequacy rules, meaning that they are alternative performance measures. Calculations and reconciliation against information in the financial statements of these performance measures are provided on the website under "Financial Information." Definitions of performance measures are provided on page 31. In this section, changes and comparative figures refer to the same period in the preceding year. This applies to all other sections of text in this interim report, profit/loss items and cash flow that are compared with the same period in the preceding year. The exception is for financial position for which the comparative figure refers to 31 December 2020.
Resurs Bank
Interim Report January-June 2021
About Resurs Bank
Resurs is a Nordic niche bank that offers leading payment and financing solutions for the retail industry and its customers. We help companies and private individuals with lending, saving and payments. With more than 40 years of experience in the retail sector, we make shopping online and in stores quick, easy and secure. We focus on the customer experience and make good things happen and the hard feel easier. We have a customer base of about 6 million private customers and 666 employees in the Nordics. When we use the term "Group" in this report, we are referring to the Resurs Bank Group.
Our partners
We partner with a wide variety of major brands and help them prepare flexible payment options to make shopping easier.
Resurs Bank
Interim Report Jan-Jun 2021
Statement by the CEO
Acceleration of digitalised retail and business-driven sustainability in focus
A new gear. The first half of the year has passed and the process of transforming Resurs to a more competitive, sustainable and digital player has started to yield effects. During the first half of the year, a number of sustainable partnerships were entered into, digital wallets were launched and our responsible credit lending have generated results. Our credit rating was also raised (BBB, stable outlook) as a result of an improved underlying Nordic consumer credit market and our strong position for attracting new partners. The situation in Norway is improving and society is increasingly opening up, particularly in the Danish and Norwegian markets that were completely closed in the first half-year. Growth in lending excl. NPL sales increased 3 per cent year-on-year.
+3%
Growth in lending excl.
NPL sales
Operating income for the period declined 11 per cent year-on-year. Expenses were 4 per cent lower than last year, but the cost/income ratio increased as a result of lower income. Enhancing the efficiency of the operations and thus reducing the cost/income ratio is an important part of the ongoing transformation journey. Credit losses improved as a result of responsible credit lending. In total, operating profit fell 12 per cent year-on-year.
Strong in Sweden. The Swedish market reported strong growth in both Consumer Loans and Payment Solutions due to the continuing positive performance of existing partnerships and good utilisation of our customer database. During the first half of the year, more than 85 per cent of new sales in Consumer Loans Sweden were to customers who are already in our database. Using our own database means that we can make better credit assessments by supplementing external data with internal data, which results in lower credit risk and lower acquisition costs and thus contributes to
Resurs's sustainable credit lending.
Positive tendencies in Norway. Lending volumes in the Norwegian market have fallen overall since the introduction of new legislation in the country in 2019. In 2021, we shrank less than the market as a whole in consumer loans – the largest product we offer in Norway.
We continued to report healthy growth in new lending in the first half-year, although we can still see that customers are repaying their loans in advance. To manage this, we are working in a variety of ways to improve the customer journey. For example, we launched Resurs Bank's app in Norway at the end of the first half-year.
Due to our clear Nordic focus and new agile work methods, we will be able to launch and develop our products and services to all markets at a faster pace moving forward.
Speaking of apps. We continued to see solid growth in the use of our Swedish app, with the number of downloads increasing 31 per cent between the first and second quarter of 2021. We are approaching a quarter of a million downloads since the app was launched in Q4 2020. Launches in Denmark and Finland are planned later this year.
+31%
Increase in number of downloads
of our app between Q1 and Q2
Sustainable partnerships. In line with our strategy of offering sustainable credit solutions, we signed a partner agreement with mortgage institution Hemma, a platform for the transition to sustainable homes. Together with Hemma, we will be able to offer our customers the opportunity of investing in climate-smart solutions, with the condition that the consumer loan from Resurs is used for sustainable energy investments in the home.
Resurs Bank
Interim Report Jan-Jun 2021
During the half-year, we broadened our offering of subscription solutions by entering into a partnership with Fairown in the Swedish and Norwegian markets. Together with Fairown, we can offer customers the option of subscribing for products in different industries, such as home electronics, construction, gardening and watches. The development of various types of subscription solutions involves both offering a smooth customer journey for our customers in addition to sustainability and the development of circular business models where older products can be exchanged and sold on the second-hand market.
During the half-year, we also completed our first comprehensive climate calculations according to the GHG Protocol, and this now forms the basis of our future action on reducing our impact on the environment and climate. We will present more about our updated sustainability strategy at our Capital Market Day in September.
Digital wallets for a smoother customer journey We have rolled out both Google Pay and Apple Pay – two in-demand payment services that make payments smoother and more secure – to our customers in the Nordic market. Adding a MasterCard from Resurs Bank to a digital wallet means that our customers can make secure and contactless payments via, for example, their mobile phone in stores or by verifying their identity on their mobile when they shop online or in apps. Accordingly, Resurs is taking yet another conscious step towards a more digital customer journey and positive customer experience.
2.4%
Credit loss ratio
High credit quality a condition for sustainable development. Since we actively introduced austerity measures in our credit lending when the pandemic broke out, we have seen a positive development in the underlying credit quality of our portfolios, which can also be observed in the lower credit loss ratio compared with both last year and the preceding period. This positive development is clear in both Payment Solutions and Consumer Loans and in all of our Nordic markets.
During the half-year, we also signed an agreement with PRA Group, a leading international credit management company in non-performing loans to sell parts of our non-performing loans in Norway for a gross carrying amount of approximately NOK 800 million. The sale had a positive impact on Resurs Bank's capital requirements and liquidity and ultimately had a neutral effect on earnings. The fact that we were able to carry out this type of transaction demonstrates that our underlying assets are of high quality and that we enjoy a high level of confidence in the market.
Long-term diversified financing In line with Resurs's strategy of long-term diversified financing, Resurs Bank issued senior unsecured bonds of SEK 1 050 million and NOK 600 million in the period. There was very high interest in this issue. Issuing bonds in both Sweden and Norway is proof that we are a Nordic player that intends to continue to maintain diversified financing in the long term. Nordic Credit Rating (NCR) raised our credit rating to BBB, stable outlook, in April, which gives us continuing good conditions to secure financing at favourable terms.
17.4%
Total capital ratio
(Regulatory requirement 11.7%)
What's happening in the future? There is a high level of activity across the entire Nordic organisation and we have started to accelerate on several fronts based on our solid transformation work. We are currently evaluating different suppliers of a new hypermodern and competitive fintech platform. We will present more about our transformation journey and our strategy to become a more sustainable, competitive and digital player at our Capital Market Day on 29 September 2021.
You will not want to miss it!
Resurs Bank
Interim Report Jan-Jun 2021
Performance measures
| SEKm unless otherwise specified | Jan–Jun 2021 | Jan–Jun 2020 | Change | Jan–Dec 2020 |
|---|---|---|---|---|
| Operating income | 1.558 | 1.750 | -11% | 3.407 |
| Operating profit* | 542 | 618 | -12% | 1.186 |
| Net profit for the period | 423 | 483 | -12% | 880 |
| C/I before credit losses, %* | 41.2 | 38.1 | 40.1 | |
| Common Equity Tier 1 ratio, % | 15.2 | 14.3 | 15.1 | |
| Total capital ratio, % | 17.4 | 16.7 | 17.4 | |
| Lending to the public | 31.148 | 30.853 | 1% | 30.858 |
| NIM, %* | 8.4 | 9.4 | 9.1 | |
| Risk-adjusted NBI margin, %* | 7.6 | 8.3 | 8.2 | |
| NBI margin, %* | 10.0 | 11.3 | 11.0 | |
| Credit loss ratio, %* | 2.4 | 3.0 | 2.7 | |
| Return on equity excl. intangible assets (RoTE), %* | 16.0 | 21.0 | 18.2 |
Resurs Bank
Interim Report Jan-Jun 2021
Performance measures business lines
Payment Solutions
| SEKm unless otherwise specified | Jan–Jun 2021 | Jan–Jun 2020 | Change | Jan–Dec 2020 |
|---|---|---|---|---|
| Lending to the public at end of the period | 10,688 | 10,921 | -2% | 10,994 |
| Operating income | 633 | 732 | -13% | 1,409 |
| Operating income less credit losses | 553 | 585 | -6% | 1,147 |
| Risk-adjusted NBI margin, % | 10.2 | 10.5 | 10.2 | |
| Credit loss ratio, % | 1.5 | 2.6 | 2.3 |
Consumer Loans
| SEKm unless otherwise specified | Jan–Jun 2021 | Jan–Jun 2020 | Change | Jan–Dec 2020 |
|---|---|---|---|---|
| Lending to the public at end of the period | 20,460 | 19,932 | 3% | 19,865 |
| Operating income | 924 | 1,017 | -9% | 1,999 |
| Operating income less credit losses | 631 | 700 | -10% | 1,406 |
| Risk-adjusted NBI margin, % | 6.3 | 7.0 | 7.1 | |
| Credit loss ratio, % | 2.9 | 3.2 | 3.0 |
Resurs Bank
Interim Report Jan-Jun 2021
January-June 2021
Group results*
First half of 2021, January-June
Operating income
The Group's operating income declined 11 per cent to SEK 1,558 million (1,750). Net interest income fell 12 per cent to SEK 1,296 million (1,468), with interest income amounting to SEK 1,480 million (1,681) and interest expense to SEK -184 (-213). The relatively lower income was mainly due to lower lending in Norway, lower interest income in Denmark, and mix effects in Payment Solutions where many of Resurs's retail finance partners noted higher demand in connection with the pandemic. At the same time, these large partnerships involve lower margins for Resurs, which negatively impacted the overall NBI margin.
SEK 1,558 million
Operating income for the period
Fee & commission income amounted to SEK 199 million (213) and fee & commission expense to SEK -39 million (-30), resulting in a total net commission of SEK 160 million (183). The net commission remained impacted by effects of COVID-19, attributable to lower credit card income and lower factoring income.
The market value of bond portfolios increased slightly, which resulted in a positive outcome for net income from financial transactions of SEK 2 million (-6). Other operating income, primarily comprising remuneration from lending operations, amounted to SEK 99 million (105).
Operating expenses
The Group's expenses before credit losses declined 4 per cent to SEK -642 million (-667). Viewed in relation to the operations' income, the cost level (excluding Insurance and nonrecurring costs) amounted to 41.2 per cent (38.1 per cent) as a result of the lower income level. Enhancing the efficiency of the operations and thus reducing the cost/income ratio is an important part of the ongoing transformation journey.
-4%
Expenses for the period
Credit losses totalled SEK -374 million (-464) and the credit loss ratio was 2.4 per cent (3.0 per cent), meaning a decline in both absolute terms and as a share of lending due to the higher credit quality of the loan portfolio. The high credit quality was a result of the active austerity measures implemented in credit lending when pandemic started. This positive development is clear in both Payment Solutions and Consumer Loans and in all Nordic markets. The bank has not yet seen any changed payment patterns among its customers due to COVID-19, which is why credit losses for the period were not impacted by direct effects related to COVID-19. The risk-adjusted NBI margin totalled 7.6 per cent (8.3 per cent), which was mainly due to mix changes in Payment Solutions.
Profit
Operating profit fell 12 per cent to SEK 542 million (618). Tax expense for the period amounted to SEK -119 million (-136), corresponding to an effective tax rate of 21.9 per cent (21.9 per cent). Net profit for the period amounted to SEK 423 million (483).
Resurs Bank
Interim Report Jan-Jun 2021
- Certain performance measures provided in this section have not been prepared in accordance with IFRS or the capital adequacy rules, meaning that they are alternative performance measures. Calculations and reconciliation against information in the financial statements of these performance measures are provided on the website under "Financial Information." Definitions of performance measures are provided on page 31.
Results of the 2020 19th World Health Organization (WHO) report
COVID-19
An extra forward-looking credit provision of SEK 75 million was made in the first half of 2020 to meet potential higher credit losses, in addition to the model-based reserves, in accordance with IFRS 9. The company has not noted any negative trend in customers' payment patterns. We continue to believe that the risk of default could be negatively affected from the, which has been taken into consideration in the extra credit provision. Future risks have reduced, but there is still uncertainty regarding the ongoing economic recovery and the trend in unemployment and its associated effects on customers' solvency. Currently, the overall assessment is that no changes to the loss allowance are necessary due to COVID-19.
Resurs took action at an early stage of COVID-19 to introduce temporary austerity measures in credit lending in Consumer Loans in order to ensure continued high control of the risk level, which reduced the risk in new lending in all markets, with the associated declining volumes. In addition to this, new lending in Finland was primarily negatively affected by interest limitation and direct marketing regulations that were temporarily introduced at the beginning of the second half of 2020. The direct effect on the Group's earnings was mainly related to the decline in the travel industry, which in turn has negatively impacted and is expected to continue to impact credit card commission and currency exchange fees negatively, while lower factoring activity resulted in lower commissions.
Resurs Bank
Interim Report Jan-Jun 2021
Financial position on 30 June 2021*
Comparative figures in this section refer to 31 December 2020, except for cash flow for which the comparative figure refers to the same period in the preceding year.
The Group's financial position is strong and on 30 June 2021, the capital base amounted to SEK 5,433 million (5,367) in the consolidated situation, comprising the Parent Company, Resurs Holding, and the Resurs Bank Group. The total capital ratio was 17.4 per cent (17.4 per cent) and the Common Equity Tier 1 ratio was 15.2 per cent (15.1 per cent).
Due to COVID-19, the authorities decided in spring 2020 to reduce the regulatory minimum capital requirement in the countercyclical capital buffer. This entails a total reduction of about 1.8 percentage points to 0.2 per cent for Resurs.
Lending to the public on 30 June 2021 amounted to SEK 31,148 million (30,858), entailing an increase of 1 per cent in both SEK and constant currencies. The trend in lending was impacted by the sale of a NPL portfolio in Norway in the second quarter; excluding the sale, growth in lending was about 2 per cent since year-end. The specification of lending on 30 June 2021 was as follows: Sweden 51 per cent, Norway 19 per cent, Denmark 13 per cent and Finland 17 per cent.
In addition to capital from shareholders and bond investors, the operations are financed by deposits from the public. The Group is working actively on various sources of financing to create and maintain diversified financing for the long term.
Deposits from the public on 30 June 2021 amounted to SEK 25,203 million (24,872). The bank has deposits in SEK, NOK and EUR. Financing through issued securities totalled SEK 6,877 million (6,297). Liquidity remained extremely healthy and the liquidity coverage ratio (LCR) was 292 per cent (288 per cent) in the consolidated situation. The minimum statutory LCR is 100 per cent. Lending to credit institutions on 30 June 2021 amounted to SEK 4,428 million (2,819). Holdings of treasury and other bills eligible for refinancing, as well as bonds and other interest-bearing securities, totalled SEK 2,792 million (2,953). Bonds of a nominal SEK 1,050 million and NOK 600 million were issued under Resurs Bank's MTN programme in 2021. The Group has a high level of liquidity for meeting its future commitments.
Intangible assets amounted to SEK 1,902 million (1,847), and primarily comprise the goodwill that arose in the acquisition of Finaref and Danaktiv in 2014 and yA Bank in 2015.
Cash flow from operating activities amounted to SEK 711 million (388) for the period. Cash flow from deposits amounted to SEK 66 million (359) and the net change in investment assets totalled SEK 171 million (-456). Cash flow from investing activities for the year totalled SEK -35 million (-32) and cash flow from financing activities was SEK -80 million (-237).
* Certain performance measures provided in this section have not been prepared in accordance with IFRS or the capital adequacy rules, meaning that they are alternative performance measures. Calculations and reconciliation against information in the financial statements of these performance measures are provided on the website under "Financial Information." Definitions of performance measures are provided on page 31.
Resurs Bank
Interim Report Jan-Jun 2021
Payment Solutions
Launch of new subscription service and digital wallets
First half of 2021, January–June
New lending in the Swedish market continued to perform positively in the first half of the year, with primarily many of the larger retail finance partners managing the pandemic very well with unchanged, or in some cases higher, demand. This is positive, but at the same time means that these partnerships involved lower margins, which negatively impacted the total NBI margin.
Resurs has focused its efforts specifically on activating partners with higher margins in order to minimise the negative margin trend. An example of such efforts is the Partner Success Program that was launched in the first half of the year, whereby developing collaborations with existing partners takes place at a new, modern and automated level.
During the first half of the year, the offering of subscription services was broadened to our retailers through a partnership with Fairown in the Swedish and Norwegian markets. Together with Fairown, Resurs can now offer customers the option of subscription solutions in several different industries. Based on this partnership, a successful collaboration was started with the e-commerce company Komplett in Norway during the period. Launch in the Swedish market with Komplett is planned for the start of the second half of the year.
Society in Denmark and Norway gradually opened up during the period, which positively impacted new lending, although demand in these markets is not back at pre-pandemic levels.
Supreme Card remained challenged by reduced travel and restaurant visits. The option of paying using Apple and Google Pay was launched during the period, a payment method that further digitalises and simplifies the customer journey and makes payments more secure. Supreme Card developed and simplified its application flows during the first half of the year, which led to a 24-per cent increase in the number of customers completing their applications.
Lending to the public on 30 June 2021 fell 2 per cent to SEK 10,668 million (10,921). Operating income amounted to SEK 633 million (732), down 13 per cent compared with the year-earlier period. Operating income less credit losses amounted to SEK 553 million (585). The risk-adjusted NBI margin fell to 10.2 per cent (10.5).
Credit losses declined both in absolute terms and as a percentage of lending, which was mainly an effect of the extra credit provision made in the first half of the year as a result of the expected future effects of COVID-19.
About Payment Solutions
The Payment Solutions segment comprises the retail finance, credit cards and factoring areas. Within retail finance, Resurs is the leading partner for sales-driving finance, payment and loyalty solutions in the Nordic region.
Credit cards includes the Resurs credit cards (with Supreme Card being the foremost), as well as cards that enable retail finance partners to promote their own brands.
Lending to the public
Trend in lending to the public in SEK billion.
Percentage of operating income, Jan–Jun 2021
Resurs Bank
Interim Report Jan–Jun 2021
Consumer Loans
Strong earnings trend for first half of the year
First half of 2021, January–June
Consumer Loans displayed stable growth in lending for the period. The Swedish market performed strongly as a result of effective marketing activities and use of the existing customer database. More than 85 per cent of new sales in the Swedish market in the first half of the year was with customers in Resurs's own database. Using Resurs's own database allows the company to make better credit assessments since traditional credit assessments can be supplemented with internal variables, which gives us lower credit risk and lower acquisition costs.
An agreement was signed with a new partner, Hemma, in the first half of the year. This company makes it easier and more profitable for private individuals in the Swedish market to invest in climate-smart living. The main investment is in solar panels, and this is where Hemma wants to help its customers with financing in the form of green loans, either via mortgages or consumer loans. This is completely in line with our strategy of sustainable credit lending.
Lending volumes in the Norwegian market have fallen overall since the introduction of new legislation in the country in 2019. In 2021, Resurs shrank less than the market as a whole in consumer loans – the largest product the segment offers in Norway.
Growth in new lending in the Norwegian market remained favourable, although the percentage of customers ending their loans in advance continued to be high. During the first half of the year, the segment worked on different ways of improving the customer journey and thus retaining customers. For example, Resurs Bank's app was launched in the Norwegian market at the end of the period.
The Danish market remained challenging in the period. The option of consolidating loans that was launched at the start of the half-year continued to be calibrated and positive effects on new lending
could be seen towards the end of the period. The Finnish market reported lower demand due to the temporary regulations on direct marketing that were introduced at the start of the second half of 2020.
Improvements to and automation of the application process for customers in the Nordic market continued in the first half of the year. A more simple and automated application processes increases the share of customers who complete their loan application. An example is the income verification launched at the end of the first half-year in Sweden that displayed positive effects at the end of the period.
Lending to the public on 30 June 2021 amounted to SEK 20,460 million (19,932). Operating income declined 9 per cent in the period to SEK 924 million (1,017). Operating income less credit losses totalled SEK 631 million (700), and the risk-adjusted NBI margin amounted to 6.3 per cent (7.0 per cent). The trend in the risk-adjusted NBI margin was mainly due to the performance of the Norwegian market and lower margins due to higher average loans with lower credit risk. Credit losses declined both in absolute terms and as a percentage of lending, which was mainly an effect of the extra credit provision made in the first half of the year as a result of the expected future effects of COVID-19.
About Consumer Loans
Consumer Loans' customers are offered unsecured loans.
Consumer Loans also helps consumers to consolidate their loans with other banks, in order to reduce their monthly payments or interest expense.
Lending to the public
Percentage of operating income, Jan–Jun 2021
Resurs Bank
Interim Report Jan–Jun 2021
January–June 2021
Significant events
Resurs sold non-performing loans to leading international investor
Resurs Bank AB entered into an agreement with PRA Group, a leading international credit management company in non-performing loans, to sell parts of Resurs Bank's non-performing loans in Norway for a gross carrying amount of approximately NOK 800 million. The sale will have a positive impact on Resurs Bank's capital requirements and liquidity and a neutral effect on earnings.
Resurs Bank launched Google Pay for its customers at the Nordic level
Resurs Bank's customers in the Nordic market now have access to Google Pay, which will enable simple and secure mobile payments. Google Pay is another step in Resurs's strategy of offering customers a broad range of digital payment solutions that enhance the customer experience.
New CFO at Resurs – internal recruitment focusing on Resurs's continuing profitable growth
Resurs appointed Sofie Tarring Lindell as the new CFO & Head of IR. Sofie was the Head of IR & Group Control and assumed her new position on 1 May 2021. For the transformation journey that Resurs has commenced, Sofie is focusing on profitable growth and supporting the operations to become a competitive, digital and sustainable company.
Resurs Bank awarded with a higher credit rating (BBB, stable outlook)
In April 2021, Resurs Bank received an update from the rating company Nordic Credit Rating (NCR). Resurs Bank's credit rating was raised from BBB- to BBB based on Resurs Bank's ability to attract new partners and an improved Nordic consumer credit market.
After the end of the period
There were no significant events after the end of the period.
Resurs Bank
Interim Report Jan-Jun 2021
Other information
Risk and capital management
The Group's ability to manage risks and conduct effective capital planning is fundamental to its profitability. The business faces various forms of risk including credit risks, market risks, liquidity risks and operational risks. The Board has established operational policies with the aim of balancing the Group's risk taking, and to limit and control risks. All policies are updated as necessary and revised at least once annually. The Board and CEO are ultimately responsible for risk management. In general, there were no significant changes regarding risk and capital management during the period. The Group's risk management capabilities were affected to a certain extent during the pandemic but the impact was limited due to robust processes. The Group managed the risk of a loss of personnel in critical functions by introducing different zones and remote working. More employees working from home set higher requirements on information security and following up the Group's control framework. A more detailed description of the bank's risks, liquidity and capital management is presented in Note G2 Liquidity, Note G3 Capital Adequacy, and in the most recent annual report.
Information on operations
Resurs Bank AB conducts banking operations in the Nordic countries. Operations are primarily consumer-oriented and are licensed by the Swedish Financial Supervisory Authority. Consumer lending is subdivided into retail finance loans, consumer loans, MasterCard and Visa credit cards, and deposits. Retail finance loans are offered to finance both traditional in-store purchases and online purchases. Operations in Finland are conducted through
branch office Resurs Bank AB Suomen sivuliike (Helsinki), in Denmark through branch office Resurs Bank filial of Resurs Bank (Vallensbæk Strand) and in Norway through branch office Resurs Bank AB NUF (Oslo). Resurs Bank also operates in deposits via cross-border operations in Germany.
Solid Försäkring provides non-life insurance products in Sweden, other Nordic countries and, to some extent, other European countries. Solid Försäkring offers traditional speciality insurance. Solid Försäkring conducts operations in Norway, Finland and Switzerland via branches. Cross-border operations are conducted in other markets.
Employees
There were 666 full-time employees within the Group on 30 June 2021, up 9 since 31 December 2020 and down 61 since June 2020. The increase since December was due to expanding the number of IT personnel in Sweden. The decline compared with the previous year was mainly due to cutbacks in the number of employees.
666
Number of employees
Resurs Bank
Interim Report Jan-Jun 2021
The Board's assurance
This interim report has not been audited.
The Board of Directors and the CEO certify that this interim report provides a fair review of the Group's and the Parent Company's operations, financial position and results and describes the significant risks and uncertainties faced by the Parent Company and Group companies.
Helsingborg, 21 July 2021
Nils Carlsson, CEO
Board of Directors,
Martin Bengtsson, Chairman of the Board
Johanna Berlinde
Fredrik Carlsson
Susanne Ehnbåge
Lars Nordstrand
Marita Odélius Engström
Kristina Patek
Mikael Wintzell
Resurs Bank
Interim Report Jan-Jun 2021
Summary financial statements — Group
Condensed income statement
| SEX thousand | Note | Jan-Jun 2021 | Jan-Jun 2020 | Jan-Dec 2020 |
|---|---|---|---|---|
| Interest income | G5 | 1,480,148 | 1,680,952 | 3,251,234 |
| Interest expense | G5 | -183,935 | -213,208 | -406,828 |
| Fee & commission income | 199,346 | 213,367 | 425,214 | |
| Fee & commission expense | -38,627 | -30,087 | -63,635 | |
| Net income/expense from financial transactions | 1,902 | -6,272 | -14,175 | |
| Other operating income | G6 | 98,864 | 104,764 | 215,660 |
| Total operating income | 1,557,698 | 1,749,516 | 3,407,470 | |
| General administrative expenses | G7 | -560,981 | -565,782 | -1,120,614 |
| Depreciation, amortisation and impairment of intangible and tangible fixed assets | -41,091 | -48,567 | -138,433 | |
| Other operating expenses | -39,613 | -52,653 | -107,903 | |
| Total expenses before credit losses | -641,685 | -667,002 | -1,366,950 | |
| Earnings before credit losses | 916,013 | 1,082,514 | 2,040,520 | |
| Credit losses, net | G8 | -374,142 | -464,276 | -854,372 |
| Operating profit/loss | 541,871 | 618,238 | 1,186,148 | |
| Income tax expense | -118,826 | -135,554 | -306,277 | |
| Net profit for the period | 423,045 | 482,684 | 879,871 | |
| Attributable to Resurs Bank AB shareholders | 423,045 | 482,684 | 879,871 |
Statement of comprehensive income
| SEX thousand | Jan-Jun 2021 | Jan-Jun 2020 | Jan-Dec 2020 |
|---|---|---|---|
| Net profit for the period | 423,045 | 482,684 | 879,871 |
| Other comprehensive income that will be reclassified to profit/loss | |||
| Translation differences for the period, foreign operations | 42,709 | -99,974 | -102,333 |
| Total comprehensive income for the period | 465,754 | 382,710 | 777,538 |
| Attributable to Resurs Bank AB shareholders | 465,754 | 382,710 | 777,538 |
Resurs Bank
Interim Report Jan-Jun 2021
Condensed statement of financial position
| SEK thousand | Note | 30 Jun 2021 | 31 Dec 2020 | 30 Jun 2020 |
|---|---|---|---|---|
| Assets | ||||
| Cash and balances at central banks | 212,184 | 208,520 | 215,493 | |
| Treasury and other bills eligible for refinancing | 2,152,806 | 2,283,253 | 2,246,182 | |
| Lending to credit institutions | 4,428,261 | 3,818,574 | 4,076,821 | |
| Lending to the public | G9 | 31,147,972 | 30,858,341 | 30,853,301 |
| Bonds and other interest-bearing securities | 639,194 | 669,570 | 785,978 | |
| Shares and participating interests | 11,421 | 7,287 | 17,392 | |
| Intangible fixed assets | 1,901,565 | 1,846,678 | 1,904,064 | |
| Tangible assets | 128,686 | 107,518 | 119,458 | |
| Other assets | 210,181 | 221,704 | 280,292 | |
| Prepaid expenses and accrued income | 128,403 | 166,900 | 191,744 | |
| TOTAL ASSETS | 40,960,673 | 40,188,345 | 40,690,725 | |
| Liabilities, provisions and equity | ||||
| Liabilities and provisions | ||||
| Liabilities to credit institutions | 500 | 107,400 | 159,100 | |
| Deposits and borrowing from the public | 25,203,171 | 24,871,535 | 24,593,339 | |
| Other liabilities | 794,437 | 748,168 | 650,320 | |
| Accrued expenses and deferred income | 313,239 | 199,452 | 277,804 | |
| Other provisions | G10 | 20,455 | 20,438 | 24,791 |
| Issued securities | 6,876,836 | 6,297,472 | 7,436,727 | |
| Subordinated debt | 599,103 | 798,702 | 798,294 | |
| Total liabilities and provisions | 33,807,741 | 33,043,167 | 33,940,375 | |
| Equity | ||||
| Share capital | 500,000 | 500,000 | 500,000 | |
| Other paid-in capital | 2,175,000 | 2,175,000 | 2,175,000 | |
| Translation reserve | 7,157 | -35,552 | -33,193 | |
| Retained earnings incl. profit for the year | 4,470,775 | 4,505,730 | 4,108,543 | |
| Total equity | 7,152,932 | 7,145,178 | 6,750,350 |
TOTAL LIABILITIES, PROVISIONS AND EQUITY
See Note G11 for information on pledged assets,contingent liabilities and commitments.
Resurs Bank
Interim Report Jan-Jun 2021
Statement of changes in equity
| SEK
thousand | Share capital | Other paid-in capital | Translation reserve | Retained earnings incl. profit for the year | Total equity |
| --- | --- | --- | --- | --- | --- |
| Initial equity at 1 January 2020 | 500,000 | 2,175,000 | 66,781 | 3,625,859 | 6,367,640 |
| Net profit for the period | | | | 482,684 | 482,684 |
| Other comprehensive income for the year | | | -99,974 | | -99,974 |
| Equity at 30 June 2020 | 500,000 | 2,175,000 | -33,193 | 4,108,543 | 6,750,350 |
| Initial equity at 1 January 2020 | 500,000 | 2,175,000 | 66,781 | 3,625,859 | 6,367,640 |
| Net profit for the year | | | | 879,871 | 879,871 |
| Other comprehensive income for the year | | | -102,333 | | -102,333 |
| Equity at 31 December 2020 | 500,000 | 2,175,000 | -35,552 | 4,505,730 | 7,145,178 |
| Initial equity at 1 January 2021 | 500,000 | 2,175,000 | -35,552 | 4,505,730 | 7,145,178 |
| Owner transactions | | | | | |
| Dividends paid according to General Meeting | | | | -458,000 | -458,000 |
| Net profit for the period | | | | 423,045 | 423,045 |
| Other comprehensive income for the year | | | 42,709 | | 42,709 |
| Equity at 30 June 2021 | 500,000 | 2,175,000 | 7,157 | 4,470,775 | 7,152,932 |
All equity is attributable to Parent Company shareholders.
Resurs Bank
Interim Report Jan-Jun 2021
Cash flow statement (indirect method)
| SEK thousand | Jan-Jun 2021 | Jan-Jun 2020 | Jan-Dec 2020 |
|---|---|---|---|
| Operating activities | |||
| Operating profit | 541.871 | 1.186.148 | 618.238 |
| - of which, interest received | 1.480.169 | 3.253.276 | 1.683.516 |
| - of which, interest paid | -116.702 | -423.216 | -138.303 |
| Adjustments for non-cash items in operating profit | 487.890 | 1.003.906 | 507.839 |
| Tax paid | -225.694 | -293.826 | -205.164 |
| Cash flow from operating activities before changes in operating assets and liabilities | 804.067 | 1.896.228 | 920.913 |
| Changes in operating assets and liabilities | |||
| Lending to the public | -313.531 | -1.545.166 | -720.038 |
| Other assets | 12.819 | 622.301 | 309.203 |
| Liabilities to credit institutions | -106.900 | 12.500 | 64.200 |
| Deposits and borrowing from the public | 65.860 | 674.496 | 359.383 |
| Acquisition of investment assets 1) | -2.055.164 | -4.681.782 | -2.604.388 |
| Divestment of investment assets 2) | 2.226.539 | 4.285.241 | 2.148.193 |
| Other liabilities | 77.295 | -49.556 | -89.594 |
| Cash flow from operating activities | 710.985 | 1.214.262 | 387.872 |
| Investing activities | |||
| Acquisition of intangible and tangible fixed assets | -35.057 | -61.017 | -32.902 |
| Divestment of intangible and tangible fixed assets | 117 | 4.395 | 902 |
| Cash flow from investing activities | -34.940 | -56.622 | -32.000 |
| Financing activities | |||
| Dividends paid | -458.000 | ||
| Shareholder's contributions | |||
| Issued securities | 578.349 | -1.377.406 | -237.050 |
| Subordinated debt | -200.000 | ||
| Cash flow from financing activities | -79.651 | -1.377.406 | -237.050 |
| Cash flow for the year | 596.394 | -219.766 | 118.822 |
| Cash & cash equivalents at beginning of the year 2) | 4.027.094 | 4.258.286 | 4.258.285 |
| Exchange rate differences | 16.956 | -11.426 | -84.793 |
| Cash & cash equivalents at end of the year 2) | 4.640.444 | 4.027.094 | 4.292.314 |
| Adjustment for non-cash items in operating profit | |||
| Credit losses | 374.142 | 854.372 | 464.276 |
| Depreciation, amortisation and impairment of intangible and tangible fixed assets | 41.091 | 138.433 | 48.567 |
| Profit/loss tangible assets | -118 | -739 | 227 |
| Profit/loss on investment assets | 1.315 | -2.709 | 1.548 |
| Change in provisions | -272 | 1.701 | 5.860 |
| Adjustment to interest paid/received | 72.006 | -6.643 | 76.296 |
| Currency effects | -1.690 | 6.148 | -90.768 |
| Depreciation, amortisation and impairment of shares | 10.000 | ||
| Other items that do not affect liquidity | 1.416 | 3.343 | 1.833 |
| Sum non-cash items in operating profit | 487.890 | 1.003.906 | 507.839 |
1) investment assets are comprised of bonds and other interest-bearing securities. Treasury and other bills eligible for refinancing, shares and participating interest.
2) Liquid assets are comprised of lending to credit institutions and cash and balances at central banks.
| SEK thousand | 1 Jan 2020 | Cash-flow | Non cash flow items | 30 Jun 2021 rate | |
|---|---|---|---|---|---|
| Accrued acquisition costs | differences | ||||
| Issued securities | 6,297,472 | 578,349 | 1,015 | 6,876,836 | |
| Subordinated debt | 798,702 | -200,000 | 401 | 599,103 | |
| Total | 7,096,174 | 378,349 | 1,416 | 0 | 7,475,939 |
Resurs Bank
Interim Report Jan-Jun 2021
Notes to the condensed financial statements
G1. Accounting principles
The Group's interim report has been prepared in accordance with IAS 34 Interim Financial Reporting and with applicable provisions of the Swedish Annual Accounts Act for Credit Institutions and Securities Companies, the Swedish Financial Supervisory Authority's regulations and general guidelines on Annual Reports in Credit Institutions and Securities Companies (FFFS 2008:25), and the Swedish Financial Reporting Board's recommendation RFR 1 Supplementary Accounting Rules for Groups.
For detailed accounting principles for the Group, see the Annual report for 2020
The regulatory consolidation (known as 'consolidated situation') comprises the Resurs Bank AB Group and its Parent Company Resurs Holding AB.
The interim information on pages 4-41 comprises an integrated component of this financial report.
No new IFRS or IFRIC interpretations, effective as from 1 January 2020, have had any material impact on the Group.
G2. Financing - Consolidated situation
A core component of financing efforts is maintaining a well-diversified financing structure with access to several sources of financing. Access to a number of sources of financing means that it is possible to use the most appropriate source of financing at any particular time.
The main type of financing remains deposits from the public. This type of financing has been offered to customers in Sweden, Norway and Germany. Deposits, which are analysed on a regular basis, totalled SEK 25,118 million (24,694), whereof in Sweden SEK 11,985 million (11,535). In Norway SEK 6,419 million (6,441) and in Germany SEK 6,714 million (6,718). The lending to the public deposits from the public ratio for the consolidated situation is 124 per cent (125 per cent).
Resurs Bank has a funding programme for issuing bonds, the programme amounts to SEK 9,000 million (9,000). Within the programme, Resurs Bank has been working successfully to issue bonds on a regular basis and sees itself as an established issuer on the market. At 30 June 2021 the program has nine outstanding issues at a nominal amount of SEK 4,950 million (4,900) and NOK 600 million. Of the ten issues, eight are senior unsecured bonds and two issues are a subordinated loan of SEK 600 million (600). Resurs Bank has outside the programme issued subordinated loan of SEK 200 million (200). Resurs Holding issued Additional Tier 1 Capital of a nominal SEK 300 million (300).
Resurs Bank has been awarded an updated rating from the rating company Nordic Credit Rating (NCR) in april 2021. Resurs Bank's credit rating was raised from BBB- to BBB based on Resurs Bank's ability to attract new partners and an improved Nordic consumer credit market. Access to Nordic Credit Ratings analyses can be found on the website www.nordiccreditrating.com.
Resurs Bank has completed a securitisation of loan receivables, a form of structured financing, referred to as Asset Backed Securities (ABS). This took place by transferring loan receivables to Resurs Bank's wholly owned subsidiaries Resurs Consumer Loans 1 Limited. Resurs Bank signed an agreement in December 2020 to extend the existing ABS financing. This financing has been arranged with JP Morgan Chase Bank. Resurs Bank has for a period of 18 months (revolving period), the right to continue sale of certain additional loan receivables to Resurs Consumer Loans. At 30 June 2021 a total of approximately SEK 2.5 billion in loan receivables had been transferred to Resurs Consumer Loans. Resurs Bank and Resurs Consumer Loans have provided security for the assets that form part of the securitisation. At the balance sheet date, the external financing amounted to SEK 2.0 billion (2.0) of the ABS financing.
Liquidity - Consolidated situation
Liquidity risk includes the risk of not being able to meet liquidity commitments without significantly higher costs. The consolidated situation, must maintain a liquidity reserve and have access to an unutilised liquidity margin in the event of irregular or unexpected liquidity flows.
The Group's liquidity risk is managed through policies that specify limits, responsibilities and monitoring and include a contingency plan. The purpose of the contingency plan is to make preparations for various courses of action should the liquidity situation trend unfavourably. The contingency plan includes, among other things, risk indicators and action plans. The Group's liquidity risk is controlled and audited by independent functions.
Liquidity comprises both a liquidity reserve and another liquidity portfolio that is monitored on a daily basis. The main liquidity risk is deemed to arise in the event multiple depositors simultaneously withdraw their deposited funds. An internal model is used to set minimum requirements for the amount of the liquidity reserve, calculated based on deposit volumes, the proportion covered by deposit insurance and relationship to depositors. The model also takes into account the future maturities of issued securities. The Board has stipulated that the liquidity reserve may never fall below SEK 1,400 million. Apart from the liquidity reserve, there is an intraday liquidity requirement of at least 4 per cent of deposits from the public, a minimum SEK 800 million. There are also other liquidity requirements regulating and controlling the business.
The liquidity reserve, totalling SEK 1,878 million (1,860), is in accordance with Swedish Financial Supervisory Authority regulations on liquidity risk management (FFFS 2010:7) and applicable amendments thereto for the consolidated situation. Accordingly, assets are segregated, unutilised and of high quality. The liquidity reserve largely comprises assets with the highest credit quality rating.
In addition to the liquidity reserve, the consolidated situation has other liquid assets primarily comprised of cash balances with other banks. These assets are of high credit quality and total SEK 5,594 million (5,127) for the consolidated situation. Accordingly, total liquidity amounted to SEK 7,472 million (6,986) corresponds to 30 per cent (28 per cent) of deposits from the public. The Group also has unutilised credit facilities of NOK 50 million (50).
Liquidity Coverage Ratio (LCR) for the consolidated situation is reported to the authorities on a monthly basis. The LCR shows the ratio between high qualitative assets and net outflow during a 30-day stressed period. A ratio of 100 per cent means the assets managed the stress test scenario and is also the authority's limit. As at 30 June 2021, the ratio for the consolidated situation is 292 per cent (288 per cent). For the period January to June 2021, the coverage LCR measures 263 per cent for the consolidated situation.
All valuations of interest-bearing securities were made at market values that take into account accrued interest.
Resurs Bank
Interim Report Jan-Jun 2021
Summary of liquidity – Consolidated situation
| SEX
thousand | 30 Jun
2021 | 31 Dec
2020 | 30 Jun
2020 |
| --- | --- | --- | --- |
| Liquidity reserve as per FFFS 2010:7 definition | | | |
| Securities issued by sovereigns | 177.935 | 176.381 | 181.397 |
| Securities issued by municipalities | 965.900 | 958.037 | 901.637 |
| Lending to credit institutions | 95.000 | 55.000 | |
| Bonds and other interest-bearing securities | 639.582 | 670.374 | 786.774 |
| Summary Liquidity reserve as per FFFS 2010:7 | 1,878,417 | 1,859,792 | 1,869,807 |
| Other liquidity portfolio | | | |
| Cash and balances at central banks | 212.184 | 208.520 | 215.493 |
| Securities issued by municipalities | 1,010.206 | 1,150.181 | 199.990 |
| Lending to credit institutions | 4,371.227 | 3,767.951 | 4,094.180 |
| Bonds and other interest-bearing securities | | | 964.926 |
| Total other liquidity portfolio | 5,593,617 | 5,126,652 | 5,474,588 |
| Total liquidity portfolio | 7,472,034 | 6,986,444 | 7,344,396 |
| Other liquidity-creating measures | | | |
| Unutilised credit facilities | 49.710 | 47.730 | 47.975 |
Stress tests are carried out on a regular basis to ensure that there is liquidity in place for circumstances that deviate from normal conditions. One recurring stress test is significant outflows of deposits from the public.
In evaluating liquid assets for LCR reporting, the following assessment of liquid asset quality is made before each value judgement in accordance with the EU Commission's delegated regulation (EU) 575/2013.
Liquid assets according to LCR
| 30/06/2021 | |||||
|---|---|---|---|---|---|
| SEX | |||||
| thousand | Total | SEX | EUR | DKK | NOK |
| Level 1 assets | |||||
| Cash and balances with central banks | 182.205 | 120.352 | 61.853 | ||
| Securities or guaranteed by sovereigns, central banks, MDBs and international org. | 177.936 | 118.023 | 28.818 | 31.095 | |
| Securities issued by municipalities and PSEs | 1,976.106 | 1,668.291 | 73.535 | 234.280 | |
| Extremely high quality covered bonds | 432.291 | 196.689 | 150.622 | 84.980 | |
| Level 2 assets | |||||
| High quality covered bonds | 207.290 | 125.422 | 81.868 | ||
| Total liquid assets | 2,975,828 | 1,990,402 | 462,532 | 28,818 | 494,076 |
| 31/12/2020 | |||||
| SEX | |||||
| thousand | Total | SEX | EUR | DKK | NOK |
| Level 1 assets | |||||
| Cash and balances with central banks | 179.039 | 119.552 | 59.487 | ||
| Securities or guaranteed by sovereigns, central banks, MDBs and international org. | 176.381 | 117.636 | 28.696 | 30.049 | |
| Securities issued by municipalities and PSEs | 1,908.211 | 1,609.889 | 73.853 | 224.469 | |
| Extremely high quality covered bonds | 390.740 | 117.923 | 191.293 | 81.524 | |
| Level 2 assets | |||||
| High quality covered bonds | 279.634 | 201.043 | 78.591 | ||
| Total liquid assets | 2,934,005 | 1,928,855 | 502,334 | 28,696 | 474,120 |
Additional information on the Group's management of liquidity risks is available in the Group's 2020 Annual report.
| SEX
thousand | 30 Jun
2021 | 31 Dec
2020 | 30 Jun
2020 |
| --- | --- | --- | --- |
| Total liquid assets | 2,975,828 | 2,934,005 | 3,220,184 |
| Net liquidity outflow | 998,025 | 995,751 | 1,007,559 |
| LCR measure | 292% | 288% | 310% |
Resurs Bank
Interim Report Jan-Jun 2021
G3. Capital adequacy - Consolidated situation
Capital requirements are calculated in accordance with European Parliament and Council Regulation EU 575/2015 (CRR) and Directive 2015/36 EU (CRD IV). The Directive was incorporated via the Swedish Capital Buffers Act (2014:966), and the Swedish Financial Supervisory Authority's (SFSA) regulations regarding prudential requirements and capital buffers (FFFS 2014:12). The capital requirement calculation below comprises the statutory minimum capital requirement for credit risk, credit valuation adjustment risk, market risk and operational risk.
The combined buffer requirement for the consolidated situation comprises a capital conservation buffer and a countercyclical capital buffer. The capital conservation buffer requirement amounts to 2.5 per cent of the risk-weighted assets. The countercyclical capital buffer requirement is weighted according to geographical requirements and after being lowered by the supervisory authorities in spring 2020 amounted to 0.2 per cent. Only Norwegian exposures have a buffer requirement remaining, which is currently 1.0 per cent of risk-weighted Norwegian assets.
The consolidated situation calculates the capital requirement for credit risk, credit valuation adjustment risk, market risk and operational risk. Credit risk is calculated by applying the standardised method under which the asset items of the consolidated situation are weighted and divided between 17 different exposure classes.
The total risk-weighted exposure amount is multiplied by 8 per cent to obtain the minimum capital requirement for credit risk. The capital requirement for operational risk is calculated by the standardised method. Under this method, the capital requirement for operational risks is 12 per cent of the income indicator (meaning average operating income for the past three years). The counterparty risk is calculated using the simplified standardised method. External rating companies are used to calculate the bank's capital base requirement for bonds and other interest-bearing securities.
Resurs Bank has applied to the Swedish Financial Supervisory Authority for permission to apply the transition rules decided at EU level in December 2017. Under the transition rules, a gradual phase-in of the effect of IFRS 9 on capital adequacy is permitted, regarding both the effect of the transition from IAS 39 as at 1 January 2018 and the effect on the reporting date that exceeds the amount when IFRS 9 is first applied to stage 1 and stage 2. The phase-in period is as follows.
2018: 5 %, 2019: 10 %, 2020: 15 %, 2021: 20 %, 2022: 25 %, 2023: 25 %
In December 2019, Resurs Holding AB issued Additional Tier 1 Capital of a nominal SEK 300 million. The notes have a perpetual tenor with a first call option after five years and a temporary write-down mechanism.
Capital base
| SEK thousand | 30 Jun 2021 | 31 Dec 2020 | 30 Jun 2020 |
|---|---|---|---|
| Common Equity Tier 1 capital | |||
| Equity | |||
| Equity, Group | 7,152,932 | 7,145,178 | 6,750,350 |
| Equity according to balance sheet | 7,152,932 | 7,145,178 | 6,750,350 |
| Proposed dividend | -536,000 | ||
| Foreseeable dividend | -600,098 | -360,000 | -668,720 |
| Additional Tier 1 instruments | 300,000 | 300,000 | 300,000 |
| Additional/deducted equity in the consolidated situation | -81,428 | 20,371 | -13,263 |
| Equity, consolidated situation | 6,771,406 | 6,569,549 | 6,368,367 |
| Adjustments according to transition rules IFRS 9: | |||
| Initial revaluation effect | 169,371 | 237,119 | 237,119 |
| Less: | |||
| Additional value adjustments | -2,821 | -3,073 | -3,224 |
| Intangible fixed assets | -1,901,565 | -1,846,678 | -1,904,064 |
| Additional Tier 1 instruments classified as equity | -300,000 | -300,000 | -300,000 |
| Shares in subsidiaries | -145 | -145 | -145 |
| Total Common Equity Tier 1 capital | 4,736,246 | 4,656,772 | 4,398,053 |
| Tier 1 capital | |||
| Common Equity Tier 1 capital | 4,736,246 | 4,656,772 | 4,398,053 |
| Additional Tier 1 instruments | 300,000 | 300,000 | 300,000 |
| Total Tier 1 capital | 5,036,246 | 4,956,772 | 4,698,053 |
| Tier 2 capital | |||
| Dated subordinated loans | 396,497 | 409,914 | 439,505 |
| Total Tier 2 capital | 396,497 | 409,914 | 439,505 |
| Total capital base | 5,432,743 | 5,366,686 | 5,137,558 |
Resurs Bank
Interim Report Jan-Jun 2021
Specification of risk-weighted exposure amount and capital requirements
| SEX
thousand | 30 Jun 2021 | | 31 Dec 2020 | | 30 Jun 2020 | |
| --- | --- | --- | --- | --- | --- | --- |
| | Risk-weighted exposure amount | Capital requirement^{a)} | Risk-weighted exposure amount | Capital requirement^{a)} | Risk-weighted exposure amount | Capital requirement^{a)} |
| Exposures to institutions | 944,383 | 75,551 | 776,530 | 62,122 | 835,320 | 66,826 |
| Exposures to corporates | 309,523 | 24,762 | 291,518 | 23,321 | 268,325 | 21,466 |
| Retail exposures | 21,228,564 | 1,698,285 | 20,883,338 | 1,670,667 | 20,730,811 | 1,658,465 |
| Exposures in default | 2,781,224 | 222,498 | 3,044,468 | 243,557 | 3,274,504 | 261,960 |
| Exposures in the form of covered bonds | 63,856 | 5,108 | 66,890 | 5,351 | 78,519 | 6,282 |
| Equity exposures | 215,410 | 17,233 | 211,279 | 16,903 | 221,375 | 17,710 |
| Other items | 477,010 | 38,161 | 453,174 | 36,255 | 429,086 | 34,326 |
| Total credit risks | 26,019,970 | 2,081,598 | 25,727,197 | 2,058,176 | 25,837,940 | 2,067,035 |
| Credit valuation adjustment risk | 39,507 | 3,161 | 25,265 | 2,021 | 44,937 | 3,595 |
| Market risk | | | | | | |
| Currency risk | 0 | 0 | 0 | 0 | 0 | 0 |
| Operational risk (standard methods) | 5,089,268 | 407,141 | 5,089,268 | 407,141 | 4,849,713 | 387,977 |
| Total risk-weighted exposure and total capital requirement | 31,148,745 | 2,491,900 | 30,841,730 | 2,467,338 | 30,732,590 | 2,458,607 |
| Concentration risk | | 261,405 | | 258,267 | | 252,170 |
| Interest rate risk | | 21,474 | | 28,881 | | 26,390 |
| Currency risk | | 810 | | 4,667 | | 1,733 |
| Pension risk | | 0 | | 0 | | 10,000 |
| Total Tier 2 capital requirement | | 283,689 | | 291,815 | | 290,293 |
| Capital buffers | | | | | | |
| Capital conservation buffer | | 778,719 | | 771,043 | | 768,315 |
| Countercyclical capital buffer | | 58,255 | | 64,243 | | 70,101 |
| Total capital requirement Capital buffers | | 836,974 | | 835,287 | | 838,416 |
| Total capital requirement | | 3,612,563 | | 3,594,440 | | 3,587,316 |
a) Capital requirement information is provided for exposure classes that have exposures.
Regulatory capital requirements
| 30 Jun 2021 | 31 Dec 2020 | 30 Jun 2020 | ||||
|---|---|---|---|---|---|---|
| Amount | Share of risk-weighted exposure amount | Amount | Share of risk-weighted exposure amount | Amount | Share of risk-weighted exposure amount | |
| Common Equity Tier 1 capital pursuant to Article 92 CRR (Pillar 1) | 1,401,694 | 4.5 | 1,387,878 | 4.5 | 1,382,967 | 4.5 |
| Other Common Equity Tier 1 capital requirements (Pillar 2) | 159,575 | 0.5 | 196,434 | 0.6 | 195,586 | 0.6 |
| Combined buffer requirement | 836,974 | 2.7 | 835,287 | 2.7 | 838,416 | 2.7 |
| Total Common Equity Tier 1 capital requirements | 2,398,243 | 7.7 | 2,419,598 | 7.8 | 2,416,969 | 7.9 |
| Common Equity Tier 1 capital | 4,736,246 | 15.2 | 4,656,772 | 15.1 | 4,398,053 | 14.3 |
| Tier 1 capital requirements under Article 92 CRR (Pillar 1) | 1,868,925 | 6.0 | 1,850,504 | 6.0 | 1,843,955 | 6.0 |
| Other Tier 1 capital requirements (Pillar 2) | 212,767 | 0.7 | 237,312 | 0.8 | 236,175 | 0.8 |
| Combined buffer requirement | 836,974 | 2.7 | 835,287 | 2.7 | 838,416 | 2.7 |
| Total Tier 1 capital requirements | 2,918,665 | 9.4 | 2,923,102 | 9.5 | 2,918,546 | 9.5 |
| Tier 1 capital | 5,036,246 | 16.2 | 4,956,772 | 16.1 | 4,698,053 | 15.3 |
| Capital requirements under Article 92 CRR (Pillar 1) | 2,491,900 | 8.0 | 2,467,338 | 8.0 | 2,458,607 | 8.0 |
| Other capital requirements (Pillar 2) | 283,689 | 0.9 | 291,815 | 0.9 | 290,293 | 0.9 |
| Combined buffer requirement | 836,974 | 2.7 | 835,287 | 2.7 | 838,416 | 2.7 |
| Total capital requirement | 3,612,563 | 11.6 | 3,594,440 | 11.7 | 3,587,316 | 11.6 |
| Total capital base | 5,432,743 | 17.4 | 5,366,686 | 17.4 | 5,137,558 | 16.7 |
Resurs Bank
Interim Report Jan-Jun 2021
Capital ratio and capital buffers
| 30 Jun 2021 | 31 Dec 2020 | 30 Jun 2020 | |
|---|---|---|---|
| Common Equity Tier 1 ratio, % | 15.2 | 15.1 | 14.3 |
| Tier 1 ratio, % | 16.2 | 16.1 | 15.3 |
| Total capital ratio, % | 17.4 | 17.4 | 16.7 |
| Institution specific buffer requirements, % | 2.7 | 2.7 | 2.7 |
| - of which, capital conservation buffer requirement, % | 2.5 | 2.5 | 2.5 |
| - of which, countercyclical buffer requirement, % | 0.2 | 0.2 | 0.2 |
| Common Equity Tier 1 capital available for use as buffer after meeting the total own funds requirements, % | 8.9 | 8.8 | 8.1 |
Leverage ratio
The leverage ratio is a non-risk-sensitive capital requirement defined in Regulation (EU) no 575/2013 of the European Parliament and of the Council. From 28 June 2021, the consolidated situation has a leverage ratio requirement of 3 per cent in accordance with CRR I/2.
The ratio states the amount of equity in relation to the bank's total assets including items that are not recognised in the balance sheet and is calculated by the Tier 1 capital as a percentage of the total exposure measure.
| SEK
thousand | 30 Jun
2021 | 31 Dec
2020 | 30 Jun
2020 |
| --- | --- | --- | --- |
| Tier 1 capital | 5,036,246 | 4,956,772 | 4,698,053 |
| Leverage ratio exposure | 41,370,857 | 41,174,564 | 41,864,536 |
| Leverage ratio, % | 12.2 | 12.0 | 11.2 |
Comparison with and without transitional arrangements for IFRS 9
| SEK
thousand | 30 Jun
2021 | 30 Jun
2020 |
| --- | --- | --- |
| Available capital | | |
| Common Equity Tier 1 capital | 4,736,246 | 4,398,053 |
| Common Equity Tier 1 capital as if IFRS 9 or analogous ECLs transitional arrangements had not been applied | 4,566,875 | 4,160,935 |
| Tier 1 capital | 5,036,246 | 4,698,053 |
| Tier 1 capital as if IFRS 9 or analogous ECLs transitional arrangements had not been applied | 4,866,875 | 4,460,935 |
| Total capital | 5,432,755 | 5,137,558 |
| Total capital as if IFRS 9 or analogous ECLs transitional arrangements had not been applied | 5,263,384 | 4,900,440 |
| Risk-weighted assets | | |
| Total risk-weighted assets | 31,148,744 | 30,732,590 |
| Total risk-weighted assets as if IFRS 9 or analogous ECLs transitional arrangements had not been applied | 31,021,716 | 30,554,751 |
| Capital ratios | | |
| Common Equity Tier 1 (as a percentage of risk exposure amount) | 15.2 | 14.3 |
| Common Equity Tier 1 (as a percentage of risk exposure amount) as if IFRS 9 or analogous ECLs transitional arrangements had not been applied | 14.7 | 13.6 |
| Tier 1 capital (as a percentage of risk exposure amount) | 16.2 | 15.3 |
| Tier 1 (as a percentage of risk exposure amount) as if IFRS 9 or analogous ECLs transitional arrangements had not been applied | 15.7 | 14.6 |
| Total capital (as a percentage of risk exposure amount) | 17.4 | 16.7 |
| Total capital (as a percentage of risk exposure amount) as if IFRS 9 or analogous ECLs transitional arrangements had not been applied | 17.0 | 16.0 |
| Leverage ratio | | |
| Leverage ratio total exposure measure | 41,370,857 | 41,864,536 |
| Leverage ratio, % | 12.2 | 11.2 |
| Leverage ratio, %, as if IFRS 9 or analogous ECLs transitional arrangements had not been applied | 11.8 | 10.7 |
Resurs Bank
Interim Report Jan-Jun 2021
G4. Segment reporting
The CEO of Resurs Holding AB is the chief operating decision maker for the Group. Management has established segments based on the information that is dealt with by the Board of Directors and used as supporting information for allocating resources and evaluating results. The CEO assesses the performance of Payment Solutions, Consumer Loans and Insurance. The CEO evaluates segment development based on net operating income less credit losses, net.
The insurance segment is evaluated at the operating profit/loss level, as this is part of the segment's responsibility. Segment reporting is based on the same principles as those used for the consolidated financial statements. Assets monitored by the CEO refer to lending to the public.
| Jan-Jun 2021 | |||
|---|---|---|---|
| SEX thousand | Payment Solutions | Consumer Loans | Total Group |
| Interest income | 506,041 | 974,107 | 1,480,148 |
| Interest expense | -62,128 | -121,807 | -183,935 |
| Provision income | 148,973 | 50,373 | 199,346 |
| Provision expenses | -38,627 | -38,627 | |
| Net income/expense from financial transactions | 770 | 1,132 | 1,902 |
| Other operating income | 78,440 | 20,425 | 98,865 |
| Summa rörelseintäkter | 633,469 | 924,230 | 1,557,699 |
| of which, internal | 0 | ||
| Credit losses, net | -80,659 | -293,483 | -374,142 |
| Operating income less credit losses | 552,810 | 630,747 | 1,183,557 |
| Jan-Jun 2020 | |||
| --- | --- | --- | --- |
| SEX thousand | Payment Solutions | Consumer Loans | Total Group |
| Interest income | 591,176 | 1,089,776 | 1,680,952 |
| Interest expense | -66,994 | -146,214 | -213,208 |
| Provision income | 162,033 | 51,334 | 213,367 |
| Provision expenses | -30,087 | -30,087 | |
| Net income/expense from financial transactions | -2,650 | -3,622 | -6,272 |
| Other operating income | 78,802 | 25,962 | 104,764 |
| Summa rörelseintäkter | 732,280 | 1,017,236 | 1,749,516 |
| of which, internal | 0 | ||
| Credit losses, net | -146,827 | -317,449 | -464,276 |
| Operating income less credit losses | 585,453 | 699,787 | 1,285,240 |
| Jan-Dec 2020 | |||
| --- | --- | --- | --- |
| SEX thousand | Payment Solutions | Consumer Loans | Total Group |
| Interest income | 1,131,989 | 2,119,245 | 3,251,234 |
| Interest expense | -139,324 | -267,504 | -406,828 |
| Provision income | 322,695 | 102,519 | 425,214 |
| Provision expenses | -63,635 | -63,635 | |
| Net income/expense from financial transactions | -5,282 | -8,893 | -14,175 |
| Other operating income | 162,144 | 53,516 | 215,660 |
| Summa rörelseintäkter | 1,408,587 | 1,998,883 | 3,407,470 |
| of which, internal | 0 | ||
| Credit losses, net | -261,335 | -593,037 | -854,372 |
| Operating income less credit losses | 1,147,252 | 1,405,846 | 2,553,098 |
| Lending to the public | |||
| --- | --- | --- | --- |
| SEX thousand | Payment Solutions | Consumer Loans | Summa koncern |
| 30 Jun 2021 | 10,687,514 | 20,460,458 | 31,147,972 |
| 31 Dec 2020 | 10,993,623 | 19,864,718 | 30,858,341 |
| 30 Jun 2020 | 10,921,274 | 19,932,027 | 30,853,301 |
Resurs Bank
Interim Report Jan-Jun 2021
G5. Net interest income/expense
| SEX
thousand | Jan-Jun
2021 | Jan-Jun
2020 | Jan-Dec
2020 |
| --- | --- | --- | --- |
| Interest income | | | |
| Lending to credit institutions | 169 | | |
| Lending to the public | 1,478,797 | 1,674,884 | 3,243,099 |
| Interest-bearing securities | 1,182 | 6,068 | 8,135 |
| Total interest income | 1,480,148 | 1,680,952 | 3,251,234 |
| Interest expense | | | |
| Liabilities to credit institutions | -3,521 | -2,134 | -3,874 |
| Deposits and borrowing from the public | -125,003 | -155,461 | -296,181 |
| Issued securities | -42,004 | -38,239 | -72,279 |
| Subordinated debt | -2,095 | -16,797 | -33,107 |
| Other liabilities | -11,312 | -577 | -1,387 |
| Total interest expense | -183,935 | -213,208 | -406,828 |
| Net interest income/expense | 1,296,213 | 1,467,744 | 2,844,406 |
G6. Other operating income
| SEX
thousand | Jan-Jun
2021 | Jan-Jun
2020 | Jan-Dec
2020 |
| --- | --- | --- | --- |
| Other income, lending to the public | 72,180 | 82,480 | 157,950 |
| Other operating income | 26,684 | 22,284 | 57,710 |
| Total operating income | 98,864 | 104,764 | 215,660 |
G7. General administrative expenses
| SEX
thousand | Jan-Jun
2021 | Jan-Jun
2020 | Jan-Dec
2020 |
| --- | --- | --- | --- |
| Personnel expenses | -274,028 | -281,490 | -560,083 |
| Postage, communication and notification expenses | -62,986 | -65,359 | -131,748 |
| IT expenses | -108,647 | -103,301 | -194,512 |
| Cost of premises^{1)} | -9,082 | -9,686 | -20,610 |
| Consultant expenses | -31,038 | -28,737 | -58,459 |
| Other | -75,200 | -77,209 | -155,202 |
| Total general administrative expenses | -560,981 | -565,782 | -1,120,614 |
G8. Credit losses, net
| SEX
thousand | Jan-Jun
2021 | Jan-Jun
2020 | Jan-Dec
2020 |
| --- | --- | --- | --- |
| Provision of credit reserves | | | |
| Stage 1 | -13,073 | -42,231 | -45,323 |
| Stage 2 | -1,960 | -55,927 | -30,086 |
| Stage 3 | 124,630 | -174,724 | -169,394 |
| Total | 109,597 | -272,882 | -244,803 |
| Provision of credit reserves off balance (unutilised limit) | | | |
| Stage 1 | 1,947 | -5,919 | -6,148 |
| Stage 2 | -1,645 | 180 | 1,804 |
| Stage 3 | | | |
| Total | 302 | -5,739 | -4,344 |
| Write-offs of stated credit losses for the period | -484,134 | -217,874 | -641,923 |
| Recoveries of previously confirmed credit losses | 93 | 32,219 | 36,698 |
| Total | -484,041 | -185,655 | -605,225 |
| Credit losses | -374,142 | -464,276 | -854,372 |
| off which lending to the public | -374,444 | -458,537 | -850,028 |
Resurs Bank
Interim Report Jan-Jun 2021
G9. Lending to the public
| SEK thousand | 30 Jun 2021 | 31 Dec 2020 | 30 Jun 2020 |
|---|---|---|---|
| Retail sector | 33,705.541 | 33,495.835 | 33,594.040 |
| Corporate sector | 358.067 | 343.966 | 330.496 |
| Total lending to the public, gross | 34,063.608 | 33,839.801 | 33,924,536 |
| Stage 1 | 25,454.118 | 25,013.470 | 24,638.969 |
| Stage 2 | 3,651.420 | 3,521.766 | 3,706.266 |
| Stage 3 | 4,958.070 | 5,304.565 | 5,579.301 |
| Total lending to the public, gross | 34,063.608 | 33,839.801 | 33,924,536 |
| Less provision for anticipated credit losses | |||
| Stage 1 | -225.441 | -209.382 | -210.853 |
| Stage 2 | -437.033 | -428.880 | -463.699 |
| Stage 3 | -2,253.162 | -2,343.198 | -2,396.683 |
| Total anticipated credit losses | -2,915.636 | -2,981.460 | -3,071,235 |
| Stage 1 | 25,228.677 | 24,804.088 | 24,428.116 |
| Stage 2 | 3,214.387 | 3,092.886 | 3,242.567 |
| Stage 3 | 2,704.908 | 2,961.367 | 3,182.618 |
| Total net lending to the public | 31,147.972 | 30,858.341 | 30,853.301 |
G10. Other provisions
| SEK thousand | 30 Jun 2021 | 31 Dec 2020 | 30 Jun 2020 |
|---|---|---|---|
| Reporting value at the beginning of the year | 20,438 | 19,818 | 19,818 |
| Provision made during the year | -279 | 4,290 | 5,770 |
| Exchange rate differences | 296 | -3,670 | -797 |
| Total | 20,455 | 20,438 | 24,791 |
| Provision of credit reserves, unutilised limit, Stage 1 | 15,739 | 17,337 | 17,575 |
| Provision of credit reserves, unutilised limit, Stage 2 | 1,531 | 1,430 | |
| Other provisions | 3,185 | 3,101 | 5,786 |
| Reported value at the end of the year | 20,455 | 20,438 | 24,791 |
G11. Pledged assets, contingent liabilities and commitments
| TSEK | 30 Jun 2021 | 31 Dec 2020 | 30 Jun 2020 |
|---|---|---|---|
| Collateral pledged for own liabilities | |||
| Lending to credit institutions | 139,558 | 139,538 | 161,850 |
| Lending to the public^{2)} | 2,463,081 | 2,455,141 | 3,560,800 |
| Restricted bank deposits^{2)} | 32,090 | 32,286 | 32,273 |
| Total collateral pledged for own liabilities | 2,634,729 | 2,626,965 | 3,754,923 |
| Contingent liabilities | 0 | 0 | |
| Other commitments | |||
| Unutilised credit facilities granted | 23,783,716 | 23,891,248 | 26,664,798 |
| Total other commitments | 23,783,716 | 23,891,248 | 26,664,798 |
2) Refers to securitisation.
3) As at 30 June 2021 SEK 29.979 thousand (29.481) refers to the requirement account at the Bank of Finland.
Resurs Bank
Interim Report Jan-Jun 2021
G12. Related-party transactions
Resurs Bank AB is a wholly owned subsidiary of Resurs Holding AB, corporate identity number 556898-2291, which is owned 28.9 per cent by Waldokt AB. Of the remaining owners, no single owner holds 20 per cent or more.
Companies with significant influence through direct or indirect ownership of the Resurs Group also have controlling or significant influence of NetOnNet AB, with which the Resurs Group conducted significant transactions during the period.
Normal business transactions were conducted between the Resurs Group and these related companies and are presented below.
Transaction costs in the table refer to market-rate compensation for the negotiation of credit to related companies' customers.
Transactions with Parent Company
| SEX thousand | Jan-Jun 2021 | Jan-Jun 2020 | Jan-Dec 2020 |
|---|---|---|---|
| Interest expense | -31 | -30 | -61 |
| Other operating income | 2,676 | 2,310 | 4,620 |
| General administrative expenses | -8,570 | -10,180 | -19,351 |
| SEX thousand | 30 Jun 2021 | 31 Dec 2020 | 30 Jun 2020 |
| Other liabilities | -1,762 | -1,922 | -2,695 |
| Deposits and borrowing from the public | -84,869 | -177,869 | -187,808 |
Transactions with other Group Companies
| SEX thousand | Jan-Jun 2021 | Jan-Jun 2020 | Jan-Dec 2020 |
|---|---|---|---|
| Interest expense | -2,319 | -4,529 | -8,805 |
| Fee & commission income | 114,208 | 121,931 | 239,090 |
| Other operating income | 6,834 | 7,169 | 14,337 |
| General administrative expenses | -869 | -781 | -1,812 |
| SEX thousand | 30 Jun 2021 | 31 Dec 2020 | 30 Jun 2020 |
| Other assets | 7,901 | 14,200 | |
| Deposits and borrowing from the public | -202,351 | -1,471 | -265 |
| Other liabilities | -36,835 | -9,255 | |
| Subordinated debt | -200,000 | -200,000 |
Transactions with other companies with significant influence
| SEX thousand | Jan-Jun 2021 | Jan-Jun 2020 | Jan-Dec 2020 |
|---|---|---|---|
| Processing fees | -36,475 | -31,031 | -68,763 |
| Interest expense – deposits and borrowing from the public | -216 | -218 | -437 |
| Fee & commission income | |||
| General administrative expenses | -496 | -720 | -1,391 |
| SEX thousand | 30 Jun 2021 | 31 Dec 2020 | 30 Jun 2020 |
| Lending to public | 13 | 82 | 14 |
| Other assets | |||
| Deposits and borrowing from the public | -147,397 | -159,195 | -185,447 |
| Other liabilities | -13,390 | -18,387 | -12,250 |
Transactions with key persons
| SEX thousand | Jan-Jun 2021 | Jan-Jun 2020 | Jan-Dec 2020 |
|---|---|---|---|
| Interest expense – deposits and borrowing from the public | -22 | -24 | -48 |
| SEX thousand | 30 Jun 2021 | 31 Dec 2020 | 30 Jun 2020 |
| Lending to public | 8 | 8 | 23 |
| Deposits and borrowing from the public | -7,019 | -7,619 | -7,835 |
Resurs Bank
Interim Report Jan-Jun 2021
G13. Financial instruments
| SEK thousand | 30 Jun 2021 | 31 Dec 2020 | 30 Jun 2020 | |||
|---|---|---|---|---|---|---|
| Carrying amount | Fair value | Carrying amount | Fair value | Carrying amount | Fair value | |
| Assets | ||||||
| Financial assets | ||||||
| Cash and balances at central banks | 212,184 | 212,184 | 208,520 | 208,520 | 215,493 | 215,493 |
| Treasury and other bills eligible for refinancing | 2,152,806 | 2,152,806 | 2,283,253 | 2,283,253 | 2,246,182 | 2,246,182 |
| Lending to credit institutions | 4,428,261 | 4,428,261 | 3,818,574 | 3,818,574 | 4,076,821 | 4,076,821 |
| Lending to the public | 31,147,972 | 31,737,228 | 30,858,341 | 31,390,974 | 30,853,301 | 31,306,997 |
| Bonds and other interest-bearing securities | 639,194 | 639,194 | 669,570 | 669,570 | 785,978 | 785,978 |
| Shares and participating interests | 11,421 | 11,421 | 7,287 | 7,287 | 17,392 | 17,392 |
| Derivatives | 17,601 | 17,601 | 113,272 | 113,272 | 174,925 | 174,925 |
| Other assets | 60,156 | 60,156 | 45,649 | 45,649 | 44,591 | 44,591 |
| Accrued income | 59,286 | 59,286 | 45,323 | 45,323 | 133,987 | 133,987 |
| Total financial assets | 38,728,881 | 39,318,137 | 38,049,789 | 38,582,422 | 38,548,670 | 39,002,366 |
| Intangible fixed assets | 1,901,565 | 1,846,678 | 1,904,064 | |||
| Tangible assets | 128,686 | 107,518 | 119,458 | |||
| Other non-financial assets | 201,541 | 184,360 | 118,533 | |||
| Total assets | 40,960,673 | 40,188,345 | 40,690,725 | |||
| SEK thousand | 30 Jun 2021 | 31 Dec 2020 | 30 Jun 2020 | |||
| --- | --- | --- | --- | --- | --- | --- |
| Carrying amount | Fair value | Carrying amount | Fair value | Carrying amount | Fair value | |
| Liabilities | ||||||
| Financial liabilities | ||||||
| Liabilities to credit institutions | 500 | 500 | 107,400 | 107,400 | 159,100 | 159,100 |
| Deposits and borrowing from the public | 25,203,171 | 25,202,909 | 24,871,535 | 24,872,097 | 24,593,339 | 24,592,341 |
| Derivatives | 9,149 | 9,149 | 3,659 | 3,659 | 9,177 | 9,177 |
| Other liabilities | 501,650 | 501,650 | 440,918 | 440,918 | 417,670 | 417,670 |
| Accrued expenses | 274,758 | 274,758 | 168,166 | 168,166 | 244,230 | 244,230 |
| Issued securities | 6,876,836 | 6,912,539 | 6,297,472 | 6,322,511 | 7,436,727 | 7,457,568 |
| Subordinated debt | 599,103 | 613,110 | 798,702 | 801,734 | 798,294 | 769,701 |
| Total financial liabilities | 33,465,167 | 33,514,615 | 32,687,852 | 32,716,485 | 33,658,537 | 33,649,787 |
| Provisions | 20,455 | 20,438 | 24,791 | |||
| Other non-financial liabilities | 322,119 | 334,877 | 257,048 | |||
| Equity | 7,152,932 | 7,145,178 | 6,750,349 | |||
| Total equity and liabilities | 40,960,673 | 40,188,345 | 40,690,725 |
For current receivables, current liabilities and variable-rate deposits, the carrying amount reflects the fair value.
Financial instruments
| Financial assets and liabilities at fair value | ||||||||
|---|---|---|---|---|---|---|---|---|
| SEK thousand | 30 Jun 2021 | 31 Dec 2020 | 30 Jun 2020 | |||||
| Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | |
| Financial assets at fair value through profit or loss: | ||||||||
| Treasury and other bills eligible for refinancing | 2,152,806 | 2,283,253 | 2,246,182 | |||||
| Bonds and other interest-bearing securities | 639,194 | 669,570 | 785,978 | |||||
| Shares and participating interests | 11,421 | 7,287 | 17,392 | |||||
| Derivatives | 17,601 | 113,272 | 174,925 | |||||
| Total | 2,792,000 | 17,601 | 11,421 | 2,952,823 | 113,272 | 7,287 | 3,032,160 | 174,925 |
| Financial liabilities at fair value through profit or loss: | ||||||||
| Derivatives | -9,149 | -3,659 | -9,177 | |||||
| Total | 0 | -9,149 | 0 | 0 | -3,659 | 0 | 0 | -9,177 |
| Changes in level 3 | ||||||||
| SEK thousand | Jan-Jun 2021 | Jan-Dec 2020 | ||||||
| Shares and participating interests | ||||||||
| Opening balance | 7,287 | 17,421 | ||||||
| Investments during the period | 4,092 | |||||||
| Depreciation | -10,000 | |||||||
| Exchange-rate fluctuations | 42 | -134 | ||||||
| Closing balance | 11,421 | 7,287 |
Resurs Bank
Interim Report Jan-Jun 2021
Return Report Jan-Jun 2021
Determination of fair value of financial instruments
Level 1
Listed prices (unadjusted) on active markets for identical assets or liabilities.
Level 2
Inputs that are observable for the asset or liability other than listed prices included in Level 1, either directly (i.e., as price quotations) or indirectly (i.e., derived from price quotations).
Level 3
Inputs for the asset or liability that are not based on observable market data (i.e., unobservable inputs).
Financial instruments measured at fair value for disclosure purposes
The carrying amount of variable rate deposits and borrowing from the public is deemed to reflect fair value.
For fixed rate deposits and borrowing from the public, fair value is calculated based on current market rates, with the initial credit spread for deposits kept constant. Fair value has been classified as level 2.
For subordinated debts to fellow subsidiary, Solid Försäkrings AB, fair value of issued amount is calculated by using the present value method. The fair value has been classified as level 2.
Fair value of subordinated debt is calculated based on valuation at the listing marketplace. Fair value has been classified as level 1.
Fair value of issued securities (MTN) is calculated based on the listing marketplace. Fair value has been classified as level 1.
Transfer between levels
There has not been any transfer of financial instruments between the levels.
Financial assets and liabilities that are offset or subject to netting agreements
Derivative agreement has been made under the ISDA agreement. The amounts are not offset in the statement of financial position. Most of the derivatives at 31 December 2020 were covered by the ISDA Credit Support Annex, which means that collateral is obtained and provided in the form of bank deposits between the parties.
NIM, % (1)
Interest income less interest expenses in relation to average balance of lending to the
Return on equity excl. Intangible fixed assets, (ROTE), % (1)
Profit for the period as a percentage of average equity less intangible fixed assets.
Risk adjusted NBI-margin, % (1)
NBI-margin adjusted for credit loss ratio.
Tier 2 capital (1)
Tier 2 capital comprises dated or perpetual subordinated loans.
Total capital ratio, % (1)
Total capital in relation to risk-weighted amount as per the Swedish Financial Supervisory Authority's directive.
Nonrecurring costs (1)
Items deemed to be of a one-off nature, meaning individual transactions, to facilitate the comparison of profit between periods. Items are identified and recognised separately since they are considered to reduce comparability.
NBI margin, % (1)
Operating income in relation to the average balance of lending to the public.
Net interest income/expense (1)
Interest income less interest expenses.
NIM represent and analysts to assess the Group's performance and are not defined in International Financial Reporting Standards (IFRS) or in the capital adequacy rules. Management believes that the performance measures make it easier for investors to analyse the Group's performance. Calculations and reconciliation against information in the financial statements of these performance measures are provided on the website under "Financial reports."
Key ratios according to capital adequacy rules, referring to the consolidated situation comprises the Resurs Bank AB Group and its Parent Company Resurs Holding AB.
Definitions
C/I before credit losses, % (1)
Expenses before credit losses in relation to operating income.
Capital base (1)
The sum of Tier 1 capital and Tier 2 capital.
Common equity tier 1 capital (1)
Common Equity Tier 1 capital comprises share capital, paid-in capital, retained earnings and other reserves of the companies included in the consolidated situation.
Core tier 1 ratio (1)
Core Tier 1 capital in relation to risk-weighted amount as per the Swedish Financial Supervisory Authority's directive.
Credit loss ratio, % (1)
Net credit losses in relation to the average balance of loans to the public.
Lending to the public, excl. exchange rate differences (1)
Total lending to the public in local currency, excl. exchange rate differences.
NBI margin, % (1)
Operating income in relation to the average balance of lending to the public.
Resurs Bank
Interim Report Jan-Jun 2021
Parent company
Income statement
| SEX
thousand | Jan-Jun 2021 | Jan-Jun 2020 | Jan-Dec 2020 |
| --- | --- | --- | --- |
| Interest income | 1,479,979 | 1,680,506 | 3,250,491 |
| Lease income | 1,200 | 3,998 | 6,320 |
| Interest expense | -183,537 | -212,705 | -405,887 |
| Fee & commission income | 199,346 | 213,367 | 425,214 |
| Fee & commission expense | -38,627 | -30,087 | -63,635 |
| Net income/expense from financial transactions | 1,903 | -6,286 | -14,197 |
| Other operating income | 98,870 | 104,770 | 215,672 |
| Total operating income | 1,559,134 | 1,753,563 | 3,413,978 |
| General administrative expenses | -602,926 | -594,686 | -1,178,587 |
| Depreciation, amortisation and impairment of intangible and tangible fixed assets | -62,072 | -68,059 | -131,513 |
| Other operating expenses | -39,613 | -52,653 | -107,903 |
| Total expenses before credit losses | -704,611 | -715,398 | -1,418,003 |
| Earnings before credit losses | 854,523 | 1,038,165 | 1,995,975 |
| Credit losses, net | -374,131 | -464,445 | -854,566 |
| Operating profit/loss | 480,392 | 573,720 | 1,141,409 |
| Income tax expense | -114,760 | -135,042 | -314,481 |
| Net profit for the period | 365,632 | 438,678 | 826,928 |
| Attributable to Resurs Bank AB shareholders | 365,632 | 438,678 | 826,928 |
Statement of comprehensive income
| SEX
thousand | Jan-Jun 2021 | Jan-Jun 2020 | Jan-Dec 2020 |
| --- | --- | --- | --- |
| Net profit for the period | 365,632 | 438,678 | 826,928 |
| Other comprehensive income that will be reclassified to profit/loss | | | |
| Translation differences for the period, foreign operations | 36,460 | -88,713 | -90,373 |
| Comprehensive income for the period | 402,092 | 349,965 | 736,555 |
| Attributable to Resurs Bank AB shareholders | 402,092 | 349,965 | 736,555 |
Resurs Bank
Interim Report Jan-Jun 2021
Balance sheet
| SEX
Housend | 30 Jun
2021 | 31 Dec
2020 | 30 Jun
2020 |
| --- | --- | --- | --- |
| Assets | | | |
| Cash and balances at central banks | 212,184 | 208,520 | 215,493 |
| Treasury and other bills eligible for refinancing | 2,152,806 | 2,283,253 | 2,246,182 |
| Lending to credit institutions | 4,332,906 | 3,701,645 | 3,938,414 |
| Lending to the public | 31,192,239 | 30,900,538 | 30,913,387 |
| Bonds and other interest-bearing securities | 639,194 | 669,570 | 785,978 |
| Shares and participating interests | 11,421 | 7,287 | 17,392 |
| Shares and participating interests, in Group companies | 50,099 | 50,099 | 50,099 |
| Intangible fixed assets | 1,351,968 | 1,365,443 | 1,422,351 |
| Tangible assets | 45,758 | 50,200 | 55,113 |
| Other assets | 210,318 | 221,966 | 280,787 |
| Prepaid expenses and accrued income | 132,582 | 171,131 | 196,208 |
| TOTAL ASSETS | 40,331,475 | 39,629,652 | 40,121,404 |
| Liabilities, provisions and equity | | | |
| Liabilities and provisions | | | |
| Liabilities to credit institutions | 500 | 107,400 | 159,100 |
| Deposits and borrowing from the public | 25,204,737 | 24,873,110 | 24,594,912 |
| Other liabilities | 2,631,431 | 2,592,002 | 3,375,285 |
| Accrued expenses and deferred income | 313,245 | 199,452 | 277,809 |
| Other provisions | 20,455 | 20,438 | 24,791 |
| Issued securities | 4,876,836 | 4,297,472 | 4,536,727 |
| Subordinated debt | 599,103 | 798,702 | 798,294 |
| Total liabilities and provisions | 33,646,307 | 32,888,576 | 33,766,918 |
| Untaxed reserves | 216,340 | 216,340 | 216,340 |
| Equity | | | |
| Restricted equity | | | |
| Share capital | 500,000 | 500,000 | 500,000 |
| Statutory reserve | 12,500 | 12,500 | 12,500 |
| Unrestricted equity | | | |
| Fair value reserve | 13,560 | -22,900 | -21,240 |
| Retained earnings | 5,577,136 | 5,208,208 | 5,208,208 |
| Net profit for the year | 365,632 | 826,928 | 438,678 |
| Total equity | 6,468,828 | 6,524,736 | 6,138,146 |
TOTAL LIABILITIES, PROVISIONS AND EQUITY
See Note P4 for information on pledged assets, contingent liabilities and commitments.
Resurs Bank
Interim Report Jan-Jun 2021
Statement of changes in equity
| TSEK | Share capital | Share premium | Translation reserve | Retained earnings | Profit/loss for the year | Total equity |
|---|---|---|---|---|---|---|
| Initial equity at 1 January 2020 | 500,000 | 12,500 | 67,473 | 4,195,818 | 1,012,390 | 5,788,181 |
| Owner transactions | ||||||
| Appropriation of profits according to resolution by Annual General Meeting | 1,012,390 | -1,012,390 | 0 | |||
| Net profit for the period | 438,678 | 438,678 | ||||
| Other comprehensive income for the year | -88,713 | -88,713 | ||||
| Equity at 30 June 2020 | 500,000 | 12,500 | -21,240 | 5,208,208 | 438,678 | 6,138,146 |
| Initial equity at 1 January 2020 | 500,000 | 12,500 | 67,473 | 4,195,818 | 1,012,390 | 5,788,181 |
| Appropriation of profits according to resolution by Annual General Meeting | 1,012,390 | -1,012,390 | 0 | |||
| Net profit for the year | 826,928 | 826,928 | ||||
| Other comprehensive income for the year | -90,373 | -90,373 | ||||
| Equity at 31 December 2020 | 500,000 | 12,500 | -22,900 | 5,208,208 | 826,928 | 6,524,736 |
| Initial equity at 1 January 2021 | 500,000 | 12,500 | -22,900 | 5,208,208 | 826,928 | 6,524,736 |
| Owner transactions | 0 | |||||
| Dividends paid according to General Meeting | -458,000 | -458,000 | ||||
| Appropriation of profits according to resolution by Annual General Meeting | 826,928 | -826,928 | 0 | |||
| Net profit for the period | 365,632 | 365,632 | ||||
| Other comprehensive income for the year | 36,460 | 36,460 | ||||
| Equity at 30 June 2021 | 500,000 | 12,500 | 13,560 | 5,577,136 | 365,632 | 6,468,828 |
Resurs Bank
Interim Report Jan-Jun 2021
Cash flow statement (indirect method)
| SEK
thousand | Jan-Jun
2021 | Jan-Dec
2020 | Jan-Jun
2020 |
| --- | --- | --- | --- |
| Operating activities | | | |
| Operating profit | 480,392 | 1,141,409 | 573,720 |
| - of which, interest received | 1,480,000 | 3,252,533 | 1,683,069 |
| - of which, interest paid | -116,299 | -422,236 | -137,756 |
| Adjustments for non-cash items in operating profit | 508,531 | 996,986 | 623,013 |
| Tax paid | -225,692 | -293,840 | -205,175 |
| Cash flow from operating activities before changes in operating assets and liabilities | 763,231 | 1,844,555 | 991,558 |
| Changes in operating assets and liabilities | | | |
| Lending to the public | -315,590 | -1,533,092 | -725,828 |
| Other assets | 13,213 | 612,990 | 213,497 |
| Liabilities to credit institutions | -106,900 | 12,500 | 64,200 |
| Deposits and borrowing from the public | 65,851 | 674,491 | 359,376 |
| Acquisition of investment assets 1) | -2,059,261 | -4,671,785 | -2,604,391 |
| Divestment of investment assets 2) | 2,230,633 | 4,285,241 | 2,148,192 |
| Other liabilities | 112,018 | -920,571 | -71,728 |
| Cash flow from operating activities | 703,195 | 304,329 | 374,876 |
| Investing activities | | | |
| Acquisition of intangible and tangible fixed assets | -6,697 | -29,922 | -18,027 |
| Divestment of intangible and tangible fixed assets | 1,126 | 9,113 | 3,428 |
| Cash flow from investing activities | -5,571 | -20,809 | -14,599 |
| Financing activities | | | |
| Dividends paid | -458,000 | | |
| Shareholder's contributions | | | |
| Issued securities | 578,349 | -477,406 | -237,050 |
| Subordinated debt | -200,000 | | |
| Cash flow from financing activities | -79,651 | -477,406 | -237,050 |
| Cash flow for the period | 617,973 | -193,886 | 123,227 |
| Cash & cash equivalents at beginning of the year 2) | 3,910,165 | 4,115,479 | 4,115,479 |
| Exchange rate differences | 16,952 | -11,428 | -84,798 |
| Cash & cash equivalents at end of the year 2) | 4,545,090 | 3,910,165 | 4,153,907 |
| Adjustment for non-cash items in operating profit | | | |
| Credit losses | 374,131 | 854,566 | 464,445 |
| Depreciation, amortisation and impairment of intangible and tangible fixed assets | 62,072 | 131,513 | 68,059 |
| Profit/loss tangible assets | -118 | -739 | -227 |
| Profit/loss on investment assets 1) | 1,315 | -2,709 | 1,547 |
| Change in provisions | -272 | 1,701 | 5,860 |
| Adjustment to interest paid/received | 72,011 | -6,604 | 76,339 |
| Currency effects | -2,026 | 5,921 | 5,162 |
| Depreciation, amortisation and impairment of shares | | 10,000 | |
| Other items that do not affect liquidity | 1,418 | 3,337 | 1,827 |
| Sum non-cash items in operating profit | 508,531 | 996,986 | 623,013 |
1) Investment assets are comprised of bonds and other interest-bearing securities, treasury and other bills eligible for refinancing, subordinated debt and shares and participating interest.
2) Liquid assets are comprised of lending to credit institutions and cash and balances at central banks.
Resurs Bank
Interim Report Jan-Jun 2021
Resurs Bank
Interim Report Jan-Jun 2021
P1. Accounting principles
The Parent Company's interim report has been prepared in accordance with the Swedish Annual Accounts Act for Credit Institutions and Securities Companies and the Swedish Financial Supervisory Authority's regulations and general guidelines on Annual Reports in Credit Institutions and Securities Companies (FFFS 2008:25). The same accounting and valuation policies were applied as in the latest annual report.
P2. Financing
A core component of financing efforts is maintaining a well-diversified financing structure with access to several sources of financing. Access to a number of sources of financing means that it is possible to use the most appropriate source of financing at any particular time.
The main type of financing remains deposits from the public. This type of financing has been offered to customers in Sweden, Norway and Germany. Deposits, which are analysed on a regular basis, totalled SEK 25,205 million (24.875), whereof in Sweden SEK 12.071 million (11.714), in Norway SEK 6,419 million (6.441) and in Germany SEK 6,715 million (6,718). The lending to the public/deposits from the public ratio is 124 per cent (124 per cent).
Resurs Bank has a funding programme for issuing bonds, the programme amounts to SEK 9,000 million (9.000). Within the programme, Resurs Bank has been working successfully to issue bonds on a regular basis and sees itself as an established issuer on the market. Resurs Bank has primarily issued bonds in Sweden but also in Norway. The programme has ten outstanding issues at a nominal amount of SEK 4,950 million (4.900) and NOK 600 million. Of the ten issues, eight are senior unsecured bonds and two issues are a subordinated loan of SEK 600 million (600).
Resurs Bank has been awarded an updated rating from the rating company Nordic Credit Rating (NCR) in april 2021. Resurs Bank's credit rating was raised from BBB- to BBB based on Resurs Bank's ability to attract new partners and an improved Nordic consumer credit market. Access to Nordic Credit Ratings analyses can be found on the website www.nordiccreditrating.com.
Resurs Bank has completed a securitisation of loan receivables, a form of structured financing, referred to as Asset Backed Securities (ABS). This took place by transferring loan receivables to Resurs Bank's wholly owned subsidiaries Resurs Consumer Loans 1 Limited. Resurs Bank signed an agreement on 19 November 2020 to extend the existing ABS financing, starts in December 2020. This financing has been arranged with JP Morgan Chase Bank. Resurs Bank has for a period of 18 months (revolving period), the right to continue sale of certain additional loan receivables to Resurs Consumer Loans. At 30 June 2021 a total of approximately SEK 2.5 billion in loan receivables had been transferred to Resurs Consumer Loans. Resurs Bank and Resurs Consumer Loans have provided security for the assets that form part of the securitisation. At the balance sheet date, the external financing amounted to SEK 2.0 billion (2.0) of the ABS financing.
Liquidity
Liquidity risk includes the risk of not being able to meet liquidity commitments without significantly higher costs. The consolidated situation, must maintain a liquidity reserve and have access to an unutilised liquidity margin in the event of irregular or unexpected liquidity flows.
Liquidity risks are managed through policies that specify limits, responsibilities and monitoring and include a contingency plan. The purpose of the contingency plan is to make preparations for various courses of action should the liquidity situation trend unfavourably. The contingency plan includes, among other things, risk indicators and action plans. The Bank's liquidity risk is controlled and audited by independent functions.
Liquidity comprises both a liquidity reserve and another liquidity portfolio that is monitored on a daily basis. The main liquidity risk is deemed to arise in the event multiple depositors simultaneously withdraw their deposited funds. An internal model is used to set minimum requirements for the amount of the liquidity reserve, calculated based on deposit volumes, the proportion covered by deposit insurance and relationship to depositors. The model also takes into account the future maturities of issued securities. The Board has stipulated that the liquidity reserve may never fall below SEK 1,400 million. Apart from the liquidity reserve, there is an intraday liquidity requirement of at least 4 per cent of deposits from the public, or a minimum SEK 800 million. There are also other liquidity requirements regulating and controlling the business.
The liquidity reserve, totalling SEK 1,878 million (1.860), is in accordance with Swedish Financial Supervisory Authority regulations on liquidity risk management (FFFS 2010:7) and applicable amendments thereto) for Resurs Bank. Accordingly, assets are segregated, unutilised and of high quality. The liquidity reserve largely comprises assets with the highest credit quality rating.
In addition to the liquidity reserve, Resurs Bank has other liquid assets primarily comprised of cash balances with other banks. These assets are of high credit quality and total SEK 5,460 million (5,005). Accordingly, total liquidity amounted to SEK 7,339 million (6,865). Total liquidity corresponded to 29 per cent (27 per cent) of deposits from the public. The Bank also has unutilised credit facilities of NOK 50 million (50).
Liquidity Coverage Ratio (LCR) for the consolidated situation is reported to the authorities on a monthly basis. The LCR shows the ratio between high qualitative assets and net outflow during a 30-day stressed period. A ratio of 100 per cent means the assets managed the stress test scenario and is also the authority's limit. As at 30 June 2021 the ratio for the consolidated situation is 292 per cent (288 per cent). For the period January to June 2021, the average LCR measures 264 per cent.
All valuations of interest-bearing securities were made at market values that take into account accrued interest.
36
Summary of liquidity
| SEK thousand | 30 Jun 2021 | 31 Dec 2020 | 30 Jun 2020 |
|---|---|---|---|
| Liquidity reserve as per FFFS 2010:7 definition | |||
| Securities issued by sovereigns | 177.935 | 176.381 | 181.397 |
| Securities issued by municipalities | 965.900 | 958.037 | 901.637 |
| Lending to credit institutions | 95.000 | 55.000 | |
| Bonds and other interest-bearing securities | 639.582 | 670.374 | 786.774 |
| Summary Liquidity reserve as per FFFS 2010:7 | 1,878,417 | 1,859,792 | 1,869,808 |
| Other liquidity portfolio | |||
| Cash and balances at central banks | 212.184 | 208.520 | 215.493 |
| Securities issued by municipalities | 1,010.206 | 1,150.181 | 199.990 |
| Lending to credit institutions | 4,237.906 | 3,646.645 | 3,938.414 |
| Bonds and other interest-bearing securities | 964.926 | ||
| Total other liquidity portfolio | 5,460,296 | 5,005,346 | 5,318,823 |
| Total liquidity portfolio | 7,338,713 | 6,865,138 | 7,188,631 |
| Other liquidity-creating measures | |||
| Unutilised credit facilities | 49.710 | 47.730 | 47.975 |
Stress tests are carried out on a regular basis to ensure that there is liquidity in place for circumstances that deviate from normal conditions. One recurring stress test is significant outflows of deposits from the public.
In evaluating liquid assets for LCR reporting, the following assessment of liquid asset quality is made before each value judgement in accordance with the EU Commission's delegated regulation (EU) 575/2013.
Liquid assets according to LCR
30/06/2021
| TSEK | Total | SEK | EUR | DKK | NOK |
|---|---|---|---|---|---|
| Level 1 assets | |||||
| Cash and balances with central banks | 182.205 | 120.352 | 61.853 | ||
| Securities or guaranteed by sovereigns, central banks, MDBs and international org. | 177.936 | 118.024 | 28.818 | 31.095 | |
| Securities issued by municipalities and PSEs | 1,976.107 | 1,668.291 | 73.535 | 0 | 234.280 |
| Extremely high quality covered bonds | 432.291 | 196.689 | 150.622 | 0 | 84.980 |
| Level 2 assets | |||||
| High quality covered bonds | 207.290 | 125.422 | 81.868 | ||
| Total liquid assets | 2,975,828 | 1,990,402 | 462,533 | 28,818 | 494,075 |
31/12/2020
| TSEK | Total | SEK | EUR | DKK | NOK |
|---|---|---|---|---|---|
| Level 1 assets | |||||
| Cash and balances with central banks | 179.039 | 119.552 | 59.487 | ||
| Securities or guaranteed by sovereigns, central banks, MDBs and international org. | 176.381 | 117.636 | 28.696 | 30.049 | |
| Securities issued by municipalities and PSEs | 1,908.211 | 1,609.889 | 73.853 | 224.469 | |
| Extremely high quality covered bonds | 390.740 | 117.923 | 191.293 | 81.524 | |
| Level 2 assets | |||||
| High quality covered bonds | 279.634 | 201.043 | 78.591 | ||
| Total liquid assets | 2,934,005 | 1,928,855 | 502,334 | 28,696 | 474,120 |
Additional information on the Group's management of liquidity risks is available in the Group's 2020 Annual report.
| SEK thousand | 30 Jun 2021 | 31 Dec 2020 | 30 Jun 2020 |
|---|---|---|---|
| Total liquid assets | 2,975,828 | 2,934,005 | 3,220,184 |
| Net liquidity outflow | 998,025 | 995,751 | 1,007,559 |
| LCR measure | 292% | 288% | 310% |
Resurs Bank
Interim Report Jan-Jun 2021
P3. Capital adequacy
Capital requirements are calculated in accordance with European Parliament and Council Regulation EU 575/2013 (CRR) and Directive 2013/36 EU (CRO IV). The Directive was incorporated via the Swedish Capital Buffers Act (2014/466), and the Swedish Financial Supervisory Authority's (SFSA) regulations regarding prudential requirements and capital buffers (FFFS 2014/12). The capital requirement calculation below comprises the statutory minimum capital requirement for credit risk, credit valuation adjustment risk, market risk and operational risk.
The combined buffer requirement for the consolidated situation comprises a capital conservation buffer and a countercyclical capital buffer. The capital conservation buffer requirement amounts to 2.5 per cent of the risk-weighted assets. The countercyclical capital buffer requirement is weighted according to geographical requirements. The countercyclical capital buffer requirement is weighted according to geographical requirements and after being lowered by the supervisory authorities in spring 2020 amounted to 0.2 per cent. Only Norwegian exposures have a buffer requirement remaining, which is currently 1.0 per cent of risk-weighted Norwegian assets. The bank calculates the capital requirement for credit risk, credit valuation adjustment risk, market risk and operational risk.
Credit risk is calculated by applying the standardised method under which the asset items of the consolidated situation are weighted and divided between 17 different exposure classes. The total risk-weighted exposure amount is multiplied by 8 per cent to obtain the minimum capital requirement for credit risk. The capital requirement for operational risk is calculated by the standardised method. Under this method, the capital requirement for operational risks is 12 per cent of the income indicator (meaning average operating income for the past three years). External rating companies are used to calculate the bank's capital base requirement for bonds and other interest-bearing securities.
Resurs Bank has applied to the Swedish Financial Supervisory Authority for permission to apply the transition rules decided at EU level in December 2017. Under the transition rules, a gradual phase-in of the effect of IFRS 9 on capital adequacy is permitted, regarding both the effect of the transition from IAS 39 as at 1 January 2018 and the effect on the reporting date that exceeds the amount when IFRS 9 is first applied to stage 1 and stage 2. The phase-in period is as follows: 2018: 5 %, 2019: 10 %, 2020: 15 %, 2021: 20 %, 2022: 25 %, 2023: 25 %
Capital base
| SEX
thousand | 30 Jun
2021 | 31 Dec
2020 | 30 Jun
2020 |
| --- | --- | --- | --- |
| Tier 1 capital | | | |
| Equity | 6,468,828 | 6,524,736 | 6,138,146 |
| Proposed dividend | | -458,000 | |
| Foreseeable dividend | -632,098 | -392,000 | -623,720 |
| Untaxed reserves (78% thereof) | 168,745 | 168,745 | 168,745 |
| Equity | 6,005,475 | 5,843,481 | 5,683,171 |
| Adjustments according to transition rules IFRS 9: | | | |
| Initial revaluation effect | 169,371 | 237,119 | 237,119 |
| Less: | | | |
| Additional value adjustments | -2,821 | -3,073 | -3,224 |
| Intangible assets | -1,351,968 | -1,365,443 | -1,422,351 |
| Total Common Equity Tier 1 capital | 4,820,057 | 4,712,084 | 4,494,715 |
| Total Tier 1 capital | 4,820,057 | 4,712,084 | 4,494,715 |
| Tier 2 capital | | | |
| Dated subordinated loans | 599,103 | 611,845 | 631,591 |
| Total Tier 2 capital | 599,103 | 611,845 | 631,591 |
| Total capital base | 5,419,160 | 5,323,929 | 5,126,306 |
Resurs Bank
Interim Report Jan-Jun 2021
Specification of risk-weighted exposure amount and capital requirements
| SEK thousand | 30 Jun 2021 | 31 Dec 2020 | 30 Jun 2020 | |||
|---|---|---|---|---|---|---|
| Risk-weighted exposure amount | Capital requirement^{(a)} | Risk-weighted exposure amount | Capital requirement^{(a)} | Risk-weighted exposure amount | Capital requirement^{(a)} | |
| Exposures to institutions | 917,719 | 73,417 | 752,268 | 60,181 | 804,166 | 64,333 |
| Exposures to corporates | 359,081 | 28,726 | 341,056 | 27,284 | 340,175 | 27,214 |
| Retail exposures | 21,228,564 | 1,698,285 | 20,883,338 | 1,670,667 | 20,730,811 | 1,658,465 |
| Exposures in default | 2,781,224 | 222,498 | 3,044,468 | 243,557 | 3,274,504 | 261,960 |
| Exposures in the form of covered bonds | 63,856 | 5,108 | 66,890 | 5,351 | 78,519 | 6,282 |
| Equity exposures | 61,509 | 4,921 | 57,379 | 4,591 | 67,474 | 5,398 |
| Other items | 365,765 | 29,262 | 322,683 | 25,816 | 345,614 | 27,649 |
| Total credit risks | 25,777,718 | 2,062,217 | 25,468,082 | 2,037,447 | 25,641,263 | 2,051,501 |
| Credit valuation adjustment risk | 39,507 | 3,161 | 25,265 | 2,021 | 44,937 | 3,595 |
| Market risk | ||||||
| Currency risk | 0 | 0 | 0 | 0 | 0 | 0 |
| Operational risk (standard methods) | 5,089,268 | 407,141 | 5,089,268 | 407,141 | 4,849,713 | 387,977 |
| Total risk-weighted exposure and total capital requirement | 30,906,493 | 2,472,519 | 30,582,615 | 2,446,609 | 30,535,913 | 2,442,873 |
| Concentration risk | 259,535 | 256,135 | 250,839 | |||
| Interest rate risk | 22,667 | 29,936 | 27,401 | |||
| Currency risk | 810 | 4,667 | 1,733 | |||
| Pension risk | 0 | 0 | 10,000 | |||
| Total Tier 2 capital requirement | 283,012 | 290,738 | 289,973 | |||
| Capital buffers | ||||||
| Capital conservation buffer | 772,662 | 764,566 | 763,397 | |||
| Countercyclical capital buffer | 58,304 | 64,314 | 70,987 | |||
| Total capital requirement Capital buffers | 830,966 | 828,880 | 834,384 | |||
| Total capital requirement | 3,586,497 | 3,566,227 | 3,567,230 |
(1) Capital requirement information is provided for exposure classes that have exposures.
Regulatory capital requirements
| 30 Jun 2021 | 31 Dec 2020 | 30 Jun 2020 | ||||
|---|---|---|---|---|---|---|
| Amount | Share of risk-weighted exposure amount | Amount | Share of risk-weighted exposure amount | Amount | Share of risk-weighted exposure amount | |
| Common Equity Tier 1 capital pursuant to Article 92 CRR (Pillar 1) | 1,390,792 | 4.5 | 1,376,218 | 4.5 | 1,374,116 | 4.5 |
| Other Common Equity Tier 1 capital requirements (Pillar 2) | 159,194 | 0.5 | 195,747 | 0.6 | 195,408 | 0.6 |
| Combined buffer requirement | 830,966 | 2.7 | 828,880 | 2.7 | 834,384 | 2.7 |
| Total Common Equity Tier 1 capital requirements | 2,380,952 | 7.7 | 2,400,844 | 7.9 | 2,403,909 | 7.9 |
| Common Equity Tier 1 capital | 4,820,057 | 15.6 | 4,712,084 | 15.4 | 4,494,715 | 14.7 |
| Tier 1 capital requirements under Article 92 CRR (Pillar 1) | 1,854,390 | 6.0 | 1,834,957 | 6.0 | 1,832,155 | 6.0 |
| Other Tier 1 capital requirements (Pillar 2) | 212,259 | 0.7 | 236,456 | 0.8 | 237,035 | 0.8 |
| Combined buffer requirement | 830,966 | 2.7 | 828,880 | 2.7 | 834,384 | 2.7 |
| Total Tier 1 capital requirements | 2,897,614 | 9.4 | 2,900,292 | 9.5 | 2,903,574 | 9.5 |
| Tier 1 capital | 4,820,057 | 15.6 | 4,712,084 | 15.4 | 4,494,715 | 14.7 |
| Capital requirements under Article 92 CRR (Pillar 1) | 2,472,519 | 8.0 | 2,446,609 | 8.0 | 2,442,873 | 8.0 |
| Other capital requirements (Pillar 2) | 283,012 | 0.9 | 290,738 | 1.0 | 289,973 | 0.9 |
| Combined buffer requirement | 830,966 | 2.7 | 828,880 | 2.7 | 834,384 | 2.7 |
| Total capital requirement | 3,586,497 | 11.6 | 3,566,227 | 11.7 | 3,567,230 | 11.7 |
| Total capital base | 5,419,160 | 17.5 | 5,323,929 | 17.4 | 5,126,306 | 16.8 |
Capital ratio and capital buffers
| 30 jun 2021 | 31 dec 2020 | 30 jun 2020 | |
|---|---|---|---|
| Common Equity Tier 1 ratio, % | 15.6 | 15.4 | 14.7 |
| Tier 1 ratio, % | 15.6 | 15.4 | 14.7 |
| Total capital ratio, % | 17.5 | 17.4 | 16.8 |
| Institution specific buffer requirements, % | 2.7 | 2.7 | 2.7 |
| - of which, capital conservation buffer requirement, % | 2.5 | 2.5 | 2.5 |
| - of which, countercyclical buffer requirement, % | 0.2 | 0.2 | 0.2 |
| Common Equity Tier 1 capital available for use as buffer after meeting the total own funds requirements, % | 9.0 | 8.5 | 8.1 |
Resurs Bank
Interim Report Jan-Jun 2021
Leverage ratio
The leverage ratio is a non-risk-sensitive capital requirement defined in Regulation (EU) no 575/2015 of the European Parliament and of the Council. The ratio states the amount of equity in relation to the bank's total assets including items that are not recognised in the balance sheet and is calculated by the Tier 1 capital as a percentage of the total exposure measure.
From 28 June 2021, the consolidated situation has a leverage ratio requirement of 3 per cent in accordance with CRR II.
| SEX
thousand | 30 Jun
2021 | 31 Dec
2020 | 30 Jun
2020 |
| --- | --- | --- | --- |
| Tier 1 capital | 4.820.057 | 4.712.084 | 4.494.715 |
| Leverage ratio exposure | 41.114.066 | 40.942.256 | 41.666.997 |
| Leverage ratio, % | 11.7 | 11.5 | 10.8 |
Comparison with and without transitional arrangements for IFRS 9
| SEX
thousand | 30 Jun
2021 | 30 Jun
2020 |
| --- | --- | --- |
| Available capital | | |
| Common Equity Tier 1 capital | 4.820.057 | 4.494.715 |
| Common Equity Tier 1 capital as if IFRS 9 or analogous ECLs transitional arrangements had not been applied | 4.650.686 | 4.257.596 |
| Tier 1 capital | 4.820.057 | 4.494.715 |
| Tier 1 capital as if IFRS 9 or analogous ECLs transitional arrangements had not been applied | 4.650.686 | 4.257.596 |
| Total capital | 5.419.159 | 5.126.306 |
| Total capital as if IFRS 9 or analogous ECLs transitional arrangements had not been applied | 5.249.789 | 4.889.186 |
| Risk-weighted assets | | |
| Total risk-weighted assets | 30.906.493 | 30.535.914 |
| Total risk-weighted assets as if IFRS 9 or analogous ECLs transitional arrangements had not been applied | 30.779.465 | 30.358.075 |
| Capital ratios | | |
| Common Equity Tier 1 (as a percentage of risk exposure amount) | 15.6 | 14.7 |
| Common Equity Tier 1 (as a percentage of risk exposure amount) as if IFRS 9 or analogous ECLs transitional arrangements had not been applied | 15.1 | 14.0 |
| Tier 1 capital (as a percentage of risk exposure amount) | 15.6 | 14.7 |
| Tier 1 (as a percentage of risk exposure amount) as if IFRS 9 or analogous ECLs transitional arrangements had not been applied | 15.1 | 14.0 |
| Total capital (as a percentage of risk exposure amount) | 17.5 | 16.8 |
| Total capital (as a percentage of risk exposure amount) as if IFRS 9 or analogous ECLs transitional arrangements had not been applied | 17.1 | 16.1 |
| Leverage ratio | | |
| Leverage ratio total exposure measure | 41.114.066 | 41.666.997 |
| Leverage ratio, % | 11.7 | 10.8 |
| Leverage ratio, %, as if IFRS 9 or analogous ECLs transitional arrangements had not been applied | 11.4 | 10.3 |
Resurs Bank
Interim Report Jan-Jun 2021
P4. Pledged assets, contingent liabilities and commitments
| SEX
thousand | 30 Jun
2021 | 31 Dec
2020 | 30 Jun
2020 |
| --- | --- | --- | --- |
| Collateral pledged for own liabilities | | | |
| Lending to credit institutions | 90.000 | 90.000 | 90.000 |
| Lending to the public^{1)} | 2,465,081 | 2,455,141 | 3,560,800 |
| Restricted bank deposits^{2)} | 32.090 | 32.286 | 32.273 |
| Total collateral pledged for own liabilities | 2,585,171 | 2,577,427 | 3,683,073 |
| Contingent liabilities | | 0 | 0 |
| Other commitments | | | |
| Unutilised credit facilities granted | 23,783,716 | 23,891,248 | 26,664,798 |
| Total Other commitments | 23,783,716 | 23,891,248 | 26,664,798 |
1) Refers to securitization.
2) As of 30 June 2021, SEX 39,979 thousand (29,481) refers mainly to a reserve requirement account at Finlands Bank.
For additional information, please contact:
Nils Carlsson, CEO, [email protected]; +46 42 382000
Sofie Tarring Lindell, CFO & Head of IR, [email protected]; +46 736 443395
Resurs Bank AB
Ekslingon 9, Väla Norra
Box 222 09
250 24 Helsingborg
Phone: +46 42 382000
www.resursbank.se
Resurs Bank
Interim Report Jan-Jun 2021