Resurs Holding Interim Report January-June 2019

“We delivered yet another quarter of strong, profitable growth. The core of our business model, Payment Solutions and mainly retail finance, continued to report a strong trend in growth and margins in the quarter.”  Kenneth Nilsson, CEO Resurs Holding AB

1 April—30 June 2019*

  • Lending to the public rose 14% to SEK 30,323 million
  • Operating income increased 5% to SEK 913 million
  • Operating profit rose 8% to SEK 405 million
  • Earnings per share increased 8% to SEK 1.56
  • C/I before credit losses (excl. Insurance) was 39.0% (41.6%)
  • The credit loss ratio was 2.0% (2.0%)

1 January—30 June 2019*

  • Lending to the public rose 14% to SEK 30,323 million
  • Operating income increased 8% to SEK 1,809 million
  • Operating profit rose 9% to SEK 783 million
  • Earnings per share rose 10% to SEK 3.03
  • C/I before credit losses (excl. Insurance) was 39.6% (41.2%)
  • The credit loss ratio was 2.1% (2.0%)
  • The Board proposes a dividend of SEK 1.80 per share to be paid in autumn 2019. This represents an increase of 9% compared with the dividend in autumn 2018

Statement by the CEO

The second quarter of the year was characterised by healthy growth in both our banking segments and in all four Nordic markets, with lending increasing 14 per cent to SEK 30,323 million on 30 June 2019. Profit after tax increased 8 per cent to SEK 313 million (289), our best ever quarterly earnings. This was achieved through our profitable growth based on responsible credit lending and continued good cost control. The scalability of the business also meant that the cost/income ratio continued to improve to 39.0 per cent (41.6 per cent) in the quarter. In total, we delivered on or over all of our financial targets, except for the risk-adjusted NBI margin, which continued to be negatively impacted mainly by the conditions in the Norwegian consumer loan market. The risk-adjusted NBI margin in the second quarter was 9.6 per cent (10.7 per cent), which was in line with the level in the first quarter of 2019.

Continued strong trend in Payment Solutions and competition on equal terms in Norway

The core of our business model, Payment Solutions and mainly retail finance, continued to report a strong trend in growth and margins in the quarter. A number of new collaborations with retail finance partners were initiated throughout the Nordic region during the quarter, in parallel with existing partnerships continuing to be developed. We are proud of the continued confidence shown in us by two leading and well-known retailers, Mio and Bauhaus, both of which chose to continue their strategic partnerships with Resurs as a payment solutions provider. We look forward to continuing to develop the customer journey and shopping experience by leveraging our ability to combine extensive retail experience with digital expertise to take their omni-retail to the next level.

Consumer Loans also reported high growth in lending in all markets. The Norwegian consumer loan market remained challenging due to the new law. As planned, Resurs took a number of measures during the quarter in the form of interest-rate hikes in June and rationalisation of costs, and also made a number of changes to the Norwegian organisation. After the new law came into effect in mid-May, we believe the consumer loan market is now, to a much greater extent, characterised by competition on equal terms. This immediately had a positive effect for Resurs with an increase in the share of special offers won in the agent channel compared with before the law came into effect, despite price increases on our new lending in the quarter.

Our smallest segment, Insurance, also reported healthy growth in both the premium earned and earnings for the quarter. During the year, we signed two new strategic partners in the Security business area, which is important for the continued development of this business area.

New credit rating and sustainable business model that is demonstrating its strength

During the quarter, Resurs Bank was awarded an investment grade rating of BBB-, stable outlook from Nordic Credit Rating (NCR). NCR’s credit rating strengthens our conditions for seeking financing on advantageous terms and is entirely aligned with our strategy of actively working with different sources of financing to continue to build up long-term diversified financing.

At the start of June, Nordic Capital sold its remaining shareholding in Resurs, thus marking the end of a seven-year epoch as a major owner of the company. We would like to thank Nordic Capital for a fantastic partnership over the years, during our intensive phase of growth followed by the IPO in 2016 and our ongoing journey of growth as a listed company.

The ability of our business model to evolve in line with technology, regulations and customer needs is continuously challenged. But one thing is clear, Resurs’s business model with its stable core of retail finance is continuing to deliver and once again demonstrated its strength during the quarter by counterbalancing and compensating the business segments to address the changing conditions in the four Nordic markets. In other words, Resurs stands strong and, as it has become accustomed to, continued to grow faster than the market during the quarter and capture market shares.

Kenneth Nilsson
CEO Resurs Holding AB

More information is available from:

Peter Rosén, CFO & Head of IR, peter.rosen@resurs.se +46 736 56 49 34
Sofie Tarring Lindell, IR Officer, sofie.tarringlindell@resurs.se +46 736 44 33 95

About Resurs Holding:

Resurs Holding (Resurs), which operates through the subsidiaries Resurs Bank and Solid Försäkring, is the leader in retail finance in the Nordic region, offering payment solutions, consumer loans and niche insurance products. Since its start in 1977, Resurs Bank has established itself as a leading partner for sales-driven payment and loyalty solutions in retail and e-commerce, and Resurs has thus built a customer base of approximately 6.0 million private customers in the Nordics. Resurs Bank has had a banking licence since 2001 and is under the supervision of the Swedish Financial Supervisory Authority. The Resurs Group operates in Sweden, Denmark, Norway and Finland. At the end of the second quarter of 2019, the Group had 777 employees and a loan portfolio of SEK 30.3 billion. Resurs is listed on Nasdaq Stockholm.

* Certain performance measures provided in this section have not been prepared in accordance with IFRS or the capital adequacy rules, meaning that they are alternative performance measures. Calculations and reconciliation against information in the financial statements of these performance measures are provided on the website under “Financial reports.” Definitions of key ratios are provided on the website under “Financial data.” The figures in parentheses refer to 30 June 2018 in terms of financial position, and to the year-earlier period in terms of profit/loss items. 

This information is information that Resurs Holding AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 07.30 CET on 23 July 2019.