Resurs Holding Interim Report January–September 2019

“Continued growth in yet another strong quarter.” Kenneth Nilsson, CEO Resurs Holding AB

1 July–30 September 2019*

  • Lending to the public rose 13% to SEK 31,125 million
  • Operating income increased 5% to SEK 925 million
  • Operating profit rose 6% to SEK 416 million
  • Earnings per share increased 5% to SEK 1.60
  • C/I before credit losses (excl. Insurance) was 37.6% (39.2%)
  • The credit loss ratio was 2.0% (2.1%)

1 January–30 September 2019*

  • Lending to the public rose 13% to SEK 31,125 million
  • Operating income increased 7% to SEK 2,734 million
  • Operating profit increased 8% to SEK 1,198 million
  • Earnings per share increased 8% to SEK 4.63
  • C/I before credit losses (excl. Insurance) was 38.9% (40.5%)
  • The credit loss ratio was 2.1% (2.1%)
  • Resurs Holding AB plans to issue Additional Tier 1 instruments of SEK 100-400 million in the next few months, if market conditions are favourable. The purpose of such an issue is to further enhance Resurs’s capital structure.

Statement by the CEO

The healthy performance of both our banking segments generated continued strong growth in lending for the third quarter of the year. It meant that Resurs grew quicker than the market and delivered above our financial targets, with lending growth of 13 per cent, which on 30 September amounted to SEK 31,125 million. Resurs also achieved its best ever earnings for a single quarter with profit after tax of SEK 320 million (306). This was achieved through our profitable growth based on responsible credit lending and continued good cost control. The cost/income ratio excluding Insurance declined further to 37.6 per cent (39.2 per cent) and the credit losses were stable at 2.0 per cent (2.1 per cent).

Innovative solutions and number of new collaborations with retail finance partners

The core of Resurs’s business model, Payment Solutions and mainly retail finance, continued to report robust growth in the third quarter. A factor for success is our concerted efforts to develop new and innovative solutions for our retail finance partners. A prime example is the launch of a new and upgraded version of Resurs’s partner portal – the Merchant Portal – during the quarter. One of the benefits this provides is a service for retailers to quickly and easily capture all sales statistics in real time regardless of sales channel.

Some examples of new collaboration during the quarter is that Svensk Handel (Swedish Trade Federation) has added us as a new partner. Resurs Checkout is now Svensk Handel’s latest offering to its members for store, e-commerce and omni-retail payment solutions, meaning that Svensk Handel’s members now have greater opportunities to offer their customers a smooth shopping experience with favourable conditions for both higher average purchases and increased customer loyalty. The ability of Resurs Checkout and the omni-solution to offer an effective customer journey also meant that a number of major companies in the car-dealer aftermarket segment decided to sign agreements with us.

Major transformation of Norwegian consumer loan market

All in all, Consumer Loans delivered healthy third-quarter lending growth, but the business segment continued for face certain challenges. These are mainly related to the far-reaching transformation that the Norwegian market is currently undergoing, which is the effect of the new legal requirements that came into effect in May combined with the implementation of the Gjeldsregisteret debt information service at the start of July.

For Resurs it is a matter of designing an offering – in pace with the emerging market conditions – that meets both the new rules of play, and delivers customer and business value. The fundamental and governing factor for all of our decisions is always to prioritise a high credit rating over volume. Our geographically diversified business model with its ability to compensate the business segments according to varying market conditions gives us the endurance and strength required to defend a sustained strong position in the Nordic markets in the long term.

We also noted a continuous increase in the average loan in Consumer Loans, primarily driven by the option of offering higher loans to our consumers using the credit engine. Compared with the year-earlier quarter, the average loan rose to about 15 per cent to app. SEK 100,000. In the shorter term, this results in a lower NBI margin. In the longer term, it will however contribute positively to our overall profitability since higher average loans with higher credit quality entail lower credit risk.

A stagnant market and cautious approach in Norway, together with the increasing average loan and some price pressure across the segment, had a negative impact on the risk-adjusted NBI margin, which amounted to 9.3 per cent (10.2 per cent) for the quarter.

Initiatives to optimise our capital structure

To further optimise Resurs’s capital structure, we are investigating the possibility of issuing Additional Tier 1 instruments (AT 1 instruments) in the next few months, if the market conditions are favourable. We also announced in the third quarter that the method for calculating operational risk had been changed, which strengthened our capital ratio by 0.5 of a percentage point in the third quarter.

Overall, these initiatives strengthened Resurs’s capital position and mean that we are well-prepared to continue to deliver both growth and profitability based on responsible credit lending and good cost control.

Kenneth Nilsson
CEO Resurs Holding AB

More information:

Peter Rosén, CFO,; +46 736 564934
Christina Jungvid Ohlsson, IR Officer,; +46 707 816558

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 third quarter of 2019, the Group had 737 employees and a loan portfolio of SEK 31.1 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.” 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 2018.

This information is information that Resurs Holding AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 07:30 CET 29 October 2019.