NORDAX GROUP INTERIM REPORT JANUARY-MARCH 2017
FIRST QUARTER 2017
Numbers compared with first quarter 2016
• Loan portfolio grew by 14%, in constant currencies by 11%
• Net interest margin was stable at 9.3% (9.3)
• Total operating income increased to 286 MSEK (280). Adjusted total operating income increased to 300 MSEK (261)
• Adjusted cost to income ratio (rolling 12 months) improved to 26.5% (28.6)
• Operating profit decreased slightly to 114 MSEK (119). Adjusted operating profit increased by 32% to 131 MSEK (99)
• Net profit decreased to 88 MSEK (93)
• Earnings per share were 0.80 SEK (0.84). Adjusted earnings per share were 0.93 SEK (0.70)
1st QUARTER 2017
Numbers compared with 4th quarter 2016
• Loan portfolio grew by 1%, in constant currencies by 2% (7% when annualised)
• Net interest margin was stabel at 9.3% (9.3)
• Total operating income decreased slightly to 286 MSEK (294). Adjusted total operating income was stable at 300 MSEK (301)
• Adjusted cost to income ratio (rolling 12 months) improved to 26.5% (27.3%)
• Operating profit decreased to 114 MSEK (140). Adjusted operating profit decreased by 13% to 131 MSEK (150)
• Net profit decreased to 88 MSEK (110)
• Earnings per share were 0.80 SEK (0.99). Adjusted earnings per share were 0.93 SEK (1.05)
Sustainable growth and increasing efficiency
Nordax developed positively during the quarter with lending growth, stable margins, stable credit quality and increased operational efficiency. Our adjusted operating profit increased by 32 per cent to 131 MSEK (99) compared to the first quarter 2016 and our capital ratios continued to strengthen. Net profit decreased slightly due to negative FX effects caused by the stronger Swedish krona.
Our total lending increased by 14 per cent, with the largest relative increase in Germany, where the lending portfolio grew by just over 30 per cent. New lending was strong in all markets except for Norway, where it decreased. In Sweden, Finland and Germany new lending increased by between 15 and 24 per cent. The decrease in new lending in Norway was primarily in the broker channel, where the quality of loan applications has deteriorated and where we have become more restrictive in our underwriting. As always Nordax prerequisite for increased new lending and sustainable growth is solid credit quality and sound margins.
“Our adjusted operating profit increased by 32 per cent and our capital ratios continued to strengthen”
One of Nordax’s priorities is to further simplify and improve processes in order to increase operational efficiency in our platform. Being more efficient as an organisation will go hand in hand with improving the customer experience. During the quarter we introduced digital solutions for our savings customers in Sweden and Norway that make it easier for them to manage their savings themselves. The solutions have been developed with an efficient structure which allows us to continue working during the year on simplifying and improving the digital processes for new and existing loan customers. Our operating expenses were stable compared to the same period in 2016 at the same time that lending increased, which improved the adjusted cost to income ratio to 26.5 per cent (28.6 per cent).
During the quarter we reached an agreement with the credit management services provider Lindorff which gives the opportunity to start selling parts of non-performing loans (so-called forward-flows). By testing this will mitigate our risk and allow us to use our capital more efficiently. The aim is to make the first transfer in the third quarter. The transfers are expected to have a marginally positive effect on profit for 2017.
New regulatory proposals concerning consumer finance have been introduced in Norway this year against a backdrop of the market’s high growth rate with many new companies with a very high growth - a trend we have not seen in our other markets. Among other things, legislation will be introduced that will make it possible to create a national debt registry, which we support since it would facilitate accurate credit assessments and reduce the risk of over-indebtedness by individuals. We are actively taking part in the consultations and support those initiatives that focus on responsible credit assessments and marketing.
“Being more efficient as an organisation will go hand in hand with improving the customer experience”
In March we published our Annual Report for 2016, which contained our first sustainability report using the GRI G4 framework and where we describe our focus areas: responsible lending, employee-well-being, business ethics and efficient use of resources. During the quarter we completed our annual salary audit which showed that we have equal pay at Nordax, and we have also prepared a green lease to reduce the direct environmental impact from our office. Learn more about our focus areas in the annual report at www.nordaxgroup.com/en.
Through great commitment and good teamwork, we continuously deliver better and more flexible solutions for our customers. Digital development will continue to be in focus during the year. I see good growth opportunities for our lending portfolio, especially in Finland and Germany.
Morten Falch CEO
For more information, please contact
Morten Falch, CEO, +46 8 690 18 03, firstname.lastname@example.org
Lennart Erlandson, CFO, + 46 8 690 14 84, email@example.com
Andreas Frid, Head of Investor Relations, +46 705 29 08 00, firstname.lastname@example.org
Media, analysts and investors are welcome to take part in a conference call on April 26 at 10.30am CET. CEO Morten Falch and Deputy CEO Jacob Lundblad will present the results. After the presentation there will be a Q&A session.
Sweden: +46 8 566 426 98
UK: +44 203 008 98 07
US: +1 855 831 59 44
Link to audiocast:
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This information is information that Nordax Group 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 April 26, 2017.