Q1 2019 PRESENTATION Q1 2019 PRESENTATION STRONG BUSINESS MODEL - - PowerPoint PPT Presentation
Q1 2019 PRESENTATION Q1 2019 PRESENTATION STRONG BUSINESS MODEL CONTINUES TO DELIVER Increased net income Highlights Strong lending Continued strong +11% +16% development in Payment Solutions SEKm SEKm 350 Increased
STRONG BUSINESS MODEL CONTINUES TO DELIVER
Strong lending Increased net income
SEKm
265 294
50 100 150 200 250 300 350 Q1 2018 Q1 2019
SEKm
25 134 29 182
5 000 10 000 15 000 20 000 25 000 30 000 35 000 Q1 2018 Q1 2019 Q1 2019 PRESENTATION
Highlights
− Continued strong development in Payment Solutions − Increased competition and margin pressure in Consumer Loans Norway − Continued improvement in cost/income ratio
2
STABLE START OF THE YEAR WITH CONTINUED STRONG GROWTH
Highlights
– Continued focus on developing existing partnerships which is driving strong growth – During Q1 more than 30 per cent of Resurs’s retail finance sales came from e-commerce – Launch of new push function for Resurs Checkout - meets new consumption trends, makes the customer journey easier and drives conversion – Invested in Dicopay and will also be the checkout solution provider for Dicopay’s mobile platform. With this partnership Resurs is entering into a new customer segment
Strong lending growth
SEKm
9 511 10 707
2 000 4 000 6 000 8 000 10 000 12 000 Q1 18 Q1 19
Digital application
80% 20%
> 80 per cent used digital application in Sweden in Q1 2019 and we see a continuous increase in all of our markets.
PAYMENT SOLUTIONS 3
CREDIT ENGINE ENABLES STRONG GROWTH IN ALL MARKETS
Highlights
– Continued strong growth in all markets with strongest performance in absolute numbers in Sweden and strongest relative growth in Finland – Increased competition and margin pressure in Consumer Loans Norway – The credit engine delivered strong growth and was launched in Denmark during the quarter
Strong lending growth
SEKm
15 623 18 475
4 000 8 000 12 000 16 000 20 000 Q1 18 Q1 19
Digital application
80% 20%
>80% of sales in Q1 to existing customers in our database. Since most
already known in our database, we can achieve higher margins because this knowledge has a positive impact on acquisition costs and credit risk.
CONSUMER LOANS 4
STABLE DEVELOPMENT AND LAUNCH OF NEW COLLABORATIONS
Highlights
– Premium earned net up 7 per cent compared with last year and technical result up 8 per cent compared with last year – Continued focus on developing existing partnerships to increase conversion rates – During the quarter, the segment launched four new partnerships in Sweden, Norway and Finland within the business areas Product, Motor and Travel business areas – The segment also signed a new strategically important partner in the Security business area, which is important for the continued development of that business area
Technical result Premium earned net
SEKm
200 215
50 100 150 200 250 Q1 18 Q1 19
SEKm
21 23
5 10 15 20 25 Q1 18 Q1 19 INSURANCE 5
CONTINUED PROFITABLE GROWTH
Strong lending Increased net income
SEKm
265 294
50 100 150 200 250 300 350 Q1 2018 Q1 2019
SEKm
25 134 29 182
5 000 10 000 15 000 20 000 25 000 30 000 35 000 Q1 2018 Q1 2019 Q1 2019 PRESENTATION 7
STRONG GROWTH IN BOTH SEGMENTS
Total Payment Solutions
SEKbn
SEKbn LOAN BOOK EVOLUTION
25.1 26.6 27.5 28.0 29.2
5 10 15 20 25 30 35 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19
9.5 10.0 10.2 10.5 10.7
2 4 6 8 10 12 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19
15.6 16.6 17.3 17.4 18.5
4 8 12 16 20 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19
Consumer Loans
SEKbn 8
STRONG INCREASE IN OPERATING INCOME
SEKm
Operating income
* NBI for bank calculated as Group operating income less reported insurance segment operating income
%
NBI margin*
12.5% 11.7% 0% 2% 4% 6% 8% 10% 12% 14% Q1 18 Q1 19 806 896
100 200 300 400 500 600 700 800 900 1 000
Q1 18 Q1 19
Highlights
– Strong increase in
– The NBI margin was negatively impacted by the new conditions in the Norwegian market
MARGIN EVOLUTION
pts
9
IMPROVEMENTS IN COST INCOME RATIO
SEKm
Operating Expenses
%
Cost Income Ratio, bank
40.7% 40.1% 0% 10% 20% 30% 40% 50% Q1 18 Q1 19 333 363
50 100 150 200 250 300 350 400
Q1 18 Q1 19
Highlights
– OPEX increased compared with last year mainly driven by marketing initiatives and IT – The cost/income ratio continues to improve year on year based on scalable business model
EVOLUTION ON OPERATING EXPENSES
pts
10
SLIGHTLY INCREASED COST OF RISK
SEKm
Credit Losses, Net
%
Cost of Risk
2.1% 2.2% 0% 1% 1% 2% 2% 3% Q1 18 Q1 19 128 155
20 40 60 80 100 120 140 160 180
Q1 18 Q1 19
Highlights
– Credit losses increased mainly following growth
– The CoR increased slightly following higher debt collection transfers in Consumer Loans Norway
EVOLUTION ON COST OF RISK
pts
11
SOLID INCREASE IN RISK ADJUSTED NBI
SEKm
Risk adjusted NBI*
%
Risk adjusted NBI margin*
10.4% 9.6% 0% 2% 4% 6% 8% 10% 12% Q1 18 Q1 19 635 683
100 200 300 400 500 600 700 800
Q1 18 Q1 19
Highlights
– Solid increase in risk adjusted NBI – Risk adjusted NBI margin was negatively impacted by the new conditions in the Norwegian market
MARGIN EVOLUTION
pts
* Risk adjusted NBI for bank calculated as Group operating income less reported insurance segment operating income and less credit losses, net
12
SEKm
Loan Book
%
NBI margin
9 511 10 707 2 000 4 000 6 000 8 000 10 000 12 000 Q1 18 Q1 19
Highlights
– Strong lending growth mainly driven by existing retail partners – Slightly lower NBI margin – Improved CoR compared with same quarter last year – Overall higher risk adjusted NBI margin
PAYMENT SOLUTIONS
pts
14.3% 14.1% 0% 2% 4% 6% 8% 10% 12% 14% 16% Q1 18 Q1 19
%
Risk Adjusted NBI margin
+0.3%
pts
11.9% 12.2% 0% 2% 4% 6% 8% 10% 12% 14% Q1 18 Q1 19
%
Cost of Risk
pts
2.4% 1.8% 0,0% 0,5% 1,0% 1,5% 2,0% 2,5% 3,0% Q1 18 Q1 19
13
SEKm
Loan Book
%
NBI margin
15 623 18 475 5 000 10 000 15 000 20 000 Q1 18 Q1 19
Highlights
– Strong growth in lending with contributions from all markets – The NBI margin was negatively impacted by the new conditions in the Norwegian market – The CoR increased following higher debt collection transfers in the Norwegian market – Lower risk adjusted NBI margin driven by lower NBI margin and higher CoR
CONSUMER LOANS
11.6% 10.5% 0% 2% 4% 6% 8% 10% 12% 14% Q1 18 Q1 19
%
Risk Adjusted NBI margin
pts
9.7% 8.1% 0% 2% 4% 6% 8% 10% 12% Q1 18 Q1 19
%
Cost of Risk
+0.5%
pts
1.9% 2.4% 0,0% 0,5% 1,0% 1,5% 2,0% 2,5% 3,0% Q1 18 Q1 19
14
SEKm
Premium Earned, net
SEKm
Technical Result
200 215 50 100 150 200 250 Q1 18 Q1 19
Highlights
– Premium earned, net up 7 per cent compared with last year – Strong increase in technical result up 8 per cent compared with last year – Improved combined ratio
INSURANCE
21 23 7 13 20 27 Q1 18 Q1 19
%
Combined ratio
pts
90.3% 90.1% 0% 20% 40% 60% 80% 100% Q1 18 Q1 19
15
STRONG CAPITAL POSITION
9.2% 13.4% 13.1% 1.6% 2.2% 1.3% 1.9% 0% 2% 4% 6% 8% 10% 12% 14% 16%
Capital requirements 31 Dec 2018 31 Mar 2019
Tier 2 Capital AT 1 CET 1
13.0% 14.7% 15.1%
Highlights
– Strong CET1 and total capital ratios well above requirement and targets – SEK 300 million of subordinated Tier 2 bonds were issued during the quarter
CAPITAL POSITION 16
CONTINUED DIVERSIFICATION
SEKm
Funding total ex. equity Funding mix Highlights
– During last twelve months further diversification of funding with SEK 1 200 million issued under the MTN programme
25 186 26 915 27 985 28 410 30 756
5 000 10 000 15 000 20 000 25 000 30 000 35 000 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 73% 73% 72% 73% 74% 11% 11% 10% 10% 10% 16% 16% 18% 17% 16% 0% 50% 100% Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Deposit ABS MTN FUNDING EVOLUTION 17
FINANCIAL TARGET PERFORMANCE
18
*Based on Capital Employed at the boards target CET1 Ratio ** SEK180m provisioned as dividend in CET1 calculation
MEDIUM TERM FINANCIAL TARGETS
Metric Target Jan-Mar 2019
Annual lending growth > 10% p.a. 16% Risk adjusted NBI margin In line with recent performance (c. 10% – 12%) 9.6% C/I before credit losses excl. Insurance and adjusted for nonrecurring costs < 40% in the medium term 40.1% Return on equity (RoTE) adjusted for nonrecurring costs* ~ 30% in the medium term 33.5% Payout ratio** > 50% n/a Common Equity Tier 1 ratio/ Total Capital Ratio >11.5% CET1 14.0% Total Capital 13.1% CET1 15.1% Total Capital