JANUARY-DECEMBER 2016
Numbers compared with January-December 2015
• Loan portfolio grew by 18% (8), in constant currencies by 12% (13)
• Net interest margin increased to 9.3% (8.9)
• Total operating income increased to 1,176 MSEK (888). Adjusted total operating income increased to 1,113 MSEK (943)
• Adjusted cost to income ratio (rolling 12 months) improved to 27.3% (28.5)
• Operating profit improved to 573 MSEK (250). Adjusted operating profit increased by 30% to 510 MSEK (392)
• Net profit increased to 446 MSEK (195)
• Earnings per share were 4.02 SEK (1.76). Adjusted earnings per share were 3.58 SEK (2.76)
• Proposed dividend of 1.60 SEK per share (0.50)
4th QUARTER 2016
Numbers compared with 4th quarter 2015
• Loan portfolio grew by 18% (8), in constant currencies by 12% (13)
• Net interest margin decreased to 9.3% (9.4)
• Total operating income increased to 294 MSEK (228). Adjusted total operating income improved to 301 MSEK (254)
• Adjusted cost to income ratio (rolling 12 months) improved to 27.3% (28.5)
• Operating profit improved to 140 MSEK (80). Adjusted operating profit increased by 38% to 150 MSEK (109)
• Net profit increased to 110 MSEK (63)
• Earnings per share were 0.99 SEK (0.57). Adjusted earnings per share were 1.05 SEK (0.76)
CEO COMMENTS
More customers and more efficient organisation improved profitability
2016 was in many ways a challenging year for the global economy characterized by geopolitical uncertainty, relatively low economic growth and low or negative interest rates.
For Nordax, 2016 was a highly successful year where we established ourselves as a listed bank with strong growth. During the year the number of customers increased and we improved our product offering. Customer-friendlier processes, more channels of communications and shorter response times have made us more competitive and increased customer satisfaction. This is a result of fantastic teamwork all our employees can feel proud of.
“Net profit increased to 446 MSEK (195) and the Board of Directors propose a dividend of 1.60 SEK per share (0.50)”
During the year all our markets developed positively with steady lending growth, stable margins and stable credit quality. Together with increased operational efficiency it improved profit.
In 2016 our adjusted operating profit rose by 30% to 510 MSEK and our loan portfolio grew by 12% in constant currencies. Our net profit increased to 446 MSEK (195) and the return on our growing equity was 23%.
New lending was record-high during the year and in our two largest markets, Norway and Sweden, the lending portfolios grew by 15% and 10% in local currencies in 2016. In the fourth quarter however, growth was higher in Sweden and lower in Norway. The Finnish loan portfolio grew by 10% in local currency in 2016 and was the market with the highest margins and lowest credit loss levels.
Germany is our youngest market, with large future potential. During the year the loan portfolio grew by more than 30% and margins developed positively. Our focus on the German market will increase in 2017 as we add more resources and broaden our marketing channels to complement direct mail.
In Nordax’s business model responsible lending and credit risk are always a top priority and during the year our credit loss level was stable at 1.4%. Our strong customer base ensures good credit quality – our average customer is today around 50 years and has an income in line or above the national average.
Our operational costs were fairly stable during the year thanks to a focus on process efficiency and a scalable platform. The adjusted cost to income ratio (excluding marketing costs) decreased to 27.3% (28.5), and our aim remains to be even more efficient.
”Our competiveness and customer satisfaction increased during the year, something all employees can feel proud of”
Our capitalisation remains solid and improved during the year. This gives us flexibility and a buffer to finance further growth and handle potential regulatory changes. In line with our dividend policy the Board of Directors propose to the Annual General Meeting a dividend of 1.60 SEK (0.50) per share for 2016.
In the fourth quarter Nordax joined the UN Global Compact. During the year we worked on identifying our most important sustainability tasks in consultation with various stakeholder groups. In 2017 we will focus our sustainability efforts on four main areas: responsible lending, employee wellbeing, business ethics and efficient resource consumption.
Late in 2016 market interest rates began to rise slightly for the first time in a long while which is good for growth dynamics in society. Our business model and demand has historically been strong also in an environment with higher interest rates. The interest rate sensitivity of our customers’ is low. An increase in lending rates of 1 percentage unit would on average mean an additional payment of around 90 SEK per month. We lend at variable rates, which mean that we continuously adjust lending rates when our funding costs and market interest rates change, ensuring stable margins over time.
The outlook and opportunities for Nordax are bountiful. I look forward to further developing the company together with all our employees. During 2017 we will focus on increased customer value through digitalizing customer processes and improving the customer experience. This will create value for customers as well as shareholders.
Morten Falch
CEO
Contact
For more information, please contact
Morten Falch, CEO, +46 8 690 18 03, morten.falch@nordax.se
Andreas Frid, Head of Investor Relations, +46 705 29 08 00, andreas.frid@nordax.se
Conference call
Media, analysts and investors are welcome to take part in a conference call on February 8 at 8.15am CET. CEO Morten Falch and CFO Camilla Wirth will present the results. After the presentation there will be a Q&A session.
Call-in numbers:
Sweden: +46 8 566 426 98
UK: +44 203 008 98 07
US: +1 855 831 59 44
Link to audiocast:
https://wonderland.videosync.fi/nordax-q4-report-2016
You can also follow the presentation on
https://www.nordaxgroup.com/en/investors/financial-reports/presentations/
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 February 8, 2017.
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