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Significant change and re-focus on core business
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For Hoist Finance, 2021 was a year of refocusing on core business and transformation. Covid-19 effects and lock-downs continued to considerably impact our markets and operations.

Hoist Finance’s third highest annual acquisition level

The market activity for NPL portfolios improved in 2021 compared to the highly Covid-affected year 2020, however, the anticipated high supply of portfolio-sales did not materialise. It continued to be a seller’s market, which put upward pressure on price-levels. As most of the industry experienced a challenging 2020, many competitors were keen to buy, often resulting in highly priced portfolios below our return targets. This was applicable for all European markets but with local differences. We participated in a high number of processes and signed some attractive deals in the latter part of the year. The portfolio from Alpha Bank in Greece stands out at more than SEK 1.1bn. Including these portfolios total acquired volumes totalled SEK 4.7bn, which is Hoist Finance’s third highest annual acquisition level. Our collection activities were also impacted by the Covid-19 situation. A substantial share of our collections stems from legal activities, which have been largely halted during the pandemic, as court systems have been closed or experienced major delays.

Our business environment improved, even though Covid-19 continued to be a concern. During the last months of 2021 we reached significant improvements in collection performance. We participated in a high number of acquisition processes and signed some attractive deals in the latter part of the year. The portfolio from Alpha Bank in Greece stands out at more than SEK 1.1bn, and will have a positive impact on our profitability for 2022 and beyond. Including these portfolios total acquired volumes totalled SEK 4.7bn, which is Hoist Finance’s third highest annual acquisition level.

Results negatively impacted by factors stemming from previous years

In addition to the tough market conditions, our results for 2021 were negatively impacted by two major factors stemming from previous years. In the first half of 2021, Hoist Finance decided to write down the value of portfolios in the UK and Spain and further provisions for tax risks related to legacy issues from 2014. In total this had a negative impact on our net result by approximately SEK –400m. Hoist Finance net loss after tax for 2021 was SEK –117m including these effects. Throughout the year, we have worked intensively to de-risk our operations and balance sheet.

Need to redirect focus to core business

The unsatisfying performance in recent years led to changes already in the spring of 2021. Six new board members, including myself, were appointed in April. On May 31, I took on the role as CEO (interim) since there was a need for change. Hoist Finance had lost focus on its core business and had not quickly enough adapted operations to changed market conditions. Short-term underperformance in portfolio revenues, due in part to the pandemic combined with a broad operational approach and a high-cost level, had reduced profitability. There was a need of redirecting focus of the strategy to our core business – secured and unsecured non-performing loans from consumers and SMEs. We need to operate with a more competitive cost base and profitability level. We also adjusted the governance structure to ensure accountability and transparency. Since the fall, we have a new leadership team including a new CFO, CIO, COO and have made several other adjustments within senior management.

Launched transformation programme

After the summer, we launched a transformation programme to accelerate portfolio acquisitions in our target markets and asset classes, improve productivity in collections, and reduce costs. Already in the summer we decided to refocus and reprioritise among various ongoing initiatives. For example, the broad Retail banking effort was put on hold, the investments to develop IRB (internal rating based) models were halted awaiting the European Banking Authority (EBA) decisions, IT and digital focus and spend were adjusted to optimise and accelerate benefits.

Efforts within sustainability continued

Our efforts within sustainability continued in 2021. All three ESG areas are important, but it is in the S – Social field - where we as a business really can make a difference and a contribution. We support banks and help our customers to get back on track and be a part of the financial ecosystem again. Thereby, we are contributing to upholding fair and stable credit markets and economic growth in the markets where we are active.

Hoist Finance has been a member of the United Nations Global Compact since 2019 and we continued to reaffirm our support to its Ten Principles for human rights, labour, environment and anti-corruption in 2021. We continually work to improve the integration of Global Compact and its principles into our business, culture, and daily operations.  We are also a certified NASDAG ESG Transparency Partner for the fourth consecutive year. In addition, 2021 marks our first reported disclosures related to the EU Taxonomy.

A good and sound base to build on

When taking on the position as interim CEO of Hoist Finance in May 2021, my ambition was to redirect focus and set the company on a route towards healthy profitability. During this period, it has become evident to me that Hoist Finance has a good and sound base to build on. We have really good people, an inclusive culture and a solid business platform. In addition, we work in an attractive industry with long-term growth potential, high returns, and, importantly, we contribute to a sustainable economy and society.

Improved business environment

Although Covid-19 continues to cast its shadow over our business environment, it has improved. During the latter part of 2021 courts opened up and our legal collection activity started to gain momentum, augmented by our own efforts. During the last months of 2021 we reached significant improvements in collection performance. Our transformation programme is starting to pay off even-though it will take a few quarters before we see the full impact. We have also signed some attractive deals in the latter part of the year, in particular the portfolio from Alpha Bank in Greece stands out at more than SEK 1.1 billion which will have a positive impact on our profitability for 2022 and beyond.

Growth balanced with improved profit generation

Hoist Finance has a tight capital position which means that portfolio growth has to be balanced with improved profit generation to harmonize with banking regulations. However, in December the European Banking Authority (EBA) published its final draft report to harmonise risk-weighting of acquired NPLs. This will reverse the competitive disadvantage Hoist Finance has had abiding by stricter banking rules. It will have a positive effect on capital ratios and increase investment capabilities, enabling further growth. When writing this CEO comment, the report is not yet approved, but the general view is that it will be.

To sum up, we enter 2022 in a better position than 12 months ago. Our view is that market conditions are improving. We will continue to strengthen the sound platform we have, using it to maximize upcoming opportunities. We will deliver on all transformation activities that we have commenced and further develop the business to create profitable growth and shareholder value. 

Per Anders Fasth, CEO
February 2022

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- Annual Report 2021 -
- Årsredovisning 2021 -