Common sense – our guiding principle

In times of negative interest rates and macroeconomic and political uncertainties, it is more important than ever to be clear about your goals and principles. I am always surprised to be asked whether our focus is on delivering today, or on building for the future.

While it is certainly true that well-defined plans and clear goals are needed when laying the foundations for future growth and profits, it is only by executing the strategy here and now that you’re able to build something that will last. And this should – and in our case does – result in improvements from the start. To me, this is common sense. And common sense is our company’s primary guiding principle.

I would like to report on our progress in 2016 from a few different perspectives.

Our figures

In brief, 2016 was yet another year during which we showed improvement and moved closer to our medium-term financial targets. EBIT increased 39 per cent to 935 (675) and our EBIT margin improved to 36 (30) per cent. Our profit before tax increased 87 per cent to SEK 533 million (285). We increased our Return on Equity during the year to 18 (12) per cent. To sum up, 2016 was a very successful and profitable year for Hoist Finance.

Our team

Our success in 2016 is essentially attributable to the first-rate work and dedication of our Hoist Finance team members. We continued to build and improve our organisation during the year. We not only met our targets each quarter, but also continued to shape the company for the future. Together, we are creating a value-driven organisation where initiatives based on common sense are rewarded. Our successes add tangible value to our growing company, and our failures teach us how to become better.

Our Partners

During the year we also strengthened our relationships with our partners – major international banks and financial institutions. It is logical (common sense) for our partners to focus on their competitive advantages in terms of scale and front-end customer interaction and have Hoist Finance handle their non-performing loans, as we are specialised and therefore more efficient in handling these assets. Hoist Finance is increasingly perceived as a long-term, transparent and trusted partner to the financial industry, well-demonstrated by the fact that many partners return to us year after year for guidance.

Our investors

Our progress can also be seen in concrete numbers. In the eight quarters since our listing, we have proven that we can maintain a high but stable growth trajectory. We continue to have an unwavering focus on risk mitigation to ensure that our investments in portfolios with ten-year cash flows are made at long-term sustainable levels – again, common sense.

When speaking to investors, I often mention that one of our goals is for Hoist Finance to be recognised as having established a new phenomenon in the financial ecosystem – a permanent work-out unit helping banks deal with troublesome assets. We will continue to move towards this position while improving our operational efficiency, capital efficiency and funding structure. All of these measures will yield predictable, growing and stable returns for our shareholders.

Our customers

We continuously invest in our staff and our systems to ensure that we can provide a customised solution for each customer’s journey towards freedom from debt. Our method is founded on individual agreements and based on our experience that every person wants to become debt-free. During the year we invested in a new customer website and a user-friendly mobile text message solution, which will be launched in the UK in 2017. Our ambition, once again based on common sense, is to make the customer journey as easy as possible and to ensure that each and every customer can interact with us using their preferred method.

Building for the future

I’d like to mention a few of the long-term building blocks we put in place during the year. We entered into a strategic partnership with the Bank of Greece, assisting them in restructuring the Greek banking sector. We were assigned a Ba1 long-term issuer rating by Moody’s, and we diversified and broadened our funding base through a successful bond issue.

We entered the Spanish market and can now fully support the Spanish banking industry with our high-calibre services. We expanded our offer to SMEs and secured assets during the year, applying the same discipline and common sense
we use when entering a new country.

Our commitment for 2017

In the coming year, we will maintain our focus on developing our business in accordance with our strategic objectives:

  • To be preferred by our customers, we need to work continuously to improve the customer journey. We help our customers improve their financial well-being, and to do so we must constantly invest in our employees, our systems and our processes. During 2017 we will develop new tools for customer interaction, making it easier for our customers to select their preferred tool for engagement.
  • By adding new countries and new asset classes we are taking firm steps towards becoming the preferred partner to banks and financial institutions. We also meet the strictest regulatory requirements and always apply good common sense. Our partners can trust that in dealing with us they have a partner who meets the highest standards.
  • Our ambitions for operational efficiency, capital efficiency and an improved funding structure will remain among our top priorities.
    We will take additional steps towards achieving our medium-term financial
    targets. Our communication will remain as transparent and clear as possible, making us attractive to investors.
  • We will continue to build an extra­ordinary company with extraordinary people. With the best team on the market, we will also fulfil our objective of being the best place to work.
  • In order for the European economy to function, European banks need to be healthy. Millions of new loans are issued in the European banking system every day – and some of these will, for various reasons, fall into default.
  • To guide us on our journey towards becoming a leading partner to international banks and financial institutions we rely on our mission statement. This is built into our growing company’s DNA and based on common sense:

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