Interim report Q2 2016

April – June 2016

  · Gross cash collections on acquired loan portfolios increased 29 per cent to
SEK 1,076m (834).
  · Total revenue increased 22 per cent to SEK 654m (537).
  · Reported EBIT was SEK 231m (161) and the EBIT margin was 35 per cent (30).
  · Profit before tax totalled SEK 125m (52).
  · Portfolio acquisitions totalled SEK 507m (665).
  · Basic earnings per share was SEK 1.25 (0.53). Diluted earnings per share was
SEK 1.22 (0.51).

Figures in parentheses refer to Q2 2015.

30 June 2016

  · Carrying value on acquired loan portfolios totalled SEK 11,360m (11,279).
  · Gross 120-month ERC (Estimated Remaining Collections) totalled SEK 19,230m
(19,367).
  · The total capital ratio improved to 15.73 per cent (15.21).
  · The CET1 capital ratio was 12.87 per cent (12.32).

Figures in parentheses refer to 31 December 2015.

Events during the quarter

  · Moody’s Investors Service assigned Hoist Kredit AB (publ) a Ba2 credit
rating, subsequently upgraded to Ba1 with a stable outlook.
  · Hoist Finance established a presence in the Spanish market.
  · A partnership with the Bank of Greece was entered.

Statement by the CEO

An eventful quarter with establishment in Spain,
obtaining a credit rating and a successful
issue in the capital market

We have now reached the halfway mark in 2016 and our strong and stable journey
continues toward becoming the leading debt restructuring partner for
international banks and financial in­stitutions. Compared with the yearearlier
period, gross cash collections on acquired loan portfolios increased by 29 per
cent, EBIT by 43 per cent and profit before tax by 139 per cent. Exclusive of
non-recurrent expenses, net profit totalled SEK 146 million – nearly three times
the amount achieved during the same period last year.

Credit rating and successful issue in the bond market

During the quarter, yet another building block was added to our company in the
form of a credit rating of Ba1 from Moody’s Investors Service (Moody’s). In
Moody’s objective analysis of Hoist Finance, they recognised our extensive
experience of debt management in Europe, where we have been operating for over
22 years. They also recognised our stable finances in the form of strong capital
adequacy and a favourable liquidity position. The credit rating has enabled us
to diversify our financing to a greater extent, and during the second quarter we
implemented a successful first issue in the amount of EUR 250m under our newly
established EMTN programme. A portion of our outstanding bonds was repurchased
in conjunction with this, which was tied to non-recurring costs of about SEK
22m.

Stable development in all regions

On the regional level, all regions reported improved year-on-year EBIT results.
In Region West Europe, our increased focus and the activities conducted during
the quarter produced results, reflected in improvements to EBIT, EBIT margin and
return on book.

Establishment in two new markets

Early in the quarter, we announced our signing of a strategic partnership
agreement with Greece’s central bank for the management and administration of
assets in 16 Greek banks under liquidation. Under the agreement, we will work
with two partners to assist the Greek central bank in recovering overdue loans.
During the quarter, we also had the pleasure of announcing our establishment in
the Spanish market, which we regard as yet another milestone in our history.
Spain is one of Europe’s largest debt markets and a market that we have for
quite some time.

High market activity with fewer acquisitions

Acquisitions during the second quarter totalled SEK 507 million, down 24 per
cent year-on-year. We are seeing an increase in supply in several of the
countries in which we have a presence, while also noting higher price
competition. While we are well positioned to grow in this market, we will
continue to be one of the industry’s more disciplined players and ensure that we
acquire portfolios at attractive levels in terms of both profitability and risk.
Through our competitive financing, our geographic presence and our long
experience, we are well prepared to acquire major portfolios in the banking and
finance sector and we will continue to generate profitable growth for our
shareholders. For the full-year, our target of maintaining an acquisition volume
in line with the past three years remains in place.

Referendum on the UK’s membership in the EU

During the quarter, a referendum was held on the UK’s membership in the EU.
Hoist Finance’s Region West Europe mainly comprises our operations in the UK,
and it is difficult to predict how the Brits’ indicative vote will affect us in
the long term. Hoist Finance’s operations in the UK generate revenues and incur
expenses in GBP, which partly mitigates currency effects associated with a
British exit from the EU. We have a strategy of minimising interest-rate and
currency risks, and in the immediate horizon, we are hedged against currency and
interest-rate fluctuations.

Outlook

We are maintaining a steady course, and have continued to develop our offering
and build our position as the leading debt restructuring partner to
international banks and financial institutions. This results in deeper and
closer relationships with our partners, whose understanding increases of the
exper­tise that they can get and how we can help them achieve greater returns on
non-performing assets. Our success is achieved through our working practices,
which provide us with a solid understanding of our customers’ circumstances that
allows us to focus on reaching constructive agreements over time.

The quarter’s performance confirms Hoist Finance’s growth aspirations and our
ambitious yet attainable targets for the full-year and beyond.

Jörgen Olsson

CEO

Hoist Finance AB (publ)

Hoist Finance AB (publ) (the “Company” or the “Parent”) is the parent company of
the Hoist Finance group of companies (“Hoist Finance”). The Company’s wholly
owned subsidiary, Hoist Kredit AB (publ) (“Hoist Kredit”) is a regulated credit
market company. Hence, Hoist Finance produces financial statements in accordance
with the Swedish Annual Accounts Act for Credit Institutions and Securities
Companies. In order to assess the operational performance of the debt purchasing
and collection operations and to facilitate comparison with our competitors,
Hoist Finance supplements its statutory financial statements with an operating
income statement. The operating income statement is prepared based on the
accounting and valuation principles used in the statutory financial statements,
with no amendments or adjustments thereto.

The information in this interim report is such that Hoist Finance is obligated
to publish under the EU Market Abuse Regulation and the Swedish Securities
Market Act. This information was submitted for publication on 28 July 2016 at
8:00 AM CET.
Michel Jonson

Group Head of IR

Tel: 46 8 555 177 19
About Hoist Finance

Hoist Finance is a leading debt restructuring partner to international banks and
financial institutions, offering a broad spectrum of advanced solutions for
acquisition and management of non-performing unsecured consumer loans. Hoist
Finance operates through eleven in-house collection centers across Europe,
complemented by local external debt servicing partners. The total carrying value
of Hoist Finance’s acquired loans was approximately SEK 11.3 billion as per 31
December 2015. The parent company Hoist Finance AB (publ) is listed on Nasdaq
Stockholm Mid-Cap list and its subsidiary Hoist Kredit AB (publ) is a regulated
“Credit Market Company” under the supervision of the Swedish Financial
Supervisory Authority (Sw. Finansinspektionen). In Sweden, the company offers
internet-based savings deposit services through HoistSpar, with around 85,000
accounts.