Interim Report Q3 2016 HKAB

July – September 2016

  ·  Gross cash collections on acquired loan portfolios increased 10 per cent to
SEK 1,075m (974).
  ·  Total revenue increased 13 per cent to SEK 667m (591).
  ·  Reported EBIT was SEK 245m (183) and the EBIT margin was 37 per cent (31).
  ·  Profit before tax totalled SEK 140m (90).
  ·  Portfolio acquisitions totalled SEK 607m (1,982).

Figures in parentheses refer to Q3 2015.

30 September 2016

  ·  Carrying value on acquired loan portfolios totalled SEK 11,658m (11,279).
  ·  Gross 120-month ERC (Estimated Remaining Collections) totalled SEK 19,450m
(19,367).
  ·  The total capital ratio improved to 15.45 per cent (15.21).
  ·  The CET1 capital ratio was 12.63 per cent (12.32).

Figures in parentheses refer to 31 December 2015.

Events during the quarter

  ·  Hoist Kredit acquired a Madrid-based master servicing company,
strengthening its position in the Spanish market.
  ·  Taking advantage of favourable market conditions, Hoist Kredit expanded its
EMTN programme with the issue of an additional EUR 50 m. The bond loan totals
EUR 300m following the issue.

Statement by the CEO

Strengthened position in the Spanish market and acquisition of other asset
classes in Italy

Hoist Kredit’s operating activities continue to perform well, while we also
continue to make investments and advance our positions for the future.
Accordingly, we reported a strong performance in the third quarter with an
operating profit (EBIT) that was up more than 20 per cent year-on-year. Over the
course of seven quarters since Hoist Kredit was listed on 25 March 2015, we have
increased revenues by more than 30 per cent and our profit before tax by more
than 150 per cent. Looking ahead, I do not foresee any change in our stable and
strong rate of growth.

Strengthened position in the Spanish market

In September, we had the pleasure of announcing the acquisition of the Madrid
-based master servicing company Optimus. This transaction was a natural
progression on our first portfolio acquisition in Spain, which we announced in
June. By acquiring this company – which enables the internal management of
acquired loans and gives us a local presence – we are making substantial
advancements of our positions in the Spanish market, which is one of the larger
markets in Europe. Using its expertise, energy and commitment, the company will
be able to support and accelerate our goal of becoming the leading business
partner to financial institutions in the Spanish market.

Acquisition of SME portfolio and portfolio of secured assets in Italy

During the quarter, Hoist acquired a portfolio of secured assets in Italy, and,
after the end of the quarter, a SME portfolio was acquired in the same country.
Our strategy remains in place, but in order to advance on our vision of becoming
the leading debt-management partner to banks and financial institutions, we are
expanding our focus to other asset categories, including secured loans and loans
to SMEs. We are doing this in the interest of being able to continue to meet our
partners’ needs and deliver value to both our shareholders and partners.

Strong earnings at the regional level and the acquisition of other asset classes

At the regional level, both Region West Europe and Central East Europe reported
improved earnings (EBIT) and operating margins compared with the year-earlier
period. Earnings in Region Mid Europe were slightly lower year-on-year, which
was attributable to a seasonally strong quarter in 2015.

Popular and well-received Capital Markets Day

We organised our first Capital Markets Day during the quarter, the aim of which
was to describe our view of the non-performing loan market and the role we play
there. This market, highly relevant to Hoist Kredit, is expected to grow by 7
per cent annually as more and more banks realise the value of making their
balance sheets more effective and divesting non-performing assets. Through
specialisation and effective procedures and processes, we are able to offer a
price for these portfolios that exceeds the sum that the bank itself could
recover using its internal processes – creating a win-win situation for
ourselves and our partners, and serving an important role in the financial
ecosystem.

Creating shareholder value

In the annual report, I wrote that we will continue to remain focused on
creating shareholder value. Our aim is to increase knowledge and understanding
of Hoist Kredit by maintaining clear and transparent communication in
conjunction with our interim reports and Capital Market Days.

Another element involves delivering on our communicated goals and fulfilling our
strategy, which we will continue to do. We had just over 1,500 shareholders at
the beginning of the year; this number increased to nearly 3,500 by the end of
the quarter. I would like to take this opportunity to welcome all of our new
shareholders and to say that we have only just begun this long and exciting
journey.

Outlook

The fourth quarter is seasonally the strongest in terms of portfolio
acquisitions. This is also verified by the beginning of the quarter, in which
acqusitions have exceeded those from the full third quarter. Our target of
achieving a 2016 acquisition volume in line with the past three years remains in
place.

Jörgen Olsson

CEO

Hoist Kredit AB (publ)

Hoist Kredit AB (publ) (“Hoist Kredit”) is a regulated credit market company and
therefore 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 Kredit
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. Hoist Kredit is part of the financial group
of companies for which Hoist Finance AB (publ) (“Hoist Finance”) is the parent
company.

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

Telefon: 46 (0)8 555 177 19