Earnings call transcript: Hoist Finance Q2 2025 sees strong stock surge

Hoist Finance AB reported its Q2 2025 earnings, revealing a solid underlying business performance despite a dip in profit before tax compared to the previous year. The company’s stock surged by 9.15% following the earnings release, reflecting investor confidence. According to InvestingPro data, the stock has delivered an impressive 74% return over the past year, with a current Financial Health Score of GREAT, suggesting strong operational fundamentals. The company is currently trading above its Fair Value estimate. The quarter saw a profit before tax of SEK 310 million, down from SEK 377 million last year, while the underlying profit before tax was SEK 335 million. The company’s return on equity (ROE) was reported at 14.7%, with a portfolio value increase of 17% year-on-year.

Key Takeaways

• Hoist Finance’s stock rose by 9.15% post-earnings release.
• Profit before tax fell to SEK 310 million from SEK 377 million last year.
• The company reported a 17% increase in portfolio value year-on-year.
• Collection performance stood at 104.4%.

Company Performance

Hoist Finance showcased a resilient performance in Q2 2025, with a focus on cost control and efficiency driving results. Despite a decrease in profit before tax due to a negative VAT ruling, the underlying business remained strong. The company continued to expand its portfolio, achieving a 17% year-on-year increase in portfolio value, and maintained a robust collection performance of 104.4%.

Financial Highlights

• Profit before tax: SEK 310 million (vs. SEK 377 million last year)
• Underlying profit before tax: SEK 335 million
• Return on Equity (ROE): 14.7% (reported), 16.1% (underlying)
• Total investment volume: SEK 2,600 million
• Portfolio value: SEK 31 billion (17% increase year-on-year)
• Collection performance: 104.4%

Market Reaction

Following the earnings announcement, Hoist Finance’s stock experienced a notable increase of 9.15%, bringing the price to levels near its 52-week high. This rise reflects the market’s positive sentiment towards the company’s underlying performance and strategic initiatives, despite the profit dip.

Outlook & Guidance

Looking forward, Hoist Finance aims to expand its portfolio size to SEK 36 billion by the end of 2026. The company is preparing for Specialized Debt Restructuring (SDR) status in 2026 and plans to increase secured portfolio investments. With a market capitalization of $930 million and a dividend yield of 2.1%, the company shows promising growth potential. For deeper insights into Hoist Finance’s growth trajectory and comprehensive analysis, check out the detailed Pro Research Report available on InvestingPro, part of their coverage of 1,400+ top stocks. It remains focused on maintaining a collection performance above 100% and is poised to expand its deposit platforms, starting with Germany in Q4 2025.

Executive Commentary

CEO Harry Branjes emphasized the company’s strategy of acquiring nonperforming loan portfolios from tier-one banks across Europe at significant discounts. CFO Magnus Sotterlin noted the stabilization of gross IRRs, which remains accretive to the quality of their book. Branjes also highlighted the company’s strong capitalization and liquidity position.

Risks and Challenges

• Negative VAT rulings could continue to impact financial results.
• Economic fluctuations in European markets may affect portfolio performance.
• Increased competition in the NPL market could pressure margins.
• Regulatory changes in European financial markets could pose challenges.

Q&A

During the earnings call, analysts inquired about the company’s deposit platform strategy, constraints on unsecured portfolio acquisitions, and the potential utilization of backstop reserves. Executives reassured that the company is well-capitalized and has ample liquidity to manage its business effectively.

Full transcript - Hoist Finance AB (HOFI) Q2 2025:

Conference Operator: And Now I will hand the conference over to CEO, Harry Vranias and CFO, Magnus Sotterlin. Please go ahead.

Harry Branjes, CEO, Hoist Finance: Thank you very much. Good morning, everyone, and welcome to this Hoist Finance earnings call for the second quarter of twenty twenty five. I am Harry Branjes, the CEO of Hoist Finance. And next to me today, I have Magnus, our recently appointed CFO, and Corin Thieke, our chief investment relations and comms officer. So, just wanna start by thanking you all for your for your interest in Hoist Finance.

As usual, we will try to run through the presentation in in thirty minutes, to leave room for for questions you may have. But before we dive into the material, a bit of repetition for for those of you who are new to to Hoist Finance. So Hoist Finance’s business model on a on a high level is is very simple. We acquire portfolios of of nonperforming loans from from tier tier one banks, around Europe at a significant discount. Historically, we’ve, had an average price of around 10% of nominal value.

Now then to reach our financial targets, we then manage the portfolios and we collect circa 20%. Now so we do this in a in a banking suit or or more specifically a credit market company suit, and, this enables us to have a stable and cost effective funding source in the form of deposits from the from the public. Now in an industry that is undergoing significant change, we are and will continue to be a capital heavy industrial actor, and we strive to become the leading investor and asset manager of consumer and SME non performing loans in Europe. Now during this second quarter of twenty twenty five, again, it has been a very active quarter, and I’m happy to report that this activity has mainly been in our core business. When I meet investors around Europe, typically, I get two questions.

They they always pop up. One, are there still NPLs for sales? You know, the NPL ratios in the European banking sector have gone down. Is there anything left to buy? The answer, and and as you can I think you can see from our activity during this quarter, is that we see, if anything, a larger pipeline than last year?

Yes. There are NPLs for sale. The second question I typically get is how are you doing on the SDR criteria, the specialized debt restructure criteria. And here, we did most of the heavy lifting during the first quarter as those of you who followed us are aware. And we are now comfortably reaching all criteria.

We will, of course, continue to monitor this, trim our very competitive funding cost. But for now, we prefer to be on the conservative side of the KPIs required for the SDR status, and we still expect to become an SDR in 2026. Now let’s dive into the material. Next slide, please. Q2 highlights.

Well, profit before tax came in at SEK $310,000,000 compared to, $3.77 last year. Now this quarter, we had a negative VAT ruling, from The Netherlands that brought down the result. And last year, as as those of you who have followed us know, we had onetime profits from portfolio sales in the quarter and also some higher costs due to restructurings. Now adjusted for that, the underlying result for the quarter is SEK $335,000,000, And Magnus will take you through this later in his presentation. Return on equity came in at a strong 14.7%, in line with our external financial targets.

And again, driven by the core underlying business, we have mentioned before that we want to have as little sort of one offs as possible. I think we have delivered that so far this year. Some one offs are sort of unavoidable, but I think we have delivered on that promise so far this year. Now making the same adjustment as on profit before tax, this would mean an underlying return on equity of a very strong 16.1% compared to then 13.7% last year. Now one of the highlights of the quarter, and I guess we flagged for that already in the Q1 report, has been the investment volumes SEK 2,600,000,000.0 booked in the quarter at stable returns.

It has been a busy period. It has continued into July with an additional signed volume of SEK 1,900,000,000.0 so far in Q3. And we see basically increased volumes in in Mid Europe, and, let’s say, still significant, unchanged volumes in in the South. Our portfolio, now stands at, SEK 31,000,000,000. And adjusted for currency, that means a 17% increase compared to the same quarter last year.

Now and quarter by quarter, we are getting closer to our ambition of having a total portfolio size of 36,000,000,000 by the end of twenty twenty six. Also, business collection performance came in at a solid 104%, even 104.4% as we continuously keep improving efficiency in all our units around Europe and together with our collection partners. Tight cost control with underlying direct costs trending in line with collections and indirect costs flattish adjusted for the one offs. Now this cost control and not unimportantly cost flexibility is helped by this cost structure that we have spent the last years building with outsourcing partners in select geographies and for select asset classes around Europe. We have a strong capital and liquidity position with a CET1 ratio of 12.5% and a significant liquidity reserve of SEK 26,000,000,000, and we continue to meet the full STR criteria with an NSFR at a safe 143% in the quarter.

And as I hope most of you have noticed, in July, Moody’s ratings affirmed all the ratings and assessments of Voice Finance and also changed the outlook on the group’s long term issuer and senior unsecured debt ratings to positive from from previously stable. And I think with that, I’m gonna hand over to to Magnus to take you through the numbers and the details of the quarter.

Magnus Sotterlin, CFO, Hoist Finance: Thank you, Harry, and thank you all for joining this call. So we had a very solid and good quarter with a profit before tax of SEK $310,000,000 with a 14.7% ROE compared to last year’s SEK $377,000,000 and seventeen 0.5% ROE. So we see a really positive intake of volume in the quarter, 2,600,000,000.0. And a, as Hari mentioned, continued high level of cost control. And regarding the one offs, as we’re expecting to see fewer and less material one off items in 2025, that is sort of disturbing the year on year comparisons and underlying business development.

We did have some impact in Q2 of this year, but even more so in the second quarter of last year, as mentioned by Harry as well. In this quarter, we see a negative 25,000,000 impact, which is the net of the VAT court ruling that we mentioned in the Q1 report. But then we also have some accrual releases related to VAT and other items. So the net was SEK 25,000,000. Last year, we saw a material impact from several extraordinary items with a net positive profit before tax impact of SEK 62,000,000 for the quarter.

And this was a combination of asset sales and costs related to improvement and restructuring activities. As an example, our insourcing of IT, where we see the benefits in this year. And for further reference, we have a detailed slide in the pack, in the appendix, illustrating the nonrecurring items by quarter. So if we look at the underlying performance of the business, we see a $3.35 profit before tax in the quarter versus the equivalent SEK $315,000,000 in 2024. So this gives us a 6% underlying growth.

If we look more into the details, we see a total interest income growth of 14% year over year, if we also include the co invest interest income, which we should. And this is in line with the portfolio growth. The investments in Q2 were heavily tilted towards June, which leads to a lesser impact in terms of interest income for the quarter coming from these new investments. They will, of course, be fully realized during Q3. The 4% growth in net interest income reflects that we are now fully financed for a whole quarter in relation to the MSFR criteria to qualify as an SDR.

Our net funding cost versus book value is tracking at 4.4%, same level as in Q1 as we saw in Q1. And we have an NSFR ratio of 143%. And here, we see some room to trim going forward. We see a continued strong operational performance, 104.4%. This demonstrates our collection abilities and the good health of our portfolio.

And the really strong investment volume for the quarter, 2,600,000,000.0, as mentioned. We are continuously buying portfolios at attractive levels that are accretive to our overall quality of the portfolio. Looking at the costs, they are tracking at a very good level as they also did in Q1. We have an increased flexibility in our direct expenses. This will be further demonstrated in a future slide, facilitated by our expanded outsourced servicing optionality.

And we have a stable indirect cost base, which will enable us to leverage our robust platform going forward. So all in all, we are very happy with this quarter. We’re taking off the second quarter of the year on our journey to achieve STR status. We saw a sharp and very positive increase in investments with a continued strong potential for the second half of the year. We are on top of our costs.

We maintain our cost control and solid performance. Underlying ROE for the quarter adjusted from the one off items comes in at 16.1% versus the equivalent of 13.7% in last year. And as this is sort of a transitional period for us in 2025, considering we are carrying the SDR costs but not seeing the benefits yet, we are very happy with the results of the quarter, maintaining a healthy return level. So if we can move to the next slide, please. So we’re picking up pace from Q1 with a really strong intake of the volume in Q2.

This is the third highest single quarter in the past three years. And looking further into the second half of the year, we see a very strong pipeline with many interesting opportunities in the short as well as the midterm. And this really brings us to a good place to reach the plan of a 36,000,000,000 portfolio book value by 2026. Already now in July, as I think Harry mentioned, we have an additional SEK 1,900,000,000.0 signed, and this is ready to be implemented in Q3, part of it possibly sliding into Q4. So we have a really good momentum in our investment activities.

To mention some specifics, very happy to increase our presence in the Portuguese market with an additional deal closed during Q2. So far, we’re very happy with the performance of this latest addition to our footprint. Overall, we’re seeing return levels in our new investments this year that are accretive to the quality of our total portfolio. We, as always, remain disciplined in our investment and pricing strategy with a healthy risk level in our portfolio. This is also proven by our collection performance remaining above forecasted levels.

And we are also continuing working with our strategic partnerships, both for servicing and for expanding our sourcing network. And our funding cost remains a very competitive edge for us in the market. I think we can move to the next slide. Looking at our asset class mix. The mix of our assets and the geographical spread remains similar to last quarter’s.

We have a healthy diversification of the book with the granular risk monitoring and a very low single risk exposure. We have a solid pan European presence and geographical diversification. Our main two asset classes we invest into remains to be secured and unsecured. The secured part of the book is gradually increasing over the past year or years, but still at a rather moderate pace. All in all, we believe we have a very healthy portfolio, and we manage it with the aim to deliver a stable and predictable performance.

We have a continued positive tilt in the book. And with this, I mean, we have materially more portfolios overperforming than underperforming in the mix of the total book. And we will continue to focus at upholding these levels and believe the quality of the book is supporting that. So if we go to the next slide, please. Looking at our funding.

We see a similar mix to the one we presented in Q1. So we have 80% or 41,000,000,000 consists of our deposits, now held that contractual maturity, three months or longer. We issued two bonds during Q1 to a total of SEK 1,300,000,000.0, and we repurchased SEK $230,000,000 of older senior preferred. Our funding cost remains at similar levels as the previous two quarters. To sum it up, we have a diversified and competitively priced funding base, which is really bringing us to the forefront in the debt purchasing markets.

You can go to the next. So this slide is to illustrate our development of net funding cost over portfolio book value. So we go from a 3.4% in last year to a 4.4% now in Q2. We also saw the same in Q1. Roughly half of the increase, the 100 bps we see, is related to SDR costs, and the rest is related to other items such as the S and P bond replacing the call of the 81 in Q1 and further bond issuance to safeguard our rating, so other activities.

We’re currently in preparation for setting up our own euro deposit platforms in select markets. This will bring a diversified set of tools and also bring lower costs. For this quarter, we are at a rather high level of NSFR, as I mentioned before. This is something we will actively work to tighten a bit moving into Q3 and the second half of twenty twenty five. But also with this increased funding rate, we remain extremely competitive and in a really good place to keep growing.

Next slide. Also in Q1, we see the continued trend of flexible direct cost versus collection with a slightly improved cost to collect in the first half of this year, mainly coming from increased level of outsourcing and other efficiency improvements. Looking at the indirect costs, we see a fairly flat underlying cost development. We are very cost conscious and focused to maintain the benefits of a former rejuvenation program and other cost saving activities, such as the insourcing of IT. We’re obviously also continuously looking for further optimization.

But with this stability, we’re in a very good place to leverage the future growth of our portfolio. You can go to the next slide. So this slide is basically describing the past five quarters ROE, excluding this is the reported number, so not the underlying. In summary, what we see is a continued strong quarter to quarter ROE trend with underlying returns above 15%. So this is also after absorbing all costs associated with becoming an STR organization, but before being able to see the full impacts of the benefits yet.

So we’re very happy with the 15% ROE in Q2. And with a strong pipeline, tight cost control and more than adequate capital, we are set to continue to grow in a very active market. And we can go to the capital position. We maintain a very strong capital position, materially above regulatory requirements. We moved from 13.1% in Q1 to the illustrated 12.5% in the slide in Q2.

This decrease is mainly driven by increased level of backstop and net investments for the quarter that were really high. So we have a continued strong and significant purchasing power sufficient to meet our growth plans for the remainder of this year. And looking at our liquidity position. Looking at the LCR, we continue to maintain a very high level, driven by materially increased liquidity portfolio associated with becoming STR. We have the 143% NSFR, as mentioned, and this is something we look to trim at reasonable levels during the second half of this year.

And the liquidity portfolio remains at similar high levels as the past two quarters driven by the STR criteria fulfillment. And I think that concludes the sort of results slide. So with that, I hand back to you, Harry.

Harry Branjes, CEO, Hoist Finance: Thank you. Thank you. And with the risk of being repetitive again here, before we open up for questions, I’ll leave you with a few key takeaways. The strong underlying return on equity of 16.1% after including the full cost of the SDR, we’re very happy about that. We do see still attractive and accretive IRRs in a in a highly active market.

We have talked about before how how seller and buyer have had difficulties meeting each other and that some deals have sort of been, you know, gone back or or or been canceled. We don’t see that so much anymore. I don’t think we have had a single deal that has been pulled back after after being sort of launched. So I think seller and buyer are on the same expectation level to a greater extent now this year. As mentioned multiple times, we have a a strong pipeline.

It is there is lots of activity out there in Europe. Our costs are under control. This doesn’t mean that we are we are done with, with optimizations, etcetera. We will continue doing that, day by day, week by week, quarter by quarter out in the markets and also in the functions. We are well capitalized, and we have, as you’ve seen, ample liquidity, for for managing our business.

And we continue to meet the full SDR criteria, and we expect to notify in, in 2026. So that was faster than thirty minutes. Thank you all for listening. And now it’s time to open up for for questions, I guess. And then I press a button somewhere.

Corin Thieke, Chief Investment Relations and Communications Officer, Hoist Finance: If you

Conference Operator: wish to ask a question, please dial pound key Next question comes from Ulrich Zerker from Nordea. Please go ahead.

Ulrich Zerker, Analyst, Nordea: Thank you for taking my questions. Have two. You’re right that the IRR has stabilized, as you say it. But I noticed if you take the investment portfolio of 36 sorry, of SEK 31,000,000,000 and when we look at the estimated remaining collection next fifteen years, you get quite a drop Q on Q in the implied gross IRR. Is there anything going on there?

Magnus Sotterlin, CFO, Hoist Finance: Sorry, Ulrik, you’re referring to the gross IRR?

Ulrich Zerker, Analyst, Nordea: Yeah. Exactly.

Magnus Sotterlin, CFO, Hoist Finance: Okay. Because I what we see, we saw an increase in in the in the net IRR during 2024, driven by certain events, And we see a stabilized level now in 2025, which is still accretive to the sort of underlying quality of our book. And in the gross IRR, I would say it’s pretty much at stable levels as well. But regarding your calculation, that that’s something I would have to sort of look into and come back, I guess. But

Ulrich Zerker, Analyst, Nordea: Yeah. It is a bit simplified, but you had, like, a upward sloping trajectory for some years now because you reinvest at higher levels, but there’s a bit of a weird drop now.

Magnus Sotterlin, CFO, Hoist Finance: Okay. But I will have to look at that, Ulrik, and get back to you.

Bjorn Olsen, Analyst, SEB: Okay. Yes.

Ulrich Zerker, Analyst, Nordea: Great. Just secondly, there’s a lot of moving parts on the deposit side. And you’re talking about being a bit more efficient on the NSFR liquidity position. Should we expect like roughly flat deposit cost like nominally out the year now? Or how will the margin develop?

And any comments you can give on that? Very helpful.

Harry Branjes, CEO, Hoist Finance: I guess, I mean, the liquidity buffer will grow in line with the portfolio. Right? So if portfolio grows, that one will also increase. But in terms of the in terms of the rates, etcetera, I guess we well, the Swedish Riksbank lowered the rates, and and we adapted to that. And I think in Europe, we are sort of adapting to, the the, let’s say, NSFR efficiency of of the platforms we are using.

Right? So so that, on that side, I would expect us to be flat to slightly lower, on the rates. And then in terms of sort of, like I said, the the full liquidity portfolio, it will it will grow, in line with the portfolio growth, basically, at similar ratios.

Ulrich Zerker, Analyst, Nordea: What about the yeah. Thank you. What about the margins in euro and sec going forward? Because they’re a bit high now because you changed your deposit base, but should the margins go down the next years?

Harry Branjes, CEO, Hoist Finance: It’s difficult to to say where where where the interest rates and and sort of the the deposit base, moves. But but, yes, in general, we we were more attractive, let’s say, in the q one, and and q two, for the especially the three month and the six month, offering. And I would expect that to, normalize, over time.

Ulrich Zerker, Analyst, Nordea: Okay. Thank you. That’s all from me.

Harry Branjes, CEO, Hoist Finance: Thank you very much, Ulrik.

Conference Operator: Next question comes from Airman from Carrick. Please go ahead.

Ermin, Analyst, Carrick: Good morning, gents. Thanks for the presentation and for taking my question. So maybe if we start on the collection performance, which was pretty good here in Q2. Do you think it’s fair to just extrapolate that from here? Or how should we think about it?

It sounds like you don’t really see much gray clouds forming on the horizon either.

Magnus Sotterlin, CFO, Hoist Finance: No. If I can. No. I mean, no gray clouds. We still have a positive tilt on the book.

We were at 103 in Q1, now at 104%. We are still very actively managing our book to perform at stable levels. We’re obviously happy with everything above the 100% forecast. But this, this item feels very stable at the moment.

Ermin, Analyst, Carrick: Makes sense. And then I’m just thinking on the kind of investment composition. Do you think that will change anything when you become an SDR? You touched upon it that you’ve increased the exposure to secured somewhat over the year. Do you think that kind of mix change will continue the coming years?

Or does unsecured become relatively more attractive to you than it was before you became an SDR, before you have become an SDR?

Magnus Sotterlin, CFO, Hoist Finance: Yes. I mean, considering the sort of backstop schedule, for the two asset types, unsecured is normally a bigger problem from a backstop perspective. So so that’s gonna facilitate, or this is gonna bring us, it’s gonna put us in a better place to keep, buying more unsecured. The secured, as I said, the backstop schedule makes it fairly less complex at the moment for us. We we also see portions of backstop in secured as well, but I think the real benefit is the unsecured for us once we achieve the achieve the SDR status.

Harry Branjes, CEO, Hoist Finance: But I I think we could also add that typically now, secured, our secured asset class, we’re mostly active in in, in the South Of Europe. What we do see now, is that that mortgages, etcetera, are are coming for sale in smaller volumes than in the South, but it’s starting to pop up further north as well. So so it might be that if if if those markets continue to develop that way, that that it would basically open up for for for a larger share of secured. But but from a sort of backstop perspective and from an SDR perspective, I’ve it’s fully like like Magnus says. Right?

It’s the unsecured will become relatively more attractive.

Ermin, Analyst, Carrick: Got it. Thanks. And then one last question coming back a little bit to what Ulrik was on as well. Just thinking here now about the NSFR you have and kind of where you would want to operate going forward? How much you think you can take out from opening up your own platform and then kind of balancing that against the strong pipeline you see of new investments?

How to think about kind of the liquidity you intend to hold?

Magnus Sotterlin, CFO, Hoist Finance: I mean we definitely are in the high range in Q2. I think it’s a combination of us sort of understanding more about the customer behavior now with the fixed terms that we are entering since Q1. But with that, we will also be better to sort of foresee the movements in the market. And our ambition is definitely to be below the 143% level where we are today. But obviously, during this year and also in future years, the 130% mark will be extremely important to stay above for obvious reasons.

But we will definitely be able to end up in a better position than in Q2. And this, I’m completely convinced about.

Conference Operator: Next question comes from Bjorn Olsen from SEB.

Bjorn Olsen, Analyst, SEB: Thank you. Hi, guys. My first question comes a bit back to what Ermin was touching upon. Sort of thinking about your pipeline for the second half of the year, And I mean, you clearly guide on it continuing to being strong. I’m just thinking, should we expect a pipeline or sort of expect something in the range of the second half of twenty twenty four?

Or is it of what size should we expect? And could you sort of elaborate a bit on sort of how busy are people? You’re writing that they’re busy now during summer. How busy are they compared to last year? And obviously, like Hermann was touching upon regarding unsecured portfolios, you’re right, you base currently your unsecured portfolio is basically eating roughly 1.5% of your CET1 per quarter now.

So is that sort of a restraint on your ability to acquire unsecured portfolios for the second half of this year as you still are not formally qualified as SDR? Or sort of could you guide any on that as well as constraint on acquisitions for the second half of this year?

Harry Branjes, CEO, Hoist Finance: Well, I’ll take that one. I think yes. I mean, the the the team is busy. That is that is clear. And I guess there there are two reasons for that.

One, typically, in the North, people want to to close the deals before midsummer. In the South, people want to close the deals before, let’s say, the first, second week in in August before they go on holidays. Right? Or at least sign them and then and then make sure that that they are implemented later in in the quarter after the holidays. So so it is a a a busy time, And I think there is a a shift in I mean, for for many years, q four has been the the absolute biggest volume quarter.

And as as you saw last year as well, with voice q two, q three, or summer, let’s say early late q two and early q three have become more important from a from a volume, perspective. And and that trend looks to continue this year. We we are absolutely not guiding for any 4,500,000,000.0 in in ’3, but but we we see we see the activity, and and we will, of course, capture the share we think is at at attractive returns. So it’s difficult to give you a number there, but but, basically, with the the pipeline is in line with with with last year, and we are tracking towards the ambition of ’36 by ’26 as as before. And there was a second part to your question there as well.

Did I or no? This was

Bjorn Olsen, Analyst, SEB: Yes. More technical one, I guess. Basically, currently, with the NPL backstop continuing to its capital, you’re basically stating that it backs up as increased by roughly SEK $05,000,000,000 since the start of this year or and you’re right that your CET1 would be 2.9% higher hadn’t it been for the NPL backstop. And like Hermann was touching upon, it’s mainly unsecured that drives this. So given that you still have six months until you qualify as STR, is this a sort of a constraint on the second half’s ability to acquire unsecured portfolios?

Or how should we view this? Sort of I guess, how low can you go in terms of CET1 pressure in the second half?

Harry Branjes, CEO, Hoist Finance: I think, obviously, it’s an important criteria when we look at the portfolio. And we do have the co investment partnerships and the tools that we have been using. And as you can see in the report, the the the income from that area is increasing. Right? So so we don’t skip interesting portfolios.

Obviously, when we co invest, we get a smaller share. We don’t get a 100%, but we still we still bid for those. Right? So we are we are obviously, with an SDR status, then we have no constraints whatsoever in that space. Right?

But we are still able, to to go after, unsecured portfolios, together with our partners, which has been working out really nicely, actually.

Bjorn Olsen, Analyst, SEB: Fair enough. Another question then on the your new deposit platform. You’re writing that you’re starting in Germany. When could we expect I mean, first of all, the platform to go live. Second, could you give us a ballpark figure of sort of basis points how much more efficient it is compared to using a platform provider?

And likewise, for sort of cost effect on the IT side of things?

Harry Branjes, CEO, Hoist Finance: I think the the plan is to to be live with the platform in q four this year, so a very high tempo project. Now we know Germany since before, obviously, through a partner. We know the platform from before. We’re using the same as we have in Sweden, so to to minimize risk and to to, make sure that, that we get it up on and running in time and and that we can operate it properly. The cost for the for the project and for the setup is, I would say I don’t want the project team to hear me, but it’s negligible in in for in in in relation to sort of the result here.

It’s it’s below 10,000,000 SEK for the project. I hope the supplier didn’t hear me. But but in terms of and then then comes sort of the marketing and and and getting the the the deposit customers on there. And and and that will start immediately in q four. Looking at the difference in cost compared to using a partner is is not something we will we will go out with.

But but we could say on a similar volume, let’s say, the the fee would be a half to to two thirds or something like that. Let’s say the operating cost. So it is it is cheaper, on the on the platform, on our own platform. Hope that answers your question.

Bjorn Olsen, Analyst, SEB: Yeah. I guess as much as you could can say. Thanks. And final question, always coming back to the backstop. It’s currently around SEK 1,100,000,000.0 in reserves.

When do you think we could expect any guidance on how you plan on utilizing these reserves once you become an STR?

Harry Branjes, CEO, Hoist Finance: Any such guidance I would expect at the Q4 report in, well, in February 2026 once the board has made its decision.

Bjorn Olsen, Analyst, SEB: Great. And you’re basically I guess, as as you say, it’s up to the board, but this is basically to be viewed as something that can either be used as a dividend or buybacks?

Harry Branjes, CEO, Hoist Finance: Yes. Our dividend policy stays in place. And of course, we need to look at at where the pipeline is and and what, you know, what the portfolio market looks like towards the end of the year and, of course, also looking forward for for the q one in in next year.

Bjorn Olsen, Analyst, SEB: Great. Thanks a lot. Have a nice summer.

Harry Branjes, CEO, Hoist Finance: Thank you. The same to you, Bjorn.

Conference Operator: Next question comes from Markus Sandgrin from Kepler Cheuvreux. Please go ahead.

Markus Sandgrin, Analyst, Kepler Cheuvreux: Good morning, guys. No, was just Hari, you said something that it seems like buyers and sellers are more on the same note now too in terms of pricing. What’s your take on is the lower rates driving I mean or the increase in the prices of portfolios? Or is that not noticeable?

Harry Branjes, CEO, Hoist Finance: I think you can almost for those of you on the call who are from Stockholm, there’s it it’s it’s very similar dynamics to the to the housing market in Stockholm, basically. So for as as funding cost went up for the industry, prices for portfolios or bids for portfolios came down, and we saw definitely during 2023, but still under 2024, a number of of of deals being revoked, basically. The sellers did not get what they want. I would say there has been an I think the IRRs, as we say, they have stabilized. Right?

So so so I think the they’re not growing at the moment, and I think the the sellers on the other hand have then sort of, gotten a new set of expectations, basically. So, so I think, that’s basically the answer to to the question, I think. I hope.

Markus Sandgrin, Analyst, Kepler Cheuvreux: Yeah. So give given that rate doesn’t move too much, this is what we should expect going forward more or less?

Harry Branjes, CEO, Hoist Finance: That’s what we see for for now in the in the pipeline and our win ratios. Yeah.

Bjorn Olsen, Analyst, SEB: Okay. Very good. Thanks. And that’s

Markus Sandgrin, Analyst, Kepler Cheuvreux: all for me, and and have a nice summer.

Harry Branjes, CEO, Hoist Finance: Thank you. You too. You too, Markus.

Conference Operator: Are no more questions at this time. So I hand the conference back to the speakers for any written questions and closing comments.

Corin Thieke, Chief Investment Relations and Communications Officer, Hoist Finance: Alright. We have, one written question here today. Is there a preference to buy secured portfolios? And do you find it harder to acquire secured portfolios as they seem to have net a higher return on investments, but are a smaller part of the total acquired portfolios today?

Harry Branjes, CEO, Hoist Finance: Well, I can just reiterate it. As we said, the the mortgage product is typically sold in in in Southern Europe. If it was if it was sold in in in the Mid Of Europe and North Of Europe as well, we would definitely be be going after it. So I think I think that’s the the limitation mostly in terms of in terms of sort of availability of of of those NPLs. We are very strong in this asset class.

It is an asset class where where the funding cost advantage is is clearer because, you know, you value the the the underlying security. I would say most most investors value it similarly, and then and then, of course, it’s a question of of how competitive you can be with your with your financing. And so that is a very strong strong point for for voice finance. And we are we are seeing, although from small volumes, right, but we see this asset class popping up now in Mid Europe or it’s it’s moving north. And so we are hoping to be able to expand in in that asset class going forward.

Corin Thieke, Chief Investment Relations and Communications Officer, Hoist Finance: Very good. That’s actually the only written question we have. So with that, thanks everyone for listening in today.

Harry Branjes, CEO, Hoist Finance: Thank you all very, very much, and we wish you a fantastic summer. And if not sooner, we’ll speak to you in another quarter. Thank you. Thank you. Bye bye.

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