Earnings call transcript: Hoist Finance sees profit rise but stock dips in Q1 2025

Hoist Finance reported a 19% increase in profit before tax during the first quarter of 2025, yet its stock price fell by 2.66% in pre-market trading. The company demonstrated robust financial health with significant growth in net interest income and an improved cost structure. According to InvestingPro data, the company has achieved impressive revenue growth of 24.21% over the last twelve months, with a healthy gross profit margin of 69.82%. Despite these strong fundamentals, a decline in return on equity and lack of specific earnings per share (EPS) and revenue figures against forecasts left some investors cautious.

Key Takeaways

• Profit before tax increased by 19% year-over-year.
• Net interest income rose by 19%, indicating strong revenue generation.
• Return on equity decreased slightly from 18.4% to 16.7%.
• Stock price fell by 2.66%, reflecting mixed investor sentiment.
• Focus on non-performing loan acquisitions and strategic partnerships continues.

Company Performance

Hoist Finance showcased a solid performance in Q1 2025, with a 19% year-over-year increase in profit before tax, reaching SEK 332 million. The company continued to expand its portfolio value, which grew by 10% to SEK 29 billion. With a market capitalization of $751.35 million and a P/E ratio of 8.18, InvestingPro analysis indicates the stock is trading at attractive valuations relative to its growth potential. Despite these gains, the return on equity saw a slight decline to 16.7% from 18.4% the previous year. The financial sector’s competitive landscape and evolving market conditions may have contributed to this mixed performance.

Financial Highlights

• Profit before tax: SEK 332 million, up 19% YoY
• Net interest income: SEK 920 million, up 19%
• Cost to income ratio: Improved to 68% from 71% last year
• Portfolio value: SEK 29 billion, a 10% YoY growth

Market Reaction

Hoist Finance’s stock price experienced a 2.66% decline in pre-market trading. Despite the recent dip, InvestingPro data shows the stock has delivered an impressive 44.17% return over the past year, while maintaining a sustainable dividend yield of 2.31%. The stock is currently trading near its InvestingPro Fair Value, suggesting balanced market pricing. This movement comes amid a broader market environment where investors are cautious, possibly due to the lack of specific EPS and revenue figures for comparison against forecasts. The stock’s performance remains within its 52-week range, with InvestingPro analysts maintaining a bullish consensus on the company’s prospects.

Outlook & Guidance

Looking ahead, Hoist Finance aims to expand its portfolio to SEK 36 billion by the end of 2026. The company is also targeting qualification as a Specialized Debt Restructuring entity by 2026, which could release approximately SEK 890 million in capital. This strategic focus on portfolio acquisitions and maintaining a flexible cost structure underscores the company’s long-term growth ambitions.

Executive Commentary

CEO Harry Vranjes emphasized the company’s strategic approach, stating, "We acquire portfolios of nonperforming loans from banks at significant discounts, historically, an average discount of 90%." Acting CFO Magnus Soderlund highlighted operational efficiencies, noting, "We continue to see an increase in operating leverage and scale effects."

Risks and Challenges

• Declining return on equity may signal potential efficiency challenges.
• Market conditions and regulatory changes could impact future profitability.
• The company’s reliance on non-performing loan acquisitions poses inherent risks.
• Currency fluctuations could affect income and cost structures.

Q&A

During the earnings call, analysts inquired about the SDR qualification process, which requires meeting specific criteria at each reporting date. Management indicated that excess capital might be used for further portfolio purchases or potential shareholder returns, reflecting a strategic focus on growth and shareholder value.

Full transcript - Hoist Finance AB (HOFI) Q1 2025:

Conference Moderator: Now I will hand the conference over to CEO, Harry Vranjesch and Acting CFO, Magnus Sotterlin. Please go ahead.

Harry Vranjes, CEO, Hoist Finance: Thank you. Good morning, everyone, and welcome to this Hoist Finance earnings call for the first quarter of twenty twenty five. I am Harry Vranjes, CEO of Hoist Finance. And next to me, I have Magnus Soderlund, our acting CFO, for his first presentation and Karl Entyk, our Chief Investor Relations Officer. So before we dive into the numbers and the highlights, I just want to thank you all for your interest in hoist finance.

We will try to run through the presentation today in thirty minutes to leave room for any questions you may have, as usual. But first, just very shortly about hoist finance for those of you who are new to us. So on a high level, our business model is is very simple. We acquire portfolios of nonperforming loans from banks at significant discounts, historically, an average discount of 90%. So basically, we buy on average for 10% of nominal value.

Now to then reach our financial targets, we manage these portfolios and we collect circa 20% of that of the nominal value. We do this in a banking suit or more specifically, a credit market company suit that enables us to have a stable and cost affecting funding source in the form of deposits 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 the first quarter of twenty twenty five has been another very active quarter for Hoist Finance on many fronts. During February, we received clarity on the interpretations of the two outstanding criteria for the qualification for so called specialized debt restructure.

Now this has triggered a host of activities within Hoist, mainly with regards to our funding, where we’ve replaced all our flex accounts with three to six months term accounts. All of these activities were completed before the thirty first to third, so before the end of the quarter. And as you need to fulfill the STR criteria per every reporting date during the preceding year, we now conclude that we are on track to notify as an STR in 2026. Now let’s dive into the material. Key highlights from Q1.

Profit before tax came in at SEK $332,000,000 compared to SEK $279,000,000 in Q1 of last year. Now the market uncertainty or turbulence towards the end of the quarter and FX had only a minor impact on the income statement, more on the balance sheet, but Magnus will take you through this later in the presentation. Our core measurement return on equity came in at a strong 16.7%, driven by the core underlying business. As we continue to execute on our strategy, the underlying core is now generating profit on a higher and higher degree. So those

Magnus Soderlund, Acting CFO, Hoist Finance: of

Harry Vranjes, CEO, Hoist Finance: you who followed us already in 2022, ’20 ’20 ’3, you know that we had a lot of positive one off effects that drove the result. Now it is the core business. We closed portfolio investments of SEK 1,000,000,000 in the quarter at good returns. After, I guess, could call a sleepy January, the market woke up and is now very busy. Our investment team is currently working on 60 transactions across Europe.

Volumes and pricing in the market are still attractive. And but as you know, investment levels will continue to be lumpy between quarters as our average portfolio size keeps going up. During April, so after the quarter ended, we signed acquisitions for an additional SEK 1,300,000,000.0 that we expect to close now during Q2 and Q3. Our portfolio now stands at SEK 29,000,000,000, which corresponds to a 10% increase year on year. But FX adjusted, that would be like 16%.

Now the FX is also the main reason the book shrinks between Q4 and Q1 this year. Now net interest income, up 19% compared to Q1 last year despite the added cost of the liquidity portfolio. And a 19% interest income growth versus a currency adjusted portfolio growth of 16% means that our so called operating leverage continues to expand, much benefited by cost control as well. Our collection performance came in at solid €103,000,000 we keep continuously improving efficiency in all units and with our collection partners around Europe. And this cost structure that we have spent the last few years building has helped mitigate the lower investments in the quarter, just as it should for an investment business.

Now during Q1, we also called our EUR 81,000,000 of EUR 40,000,000 without replacing it with another AT1 instrument. You will not see the full effect in Q1 as we paid the full year coupon in February, but that is now not reoccurring, right? And in the quarter, we also issued senior preferred and non preferred bonds for a total of 1,450,000,000.00. And as you can see, our capital and liquidity position is very strong. We have ample purchasing power.

Our CET1 ratio came in at 13.1%. Now with that, I will hand over to Magnus to take you through the numbers in detail.

Magnus Soderlund, Acting CFO, Hoist Finance: Thank you, Harry, and thank you all for joining this call. So if we start with our financial summary. So for q one, we’re delivering a solid quarter from an earnings and returns perspective. We have 332,000,000 in profit before tax, which is 19% increase from last year, and then a return on equity of 16.7%. So this is slightly lower, the ROE, than last year’s 18.4.

But that was also partially impacted by a materially lower than usual tax rate for the quarter that related to timing differences. We have a net interest income of $920,000,000 for the quarter, which represents a growth of 19% versus last year. And our net interest margin remains at good levels at the same time as we are meeting all requirements of becoming STR compliant also with the increased costs that brings. Looking at the cost side, we have no material extraordinary one off costs to consider for the quarter during 2024. We have completed our with the extraordinary costs reported, particularly in q two to q four.

Whilst the extraordinary costs, one off costs will likely appear also in the future, it will be to a lesser extent. Our ambition is to be less volatile than previous years on the cost side. We’re seeing the benefits from the completed rejuvenation program and further restructuring activities during last year coming through now in q one. So we are growing the book by 10% or 16% excluding FX, and we remain cost flat versus Q1 last year. But we also didn’t have any material one offs in the P and L.

So looking at our cost to income ratio for q one, it comes in at 68% to be compared to last year with the 71%. So we’re very happy about that improvement. Then as Harry concluded, we saw a rather sharp FX impact towards the end of Q1. So the size of our book decreases versus last quarter by roughly 1,700,000,000. And out of this SEK 1,500,000,000.0 is driven by FX movements that occurred in the later days of the quarter.

So for the P and L, the impact was not as significant since its average currencies of the quarter. But for the portfolio, which is reported as a point in time, the impact was more significant. All in all, we are very happy with the results for the quarter and the fact that we are managing a 16% growth in our book with a flat year on year. So next slide, please. Investments.

So volumes comes in at roughly SEK 1,000,000,000 for the quarter, which is a relatively low number compared to our quarterly average run rate during 2024. But also in our line of business, some quarters are slower than others and some more intense. For instance, Q3 of last year where we acquired close to 4,500,000,000.0. But we remain disciplined in our investment and pricing strategy. We’re very data driven and granular in our cash forecasts when assessing new deals, and we are very careful to minimize the level of assumptions in our valuations.

Hence, the risk level of our book is in a very good place, which is also proven by our collection performance, which has been above forecasted levels throughout the whole of 2024 and now also in Q1 of this year. So we are in a supportive market where we’re still seeing good and healthy return levels, and we believe this will continue and support us as we see shift in the market to more capital light business models for some of our peers. We have a really strong business model and our funding capabilities continue to be a competitive edge for us. And as Harry mentioned, we have signed additional deals equal to book value SEK 1,300,000,000.0 in Q2, which we expect to close and implement later this year. And we remain convinced on the line to meet our plan of SEK 36,000,000,000 in book value at the end of twenty twenty six.

We also have a very healthy and big pipeline that will provide many good opportunities during the rest of this year. We are also worth mentioning continuing with our strategic partnerships to expand our sourcing network. We are continuously working with servicing partners, industry and financial peers to source and potentially co invest where we see fit. In q one, our cooperation with co investors represented a total share of roughly 25% of the total acquired portfolios. And also worth reiterating that we will always only report and show our share of all co investments in the balance sheet and p and l.

Next slide, please. So 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. And our main two asset classes we invest into remains to secured and unsecured.

And there are a couple of subsectors as well, but those are the main asset classes. And our collection performance is the evidence of a healthy book and risk profile. So if we go to next slide. So looking at our operating leverage. We continue to see an increase in operating leverage and scale effects also during Q1.

We have a growth in the book, 16%, as mentioned, excluding FX. And the profit before tax increased by 90%. So we’re growing our net interest income by 19%, whilst remaining cost flat year on year. This is a result of our cost control activities and completed restructuring work in last year. And we are obviously also actively working with further cost efficiency improvements in our daily business.

And we can go to the next slide. So I think this is a new slide in the presentation. The purpose of this is to illustrate the development of our direct and indirect costs over time. And as you can see when comparing the direct cost to collections, collections is the top graph. Sorry, the top line in the graph.

So we have a very flexible cost base, and we are becoming more flexible over time, thanks to our outsourcing model applied in a number of our markets at this point. Looking at our indirect costs, we see a fairly flat underlying cost development with the previously mentioned and discussed one offs during 2024 that mostly related to the restructuring program. And also to keep in mind that the flat number of indirect FTEs includes an increase of roughly 40 FTEs that came with the insourcing IT initiative. This also brought cost savings that make up for the high inflation environment. So we are becoming more flexible over time.

We can also see the number of FTEs reducing over time, which is a combination of efficiency improvements and outsourcing where we find it optimal. So the next slide. The funding. Looking at the funding, it is a similar mix to the one we presented in q four. Largest portion consists of our deposits, which are by the end of Q1 transformed into 100% deposits with contractual maturity.

We also issued two bonds during Q1 of a total of SEK1.5 billion. And as Harry mentioned, we called the €40,000,000.81. So 80% of our funding consists of term deposits, three months to five years, and the rest consists of different types of market funding in order to maintain a healthy diversification. This ratio can vary slightly throughout the year, but this is roughly where we’ll be. It’s a diversified, stable, competitively priced funding base, which is supporting our growth.

We have an average cost of the 3.7%, which is in the same range as q four of last year. Next slide, please. So our liquidity position. Looking at the LCR, we continue to maintain a very high level. We have more than tripled the liquidity portfolio and reserve year over year, and we have an extraordinarily high LCR at over 1500%.

Regarding NSFR, we are now reporting in accordance with the legal position of the SFSA. We have also restated Q4 now of 2024 accordingly. And for Q1, as you can see, we are above the required 130%. The growth of the liquidity reserve is basically driven by three factors. It is the 30% NSFR requirements, the legal position of the SFSA, and the removal of the flex accounts.

So this is all related to the SDR criterias that Harry will cover more in detail a bit later. We can move to the next one. Our CET1 capital position, we maintain a very strong capital position materially above regulatory requirements. We moved from 11.5% in Q4 to 13.1 now in Q1. And this increase is mainly driven by three factors.

First, the new standard model with calculating financial risk that came with the updated banking package. Secondly, the FX impact and third is the fact that we had a relatively slow investment quarter in q one. But we have a continued and significant purchasing power sufficient to meet our growth plans for the remainder of this year. And with that, I will hand back to you, Herr.

Harry Vranjes, CEO, Hoist Finance: Thank you very much, Magnus. Yes, SDR. So as mentioned, we are aiming to notify as SDR in 2026. Now to do that, we need to fulfill a number of criteria. And in the beginning of this quarter or the discussions between regulators that started in late autumn twenty twenty four and continued until clarification in February have centered around two criteria.

Primarily, what does preceding financial year mean? Basically, of the criteria is that you need to have fulfilled all the other criteria during during a a full year before being able to notify as SDR. Now this has now been clarified exactly how that should be interpreted, and that is the interpretation the clarification is that we need to meet all the criteria at each reporting date for a full financial year before notifying as SDR. And, you know, feel free to go through the appendix to see all all the other the full article text and and and the and the other criteria as well. But, basically, we conclude that we are fulfilling all the criteria per first reporting date of 2025 to date.

So we are well on the way towards SDR 2026 based on this criteria. Now, the second question that where there was discussion around the interpretation was how site deposits should defined. Now also here, the Swedish FSA has clarified that all deposits without contractual maturity should be considered site deposits. Now so for that reason, we have phased out all our so called flex accounts, which did not have contractual maturity. And we now only offer fixed term deposits with a duration from three months to five years.

So no overnight or flex accounts anymore. And this makes us very confident that, that we are now well on the way to, to, notifying as an SDR in the beginning of twenty six. So key takeaways. Before we open up for questions, just want to leave you with some key takeaways for the quarter. Now we have a strong investment pipeline for the year, and we reiterate our ambition of having 36,000,000,000 portfolio by the end of next year, actually.

NPL ratios in European banks are growing again, and we see a highly active secondary market still. Our operating leverage continues to increase with good cost control and a flexible cost model, which we have spent years building. Significant, of course, purchasing power and we also have an unmatched funding cost in the industry. And as mentioned a couple of times now, we are on track to notify as STR in 2026. I should also repeat that the Board of Directors has suggested a dividend of two per share after Q4, which is up for decision in the AGM tomorrow.

So with that, that concludes actually our remarks for the first quarter. Thank you all for listening. Let’s open up for questions.

Conference Moderator: The next question comes from Bjorn Olsen from SEB. Please go ahead.

Bjorn Olsen, Analyst, SEB: Good morning, guys. So a few questions on the STR then. First one, on Page 11 in your slide deck, as you mentioned there, basically, when you qualify as SDR, you become exempt from the NPL backstop, freeing up currently around $890,000,000 by 2026. How should we view this sort of excess capital that you then hold? Is it relevant should we look at this as an additional buffer for additional acquisitions or an extra dividend?

Or could you guide any on that?

Harry Vranjes, CEO, Hoist Finance: I think the excess capital that will be released at that moment will be utilized either for portfolio purchases, which is always our our preference, but the board may very well choose to to to do something else related to that. We always have the options of of share buybacks, etcetera. And I guess we will continue to inform the markets of how we’re going to handle that going forward.

Bjorn Olsen, Analyst, SEB: Makes sense. And on growth side then, your funding, like you mentioned, is basically flat Q on Q as this shift in deposit intake as you’re trying to qualify as SDR affected the growth of your portfolio acquisition pace? Has it limited you or

Harry Vranjes, CEO, Hoist Finance: No, no. There has been no Or of No. There’s no link between those two, no.

Bjorn Olsen, Analyst, SEB: Right. And finally then, one, since you now know that you will qualify or on path to qualify SSTR, Will you shift your acquisition pace or change what you’re purchasing? Or how should we view that and how should we view that SEK 36,000,000,000 target?

Harry Vranjes, CEO, Hoist Finance: I think we reiterate the SEK 36,000,000,000 target. And I mean, we have a wide range of options for for what we purchase. Obviously, the the closer we get to SDR, the options expand further, let’s say. Right? But we have we have the tools with securitizations.

We have the co investments already now. We have the secured asset class, which which we are very successful in, where we see a strong pipeline for the year. So we expect that becoming an SDR will give us a little bit more options. And of course, it will the benefits will be that we will have a greater independence in our sourcing.

Bjorn Olsen, Analyst, SEB: Great. Finally, on acquisition pace then or investment pace. Is it since it’s still quite low, is it explained by sort of lack of supply in the market or that you’ve felt that the sort of the competition in pricing has been not attractive enough? Or how should we view that? You said it was sleepy in January, but decided to go on that.

No. It’s expired after Christmas. Is there any other explanation?

Harry Vranjes, CEO, Hoist Finance: I think that is it is a question of timing. And I think usually, q one starts usually, there’s sort of a burst of activity in q four, and then q one typically starts slowly. Previous years, we have had portfolios that have started out or were supposed to close in Q4, where the seller, for some reason, has chosen to postpone the closing into next year. This year, we had fewer of those. But in terms of sort of sleepiness of January, it is pretty much the same as it has been other years as well.

So it is a traditionally seasonally weaker quarter. But as we say, we saw the pace pick up again in February, March, which now means we have signed SEK 1,300,000,000.0 already in April. So we are positive for the acquisition pace for the full year and for the $36,000,000,000 target in ’20

Conference Moderator: The next question comes from Markus Sandgrain from Kepler Cheuvreux.

Markus Sandgrain, Analyst, Kepler Cheuvreux: Guys. No, I was just thinking three things. First, FX. How much of income is denominated in SEK and the same for the cost base?

Harry Vranjes, CEO, Hoist Finance: Yes, Magnus?

Magnus Soderlund, Acting CFO, Hoist Finance: Yes. Thank you for that question, Marcus. I think if we look at our income, that pretty much follows our book value split. So it’s roughly 70% euro, sixteen % sloppy, and then smaller parts for the sterling, roughly 8%. And on the cost side, looking at OpEx, we have approximately 50% of our cost in euro, 30 percent in SEK, and then 10% in sterling and the PLN Polish zloty, respectively.

Okay. So that’s

Markus Sandgrain, Analyst, Kepler Cheuvreux: the So 30% okay. So 30% SEK and not much on on the income side then?

Magnus Soderlund, Acting CFO, Hoist Finance: No. No, that’s definitely. Okay.

Markus Sandgrain, Analyst, Kepler Cheuvreux: Okay, good. And then on this SDR status again, sorry for asking, but is there any uncertainty in your view about that this is going to happen Q1 twenty twenty six?

Harry Vranjes, CEO, Hoist Finance: What we need to do is we need to continue to deliver on these criteria for three more quarters. That is all in our own hands, and we will make sure to do so. As long as we do that, there is no uncertainty.

Markus Sandgrain, Analyst, Kepler Cheuvreux: Okay, great. And then lastly, costs in Q1 now, are they representative, so to speak? So if you grow, that will be direct expenses that mostly grows from here?

Magnus Soderlund, Acting CFO, Hoist Finance: Yes. As said in the presentation, we’re very happy to see our low cost base. I mean, cost base is improving, and we are flexible if and when we grow, we will grow for sure, then the direct costs will move accordingly. And on the indirect costs, arms stay flat. So yes.

Markus Sandgrain, Analyst, Kepler Cheuvreux: Very good. That’s all for me. Thanks.

Harry Vranjes, CEO, Hoist Finance: Thank you very much, Markus.

Conference Moderator: Question comes from Airman Carrick from Carnegie. Please go ahead.

Armin Carrick, Analyst, Carnegie: Good morning, gents, and thanks for the presentation and for taking my question. Maybe I’ll just start with following up on the cost question. It’s almost what you just answered. But do I get it correctly then that the best way to forecast your cost going forward would be to kind of look at gross collection to direct cost and we just use kind of the rolling twelve month average or something going forward as well? And then indirect cost, is it now flat instead of going with inflation?

So so you’re actually a little bit more ambitious on indirect cost, or or is it still the same?

Magnus Soderlund, Acting CFO, Hoist Finance: I think the way of looking at it does is comparing it to the collection rate. But then the investment volumes also plays a part. Right? Because if we have a quarter with intense investments, that will likely drive some of the direct costs up for that the sort of starting period of the of the portfolio. So it’s not exactly linear from that sense, but I think looking at the collection levels is the best indication.

And sorry, Armin, you had another question.

Armin Carrick, Analyst, Carnegie: And the indirect costs? No. No. There was the indirect cost. I think previously, you said that they should grow in line with inflation, and now you said flat.

Is that just because you expect inflation to be fairly low this year? Or are you more ambitious on how much indirect costs you

Magnus Soderlund, Acting CFO, Hoist Finance: can take That’s a fair point, Armen, and apologies for that. We always have to consider inflation as well.

Harry Vranjes, CEO, Hoist Finance: Yeah. No. So the guiding remains the same on the on that. We see the IT insourcing is basically giving us the savings this year to to sort of offset the inflation so far. So that’s actually delivering better than expected.

But I think the guidance stays at indirect costs will will will follow inflation.

Armin Carrick, Analyst, Carnegie: Great. Then on the impairment gains and losses, how should we think about that going forward? It was obviously a bit higher last year even though you you still have a solid kind of collection rate relative to your active forecast now as well?

Magnus Soderlund, Acting CFO, Hoist Finance: Yeah. We do have we do have we we had a very solid performance last year. And, yes, q one of this year is slightly lower, but these things can move up and down as well depending on time. We have a very healthy book. We have a positive tilt in our book.

And, I mean, as long as we’re above a %, we’re happy. But we will obviously not guide for this in the future. But I I mean, our ambition is to remain in the in this range or at this level. And considering the quality of the book, that’s definitely something we believe in.

Armin Carrick, Analyst, Carnegie: Great. Then one last question just for my understanding. On the SDR, so obviously, you need to keep above all the criteria for the rest of the year to notify into next year. How does it work thereafter? If you would list below on, let’s say, NSFR for one quarter in two years, does it reset, you lose your status, you have to qualify for another year?

Or how does that work? And maybe as a follow on on that, then just like how much buffer do you want to have to the NSFR requirements on a longer

Harry Vranjes, CEO, Hoist Finance: I think let’s the buffer, we will keep some 10% to 13% above the NSFR target of 130%. That’s where we want to well, 5% to 15%, let’s say, right, is where we want to be. And now we’re smack in the middle of that range for this quarter. Then in terms of how this will work going forward, we will need to stay on these criteria throughout the full time. Should there be anything, and then there is a discussion with the with the FSA.

So but we fully intend to to stay within and above the criteria that are set by the regulators for the full period.

Armin Carrick, Analyst, Carnegie: Great. Thank you.

Harry Vranjes, CEO, Hoist Finance: Thank you, Ermin. Okay. So no more questions on the phone.

Conference Moderator: Next question comes from Markus Sandgren from Kepler Cheuvreux.

Markus Sandgrain, Analyst, Kepler Cheuvreux: Hi, again. Just one last one on the AT1 redemption. So was that what kind of costs was it in this quarter? Was it for coming quarters? Or was it related to redemption in itself?

Or was it that took it higher?

Harry Vranjes, CEO, Hoist Finance: So in February, we paid the full year coupon for the redeemed 81, the SEK 40,000,000. So going forward, we will not have that, right.

Bjorn Olsen, Analyst, SEB: Okay. Thanks.

Harry Vranjes, CEO, Hoist Finance: The remaining 81,000,000, the SEK 700,000,000 has a quarterly interest payment. Super. Any

Written Question Moderator: Yes, let’s do some written questions as well. So there’s one here on the CEO letter. Harry, you write that if market rates rise, our lead will increase and if rates fall, we will see an immediate positive impact on our results. Can you please elaborate on that?

Harry Vranjes, CEO, Hoist Finance: Yes. Well, typically, higher market rates means means higher rates basically for bond bond financed peers. Right? And and I think this is one of one of the benefits we have seen with the hoist model and and one of the core benefits that we have is our is our very, very competitive funding. Right?

So we have seen also now during this, let’s say, turbulence after the April 2, how bond markets briefly froze. Now, of course, we are less dependent on those markets than many other actors in the industry. So typically, higher market rates will make us more competitive on the when it comes to portfolio purchases. Then obviously, if interest rates fall, then we typically, we will see that immediately in our interest expense lines, right? Our deposit funding, we can very quickly react and and adapt the interests to to to the market levels.

Right? So it is that’s what that’s that’s the sort of the the point of that statement in the CEO letter.

Written Question Moderator: Very good. That’s actually all the questions we have today. So, thanks very much for listening in.

Harry Vranjes, CEO, Hoist Finance: Thank you all very much and have a great continued day. Thank you. Thank you.

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