Hoist Finance (HOFI) CMD 2024 summary

Strategic direction and business model

• Focuses on being a specialized, bank-regulated NPL manager with a low-risk, data-driven approach, targeting SEK 36 billion in portfolio value by 2026 and emphasizing diversification and no single risk exposure.

• Shifted strategy since 2021 to treat investment management, loan management, and funding differently from peers, following a comprehensive strategic review.

• Emphasizes a pan-European footprint, operating in key markets such as Italy, Germany, UK, Poland, Greece, Sweden, Spain, France, Netherlands, and Belgium.

• Maintains a diversified portfolio across asset classes and geographies, with 28% secured and 72% unsecured NPLs, and 38% internalized vs. 62% externalized management.

• Pursuing specialized debt restructurer (SDR) status by January 2025, which will exempt from the prudential backstop and simplify the business model.

Financial guidance and performance

• Targets return on equity (ROE) above 15% and average annual EPS growth of 15%, with strong capitalization above regulatory limits.

• As of H1 2024, ROE stands at 13.9%, with continued progress toward 2026 targets.

• Funding cost is industry-leading, with a weighted average cost of debt at 4.4%, supported by a stable, granular deposit base and investment-grade market funding.

• Achieved significant improvement in profitability and capital generation since 2021, with recent EPS growth projections at 57% CAGR based on analyst consensus.

• Dividend policy is 25-30% of annual net profit, determined annually by the board.

Capital, funding, and risk management

• Funding is primarily deposit-based (73%), providing a stable, low-cost, and diversified funding structure across Europe.

• Maintains a low and stable risk profile through active risk management, diversified assets, and robust governance frameworks.

• Investment and loan management are highly data-driven, with centralized data lakes, feedback loops, and rigorous governance.

• High liquidity reserves and a flexible funding model support resilience and regulatory compliance.

• Outsourcing of collections is used flexibly to manage cost base and adapt to market fluctuations.