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Hoist Finance: the Swedish bank challenging Intrum

10 December, Il Sole 24 Ore

Someone has already dubbed it Anti-Intrum. The main reason is that they both come from Sweden, although Intrum, which has recently entered a partnership with Intesa Sanpaolo, is way bigger and more structured. Like Intrum, Hoist Finance operates in the acquisition and collection of non-performing loans, and it has been interested in Italy for a long time. It’s here, in fact, that the company aims at doubling the stock of its managed credits in a couple of years in order to go from NPE for 8 billion euro to over 15 billion.

A help might come from the recently approved measures of the EU that favour the acquisition of NPLs by specialised banks as Hoist. The goal is ambitious, although Italy represents 35% of the business of the group after the acquisition of the servicer Maran (about 200 employees) last October. Thanks to the great number of impaired loans in Italy, the competition is harsh. The main investment funds, like Fortress, Anacap, Crc and Pimco have been active on the Italian market for quite some time. The chances of the Swedish servicer listed on the Stockholm Stock Exchange depend on the new Ceo Klaus-Anders Nysteen. Nysteen comes from Lindorff, the company that merged with Intrum Iustitia in 2017 creating the giant Intrum, and he radically changed the Hoist top management. He presented the new business plan to the investors and analysts during a meeting in Stockholm. He explains to Il Sole 24 Ore: “The plan is very simple. We want to concentrate on a few markets, and Italy is our main focus”. While Banco Bpm has recently expressed the possibility to sell its management platform, Hoist has no interest in deals of this type. “We want to focus on the right assets now to diversify our portfolio, with particular attention on secured and performing credits, reducing in this way the predominance of unsecured loans in the portfolio, although they remain our core business”.

As Nysteen stated, the growth objectives are very challenging. It means increasing the EPS by 50% within 3 years and decreasing the cost income from 74% to 65%. In order to do that, it will be necessary to make some changes in the business model, which, as the Ceo admits, “it’s not very performing in terms of operational efficiency”. The company will have to reduce the traditional activity of credit collection via physical channels. Concerning this matter, the management intends bringing digital and low-cost collections up to 80%. The growth is based on low-cost funding. Thanks to its banking license, Hoist can self-fund “at a very contained spread compared to the competitors”.

Source: Il Sole 24 Ore

Translator: Cristina Ambrosi