Results negatively impacted by factors stemming from previous years

In addition to the tough market conditions, our results for 2021 were negatively impacted by two major factors stemming from previous years. In the first half of 2021, Hoist Finance decided to write down the value of portfolios in the UK and Spain and further provisions for tax risks related to legacy issues from 2014. In total this had a negative impact on our net result by approximately SEK –400m. Hoist Finance net loss after tax for 2021 was SEK –117m including these effects. Throughout the year, we have worked intensively to de-risk our operations and balance sheet.

Need to redirect focus to core business

The unsatisfying performance in recent years led to changes already in the spring of 2021. Six new board members, including myself, were appointed in April. On May 31, I took on the role as CEO (interim) since there was a need for change. Hoist Finance had lost focus on its core business and had not quickly enough adapted operations to changed market conditions. Short-term underperformance in portfolio revenues, due in part to the pandemic combined with a broad operational approach and a high-cost level, had reduced profitability. There was a need of redirecting focus of the strategy to our core business – secured and unsecured non-performing loans from consumers and SMEs. We need to operate with a more competitive cost base and profitability level. We also adjusted the governance structure to ensure accountability and transparency. Since the fall, we have a new leadership team including a new CFO, CIO, COO and have made several other adjustments within senior management.

Launched transformation programme

After the summer, we launched a transformation programme to accelerate portfolio acquisitions in our target markets and asset classes, improve productivity in collections, and reduce costs. Already in the summer we decided to refocus and reprioritise among various ongoing initiatives. For example, the broad Retail banking effort was put on hold, the investments to develop IRB (internal rating based) models were halted awaiting the European Banking Authority (EBA) decisions, IT and digital focus and spend were adjusted to optimise and accelerate benefits.

Efforts within sustainability continued

Our efforts within sustainability continued in 2021. All three ESG areas are important, but it is in the S – Social field - where we as a business really can make a difference and a contribution. We support banks and help our customers to get back on track and be a part of the financial ecosystem again. Thereby, we are contributing to upholding fair and stable credit markets and economic growth in the markets where we are active.

Hoist Finance has been a member of the United Nations Global Compact since 2019 and we continued to reaffirm our support to its Ten Principles for human rights, labour, environment and anti-corruption in 2021. We continually work to improve the integration of Global Compact and its principles into our business, culture, and daily operations.  We are also a certified NASDAG ESG Transparency Partner for the fourth consecutive year. In addition, 2021 marks our first reported disclosures related to the EU Taxonomy.

A good and sound base to build on

When taking on the position as interim CEO of Hoist Finance in May 2021, my ambition was to redirect focus and set the company on a route towards healthy profitability. During this period, it has become evident to me that Hoist Finance has a good and sound base to build on. We have really good people, an inclusive culture and a solid business platform. In addition, we work in an attractive industry with long-term growth potential, high returns, and, importantly, we contribute to a sustainable economy and society.