Published Date: 04-13-2022 08:05
Hoist Finance sells its UK subsidiary in credit management operations and unsecured receivables portfolios.
Hoist Finance has entered into an agreement with Lowell to wind up its UK subsidiary in credit management operations and unsecured receivables portfolios. The transaction value (enterprise value) is approximately SEK 4,500 million and represents 108 percent of Hoist Finance’s book value of unsecured receivables.
The divestment from UK operations within unsecured past dues is a result of our dedication to investing and conducting operations where we can achieve attractive risk-adjusted returns. Our UK operations in unsecured past due have resulted in low returns for many years. It includes significant fixed and semi-fixed costs, which means that a large scale is an important prerequisite for long-term success. Our UK credit management platform is not large enough and will be better developed as part of Lowell’s larger business. The sale gives Hoist Finance opportunities to grow and invest in portfolios where we can generate higher returns, says Lars Wolong, CEO.
net profit from the transaction
According to Hoist Finance, the transaction provides a positive contribution to profits, capital and return on equity from the acquisition date. The net profit from the transaction before tax is about SEK 140 million, the CET1 headline figure is estimated to rise by about 280 basis points and ROE will increase by about one percentage point in 2022, all other things equal.
The book value of the portfolios sold with unsecured past due receivables was approximately SEK 4,150 million, representing approximately 19 percent of the group’s total portfolio in December 2021.
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The secured loan portfolio of SEK 340 million and group jobs will remain and will continue to operate as normal in the UK.
The transaction is expected to be completed during the third quarter of 2022 and is subject to approval by the UK’s Financial Conduct Authority (FCA).
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