Hoist Finance earnings for the third quarter of 2026 showed profit before tax rising 44% year over year to SEK 503 million as its acquired-loan portfolio expanded and funding costs improved. In its October 23 earnings discussion, the company also reported higher collection costs, reflecting legal expenses and the integration of Azuro.
Key Takeaways
- The loan portfolio grew 27% year over year to SEK 40 billion, while return on equity reached 21.2%.
- Higher legal and servicing expenses pushed the cost-to-collect ratio to 21%, up from 17.2% in the second quarter.
- Management expects further near-term funding benefits and plans a Polish zloty deposit platform for early 2027.
Table of Contents
- Hoist Finance earnings rise alongside portfolio growth
- Legal spending raises collection costs
- Lower funding costs come with smaller liquidity cushions
- Investment pipeline extends into 2027
- Conclusion
Hoist Finance earnings rise alongside portfolio growth
Underlying pretax profit growth was 47% excluding one-off items, compared with the reported increase of 44%. Return on equity exceeded the company’s new financial target floor of 20%.
Collection performance stood at 103%, matching the year-earlier level despite substantial portfolio additions. Management said all markets contributed. Net interest income totaled SEK 1.24 billion, and collections were approximately SEK 3 billion.
The larger portfolio supported earnings, but expansion also brought additional operating costs. The cost-to-income ratio improved to 63.8% from 66.8% a year earlier, even as direct expenses increased sharply.
| Item | Details |
|---|---|
| Azuro net interest income | SEK 103 million in Q3 2026 |
| Azuro collections | Approximately SEK 250 million |
| Azuro total operating income | SEK 133 million |
| Azuro direct costs | Approximately SEK 90 million, including roughly SEK 35 million of legal investment activity |
| Azuro indirect costs | Approximately SEK 20 million |
Legal spending raises collection costs
Direct costs rose 39% year over year. CFO Magnus Soderlund attributed the higher cost-to-collect ratio mainly to legal expenses and SEK 17 million of third-party servicing costs that were not associated with the reported collection figure.
The sequential comparison was also affected by unusually strong second-quarter receipts. That period included two large one-off interim payments totaling SEK 180 million. Soderlund said seasonally lower third-quarter collections had an approximately SEK 150 million negative effect on a like-for-like basis.
Azuro added both income and expenses, including significant legal investment activity. Its contribution is detailed below. Integration remained ongoing, with no one-off integration costs booked at that point.
Management expects portfolio growth to help spread indirect costs across a larger business, but Soderlund declined to give a specific percentage target for further improvement.
Lower funding costs come with smaller liquidity cushions
Funding costs improved to 3.21%, while funding costs relative to the nonperforming-loan portfolio’s book value fell below 4%. Soderlund expected the favorable funding outcome to continue for at least one or two more quarters; that remains management’s outlook rather than a completed result.
The net stable funding ratio, a measure of funding stability, declined to 138% from 142% a year earlier, against management’s ambition of around 140%. The liquidity reserve ratio fell to 68% from 79%. The common equity tier 1 capital ratio was 12.9%.
Hoist’s risk management framework explains that interest-rate changes affect interest-bearing assets, liabilities and net interest income, while liquidity reserves help cover potential cash outflows. Those principles provide context for the balance-sheet discussion, rather than verification of the quarter’s reported figures.
CEO Harry Branjes said fixed-term deposits, averaging about 1.2 years, delay the effect of rate changes on deposit costs. He also described the SEK 27 billion liquidity reserve as a partial offset to higher funding costs because its treasury holdings can earn higher yields when rates rise.
Investment pipeline extends into 2027
Hoist invested SEK 1.6 billion in the third quarter, bringing year-to-date investment to SEK 9.7 billion. Branjes said about SEK 1 billion signed in October was expected to close by year-end, while the first-quarter 2027 pipeline was beginning to fill.
Management noted stronger competition on selected Nordic transactions. Branjes said the ability to invest across 15 markets allows Hoist to redirect capital when pricing becomes less attractive in a particular market.
The company also plans to launch a Polish zloty deposit platform in Poland during the first quarter of 2027, following euro deposit platforms in Germany and Spain. Management expects the initiative to diversify funding sources and improve funding efficiency.
Conclusion
The next milestones are the expected year-end closing of portfolios signed in October and the planned Polish deposit-platform launch in the first quarter of 2027. Further results will show whether funding improvements and operating scale offset higher collection and integration expenses.
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