A comment from our CEO
Continued strong growth
Collector continues to deliver strong growth. Once again, we have surpassed previous years. It is gratifying to be able to report that 2017 became our most successful year to date financially. During 2017, we invested considerable amounts in implementing new regulations such as PSD 2, GDPR and IFRS 9, especially during the last quarter of the year. Naturally, being able to report the same growth rate as before, despite these necessary investments, is particularly satisfying. Income increased by 28 percent and amounted to SEK 1,933 million, and earnings after tax was SEK 517 million, an increase of 28 percent.
Developments have been good in both the Corporate and Retail segments, both in the last quarter and during the year as a whole. Within the Corporate segment, our lending has continued to develop very well, with a good inflow of new customers in Sweden and the rest of the Nordic countries. In particular, factoring and company credits to medium-sized companies have increased.
On the private side, Retail, development in Sweden has been good, although we have deliberately lowered the growth rate of Personal loans compared with the previous year. The Retail segment also includes our e-commerce solutions (B2B+B2C), which have been a strong contributing factor to the good development. During the quarter and after its end, several important agreements were entered into, and even more dialogues with major customers have approached the final phase. As a benchmark against other leading players in the market, we offer our customers a high conversion rate thanks to our checkout function.
Intensive development has enabled us to enter the Retail segment with digital innovations, such as the Spira app – a collaboration with Aktieinvest with saving in shares on a monthly basis made simple. Much effort has also been focused on Collector’s app, where we now present our complete Retail offering for private customers in one interface.
Real estate credits
During autumn, property market worries were highly discussed in the media. Of Collector’s total lending, 30 percent consists of real estate credits. The part of the property portfolio comprising real estate developers accounts for less than 5 percent of our total lending, distributed among a few larger players. In addition to growing cities in Sweden, the portfolio also includes quality properties in Finland, Norway and Denmark. We are generally very selective in our choice of borrowers, properties and regions. Given the good property expertise among Collector’s management and board, the risks are low and have been thoroughly analyzed.
Development and sustainability
It is clear that consumption of financial services continues to change, especially among private individuals, but also among small and medium-sized companies. Collector’s aim is to be among the leading players in the digital transformation by continuing to develop technology and business models. We, therefore, maintain an agile approach to working with digital innovation, usually directly with customers through solid business transactions – and always with a focus on low risk.
Sustainability is a strategic prerequisite for our business model. During the quarter, we increased this focus with concerted efforts to identify the sustainability issues most important to us. Our first sustainability report is now in place.
Power of innovation under regulated development
During the fourth quarter, we made considerable financial investments toward implementing the new regulations GDPR, PSD2 and IFRS9. New security requirements and open APIs are expected to increase IT expenses. However, we have developed our solutions to also ensure they provide us with new business opportunities. With the development of our new app launched at the beginning of the year, we have prepared for the new payment services directive PSD2. When the directive is introduced, it will allow us to provide financial services to customers with accounts at other banks, both private individuals and companies. To this end, we have now launched “Collector Open Banking”
We have also been strongly focused on further strengthening our employer brand, both to recruit new employees and to retain valuable skills. As a step in finding new IT talent, we have launched the intensive programme Collector Academy in collaboration with Academic Work. Through a tailor-made 12-week course, 15 participants will be trained in systems development, starting in March. The education period is followed with a one-year trainee programme. Collector Academy further strengthens our attractiveness as an employer and is part of ensuring our workplace always remains at the forefront of digital technology and innovation.
Strong growth in e-commerce is expected
Early this autumn, we began work on the Convert report, which examines the business-to-business (B2B) e-commerce market. Before the report was begun, we knew that B2B was far behind business- to-consumer (B2C). It was assumed this was due to the companies on the purchasing side not yet being ready. However, it quickly became apparent that the opposite was true. Market expectations are high, while the companies on the selling side are hesitant to launch e-commerce. One reason may be that the technical and financial tools for B2B are far behind the consumer segment. Therefore, Collector’s launch of a checkout function at the end of 2017 is a particularly positive development. The solution, adapted for B2B application, provides a buying experience equivalent to private consumer standards. I am certain we will quite soon see a major shift in how companies conduct purchases with other companies – in which digital interfaces will play a crucial role.