Alternative performance measures
Alternative performance measures (APMs) are financial measures of past or future earnings trends, financial position or cash flow that are not defined in the applicable accounting regulatory framework (IFRS), in the Capital Requirements Directive (CRD IV), or in the EU’s Capital Requirement Regulation number 575/2013 (CRR). APMs are used by Hoist Finance, along with other financial measures, when relevant for monitoring and describing the financial situation and for providing additional useful information to users of the financial reports. These measures are not directly comparable with similar performance measures that are presented by other companies. Estimated remaining collections, Return on book and Adjusted EBITDA are three APMs that are used by Hoist Finance. Alternative performance measures are described below.
Total of acquired loan portfolios, run-off consumer loan portfolios and participations in joint ventures.
Acquired loan portfolios
An acquired loan portfolio consists of a number of defaulted consumer loans or debts that arise from the same originator.
Additional Tier 1 capital
Capital instruments and associated share premium reserves that fulfil the requirements of Regulation (EU) 575/2013 of the European Parliament and the Council and that may accordingly be included in the Tier 1 capital.
Average interest rate, deposits (incl. deposit guarantee scheme expenses)
Interest expenses for deposits, including deposit guarantee scheme expenses, in relation to average deposits from the public.
Average number of employees
Average number of employees during the year converted to full-time posts (FTEs). The calculation is based on the total average number of FTEs per month divided by the year’s twelve months.
Basic earnings per share
Net profit for the year, adjusted for interest on capital instruments recorded in equity, divided by the weighted average number of outstanding shares.
Capital requirements – Pillar 1
Minimum capital requirements for credit risk, market risk and operational risk.
Capital requirements – Pillar 2
Capital requirements beyond those stipulated in Pillar 1.
Common Equity Tier 1
Capital instruments and associated share premium reserves that fulfil the requirements of Regulation (EU) 575/2013 of the European Parliament and the Council, and other equity items that may be included in CET1 capital, less regulatory dividend deduction and deductions for items such as goodwill and deferred tax assets.
Common Equity Tier 1 ratio
Common Equity Tier 1 in relation to total risk exposure amount.
Diluted earnings per share
Net profit for the year, adjusted for interest on capital instruments recorded in equity, divided by the weighted average number of outstanding shares after full dilution.
EBIT (operating earnings), less depreciation/impairments and amortisation for run-off consumer loan portfolio and depreciation of acquired loan portfolios.
Earnings Before Interest and Tax. Operating profit before financial items and tax.
EBIT (operating earnings) divided by total revenue.
Fee and commission income
Fees for providing debt management services to third parties.
Gross ERC 120 months
“Estimated Remaining Collections” – the company’s estimate of the gross amount that can be collected on the loan portfolios currently owned by the company. The assessment is based on estimates for each loan portfolio and extends from the following month through the coming 120 months. The estimate for each loan portfolio is based on the company’s extensive experience in processing and collecting over the portfolio’s entire economic life.
Gross cash collections
Gross cash flow from the Group’s customers on loans included in Group’s acquired loan portfolios.
Legal collections relate to the cash received following the initiation of Hoist Finance’s litigation process. This process assesses customers’ solvency and follows regulatory and legal requirements.
Net revenue from acquired loans
The sum of gross cash collections from acquired loan portfolios and income from the run-off consumer loan portfolio, less portfolio amortization and revaluation.
Sum of Tier 1 capital and Tier 2 capital.
The share of gross collections that will be used for amortising the carrying value of acquired loan portfolios.
Changes in the portfolio value based on revised estimated remaining collections for the portfolio.
Non-performing loans (NPLs)
An originator’s loan is non-performing as at the balance sheet date if it is past due or will be due shortly.
Number of employees (FTEs)
Number of employees at the end of the period converted to full-time posts (FTEs).
Return on assets
Net result for the year as a percentage of total assets at the end of the year.
Return on book
EBIT (operating profit) for the period calculated on annualised basis, exclusive of Central Functions operating expenses, divided by average carrying value of acquired loan portfolios. In the financial statements, calculation of average carrying value is based on opening amount at the beginning of the year and closing amount at the end of the year.
Return on equity
Net profit for the period adjusted for accrued unpaid interest on AT1 capital calculated on annualized basis, divided by equity adjusted for AT1 capital reported in equity, calculated as an average for the year based on a quarterly basis.
Risk-weighted exposure amount
The risk weight of each exposure multiplied by the exposure amount.
A company that employs fewer than 250 people and has either annual turnover of EUR 50 million or less or a balance sheet total of EUR 43 million or less.
Tier 1 capital
The sum of CET1 capital and AT1 capital.
Tier 1 capital ratio
Tier 1 capital as a percentage of the total risk exposure amount.
Tier 2 capital
Capital instruments and associated share premium reserves that the requirements of Regulation (EU) 575/2013 of the European Parliament and the Council and that may accordingly be included in the funds.
Total capital ratio
Own funds as a percentage of the total risk exposure amount.
Total of net revenue from acquired loan, fee and commission income, profit or loss from joint ventures and other income.
Weighted average number of diluted shares
Weighted number of outstanding shares plus potential dilutive effect of outstanding warrants.