2015 ANNUAL REPORT
2015 ANNUAL REPORT
“A technology company
with a banking licence”

Banking licence, stock exchange listing and record growth. 2015 was another good year for Collector, but CEO Stefan Alexandersson has even greater expectations of the future: “I’ve worked here for 11 years and have never seen greater opportunities.”

What was the most important achievement in 2015?

The banking licence and especially the stock exchange listing. It’s given us an entirely different level of brand recognition, which makes it easier to reach large customers. We also brought home the largest deal ever and launched several new products.

How did it feel to ring in Collector on the Stockholm Stock Exchange?

We worked extra hard for the listing, so it was kind of like crossing the finish line. Since then, the share price has gone up by more than 130 percent. This was the best listing on the Stockholm Stock Exchange in 2015.

What would you like to emphasize for the new shareholders?

Collector’s long-range thinking, where quality and innovation are our main driving forces.

Has the stock exchange listing changed how you are received in the market?

We were previously a credit market company from Gothenburg. Today, we are a listed bank, which provides an entirely different level of credibility. We reach much larger customers this way.

Collector has grown by more than 30 percent per year on average. How is this possible?

Besides growing by 30 percent on average completely organically, for more than 15 years, our earnings have also grown by 50 percent every year. One explanation for this is internal factors – primarily the corporate culture. We have combined an entrepreneurial culture with order and structure. We also have a very agile IT situation, which is fundamental to being able to continue growing.

You see yourselves as a technology company with a banking licence. What does that mean?

Consumption patterns for financial services are changing quickly, especially among small and medium-sized enterprises and private individuals. There are plenty of fintech companies – technology-oriented companies with interesting products or exciting online solutions. There are also old banks that have liquidity and a capital structure. But Collector is unique in that we have the technology, a grasp of the changing consumption and structure capital.

You are developing all business critical systems on your own. How does this influence your way of working?

At the end of 2016, most of our business critical systems will have been replaced by proprietary systems. We can then design our products entirely on our own, which is very important to be able to continue being a spearhead in this market.

Today, Collector has 100 employed developers and 40 more will be hired. How can a bank attract skilled developers?

We only use the latest technology – it’s not old systems that are updated. This attracts developers. Combined with an agile approach and a self-designed system, we offer an environment that is important for developers. We also attract recruits with our strong corporate culture.

What do you think the consumers of the future will expect from a bank?

The concept of a bank is disappearing. In days past, you went to the major banks to do business. Today, you go to Collector on your mobile phone. It will also be possible to consume financial services over Spotify, Telia or other distribution channels that have a strong, positive relationship with end customers. This is a trend that suits us excellently. We can rapidly make adjustments and have a technical platform that makes it possible to integrate with other services.

What is the most important thing you want to achieve in 2016?

The most important aspects are product development and growth, and, as always when running a bank, to increase quality in our lending operations. It is also important that our financial key ratios continue to develop positively, but above all, it’s a matter of being innovative to stay at the cutting edge.

2015

Stock exchange listing, banking licence and technical focus

25 May

Banking licence granted – Collector Credit becomes Collector Bank

“The banking licence is an important stamp of quality for us as a responsible actor in the banking and financial market. We are incredibly pleased and proud of having it confirmed that Collector qualifies to conduct banking operations.”

10 June

Stock market listing with a positive price trend

When trading began on Nasdaq Stockholm, there was considerable interest in the share, both among institutional investors in Sweden and abroad, and among the public in Sweden. In 2015, the share price rose from SEK 55 to SEK 127.

15 October

Kirra – yet another digital innovation

With the new app Kirra, Collector solves problems with group payments. Groups of friends, football teams, hen parties and everyone else has an easier time of realizing their plans with Kirra. The app is a smart combination of Collector’s invoice solution and mobile phones.

9 December

Factoring agreement with Valora International AG

The single largest factoring deal in Collector’s history comprises factoring for Valora’s operations in Sweden, Norway, Finland and Denmark. The agreement involves a new credit of approximately SEK 800 million, corresponding to an annual factoring volume of approximately SEK 5,000 million.

31 December

One million new private customers

With one million new card,loan, savings and credit customers in 2015, Collector is entering 2016 with a high input speed at every level. Collector will retain its high organic turnover and profit growth, in combination with declining credit losses.

31 December

Best growth year ever

2015 was a successful year financially. With a revenue growth of 30 percent, we increased the market shares for all our products. The 52 percent increase in profit after tax is also a testament to the high scalability of Collector’s business model.

Stock market listing and share price trend

Today’s highest:

Today’s lowest:

SEK

Collector (“COLL”) was listed on the Nasdaq Stockholm Mid-cap list on 10 June 2015. The listing price was SEK 55. The price trend for the Collector share in 2015 was a growth of 131 percent compared with a decline of 25 percent for OMXSPI for the same comparison period. The highest price for the year was quoted at SEK 154 in December 2015. The last price paid was SEK 127 on 30 December.

Turnover

From the listing date on 10 June 2015 until 30 December, approximately 16 million Collector shares were traded. On average, approximately 116,000 shares per day were traded.

Market capitalization

Collector’s total market capitalization amounted to approximately SEK 12 billion at year-end, which corresponds to number 76 in order of magnitude among 287 companies on Nasdaq Stockholm.

Share capital and number of shares

Collector’s share capital amounts to SEK 9,335,550 distributed over 93,355,502 shares. All shares confer a right of one (1) vote per share to the holder. The quota value per shareis SEK 0.10. All shares confer equal rights to the company’s profit.

Ownership structure

There were approximately 4,000 shares at year-end. The ten largest shareholders accounted for 89 percent of the capital and votes. The proportion of shares owned by natural persons or legal entities outside of Sweden amounted to 4 percent.

Dividends

According to the adopted dividend policy, Collector will focus on medium-term growth, which means that dividends may be low or not occur at all in the medium term. The Board of Directors proposes that no dividends be paid for the 2015 financial year.

Prepared for an exciting future

“Although we are the largest listed niche bank in Sweden, we are growing by record numbers. The 2015 profit will form the foundation when we continue to invest in growth.” Pia-Lena Olofsson, CFO

Our IT platform has never been better

The entire bank concept is being transformed as power gradually shifts to the consumer. Banks of the future must realize this and build an infrastructure that pave the way for user friendly services. “We devote 70 percent of the IT budget to innovation and development and it is world class,” says Magnus Lenngren, CTO at Collector.

From a technical perspective, what were you most proud of in 2015?

The most ambitious move we made was to replace a purchased system for lending and deposits with a proprietary system. Otherwise, it was a lot about building up the department, both recruiting new staff and scaling up processes and methods. More teams and more developers.

What distinguishes Collector from what people generally think of banks and their IT operations?

The picture of a bank's IT systems, which is probably somewhat accurate for the major banks, is one of large, heavy computers in a cellar with tape reels that spin. Tested with quality, but not adapted to our era. Our systems are like those at a modern IT company.

What actually is a modern bank?

I don't believe that the next generation of banking customers will have a bank with a big B. They will have niched financial super services that do exactly what they want, exactly when and how they want. Completely digitally. The bank's traditional information advantage is in the midst of disappearing entirely. And that advantage is shifting to the consumer.

What do the consumers expect?

Those who are young today, between 22 and 32, who might buy their first apartment and come into contact with the heavier bank sector will have incredible demands. They are used to doing everything on their mobile phones. They will demand the bank services to be completely digital, to be able to be integrated with other services and to provide an experience that can be personalized.

How well prepared are you to meet these demands?

When we build services, they are more distributed, simpler and made to speak with each other. One of our strengths is putting services together with e-traders that are based on our platform. It is often said that 30 percent of an IT budget is devoted to new development, while 70 percent goes to taking care of what already exists. A traditional large bank might devote 10 or 20 percent to new development. We devote 30 percent to maintenance.

Why has it been good to develop all key business systems on your own?

It has been incredibly powerful to own the business logic ourselves. When we used purchased standard systems, we haven't been able to influence the business processes. With our own systems, we control the timetable, prioritization and how we should go about making changes.

What is the most important happening on the technical side in 2016?

We will finish our own proprietary lending and deposit system. It is really important and will give us the same opportunities as in payment solutions to control the products ourselves. In payment solutions, we have hugely important projects where we simplify and improve the end customer experience. Not only online, but on the mobile phone and in the store. It is a matter of giving the consumer a more uniform experience when paying for goods and services.

We take the users' digital needs seriously

How Collector Bank will conduct the development of the banking services of the future

On paper, the banking industry seems to agree. The banking services of the future must be close to the customer. They have to be based on data, and be developed in an open environment, in consultation with customers and interest groups. These are a few of the conclusions of the Retail Banking 2020 report by the consulting company PwC. Nonetheless, not even one-fifth of the banks say that they are prepared to compete under such conditions. Collector Bank's innovation group was formed with the ambition and the need to continuously take stock of the organization for new ideas, and then cultivate them under structured conditions. The group gathers participants from all business areas, and meets at least once a month.

“It is a group of very goal-oriented individuals and the goal is to leave every meeting with clear tasks that we follow up for a concrete plan of action. Innovation needs to be partially structured, the process needs to be based on customer insights and selected ideas need to have the potential to generate value.”

The banking services Kirra and Betalkoll were born with basically the same philosophy. It is the customers who decide, not the banks. The job of the innovation group is to listen to the needs, prioritize and ensure that new services can be brought to market.

The PwC report

New needs-driven apps

Kirra – simplifies group payments and becomes a shared wallet

Download the app Kirra when you are going to pay together. You can then book the trip, the hen party, the football cup as soon as you have made a decision. Then, Collector Bank helps all participants to pay when and how they want.

Betalkoll – Photograph and pay bills with the mobile phone

With the app Collector Bank Betalkoll, your most common banking errands are made easier. Photograph your bills and Collector Bank will make sure they are paid on time. You get a collective invoice every month that you can choose to make partial payments on.

Loyal consumers give Miinto.com satisfied customers

With a shared consideration of the consumer, Collector Bank was able to deepen the relationship with the growth rocket Miinto.com. The results? Fewer calls to customer service, more returning customers and higher profitability for everyone.

The European fashion market Miinto and Collector Bank found each other early on – two digitally oriented growth companies, but with large ambitions. A few years into the cooperation, they met to discuss a common challenge: A great deal of time went to handling unpaid invoices and customer service calls from customers who for one reason or another had not paid on time. The reason? With two weeks' return right and an equally long payment period, the consumers felt that the reminder came before the product return had been registered. At that point, Miinto and Collector Bank decided to extend the payment period to 30 days.

“We sent free SMS reminders to the customers and wrote a polite don't forget to pay. Actually, it was no major change, but we adapted the service to the customers' needs and wishes so that it fit the customers' payment patterns,” says Mikael Anstrin, who is responsible for Collector Bank's e-commerce solutions.

The number of returning customers increased by 9 percent, and both Miinto and Collector Bank were able to draw a valuable conclusion.

“The results have been fantastic. The customers are more satisfied, and the number of calls to our support lines and customer service have decreased. And I know that Collector Bank notes the same thing so the consumers actually like Miinto even more today,” says Martin Dahl Carstensen, CFO at Miinto.

Financing solutions

Our corporate financing, which is often based on factoring, comprises operationally adapted, business-improvement tools to control growth. We also work hard to understand your industry, analyse trends, combine with data-driven insights and provide smart advice.

Supplier financing

Finance your accounts payable. It gives you a stronger negotiating position, improves your liquidity and strengthens your balance sheet, in growth or change, for example.

Corporate financing

We offer financing solutions, credit limits and building credits. It strengthens your balance sheet and improves your liquidity in long-term investments and during periods of growth or change.

Order financing

Finance newly received orders and projects to secure purchases and investments. You can then improve your key ratios at the same time that you focus on your business and continue to grow.


One hundred new developers

Five years ago, Collector Bank was a radically different company with three people in the IT department. At the end of 2016, the company is expected to employ nearly 140 software developers.

How can a finance company be converted into a full-fledged technology company? This question hung over Collector Bank's management when the company made the strategic decision to invest in proprietary business systems. There were plenty of skilled developers, but Collector Bank was not necessarily the first choice of the talent when Spotify and other hot rising stars were vacuuming up the market.

“In that time, we were not known for any technical know-how, and Collector Bank was not viewed as an IT company. We were not an intended player for developers,” says Beatrice von Lempruch.

Skilled developers did not frequent the same environments as others, which simply made them difficult to reach. While many common regular employees spent time on the LinkedIn network, the creative IT talents were elsewhere. Beatrice and her colleagues did the only thing possible and brought in consultants. They in turn formed a channel to a broader network. And by laboriously building a culture that attracted the target group, the pendulum began to swing.

“There is an entrepreneurial spirit here, and an opportunity to develop. And that's what we stand for. One can experiment and work with the latest technology. But there has clearly been a risk of being mixed up with banks because they are perceived as being not particularly modern. But today, I think we are perceived as an IT company, not a bank,” says Beatrice.

At the beginning of 2016, Collector Bank was able to count nearly 100 developers with cutting-edge expertise in the development of business systems, apps and web interfaces. Now, recruitment is under way for another 40 people, making Collector Bank one of Gothenburg's largest employers in IT.

“We have worked extremely hard to get here, but today, we notice that more and more are seeking us out, not the other way around,” says Beatrice.

Other products

Property finance

With extensive experience and knowledge, Collector Bank offers financing solutions for commercial properties in metropolitan areas, based on mortgaging.

Credit cards

Collector Bank's credit cards are linked to MasterCard. Collector Bank easycard is easy to get and use. Collector Bank easyliving is one of Sweden's best travel card because it has cancellation insurance, but no currency surcharge.

Private borrowing

The Collector loan, with the possibility of borrowing up to SEK 350,000, is based on your situation. Pay back after two years or up to 15 years, with interest set based on your particular circumstances.

Private savings

Our three savings accounts have different fixed-rate periods and interest levels and are covered by the national deposit guarantee of up to EUR 100,000.