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4finance Holding S.A. (the ‘Group’ or ‘4finance’), Europe’s largest online and mobile consumer lending group, today announces unaudited consolidated results for the six months ending 30 June 2017 (the ‘Period’).

Financial Highlights

  • Revenue up 17% to EUR 213.6 million in the Period compared with EUR 182.8 million in the prior year period.
  • Adjusted EBITDA was EUR 70.8 million for the Period, up 14% year-on-year, with adjusted interest coverage of 2.4x.
  • The Group’s profit before tax for the Period was EUR 35.3 million, a decrease of 9% from EUR 38.6 million in 1H 2016.
  • Online loan issuance during the Period grew by 13% to EUR 609.1 million from EUR 537.2 million in 1H 2016.
  • Net loan portfolio reached EUR 519.8 million as of 30 June 2017, up 5% year to date.
  • Cost to revenue ratio for the Period was 55%, vs. 46% for the six months to 30 June 2016, reflecting a significant increase in staff numbers during last year, acquisitions and investment for future growth.
  • Financial strength remains solid with a capital to assets ratio of 24% as of 30 June 2017 and capital / net loans of 50%, supporting an ordinary dividend payment of EUR 10 million made in July.
  • Credit discipline and effective NPL management maintained, with a non-performing loans to online loan issuance ratio of 8.5% as of 30 June 2017, improving from 9.3% at year end 2016, and a reduction in net impairment / revenue to 22%.

Operational Highlights

  • The number of registered online lending customers reached 6.9 million as of 30 June 2017, up 30% from a year ago, with a further 1.4 million registered banking customers added through TBI Bank.
  • Continued strong financial performance from TBI Bank and an initial transfer of Swedish instalment loans underway.
  • Latin American growth continues, with issued loan volumes and revenue for the Period reaching 3x the prior year period.
  • Pilot of near-prime products started in Lithuania (instalment loans) and continued in Spain (point-of-sale).
  • Mark Ruddock appointed as CEO, Stephen Buechner joins as CRO and new executive committee positions for Compliance and Data.  Martins Baumanis has also decided to leave the Group in September.
  • LadoGurgenidze and David Geovanis appointed to Supervisory Board, bringing extensive experience.

Mark Ruddock, CEO of 4finance, commented:

“These results evidence the growing scale and geographic reach of 4finance. With revenue growth of 17% and profit before tax of EUR 35.3 million, our first half performance also demonstrates the benefits of our diversification. The quarter-on-quarter revenue growth of 4% and the quarterly reduction in the cost to revenue ratio are encouraging early signs of our drive to optimize performance as we prepare for further growth in the business.

“I am excited at the opportunity ahead for 4finance. Today, some 2.6 billion consumers globally remain underserved by traditional financial products; breakthroughs in data science and analytics are enabling new methods of scoring those with limited credit histories; we are seeing unprecedented access to the internet via increasingly ubiquitous and inexpensive mobile devices; and the millennial generation are breaking old conventions about the nature of financial products and how they are consumed.

“4finance is uniquely positioned to take advantage of these trends. The simplicity and transparency of our products, our experience in alternative scoring methodologies, our geographic diversification and the fact that over 50% of our customers now interact with us on mobile devices is a solid foundation on which to pursue this global opportunity.

“We welcome Robin Jose as Chief Data Officer and Elaine McKinney as Chief Compliance Officer. These roles reflect the importance of us being both a data-driven and a responsible lender. We respect Manu Panda’s decision to return to Asia for family reasons and welcome Stephen Buechner as CRO to lead our overall risk management efforts. Lastly we thank Martins Baumanis for his great contribution to the business over the last 6 years as he steps down in September.”

Key Financial Ratios

Six Months Ended 30 June 2017
Six Months Ended 30 June 2016
Year Ended
31 December 2016
Year Ended
31 December 2015
Net loan portfolio (in millions of EUR)(1)519.8322.7493.9308.3
Capital/assets ratio(2)24%34%25%40%
Capital/net loan portfolio(3)50%62%47%56%
Adjusted interest coverage(4)2.4x3.9x3.6x4.1x
Profit before tax margin(5)17%21%21%23%
Return on average equity(6)21%33%31%41%
Cost/revenue ratio(7)55%46%48%42%
Net impairment to revenue ratio(8)22%25%23%24%
Non-performing loans to loan issuance ratio(9)8.5%9.5%9.3%9.0