4finance Reports Results for the three months ending 31 March 2016

Riga, Latvia, 31 May 2016. 4finance Holding S.A. (the ‘Group’), one of Europe’s largest online and mobile consumer lending groups, today announces unaudited consolidated results for the three months ending 31 March 2016 (the ‘Period’).

Financial Highlights

  • Revenue up 30% to EUR 90.3 million in the Period compared with EUR 69.2 million in the prior year period.
  • The Group’s profit from continuing operations for the three months to 31 March 2016 was EUR 16.7 million, an increase of 7% from EUR 15.6 million in 2015.
  • Average net loan portfolio for the Period of EUR 308.7 million, up 20% from a year ago.
  • Cost to revenue ratio for the Period was 47%, vs. 38% for the three months to 31 March 2015, reflecting a two thirds increase in staff and investment across the platform for future growth and geographic / product diversification.
  • Financial strength continues to build, with a capital-to-assets ratio of 42% as of 31 March 2016 (35% as of 31 March 2015).
  • Credit discipline maintained, with non-performing loans to loan issuance ratio of 9.4% as of 31 March 2016 within expected range given growth of higher return markets with higher non-performing loan ratios.
  • Adjusted EBITDA was EUR 29.1 million for the Period, leading to an adjusted interest coverage ratio of 4.0x.

Operational Highlights

  • Total number of registered customers reached 5.0 million as of 31 March 2016, up 35% from a year ago.
  • Applications from mobile devices increased to 32% of total loan applications in the Period from 13% in Q1 2015.
  • Successful implementation of regulatory changes in key markets in the first quarter of 2016, including Poland, Latvia, Sweden and re-starting lending in Lithuania.
  • Continued progress in Instalment Loans: strong volume growth in Poland after product re-design and recent launch in Spain.
  • Subsequent to quarter end: EUR 100 million bond issue with 5 year maturity and further enhancements to management team, separating the roles of Chairman and CEO.

Kieran Donnelly, Chairman of the Management Board, commented:

“These solid results for the first quarter, with revenue up 30% and net profit of EUR 16.7 million, have been delivered whilst implementing regulatory changes in four key markets and increasing staff and IT resources. The rise in our non-performing loans to loan issuance ratio is in line with our plans and reflects our geographic diversification.”

“We are laying the foundations for the next phase of growth. Our significant investment in people and technology continues, supporting an ambitious roll-out plan for Instalment Loans and new markets. The recent 5 year EUR 100 million bond issue diversifies our funding and underpins this expansion.”

“As we gain global scale, our management team and structure also develops. On this front, we have decided to split the Chairman and CEO roles and are pleased to welcome George Georgakopoulos as CEO, while I will remain as Chairman. George is the former CEO of Eurobank in Romania and has extensive banking experience. This added experience and expertise will allow us to effectively manage the larger and more complex business we envisage.”

Key Financial Ratios

Three Months Ended
31 March 2016
Three Months Ended
31 March 2015
Year Ended
31 December 2015
Year Ended
31 December 2014
2016 2015 2015 2013
Net loan portfolio (1)
(in millions of EUR)
309.1 271.2 308.3 241.4
Capital/assets ratio (2) 42% 35% 40% 35%
Capital/net loan portfolio (3) 62% 49% 56% 47%
Adjusted interest coverage (4) 4.0x 3.4x 4.2x 3.7x
Profit before tax margin (5) 22% 28% 23% 27%
Return on average equity (6) 37% 51% 41% 54%
Cost/revenue ratio (7) 47% 38% 42% 37%
Net impairment to revenue ratio (8) 25% 25% 25% 25%
Non-performing loans to loan issuance ratio (9) 9.4% 9.0% 9.0% 8.8%


  1. Gross loan portfolio less provisions for bad debts.
  2. Total equity/total assets (2014 assets adjusted for effect of bond defeasance).
  3. Total equity/net loan portfolio.
  4. Adjusted EBITDA/interest expense.
  5. Profit before tax/interest income.
  6. Profit from continuing operations/average equity (total equity as of the start and end of each period divided by two).
  7. General administrative expenses/interest income.
  8. Net impairment losses on loans and receivables/interest income.
  9. Non-performing loans with a delay of over 90 days/value of loans issued. The value of loans issued represents loans issued for the two-year
    period before commencement of the 90 day past-due period, eg for 31 March 2016: 1 January 2014 to 31 December 2015.



Email: investorrelations@4finance.com
HQ Address: Lielirbes iela 17a-8, Riga, LV-1046, Latvia
Website: www.4finance.com


Conference call
A conference call with management to discuss these results is scheduled for Thursday, June 2 at 15:00 UK time.  To register, please visit www.4finance.com/investors.

About 4finance
Established in 2008, 4finance is one of the largest and fastest growing online and mobile consumer lending groups in Europe with operations in 14 countries. Putting innovative data-driven analysis into all aspects of the business, 4finance has grown rapidly, issuing over EUR 3 billion in single payment and instalment loans to date.

4finance operates through a portfolio of market leading brands with strong regional presence including Vivus, SMSCredit and Zaplo. A responsible lender, offering simple, convenient and transparent products and service, 4finance is meeting growing customer demand from those under-served by conventional lending.

4finance has group offices in Riga (Latvia), London (UK) and Miami (USA), and currently operates in Argentina, Armenia, Bulgaria, the Czech Republic, Denmark, Finland, Georgia, Latvia, Lithuania, Mexico, Poland, Romania, Spain and Sweden. To support its international expansion, 4finance continues to pursue a twin-track strategy of strong organic growth bolstered by targeted acquisition.

Forward looking statements
Certain statements in this document are “forward-looking statements”. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from those included in these statements.

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