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4finance Holding S.A. reports results for the nine months ending 30 September 2022

  • Solid 9M 2022 results delivering net profit of €35.3 million and Adjusted EBITDA of €92.5 million
  • 10% growth in net receivables in Q3 across both online and banking business, driven by strong loan issuance
  • First post-Covid dividend payment by TBI Bank of €10 million

21 November 2022. 4finance Holding S.A. (the ‘Group’ or ‘4finance’), one of Europe’s largest digital consumer lending groups, today announces unaudited consolidated results for the nine months ending 30 September 2022 (the ‘Period’). 

Operational Highlights

  • Customer repayment dynamics remained robust, with fundamental asset quality metrics broadly stable across the business.
  • Online loan issuance volume of €502.3 million during the Period, up 21% in continuing products (excluding acquisitions and disposals).
  • Near-prime portfolio development aligned with ability to fund those loans via TBI Bank. So far in 2022, over €25 million of Lithuanian near-prime loan principal was sold to TBI Bank.
  • TBI Bank loan issuance volume during the Period grew by 35% year-on-year to €507.4 million from €376.7 million in the prior year period, with increased issuance in all products. 

Financial Highlights

  • Interest income of €239.2 million in the Period, up 11% from €215.9 million in the prior year period. Consistent growth in interest income from continuing products since Q2 2020 Covid impact and another strong quarterly contribution from Philippines and TBI. Stable quarterly interest income in Q3 despite the exit from Poland in mid April.
  • The cost to income ratio for the Period improved significantly at 47.9% vs 56.6% in the prior year period. Cost discipline and operational efficiency remain a focus both in the online business and TBI with quarterly cost base held flat in Q3. 
  • Fundamental asset quality indicators at product level remain good. Net impairment charges of €61.5 million, up 49% on the prior year, reflect the larger portfolio and different product mix in online. Cost of risk at 10.1% vs 8.0% in the prior year period.
  • Adjusted EBITDA was €92.5 million for the Period, up 14% year-on-year, delivering 39% adjusted EBITDA margin for the period vs 38% in 9M 2021. The interest coverage ratio as of the date of this report, including proforma effect of acquisitions and disposals, is 2.8x. 
  • Post-provision operating profit for the Period was €62.4 million, benefiting from the 11% year-on-year increase in interest income and lower interest expense, with profit after tax of €35.3 million.
  • Net receivables totaled €779.8 million as of 30 September 2022, up 10% year-to-date. During the quarter, TBI Bank grew net receivables another 10% and the online business portfolio grew 11%.
  • Improved overall gross NPL ratio at 9.6% as of 30 September 2022 (7.0% for online), compared with 11.3% as of 31 December 2021 (12.7% for online). TBI NPL ratio has improved to 10.4% as of 30 September 2022, compared with 10.7% as of 31 December 2021. 

Liquidity and funding

  • Solid capital position at TBI Bank (18.9% capital adequacy ratio) despite continued growth in risk weighted assets. 
  • TBI Bank paid a dividend of €10.0 million in November, the bank's first dividend payment post-Covid.
  • Listing of the Group's EUR 2026 bonds on the Oslo Stock Exchange completed in October.

Kieran Donnelly, CEO of 4finance, commented:

“Our online and banking businesses continued to grow profitably in the third quarter, aided by our push for efficiency across the Group. We achieved double-digit loan growth in the quarter, a 26% increase in net profit year-on-year, and TBI Bank has now resumed dividend payments. Our leaner business, with its revised international footprint is delivering the growth we planned.”

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