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4finance Holding S.A. reports results for the twelve months ending 31 December 2022

  • Solid FY 2022 performance with net profit of €41.2 million and Adjusted EBITDA of €122.4 million
  • Strong loan issuance drives organic growth in Q4: quarterly growth of 9% in net receivables and 10% in revenue
  • Significant deleveraging with over €50 million of bonds repurchased in 2022

28 February 2023. 4finance Holding S.A. (the ‘Group’ or ‘4finance’), one of Europe’s largest digital consumer lending groups, today announces unaudited consolidated results for the twelve months ending 31 December 2022 (the ‘Period’).

Operational Highlights

  • Customer demand and repayment dynamics remained robust, with fundamental asset quality metrics broadly stable across the business.
  • Online loan issuance volume of €629.2 million during the Period, up 19% in continuing products (excluding acquisitions and disposals).
  • Near-prime portfolio development aligned with ability to sold those loans to TBI Bank. During the period, over €28 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 €706.2 million from €523.4 million in the prior year period, with increased issuance in all products.

Financial Highlights

  • For the IFRS full year results, the Poland business segment is reflected separately as 'discontinued operations' in the income statement.
  • Interest income of €311.2 million in the Period, up 26% from €246.2 million in the prior year period. Interest income for the fourth quarter increased 7% QoQ, with another strong quarterly contribution from Philippines and TBI. Consistent growth in interest income from continuing products since Q2 2020 Covid impact.
  • The cost to income ratio for the Period improved significantly at 47.8% vs 57.6% in the prior year period. Cost discipline and operational efficiency remain a focus both in the online business and TBI. Cost base in the online business grew mainly due to Philippines acquisition and at TBI to support higher issuance, and investment in ongoing initiatives.
  • Adjusted EBITDA was €122.4 million for the Period, up 13% year-on-year, delivering 37% adjusted EBITDA margin for the year vs 36% in 2021. The interest coverage ratio as of the date of this report, including proforma effect of acquisitions and disposals, is 2.7x.
  • Post-provision operating profit from continuing operations for the Period was €69.6 million, benefiting from the 26%year-on-year increase in interest income and lower interest expense, with total profit after tax of €41.2 million.
  • Fundamental asset quality indicators at product level remain good. Net impairment charges of €90.4 million reflect the larger portfolio and different product mix in online. Cost of risk at 11.1% vs 8.0% in the prior year period.
  • Net receivables totaled €846.6 million as of 31 December 2022, up 9% quarter-on-quarter and 29% year-on-year. During the quarter, TBI Bank grew net receivables another 10% and the online business portfolio grew 2%.
  • Improved overall gross NPL ratio at 8.8% as of 31 December 2022 (9.0% for online), compared with 11.3% as of 31 December 2021 (13.7% for online). TBI NPL ratio has improved to 8.7% as of 31 December 2022, compared with 10.4%as of 31 December 2021.

Liquidity and funding

  • The Group made further repurchases of €19.3 million of its EUR 2025 and EUR 2026 bonds in December 2022, bringing total bond repurchases in 2022 to €52.4 million.
  • Solid capital position at TBI Bank (22.2% capital adequacy ratio) despite continued growth in risk weighted assets with €20.7 million of MREL eligible instruments issued in Q4.
  • TBI Bank paid a dividend of €10.0 million in November, the bank's first dividend payment post-Covid.

Kieran Donnelly, CEO of 4finance, commented:

“We set out a vision of a leaner, more focused and more profitable business, and have worked steadily to achieve that goal. These strong full year results also reflect the efforts of our teams in the online and banking business to respond to the effects of the war on Ukraine and global inflationary pressures.

"4finance was founded 15 years ago this month. As we celebrate this important milestone, we remember that this success has been down to our spirit of adaptability and resilience. This culture remains the key to our future.

"Looking forward, while we keep a close eye on costs and efficiency, we are investing in growth across the business and particularly at TBI Bank and our Philippines business."

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