Inbank’s unaudited financial results for Q3 and 9 months 2020 Tallinn Stock Exchange: INBB070026A

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In the third quarter of 2020, Inbank achieved a net profit of 1.45 million euros. The net profit for the first 9 months of 2020 was 4.2 million euros. Q3 return on equity was 11.3%.

  • The third quarter net result decreased by 35% compared to the second quarter 2019 and amounted to 1.45 million euros. Respectively, the net profit for the first 9 months of 2020 decreased 36% year-on-year to 4.2 million euros.
  • Profit before loan losses for the quarter increased by 4% compared to Q3 2019 and amounted to 4.6 million euros. Provisions for loan losses increased 62% year-on-year to € 3.1 million.
  • The bank loan portfolio increased by 21% compared to Q3 2019 to reach 374 million euros while the deposit portfolio fell 3.5% to 362 million euros at the end of Q3.
  • Total Q3 revenue was EUR 88.2 million, an increase of 9% over Q3 the previous year. In terms of revenue, personal loan sales decreased by 63% and auto finance products by 18% while sales finance volumes increased by 55% from the previous year. The share of sales financing in total turnover is 74% or 65.6 million euros.
  • At the end of the third quarter, Inbank had 600,000 active contracts and was working with 3,200 merchant partners.

Jan Andresoo, Chairman of the Management Board, comments on the results:

“The third quarter was very fast and hectic, and certainly more successful than expected. We have actively improved our existing products and prepared for the launch of our first credit card and mobile app.

While in the second quarter we saw a sharp decline in sales volumes, the third quarter sales results were a positive surprise – growth was 47% from the previous quarter. The total sales volume in all of our markets amounted to 88.2 million euros and increased by 9% compared to the previous year. The share of sales financing in total turnover is 74% or 65.6 million euros. This is a 55% increase year over year. One of the reasons is certainly the Polish unit, which did a great job with sales and was able to start cooperation with a large number of new sales finance partners. In the third quarter, Poland accounted for 46% of the total sales financing volume.

The modest volumes of small loans were affected by our own decision to take a more conservative approach to credit underwriting. Quarterly sales of auto finance and small loans declined significantly year over year: 18% and 63%, respectively. Although we were more cautious about credit underwriting, a general drop in demand was also noticeable.

Since a large portion of our clients requesting a spring grace period preferred a three month period, their next payment date after the grace period was in the third quarter. It is positive to note that 87% of these clients continued to honor their contracts as usual. In addition, the general discipline of paying customers can be considered very good at the moment.

We have also prepared the launch of our first card product. Inpay, which is now publicly launched, is an app and payment card with a cashback program unique in Estonia, with which the customer gets money back on their daily purchases. As we enter the card and payments market, we move into everyday shopping territory and see great potential in building a bridge between our vast network of retailers and our customer base.

The coronavirus crisis naturally impacted our financial results, but sales volumes recovered faster than expected and the third quarter ended on a clear positive note. In addition, the crisis has not affected our capacity for product development and innovation nor reduced our investments. As an organization, we continue to be growth oriented and believe that new products will help us to increase our growth rate again. “

Key financial indicators 30.09.2020

Total assets EUR 449 million
Loan portfolio 374 million euros
Deposit portfolio 362 million euros
Total equity 52 million euros
Net profit 4.2 million euros
Return on equity 11.3%

Consolidated income statement (in thousands of euros)
Q3
2020
Q3
2019
9 months
2020
9 months
2019
Interest income 10 694 9 854 31 974 26,983
Interest expense -1 969 -1 685 -5,910 -4,471
Net interest income 8,725 8,169 26,064 22,512
Fee income 254 255 811 687
Fee costs -546 -459 -1 548 -1 261
Net commission and commission income -292 -204 -737 -574
Net gains on financial assets measured at fair value 0 273 0 539
Other exploitation products 107 25 469 578
Net interest, fees and other total income 8,540 8,263 25,796 23,055
Personal expenses -2 152 -2,001 -7,008 -5,898
Marketing costs -301 -518 -1,001 -1 687
Administrative expenses -962 -1,009 -3,061 -2 739
Depreciation, amortization -606 -333 -1 627 -912
Total operating expenses -4,021 -3 861 -12,697 -11 236
Profit before income from associates and impairment losses on loans 4,519 4,402 13,099 11 819
Share of associates’ profits 76 0 668 0
Impairment losses on loans and advances -3,070 -1 898 -9 229 -4 845
Profit before income tax 1,525 2 504 4,538 6,974
Income tax -74 -283 -350 -408
Profit for the period 1,451 2 221 4 188 6 566
incl. shareholders of the parent company 1,451 2 221 4 188 6 566
Other comprehensive income items that may be subsequently reclassified to income
Currency conversion differences -119 133 -195 82
Total comprehensive income for the period 1332 2 354 3 993 6 648
incl. shareholders of the parent company 1332 2 354 3 993 6 648
Consolidated statement of financial position (in thousands of euros)
09/30/2020 12/31/2019
Assets
Due by central banks 22,563 83080
Due by credit institutions 16,580 20 655
Investments in debt securities 11 567 0
Loans and advances 374,424 338,157
Investments in partners 3 763 3 276
Tangible fixed assets 864 840
Right to use the asset 445 773
Intangible assets 14 927 11 721
Other financial assets 837 1,692
other assets 1,095 588
Deferred tax asset 1,993 1 985
Total assets 449,058 462 767
Liabilities
Customer deposits 361 854 377,518
Other financial liabilities 11,279 13 545
Other liabilities 2,712 2 837
Debt securities issued 4,010 4,010
Subordinated debt securities 17,554 17,537
Total responsibilities 397,409 415,447
Equity
Share the capital 909 903
Premium sharing 16,082 15,908
Statutory reserve capital 90 88
Other reserves 1 411 1 463
Retained earnings 33,157 28 958
Total equity 51 649 47,320
Total liabilities and equity 449,058 462 767

Inbank is a digital consumer-lending bank active in the Baltic States and Poland, with additional deposits accepted in Germany, Austria and the Netherlands. Inbank has more than 3,200 active partners and 600,000 active contracts. Bank bonds are listed on the Nasdaq Baltic Stock Exchange.

Further information:

Merit Arva
Inbank AS
Head of corporate communications
[email protected]
+372 553 3550

  • Inbank_Interim_Report_Q3_2020_EN



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