Online lending group 4Finance has reported financial results for the first six months as of June 30, 2017. According to the report, top line revenue has increased by 17% versus same period year prior. 4Finance says that revenue came in at €213.6 million compared with € 182.8 million in 2016.
Adjusted EBITDA was said to be at € 70.8 million up 14% year-on-year. The group’s profit before tax for the Period was € 35.3 million, a decrease of 9% from € 38.6 million in 1H 2016. Online loan originations during the period grew by 13% to € 609.1 million from € 537.2 million in 1H 2016.
Mark Ruddock, CEO of 4finance, commented on the published results saying the results were evidence of growing scale and geographic reach;
“With revenue growth of 17% and profit before tax of € 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,” said Ruddock. “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.”
Ruddock said that 4Finance is uniquely positioned and the simplicity and transparency of their products are positive indicators for the coming year. He also said that over 50% of their customers now interact with 4Finance on mobile devices.
He also welcomed 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,” stated Ruddock.
Established in 2008, 4Finance says it is the largest and fastest growing online and mobile consumer lending group in Europe with operations in 16 countries. Over € 4 billion in single payment loans, instalment loans and lines of credit have been originated via 4Finance.
4finance has group offices in Riga (Latvia), London (UK) and Miami (USA), and currently operates in Argentina, Armenia, Bulgaria, the Czech Republic, Denmark, the Dominican Republic, Finland, Georgia, Latvia, Lithuania, Mexico, Poland, Romania, Spain, Slovakia and Sweden.
The group also provides consumer and SME lending through TBI Bank, its EU licensed banking operations in Bulgaria and Romania.
Additional Highlights include:
- 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).
A conference call with management to discuss the results is scheduled for Wednesday 30 August at 15:00 UK time. To register, please visit www.4finance.com/investors