In Q2 2020 Inbank earned a net profit of 556 thousand euros. The 2020 half-
year net profit was 2.7 million euros. The return on equity in Q2 was 4,5%.
* Q2 net profit decreased by 76% compared to Q2 2019, from 2.3 million euros
to 556 thousand.
* Profit before loan losses for the quarter increased by 10% and amounted to
4.3 million euros. Provisions for loan losses increased by 113% to 3.7
million euros.
* Inbank loan portfolio increased 27% compared to Q2 2019 reaching 349 million
euros while the deposit portfolio grew 47%, reaching 402 million euros at
the end of Q2.
* Total sales for Q2 was 60 million euros, showing a decrease of 19% compared
to Q2 of the previous year. In terms of products, personal loan sales
decreased by 72% and car financing products by 28% while the sales finance
volumes increased by 12% compared to the previous year.
* By the end of Q2, Inbank had 625,000 active contracts and the number of
active merchant partners we are working with reached 3,200.
Jan Andresoo, Chairman of the Management Board, comments on the results:
"The first half of the year, and especially the second quarter was primarily
affected by the state of emergency in our home markets that lasted until mid-May
resulting in a sharp decline in sales in March and April across all product
lines. Because of the conservative approach to credit underwriting, the personal
loan sales volumes declined 72%. However, the sales finance product line grew
12% during the COVID-19 crisis and we are already seeing a rapid recovery in
sales and demand.
The financial results were mainly affected by provisions for future loan losses,
which increased by 113%. Despite the very difficult macroeconomic situation, the
second quarter did not show a significant change in customers' payment behavior.
How real loan losses turn out depends significantly on the ability of companies
to maintain jobs, because the unemployment rate and loan losses are directly
correlated.
In the light of the new reality, we also reviewed our investment strategy and
focused even more on partner-based business, i.e. consumer financing in merchant
channels. In order to support the sales growth of our partners' e-channels, we
focused our resources on the development of the Indivy new generation 'pay
later' platform, which we launched in early May, right at the beginning of the
crisis.
In order to foster international growth, we made a strategic decision in the
second quarter to make the current country-specific organisation more product-
centric. As of 1 July, the organisation focuses on three cross-border business
units: Sales Finance, which is now managed by Benas Pavlauskas, Car Financing,
which is led by Margus Kastein, and Consumer Loans and Cards, which is headed by
Piret Paulus. As an exception, the fast-growing Polish business remained as is
and continues to be managed by Maciej Pieczkowski.
Inbank has not laid off employees or reduced salaries. Instead, we saw an
opportunity to strengthen our technology team during the crisis, and several
skilled specialists joined our team.
Although sales volumes decreased and impairment loan losses increased
significantly, Inbank's operations were profitable both quarterly and semi-
annually. "
Key Financial Indicators 30.06.2020
Total assets EUR 485 million
Loan portfolio EUR 349 million
Deposit portfolio EUR 402 million
Net profit EUR 2.7 million
Total equity EUR 50 million
Return on equity 11%
Consolidated income statement (in thousands of euros)
Q2 Q2
2020 2019 6 months 2020 6 months 2019
Interest income 10 393 8 974 21 280 17 129
Interest expense -2 005 -1 396 -3 941 -2 786
Net interest income 8 388 7 578 17 339 14 343
Fee income 263 228 557 432
Fee expense -512 -427 -1 002 -802
Net fee and commission income -249 -199 -445 -370
Net gains from financial assets
measured at fair value 0 266 0 266
Other operating income 222 308 362 553
Total net interest, fee and other
income 8 361 7 953 17 256 14 792
Personnel expenses -2 457 -2 041 -4 856 -3 897
Marketing expenses -193 -778 -700 -1 169
Administrative expenses -1 052 -931 -2 099 -1 730
Depreciations, amortisation -542 -302 -1 021 -579
Total operating expenses -4 244 -4 052 -8 676 -7 375
Profit before profit from associates
and impairment losses on loans 4 117 3 901 8 580 7 417
Share of profit from associates 176 0 592 0
Impairment losses on loans and
advances -3 740 -1 752 -6 159 -2 947
Profit before income tax 553 2 149 3 013 4 470
Income tax 3 174 -276 -125
Profit for the period 556 2 323 2 737 4 345
incl. shareholders of parent company 556 2 323 2 737 4 345
Other comprehensive income that may
be reclassified subsequently to
profit or loss
Currency translation differences 40 -50 -76 -51
Total comprehensive income for the
period 596 2 273 2 661 4 294
incl. shareholders of parent company 596 2 273 2 661 4 294
Consolidated statement of financial position (in thousands of euros)
30/06/2020 31/12/2019
Assets
Due from central banks 70 319 83 080
Due from credit institutions 22 209 20 655
Investments in debt securities 20 043 0
Loans and advances 348 977 338 157
Investments in associates 3 492 3 276
Tangible assets 879 840
Right of use asset 567 773
Intangible assets 14 109 11 721
Other financial assets 1 378 1 692
Other assets 969 588
Deferred tax asset 1 881 1 985
Total assets 484 823 462 767
Liabilities
Customer deposits 401 589 377 518
Other financial liabilities 9 133 13 545
Other liabilities 2 282 2 837
Debt securities issued 4 010 4 010
Subordinated debt securities 17 544 17 537
Total liabilities 434 558 415 447
Equity
Share capital 909 903
Share premium 16 082 15 908
Statutory reserve capital 90 88
Other reserves 1 478 1 463
Retained earnings 31 706 28 958
Total equity 50 265 47 320
Total liabilities and equity 484 823 462 767
Inbank is a consumer finance focused digital bank active in the Baltics and
Poland with additional deposits accepted in Germany, Austria and the
Netherlands. Inbank has over 3,200 active partners and 625,000 active contracts.
Inbank bonds are listed on the Nasdaq Baltic Stock Exchange.
Additional information:
Merit Arva
Inbank AS
Head of Corporate Communications
merit.arva@inbank.ee
+372 553 3550
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