4finance Holding SA...2020/06/04 · • Significant bond repurchases made in March and April...
34
4finance Holding SA Investor Presentation for three month 2020 results 2 June 2020
4finance Holding SA...2020/06/04 · • Significant bond repurchases made in March and April ($35.9m of USD bonds) • Current “online” cash levels, after May coupons, remain
4finance Holding SAInvestor Presentation for three month 2020 results
2 June 2020
2
DisclaimerWhile all reasonable care has been taken to ensure that the facts stated herein are accurate and that the forecasts opinions and expectations contained herein are fair and reasonable no representationor warranty express or implied is made as to and no reliance should be placed on the fairness accuracy completeness or correctness of the information or opinions contained herein Neither 4financenor any of 4finance`s advisors or representatives shall have any responsibility or liability whatsoever (for negligence or otherwise) for any loss howsoever arising from any use of this document or itscontents or otherwise arising in connection with this document The information set out herein may be subject to updating completion revision verification and amendment and such information maychange materially
This presentation is based on the economic regulatory market and other conditions as in effect on the date hereof It should be understood that subsequent developments may affect the informationcontained in this document which neither 4finance nor its advisors are under an obligation to update revise or affirm
The distribution of this presentation in certain jurisdictions may be restricted by law Persons into whose possession this presentation comes are required to inform themselves about and to observe anysuch restrictions
The following information contains or may be deemed to contain ldquoforward-looking statementsrdquo These statements relate to future events or our future financial performance including but not limited tostrategic plans potential growth planned operational changes expected capital expenditures future cash sources and requirements liquidity and cost savings that involve known and unknown risksuncertainties and other factors that may cause 4financersquos or its businessesrsquo actual results levels of activity performance or achievements to be materially different from those expressed or implied by anyforward-looking statements In some cases such forward-looking statements can be identified by terminology such as ldquomayrdquo ldquowillrdquo ldquocouldrdquo ldquowouldrdquo ldquoshouldrdquo ldquoexpectrdquo ldquoplanrdquo ldquoanticipaterdquo ldquointendrdquoldquobelieverdquo ldquoestimaterdquo ldquopredictrdquo ldquopotentialrdquo or ldquocontinuerdquo or the negative of those terms or other comparable terminology By their nature forward-looking statements involve risks and uncertainties becausethey relate to events and depend on circumstances that may or may not occur in the future Future results may vary from the results expressed in or implied by the following forward-looking statementspossibly to a material degree All forward-looking statements made in this presentation are based on information presently available to management and 4finance assumes no obligation to update anyforward-looking statements
3
Agenda
bull Business update
bull Review of three month 2020 results
bull Loan portfolio and asset quality
bull Summary
4
bull Solid initial start to year prior to impact of Covid-19bull Jan-Feb broadly in line with expectations strong start by TBI Bankbull Online near-prime traction with new product upgradeslaunchesbull Over half of net receivables (51) now lsquonear-primersquo
bull Rapid operational response to Covid-19bull Over 2000 staff in 16 countries moved to home workingbull Focus on employee safety and providing continuous servicebull Now gradually returning to offices depending on local situation
bull Continued to serve and support our loyal online customersbull Rapid adjustments to underwriting scorecards particularly for new
customers but maintained availability of credit to suitably qualified returning customers
bull Generally solid loan repayment data in AprilMaybull Proactive support for those who need it (payment deferrals etc)
supplemented by regulatory measures
bull Prudent balance sheet and liquidity managementbull Strong cash generation in April amp May with lower loan issuancebull Significant repurchases of bonds below parbull ceuro90m of lsquoonlinersquo cash at end Maybull Strong capital ratios and liquidity at TBI Bank
Q1 2020 business and financial highlights
(9) YoYeuro233m
Adjusted EBITDA
(21) YoY
+17
TBI consumer loan issuance
YoY increase+64
Online near-prime loan issuance
YoY increase
Interest income
euro966m
5
Operational overview for key marketsRegulatory measures of interest
income Q1 Operational response
Poland bull Temporary reduction in non-interest cost caps to 15 fixed 6 annual (from 25 amp 30)
bull Nominal interest rate cap to 72 (from 10)bull ldquoAnti crisis shieldrdquo regulations in development
(payment deferrals but for instalment loans only)
23 bull 1-3 month payment deferrals introduced voluntarily in line with association guidelines Limited requests so far
bull Adapted single payment product to new pricing overnightbull Relaunched instalment loan product as a 3-month loan
Current trading and outlookbull Early indications of demand in recent weeks have been
encouraging with May online issuance 23 above Aprilbull Issuance levels of shorter-term products for returning customers are
back to nearly 75 of Jan-Feb levelsbull Spain remained at a lower issuance level but improving in late Maybull Denmark demand already returned to more normal levels in May
Record for daily applications in 2020 set last week
bull Strong near-prime progress with product enhancements in Latvia Lithuania and Swedenbull Carefully moderated underwriting and marketing spend post Covid-19bull Development of funding via TBI Bank continuesbull 51 of net loan portfolio is near-prime consumer lending
bull Decisions taken already on business footprint and cost reductionbull Latin America and Finlandbull Significant headcount reductions across the network
bull Significant medium-term opportunitiesbull Potentially larger lsquonon-primersquo market sizebull Potential competitive dislocation in many markets
Weekly issuance of short-term products (rebased to 100 as Jan-Feb average)
Week number
FebruaryJanuary March April May
Includes single payment loans and lines of credit
7
Review of three month 2020 results
8
bull Solid initial start to the year with January and February largely in line with management expectationsbull Follows Q4 a naturally seasonally strong quarter especially at TBI Bank
bull Q1 2020 interest income down 9 Adjusted EBITDA of euro233m down 21 year-on-year bull Half of QoQ interest income change from products that have been discontinued
de-emphasised (eg instalment loans in Poland amp Armenia)bull Main Covid-19 impact on Q1 financials additional ceuro3m of net impairmentsbull Post-provision operating profit of euro107m vs euro135m in Q1 2019
bull Continued progress on cost reductionbull Year-on-year reduction in costs of 6 from existing cost efficiency programmesbull Additional measures taken post Covid-19
bull Strong operating cashflow and robust cash positionbull Operating cashflow before movements in portfolio amp deposits of euro479mbull Significant bond repurchases made in March and April ($359m of USD bonds)bull Current ldquoonlinerdquo cash levels after May coupons remain strong at ceuro90m
bull Overall stable risk performance although delayed debt sales did impact the NPL ratiobull Overall gross NPL ratio of 222 (vs 207 as of Dec 2019)bull Net impairmentinterest income at 323 for Q1 2020 (vs 304 in Q1 2019)
Adjusted EBITDAeurom
Summary of three month 2020 results
Interest Incomeeurom
See appendix for definitions of key metrics and ratios
Q4 2019 costs have been adjusted to reflect audited figuresEstimated Covid-19 impact comprises -euro1m of interest income reduction +euro02m marketing cost savings and -euro31m additional impairment
Year-on-year comparison
eurom
Quarter-on-quarter bridge for Adjusted EBITDA
294
233
Q1 2019 Q1 2020
1065
966
Q1 2019 Q1 2020
-9-21
9
7
13
23
22
25
8
2
Baltics
Nordics
Poland
Spain
BGRO
Other Europe
Latin America
Interest income remains well diversified
Interest income by country
1065
966
euro0m
euro20m
euro40m
euro60m
euro80m
euro100m
euro120m
Q1 2019 Q1 2020
Other MexicoArgentinaArmeniaSlovakiaCzech RepublicRomaniaBulgariaSpainPolandDenmarkSwedenFinlandLithuaniaLatvia
-9
2020 interest income euro966m
Other represents countries exited during 2018 (Dominican Republic and Georgia)
10
472 459
387 410 385 386 372 383341
10198
107112
113 117109
117
126
3733
1615
54 53
49
52 52 5250 51
53
0
10
20
30
40
50
60
00
100
200
300
400
500
600
700
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
4finance TBI Friendly Finance Quarterly costincome ratio
Operating cost driversbull Operating costs down 6 year-on-year vs revenue down 7
bull Q1 2020 costincome ratio at 527 compared to 520 in Q1 2019
bull Some cost reduction effect from IFRS 16 impacting comparison with 2018 data
bull Seasonal increase in marketing spend in Q4 reduced in Q1 with some early impact of Covid-19 reductions
bull Investment in TBI Bank to support growth
bull Cost efficiency projects ongoing with focus on costincome ratiobull Headcount reduction of 5 year-on-yearbull Lower above-the-line marketing spend due to efficiency savings
from econometric modelling
bull Additional actions taken post Covid-19 bull Further headcount reductions of c20 of online business
personnel costs to align cost structure with market and product footprint
Notes(1) Q4 2018 costs have been adjusted to reflect audited figures(2) Q4 2019 costs have been adjusted to reflect audited figures
Total operating costs (1)
eurom
2018(1)
See appendix for definitions of key metrics and ratios
2019 (2) 2020
11
135149
124
29 23
2017 2018 2019 Q1 2019 Q1 2020
eurom
81
11
53 51
120
2016 2017 2018 2019 Q1 2019 Q1 2020
Profit before tax
1814 16 17 16 17
2017 1 Jan2018
2018 2019 Q1 2019 Q1 2020
Strong financial profile ndash stability and profitabilityInterest income
448475
425
106 97
2017 2018 2019 Q1 2019 Q1 2020
Adjusted EBITDA Equity assets ratio
22x24x
22x20x 18x
2017 2018 2019 Q1 2019 Q1 2020
Adjusted interest coverage ratio (1)
32
2628 29 30 30
2017 1 Jan 2018 2018 2019 Q1 2019 Q1 2020
Equity net receivables (2)
eurom
eurom
Post IFRS 9
Post IFRS 9
Times
Note (1) The full covenant calculation of interest coverage ratio is based on proforma last twelve month figures and is currently 25x(2) The full covenant calculation of equitynet loans includes related party loans and finance leases and is currently 27
12
Funding strategy
Overview of funding structure 31 March 2020 (2)
2021 Notes194
2022 Notes335
4finance customer deposits
16
TBI customer deposits
442
TBI deposits from banks13
Notes(1) Represents the principal value of public bonds outstanding that comes due in each respective period net of buybacks and bonds owned by TBI Bank(2) The chart reflects the principal and accrued interest amounts of each of the instruments net of buybacks and bonds owned by TBI Bank
euro7277m
Strategy to diversify sources of funding and reduce overall funding cost over time
bull Strong cash generation and cash positionbull Cash generated from portfolio in Q1 and AprilMaybull Online cash ceuro90m at end May (after coupons and buybacks)bull TBI Bank increased deposit levels in Q1 and has strong liquidity ratios
bull Accessing TBI Bank balance sheet to fund online loansbull Successful initial portfolio sales of Polish instalment loans H2 2019bull Passport application for Lithuania to support portfolio sales from that
market submitted in April due to start in Q3
bull Further de-leveraging already achieved in 2020bull $359m of USD 2022 bonds and euro11m of EUR 2021 bonds purchased in
2020 year-to-datebull Proforma covenant interest expense reduced by 18 year-on-yearbull Retain ongoing flexibility to buy back bonds with spare liquidity
bull Strong capital positionbull 30 equity net receivables ratiobull TBI Bank capital adequacy c22 after adoption of 2019 profit in April
bull Consultations underway on potential extension to EUR 2021 bondsbull Allows financial results and markets to normalise prior to refinancing
Debt maturity schedule proforma for 31 May 2020 (1)
eurom
0
146
217
0
2020 2021 2022 2023+
13
195 167 170 171 162 150
3747 48 47 47 38
3940 35 23 21
17
6 7 10 12 811
7758 65 72 90
69
364328 341 341 342
293
Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020
Single Payment loans Line of Credit Instalment loans Near Prime TBI bank SME (Bank)
211 199 171 131 101 89
18 4537
34 51 48
159
242215
255 260 247
58
64
63 83 10398
47
42
42 49 6460492
591529 553 579
543
00
1500
3000
4500
6000
7500
2016 2017 1 Jan 2018 2018 2019 31 Mar 2020
Single Payment loans Line of Credit Cards Instalment loans Point of Sale SME (Bank)Baltics11
Nordics6
Poland16
Spain6
CZSK 2GEAM
1LatAm 05
BG (online)05
Bulgaria (TBI)25
Romania (TBI) 20
SME (TBI)11
Diversified loan portfolioNet receivables (1)
Net receivables 31 March 2020
Notes (1) Reflects reclassification of former SPL products in Sweden (from January 2016) Denmark (from January 2017) Armenia (from launch in July 2017) and Latvia (from January 2019) to Lines of Credit
bull Selective approach to new loan issuance
bull Overall net receivables totals euro542mbull 4 reduction during Q1 bull 89 consumer loansbull 43 online loans 57 banking
TBI Bank 57(funded clt2)
Online 43(funded c12)
eurom
See appendix for definitions of key metrics and ratios Includes TBI bank BG online and euro18m of purchased Poland portfolio Introduction of IFRS 9 as of 1-Jan-2018 reduced net receivables by euro62 million to euro529 million
Online loans issued (1)
eurom
14
486 464426 413
359 373 376 379 364
(55) (52) (42) (45) (36) (34) (34) (32) (31)
(67)(143)
(78) (77)
01
(57)(23) (41) (20)
364
269305 291
324281
319 307 312
-600
-500
-400
-300
-200
-100
00
100
200
300
400
-200
-150
-100
-50
00
50
100
150
200
250
300
350
400
450
500
550
600
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Analysis of net impairments and cost of risk
bull Q1 2020 net impairment charges remain fairly elevatedbull Most products in line with expectations Some additional
provisions in Armenia IL portfolio (in run-off)bull Overall impact of Covid-19 increased net impairments by
approximately euro3 million in Q1 (higher macro provisions delayed debt sales some impact on delay indicators)
bull Overall cost of risk relatively stablebull Overall cost of risk 174 (Q1 2020 including TBI Bank) vs 184
(Q1 2019)bull Online cost of risk 295 vs 289 (Q1 2019)bull Net impairment interest income 323 vs 304 (Q1 2019)
bull Proactive and ongoing adjustments to risk parameters across markets since mid-March
bull 63 changes to underwriting scorecardspoliciesbull 82 changes to debt collection scorecardspoliciesbull Ongoing regular reviews by market (eg Spain Poland)
Net impairment charges by quarter (1)
eurom
See appendix for definitions of key metrics and ratios
208 151
Gross impairments
Net impairment losses
Over provisioning on debt sales (net gainloss)
Recoveries from written off loans
174
2018166
Note (1) Q4 2018 and 2019 figures have been adjusted to reflect audited figures
2019184 160 Overall quarterly
cost of risk183 171 174
2020
15
Asset quality and provisioning bull Gross NPL ratios increased in lsquoonlinersquo due to delayed debt sales but asset quality relatively stable Coverage ratios remain over 100
bull Online gross NPL ratio 283 as of March 2020 compared with 249 as of December 2019bull Overall gross NPL ratio 222 as of March 2020 from 207 as of December 2019bull Some delayed debt sales already restarting in May including Poland
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Recent collections performancebull April and May repayment dynamics
in line with prior monthsbull April performance comparable
with Januarybull Improvement in May
bull Requests for payment deferrals either proactively offered by 4finance or offered in accordance with local regulation have been relatively limited
bull Main take-up in Czech Republic Armenia and TBI Bank
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
January Feb-Mar average April May
Repayment dynamics (single payment)
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
January Feb-Mar average April May
Repayment dynamics (instalment)
Repayment dynamics graphs represent cumulative sum of payments and extensions performed at under 30 DPD as a of amounts due in the prior month For example May line shows progress by day in May of repaymentextension of amounts that were due at any time in April and performed within 30 days of the due date
Payment deferral take-up in selected markets( of eligible portfolio by value)
Poland 2
Spain 3
Denmark 1
Baltics 1
Czech Republic 12
Armenia 17
TBI consumer 12
TBI SME 43
Day number in relevant month Day number in relevant month
17
Pro-active response to Covid-19 across the business with good resultsbull Rapidly adapted operations to home working ensuring employee safety and continuous services for customersbull Focus on risk management but remained ldquoopen for businessrdquo in AprilMay particularly for our returning customersbull Customer repayment behaviour within normal ranges in AprilMay with proactive support offered for customers who have
been impacted
Well positioned to lsquoweather the stormrsquo and take advantage of subsequent opportunitiesbull Key decisions taken to streamline footprint focus on larger markets and right-size cost basebull Continued development of near-prime business both on product side (Latvia Lithuania Sweden launches) and TBI Bank
funding side (Lithuania passport application)bull Encouraging demand and issuance trends in May (22 increase in online loans issued vs April) with improvement
expected to continue in June
Strong balance sheet and funding position with further action being takenbull Strong liquidity position in both lsquoonlinersquo and TBI Bankbull Strong cashflow generation deployed in significant bond buybacks to reduce leveragebull Consultations underway on potential extension to EUR 2021 bonds to allow financial results and markets to normalise
prior to long term refinancing
Summary
4finance a multi-segment multi-product consumer credit specialist
18
Thank you and Questions
19
Appendix ndash responsible lending and regulatory overview
20
Sustainability through good governance and responsible lendingOperating as a mainstream consumer finance business
bull ldquoBank-likerdquo policies and procedures with strong compliance function
bull Continued investment in AML GDPR and other strategic compliance priorities
bull Robust corporate governance with strong Supervisory Board
bull Increasingly regulated by main financial supervisory authorities
bull Diversification of portfolio and consequent reduction of reliance on single payment loans
bull Clear corporate values and code of conduct
bull Listed bond issues with quarterly financial reporting
Developing meaningful and constructive regulatory relationships
bull Ensuring we understand the regulatory arc
bull Helping regulators and legislators gain a solid understanding of our business
bull Ensuring we have a seat at the table
bull Contributing to EU Consumer Credit Directive consultation process
bull Continuous improvements in credit underwriting
bull Ensuring products are used appropriately
bull Working to ensure customers have safe landings when they signal difficulties
21
Regulatory overviewCountry
of interest income(Q1 2020)
Products (1) Regulator CB (2) Licenserequired (3)
Interest rate cap (1) Status
Argentina 1 SPL Consumer Protection Directorate - - -
Armenia 2 LOC Central Bank of the Republic of Armenia Yes Yes Nominal
Bulgaria ndash Online 2 SPL Bulgarian National BankYes Yes APR
(inc fees) Stable frameworkBulgaria ndash Bank 13 IL LOC POS SME
Czech Republic 5 SPL IL Czech National Bank Yes Yes - Stable framework
Denmark 11 LOC IL FSA and Consumer Ombudsman Yes YesAPR amp TCOC
being introduced
Danish FSA licensing process ongoing New regulations regarding interest rate caps (35 APR cap 100 cost of credit cap) and marketing restrictions in final stages of review Expected to start in July
Finland 1 IL(4) Finnish Competition and Consumer Authority - - Nominal
amp fees
New interest rate caps in force from September 2019 Further discussions on temporary reduction to 10 are ongoing
Latvia 5 MTP IL Consumer Rights Protection Centre - Yes Nominal fees amp TCOC
Stable framework since new interest rate caps in July 2019
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards MTP ndash Minimum to pay POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit(2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement(4) lsquoMini-ILrsquo (4 monthly instalments) from September 2019
22
Regulatory overview (continued)Country
of interest income
(Q1 2020)Products (1) Regulator CB (2) License
required (3)Interest rate
cap (1) Status
Lithuania 2 SPL IL Central Bank of Lithuania Yes Yes Nominal fees amp TCOC Stable framework
Mexico 1 IL National Financial Services Consumer Protection Commission - Yes - Stable framework
Poland 23 SPL IL Office of Competition and Consumer Protection - - Nominal fees
amp TCOC
Non-interest cost caps adjusted in April for one year to 15 fixed and 6 annual with a 45 total limit
Romania 10 IL LOC POS SME National Bank of Romania Yes Yes - Bill to introduce interest rate cap under discussion
Slovakia lt1 SPL National Bank of Slovakia Yes Yes APR (inc fees) Stable framework
Spain 22 SPL IL NA - - -
Sweden 1 LOC IL Swedish Financial Supervisory Authority Yes Yes Nominal amp
TCOCStable framework since new interest rate caps in September 2018
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit (2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement
23
Appendix ndash strategic evolution of portfolio
24
Evolving and broadening our business model
Prime
Sub-Prime
Near-Prime
Segments
Higher Duration Lower APR Products
SPL ILLOC POS
A multi-segment multi-product consumer credit specialist
1
1 Optimise
2 2 Diversify amp Grow
Illustrative
25
Evolution of product mix
Note (1) Reflects reclassification of Vivus brand products in Sweden (from January 2016) Denmark (from January 2017) Armenia (from launch in July 2017) and short-term products (SMS Credit amp Ondo) in Latvia (from January 2019) to Lines of Credit
68
17
3
9
29
45
18
11
0
25
50
75
100
30 Jun 2016 31 Mar 2020
SME (Bank)
Point of Sale
Instalment loans
Line of Credit Cards
Single Payment Loans
euro543meuro323m
Net receivables by product (1)
Online sub-prime only
Bank and onlinenear-prime
and sub-prime
76
48
4
14
20
29
7
0
25
50
75
100
Q1 2016 Q1 2020
Interest income by product (1)
euro97meuro90m
Date chosen to reflect the composition of loan portfolio immediately prior to purchase of TBI Bank
26
Funding near-prime growth via TBI Bank
Online acquisition Retail deposit funding
Initial portfolio development
Early stage customer acquisition and credit metrics monitored and
enhanced
Funding Platform
In-house IT funding platform ensuring ongoing automated
portfolio transfers
Bringing portfolios to scale
Market specific portfolios grow with ongoing sales to reach scale
True saleof portfolio(s)loan servicing
Indicative APRs
20-40
CostIncome ratio
c40
Cost of Risk
6-8
Cost of Funds
3-5
Return on Assets
3-5(2)
Illustrative near-prime
ldquounit economicsrdquo(1)
Notes(1) Illustrative metrics for near-prime portfolios and not indicative of a specific product or market(2) Illustrative potential returns in medium-term at scale
Payment of fair market value
bull Regular sales of Polish instalment loans since September 2019bull Passporting application submitted for Lithuania (largest near-prime portfolio)
Accessing TBI Bank deposit funding for lsquoonlinersquo portfolios via ongoing loan sales
27
Asset quality and provisioning ndash loan principal
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Interest Income 966 1065 (9)Interest Expense (127) (150) (16)Net Interest Income 839 915 (8)Net FampC Income 24 21 12Other operating income 23 22 7Non-Interest Income 47 43 10Operating Income (Revenue) 886 957 (7)Total operating costs (467) (498) (6)Pre-provision operating profit 419 459 (9)Net impairment charges (312) (324) (4)Post-provision operating profit 107 135 (21)Depreciation and amortisation (32) (32) +0Non-recurring income(expense) (39) (01) nmNet FX gain(loss) (34) 16 nmProfit before tax 02 119 nmIncome tax expense (27) (62) (57)Net profit(loss) after tax (25) 57 nm
Adjusted EBITDA 233 294 (21)
Income Statement
30
Balance sheetIn millions of euro
31 March 2020 (unaudited)
31 December 2019
Cash and cash equivalents of which 1560 1257- Online 834 767- TBI Bank 725 490
Placements with other banks 127 64Gross receivables due from customers 7042 7337Allowance for impairment (1616) (1548)Net receivables due from customers of which 5426 5789
- Principal 5147 5480- Accrued interest 277 309
Net investments in finance leases 45 47Net loans to related parties 594 607Property and equipment 182 178Financial investments 502 564Prepaid expenses 40 45Tax assets 174 213Deferred tax assets 353 330Intangible IT assets 168 178Goodwill 165 165Other assets 392 295Total assets 9727 9731Calculation for Presentation other assets (not loans Loans and borrowings 3849 3846Deposits from customers 3333 3222Deposits from banks 95 130Corporate income tax payable 124 95Other liabilities 718 780Total liabilities 8119 8074Share capital 358 358Retained earnings 1628 1657Reserves (378) (357)Total attributable equity 1608 1658Non-controlling interests 00 (00)Total equity 1608 1658Total shareholders equity and liabilities 9727 9731
Balance Sheet
31
Statement of Cash FlowsIn millions of euro
2020 2019Cash flows from operating activitiesProfit before taxes 02 119
Adjustments forDepreciation and amortisation 32 32
Impairment of goodwill and intangible assets - -
Net (gain) loss on foreign exchange from borrowings and other monetary items 131 63
Impairment losses on loans 364 359
Reversal of provision on debt portfolio sales (20) 01
Write-off and disposal of intangible and property and equipment assets 01 01
Interest income from non-customers loans (19) (19)
Interest expense on loans and borrowings and deposits from customers 127 150Non-recurring finance cost 32 -
Other non-cash items 14 0
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663 707
Adjustments forChange in financial instruments measured at fair value through profit or loss (137) (82)(Increase) decrease in other assets (including TBI statutory reserve placements amp leases) (09) (15)
Increase (decrease) in accounts payable to suppliers contractors and other creditors (39) (81)
Operating cash flow before movements in portfolio and deposits 479 530
Increase in loans due from customers (132) (468)
Proceeds from sale of portfolio 71 161
Increase in deposits (customer and bank deposits) 77 74
Deposit interest payments (15) (10)
Gross cash flows from operating activities 481 288
Corporate income tax paid (06) (63)
Net cash flows from operating activities 475 225
3 months to 31 March In millions of euro
2020 2019
Cash flows used in investing activitiesPurchase of property and equipment and intangible assets (15) (13)
Net cash from Purchase Sale of financial instruments 39 (118)
Loans issued to related parties - -
Loans repaid from related parties 0 40
Interest received from related parties 31 01
Disposal of subsidiaries net of cash disposed (13) -
(Acquisition)Disposal of equity investments (14) -
Acquisition of non-controlling interests (04) (04)
Net cash flows from investing activities 25 (94)
Cash flows from financing activitiesLoans received and notes issued - 0
Repayment and repurchase of loans and notes (164) (133)
Interest payments (06) (35)
FX hedging margin 14 82
Payment of lease liabilities (11) (1)
Dividend payments - -
Net cash flows used in financing activities (167) (95)
Net increase (decrease) in cash and cash equivalents 333 35
Cash and cash equivalents at the beginning of the period 985 1488
Effect of exchange rate fluctuations on cash (01) 0
Cash and cash equivalents at the end of the period 1318 1524
TBI Bank minimum statutory reserve 242 354
Total cash on hand and cash at central banks 1560 1878
3 months to 31 March
Cash Flow
Cash Flow (2)
Cash Flow
Cash Flow (2)
32
Key financial ratiosQ1 2020 Q1 2019
CapitalisationEquity assets 165 161Equity net receivables 296 299Adjusted interest coverage 18x 20xTBI Bank consolidated capital adequacy 188 210
ProfitabilityNet interest margin
- Online 764 802- TBI Bank 246 252- Overall group 500 557
Cost income ratio 527 520Normalised Profit before tax margin 111 127Normalised Return on average equity 118 104Normalised Return on average assets 20 17
Asset qualityCost of risk
- Online 295 289- TBI Bank 47 45- Overall group 174 184
Net impairment interest income 323 304Gross NPL ratio
- Online 283 227- TBI Bank 160 173- Overall group 222 204
Overall group NPL coverage ratio 1035 1064
See appendix for definitions of key metrics and ratios
key ratios
33
GlossaryDefinitionsbull Adjusted EBITDA ndash a non-IFRS measure that represents EBITDA (profit for the period plus tax plus interest expense plus depreciation and amortization) as adjusted by incomeloss from discontinued operations non-cash gains and losses
attributable to movement in the mark-to-market valuation of hedging obligations under IFRS goodwill write-offs and certain other one-off or non-cash items Adjusted EBITDA as presented here may not be comparable to similarly-titled measures that are reported by other companies due to differences in the way these measures are calculated Further details of covenant adjustments can be found in the relevant bond prospectuses available on our website
bull Adjusted interest coverage ndash Adjusted EBITDA interest expense for the relevant period (nb not equal to the full covenant coverage ratio calculation)
bull Cost of risk ndash Annualised net impairment loss average gross receivables (total gross receivables as of the start and end of each period divided by two)
bull Cost income ratio ndash Operating costs operating income (revenue)
bull Equity assets ratio ndash Total equity total assets
bull Equity net receivables ndash Total equity net customer receivables (including accrued interest)
bull Gross NPL ratio ndash Non-performing receivables (including accrued interest) with a delay of over 90 days gross receivables (including accrued interest)
bull Gross receivables ndash Total amount receivable from customers including principal and accrued interest after deduction of deferred income
bull Intangible assets ndash consists of deferred tax assets intangible IT assets and goodwill
bull Interest income ndash Interest and similar income generated from our customer loan portfolio
bull Loss given default ndash Loss on non-performing receivables (ie 1 - recovery rate) based on recoveries during the appropriate time window for the specific product reduced by costs of collection discounted at the weighted average effective interest rate
bull Net effective annualised yield ndash annualised interest income (excluding penalties) average net loan principal
bull Net impairment to interest income ratio ndash Net impairment losses on loans and receivables interest income
bull Net interest margin ndash Annualised net interest income average gross loan principal (total gross loan principal as of the start and end of each period divided by two)
bull Net receivables ndash Gross receivables (including accrued interest) less impairment provisions
bull Non-performing loans (NPLs) ndash Loan principal or receivables (as applicable) that are over 90 days past due (and for TBI Bank shown on a customer level basis)
bull Normalised ndash Adjusted to remove the effect of non-recurring items net FX and one-off adjustments to intangible assets and for 2018 ratios only adjusted to reflect the opening balance of 2018 balance sheet after IFRS 9 effects
bull Profit before tax margin ndash Profit before tax interest income
bull Return on Average Assets ndash Annualised profit from continuing operations average assets (total assets as of the start and end of each period divided by two)
bull Return on Average Equity ndash Annualised profit from continuing operations average equity (total equity as of the start and end of each period divided by two)
bull Return on Average Tangible Equity ndash Annualised profit from continuing operations average tangible equity (tangible equity as of the start and end of each period divided by two)
bull Tangible Equity ndash Total equity minus intangible assets
bull TBI Bank Capital adequacy ratio ndash (Tier One Capital + Tier Two Capital) Risk weighted assets (calculated according to the prevailing regulations of the Bulgarian National Bank)
34
Contacts
Investor Relationsinvestorrelations4financecom
James EtheringtonHead of Investor RelationsPhone +44 7766 697 950E-mail jamesetherington4financecom
Paul GoldfinchChief Financial OfficerPhone +371 2572 6422E-mail paulgoldfinch4financecom
Headquarters17a-8 Lielirbes street Riga LV-1046 Latvia
4finance Holding SA
Disclaimer
Agenda
Q1 2020 business and financial highlights
Slide Number 5
Current trading and outlook
Review of three month 2020 results
Summary of three month 2020 results
Interest income remains well diversified
Slide Number 10
Strong financial profile ndash stability and profitability
Funding strategy
Diversified loan portfolio
Analysis of net impairments and cost of risk
Asset quality and provisioning
Recent collections performance
Slide Number 17
Thank you and Questions
Appendix ndash responsible lending and regulatory overview
Sustainability through good governance and responsible lending
Regulatory overview
Regulatory overview (continued)
Appendix ndash strategic evolution of portfolio
Evolving and broadening our business model
Evolution of product mix
Slide Number 26
Asset quality and provisioning ndash loan principal
Appendix ndash financials and key ratios
Slide Number 29
Balance sheet
Statement of Cash Flows
Slide Number 32
GlossaryDefinitions
Contacts
Q12018
Q1 2020
9M 2018
Q1 2019
FY 2017
Net receivables (eurom) of which
5426
5408
5477
- Principal
272
5147
5144
5165
208
- Accrued interest
98
279
265
312
39
Total assets (eurom)
9724
10238
10147
Total equity (eurom)
221
1605
1607
1637
335
Capitalisation
Equity assets
147
165
157
161
127
Equity net receivables
195
296
297
299
267
Adjusted interest coverage
233
18x
25x
20x
223
TBI Bank consolidated capital adequacy
231
188
241
210
239
240
Profitability
Q12018
Net interest margin
- Online
764
882
802
- TBI Bank
246
280
252
- Overall group
500
648
557
Cost income ratio
527
520
520
Post-provision operating profit margin
145
166
177
Normalised Profit before tax margin
111
154
127
Normalised Return on average equity
118
375
104
Normalised Return on average assets
20
56
17
Asset quality
Cost of risk
- Online
295
237
289
- TBI Bank
47
86
45
- Overall group
174
181
184
Net impairment interest income
323
259
304
Gross NPL ratio
- Online
283
222
227
- TBI Bank
160
154
173
- Overall group
222
196
204
Overall group NPL coverage ratio
1035
1156
1064
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
505
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(06)
57
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
50
199
199
(248)
(301)
0800
Impairment losses on loans
1485
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(120)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(73)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
568
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
09
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2599
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
108
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(11)
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2637
2840
2840
1756
2279
00
Increase in loans due from customers
(2248)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1453
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1120
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(15)
(13)
(84)
(128)
(131)
(21)
Net cash from Purchase Sale of financial instruments
39
(118)
(136)
mdash
Repayment of financial instrument
-
-
Loans issued to related parties
-
-
(26)
(06)
(43)
(23)
Loans repaid from related parties
0
40
74
23
109
54
Interest received from related parties
31
01
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
00
(01)
0-
mdash
Disposal of subsidiaries net of cash disposed
(13)
-
(59)
(45)
(44)
mdash
(Acquisition)Disposal of equity investments
(14)
-
Acquisition of non-controlling interests
(04)
(04)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
-
-
mdash
0-
(00)
Prepayment for potential acquisition
-
00
208
0-
(208)
mdash
Acquisition of shares
-
00
00
Net cash flows from investing activities
25
(94)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
0
05
2999
1637
05
Repayment and repurchase of loans and notes
(164)
(133)
(272)
(1737)
(580)
(01)
Interest payments
(06)
(35)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
-
00
(00)
(192)
(58)
mdash
FX hedging margin
14
82
42
(140)
(88)
Payment of lease liabilities
(11)
(1)
mdash
Dividend payments
-
-
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(167)
(95)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
333
35
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
985
1488
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
(01)
0
01
10
10
03
Cash and cash equivalents at the end of the period
1318
1524
1488
2040
1319
681
TBI Bank minimum statutory reserve
242
354
234
230
230
242
Total cash on hand and cash at central banks
1560
1878
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
02
119
526
495
107
17000
Adjustments for
Depreciation and amortisation
32
32
121
64
83
1700
Impairment of goodwill and intangible assets
-
-
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
131
63
199
(248)
(301)
0800
Impairment losses on loans
364
359
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(20)
01
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
01
01
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(19)
(19)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
127
150
621
455
619
13300
Non-recurring finance cost
32
-
mdash
mdash
63
Other non-cash items
14
0
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663
707
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(137)
(82)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
(09)
(15)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(39)
(81)
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
479
530
2840
1756
2279
00
Increase in loans due from customers
(132)
(468)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
71
161
819
333
542
160
Increase in deposits (customer and bank deposits)
77
74
165
265
338
110
Deposit interest payments
(15)
(10)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
481
288
1233
524
442
(535)
Corporate income tax paid
(06)
(63)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
475
225
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(83)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(196)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
Q12018 (unaudited)
31 March 2020 (unaudited)
1 January 2018 (post IFRS 9 unaudited)
31 December 2019
Cash and cash equivalents of which
1538
1560
1549
1257
- Online
535
834
658
767
- TBI Bank
1003
725
892
490
Placements with other banks
57
127
70
64
Gross receivables due from customers
7156
7042
6588
7337
Allowance for impairment
(1665)
(1616)
(1575)
(1548)
Net receivables due from customers of which
5491
5426
5013
5789
- Principal
5147
5026
5480
- Accrued interest
277
264
309
Net investments in finance leases
93
45
105
47
Net loans to related parties
631
594
598
607
Property and equipment
96
182
101
178
Financial investments
183
502
184
564
Prepaid expenses
87
40
108
45
Tax assets
212
174
221
213
Deferred tax assets
371
353
368
330
Intangible IT assets
281
168
286
178
Goodwill
214
165
214
165
Other assets
678
392
573
295
Total assets
9932
9727
9390
9731
Calculation for Presentation - other assets (not loans or cash)
Loans and borrowings
4672
3849
3794
3846
Deposits from customers
2728
3333
2710
3222
Deposits from banks
94
95
mdash
130
Corporate income tax payable
178
124
198
95
Other liabilities
799
718
765
780
Total liabilities
8471
8119
7466
8074
Share capital
358
358
358
358
Retained earnings
1475
1628
1350
1657
Reserves
(343)
(378)
(323)
(357)
Total attributable equity
1490
1608
1385
1658
Non-controlling interests
(28)
00
(24)
(00)
Total equity
1461
1608
1362
1658
Total shareholders equity and liabilities
9932
9727
8828
9731
In millions of euro
Q1 2020 (unaudited)
Q1 2019 (unaudited)
change YoY
Interest Income
966
1065
(9)
Interest Expense
(127)
(150)
-(16)
1000000
Net Interest Income
839
915
(8)
Net FampC Income
24
21
12
Other operating income
23
22
7
Non-Interest Income
47
43
10
Operating Income (Revenue)
886
957
(7)
Personnel costs
(221)
(221)
(0
Discretionary bonus
(18)
(19)
(6)
Marketing
(91)
(96)
(5)
IT costs
(39)
(45)
(12)
DampA costs
(35)
(32)
+8
Other costs
(98)
(118)
(17)
Total operating costs
(467)
(498)
(6)
Pre-provision operating profit
419
459
(9)
Net impairment charges
(312)
(324)
-(4)
manual
Post-provision operating profit
107
135
(21)
Depreciation and amortisation
(32)
(32)
-+0
manual
Non-recurring income(expense)
(39)
(01)
nm
Non-recurring finance cost
mdash
mdash
+0
Net FX gain(loss)
(34)
16
nm
One-off adjustments to intangible assets
-
-
(0)
manual
Profit before tax
02
119
nm
Income tax expense
(27)
(62)
-(57)
manual
Net profit(loss) after tax
(25)
57
nm
manual
Adjusted EBITDA
233
294
-(21)
Costincome ratio
527
520
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online principal
Performing (1)
2347
(357)
1990
737
2634
(397)
2237
774
3177
(493)
2684
791
(22139)
3177
(302)
2875
681
(191)
150128837891005
Non-performing (2)
836
(656)
181
263
770
(590)
180
226
840
(664)
175
209
(74878)
36947
1488
(983)
505
319
-648
319
-64836054
-250544747891005
Online total
3184
(1013)
2171
1000
3404
(987)
2417
1000
4017
(1158)
2859
1000
4665
(1286)
3379
1000
(74878)
14808
TBI Bank principal
Performing (1)
2853
(121)
2732
840
2896
(118)
2778
838
2090
(68)
2022
873
(2586)
2090
(43)
2047
873
(25)
-251961477
Non-performing (2)
541
(298)
244
160
558
(274)
284
162
303
(158)
145
127
0437
303
(162)
141
127
04
42578177
TBI Bank total
3394
(418)
2976
1000
3454
(392)
3062
1000
2393
(226)
2167
1000
-
(2149)
2393
(205)
2188
1000
Overall group principal
Performing (1)
5200
(478)
4722
791
5529
(515)
5015
806
5267
(562)
4706
822
-
(24725)
5267
(345)
4922
746
Non-performing (2)
1378
(953)
424
209
1328
(864)
465
194
1142
(822)
320
178
(74878)
37384
1791
(1145)
646
254
Overall total
6578
(1431)
5147
1000
6858
(1378)
5480
1000
6410
(1384)
5026
1000
(74878)
12659
7058
(1490)
5567
1000
31122018 data updated post audit
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
IFRS 9 ADJ part
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online receivables
Performing (1)
2553
(412)
2141
717
2855
(456)
2399
751
3432
(567)
2864
778
(22139)
3432
(346)
3086
665
00
221
-150
Non-performing (2)
1006
(775)
232
283
946
(691)
255
249
977
(775)
201
222
(74878)
36947
1725
(1145)
580
335
749
(369)
250
Online total
3559
(1187)
2373
1000
3801
(1147)
2654
1000
4408
(1343)
3065
1000
5157
(1491)
3666
1000
(148)
NPL (90+)
(74878)
14808
TBI Bank receivables
Performing (1)
2927
(124)
2803
840
2964
(120)
2844
838
2145
(70)
2075
873
(2586)
2145
(44)
2101
873
00
26
120
Non-performing (2)
556
(305)
250
160
571
(280)
291
162
311
(162)
149
127
0437
311
(166)
145
127
00
(04)
-20
TBI Bank total
3482
(429)
3053
1000
3535
(401)
3135
1000
2456
(232)
2224
1000
-
(2149)
2456
(210)
2246
1000
21
Overall group receivables
Performing (1)
5480
(536)
4944
778
5819
(577)
5242
793
5577
(637)
4939
812
-
(24725)
5577
(390)
5187
733
Non-performing (2)
1562
(1080)
482
222
1517
(971)
546
207
1287
(937)
350
188
(74878)
37384
2036
(1311)
725
267
Overall total
7042
(1616)
5426
1000
7337
(1548)
5789
1000
6864
(1575)
5290
1000
(74878)
12659
7613
(1701)
5912
1000
31122018 changed to audited figures
2
DisclaimerWhile all reasonable care has been taken to ensure that the facts stated herein are accurate and that the forecasts opinions and expectations contained herein are fair and reasonable no representationor warranty express or implied is made as to and no reliance should be placed on the fairness accuracy completeness or correctness of the information or opinions contained herein Neither 4financenor any of 4finance`s advisors or representatives shall have any responsibility or liability whatsoever (for negligence or otherwise) for any loss howsoever arising from any use of this document or itscontents or otherwise arising in connection with this document The information set out herein may be subject to updating completion revision verification and amendment and such information maychange materially
This presentation is based on the economic regulatory market and other conditions as in effect on the date hereof It should be understood that subsequent developments may affect the informationcontained in this document which neither 4finance nor its advisors are under an obligation to update revise or affirm
The distribution of this presentation in certain jurisdictions may be restricted by law Persons into whose possession this presentation comes are required to inform themselves about and to observe anysuch restrictions
The following information contains or may be deemed to contain ldquoforward-looking statementsrdquo These statements relate to future events or our future financial performance including but not limited tostrategic plans potential growth planned operational changes expected capital expenditures future cash sources and requirements liquidity and cost savings that involve known and unknown risksuncertainties and other factors that may cause 4financersquos or its businessesrsquo actual results levels of activity performance or achievements to be materially different from those expressed or implied by anyforward-looking statements In some cases such forward-looking statements can be identified by terminology such as ldquomayrdquo ldquowillrdquo ldquocouldrdquo ldquowouldrdquo ldquoshouldrdquo ldquoexpectrdquo ldquoplanrdquo ldquoanticipaterdquo ldquointendrdquoldquobelieverdquo ldquoestimaterdquo ldquopredictrdquo ldquopotentialrdquo or ldquocontinuerdquo or the negative of those terms or other comparable terminology By their nature forward-looking statements involve risks and uncertainties becausethey relate to events and depend on circumstances that may or may not occur in the future Future results may vary from the results expressed in or implied by the following forward-looking statementspossibly to a material degree All forward-looking statements made in this presentation are based on information presently available to management and 4finance assumes no obligation to update anyforward-looking statements
3
Agenda
bull Business update
bull Review of three month 2020 results
bull Loan portfolio and asset quality
bull Summary
4
bull Solid initial start to year prior to impact of Covid-19bull Jan-Feb broadly in line with expectations strong start by TBI Bankbull Online near-prime traction with new product upgradeslaunchesbull Over half of net receivables (51) now lsquonear-primersquo
bull Rapid operational response to Covid-19bull Over 2000 staff in 16 countries moved to home workingbull Focus on employee safety and providing continuous servicebull Now gradually returning to offices depending on local situation
bull Continued to serve and support our loyal online customersbull Rapid adjustments to underwriting scorecards particularly for new
customers but maintained availability of credit to suitably qualified returning customers
bull Generally solid loan repayment data in AprilMaybull Proactive support for those who need it (payment deferrals etc)
supplemented by regulatory measures
bull Prudent balance sheet and liquidity managementbull Strong cash generation in April amp May with lower loan issuancebull Significant repurchases of bonds below parbull ceuro90m of lsquoonlinersquo cash at end Maybull Strong capital ratios and liquidity at TBI Bank
Q1 2020 business and financial highlights
(9) YoYeuro233m
Adjusted EBITDA
(21) YoY
+17
TBI consumer loan issuance
YoY increase+64
Online near-prime loan issuance
YoY increase
Interest income
euro966m
5
Operational overview for key marketsRegulatory measures of interest
income Q1 Operational response
Poland bull Temporary reduction in non-interest cost caps to 15 fixed 6 annual (from 25 amp 30)
bull Nominal interest rate cap to 72 (from 10)bull ldquoAnti crisis shieldrdquo regulations in development
(payment deferrals but for instalment loans only)
23 bull 1-3 month payment deferrals introduced voluntarily in line with association guidelines Limited requests so far
bull Adapted single payment product to new pricing overnightbull Relaunched instalment loan product as a 3-month loan
Current trading and outlookbull Early indications of demand in recent weeks have been
encouraging with May online issuance 23 above Aprilbull Issuance levels of shorter-term products for returning customers are
back to nearly 75 of Jan-Feb levelsbull Spain remained at a lower issuance level but improving in late Maybull Denmark demand already returned to more normal levels in May
Record for daily applications in 2020 set last week
bull Strong near-prime progress with product enhancements in Latvia Lithuania and Swedenbull Carefully moderated underwriting and marketing spend post Covid-19bull Development of funding via TBI Bank continuesbull 51 of net loan portfolio is near-prime consumer lending
bull Decisions taken already on business footprint and cost reductionbull Latin America and Finlandbull Significant headcount reductions across the network
bull Significant medium-term opportunitiesbull Potentially larger lsquonon-primersquo market sizebull Potential competitive dislocation in many markets
Weekly issuance of short-term products (rebased to 100 as Jan-Feb average)
Week number
FebruaryJanuary March April May
Includes single payment loans and lines of credit
7
Review of three month 2020 results
8
bull Solid initial start to the year with January and February largely in line with management expectationsbull Follows Q4 a naturally seasonally strong quarter especially at TBI Bank
bull Q1 2020 interest income down 9 Adjusted EBITDA of euro233m down 21 year-on-year bull Half of QoQ interest income change from products that have been discontinued
de-emphasised (eg instalment loans in Poland amp Armenia)bull Main Covid-19 impact on Q1 financials additional ceuro3m of net impairmentsbull Post-provision operating profit of euro107m vs euro135m in Q1 2019
bull Continued progress on cost reductionbull Year-on-year reduction in costs of 6 from existing cost efficiency programmesbull Additional measures taken post Covid-19
bull Strong operating cashflow and robust cash positionbull Operating cashflow before movements in portfolio amp deposits of euro479mbull Significant bond repurchases made in March and April ($359m of USD bonds)bull Current ldquoonlinerdquo cash levels after May coupons remain strong at ceuro90m
bull Overall stable risk performance although delayed debt sales did impact the NPL ratiobull Overall gross NPL ratio of 222 (vs 207 as of Dec 2019)bull Net impairmentinterest income at 323 for Q1 2020 (vs 304 in Q1 2019)
Adjusted EBITDAeurom
Summary of three month 2020 results
Interest Incomeeurom
See appendix for definitions of key metrics and ratios
Q4 2019 costs have been adjusted to reflect audited figuresEstimated Covid-19 impact comprises -euro1m of interest income reduction +euro02m marketing cost savings and -euro31m additional impairment
Year-on-year comparison
eurom
Quarter-on-quarter bridge for Adjusted EBITDA
294
233
Q1 2019 Q1 2020
1065
966
Q1 2019 Q1 2020
-9-21
9
7
13
23
22
25
8
2
Baltics
Nordics
Poland
Spain
BGRO
Other Europe
Latin America
Interest income remains well diversified
Interest income by country
1065
966
euro0m
euro20m
euro40m
euro60m
euro80m
euro100m
euro120m
Q1 2019 Q1 2020
Other MexicoArgentinaArmeniaSlovakiaCzech RepublicRomaniaBulgariaSpainPolandDenmarkSwedenFinlandLithuaniaLatvia
-9
2020 interest income euro966m
Other represents countries exited during 2018 (Dominican Republic and Georgia)
10
472 459
387 410 385 386 372 383341
10198
107112
113 117109
117
126
3733
1615
54 53
49
52 52 5250 51
53
0
10
20
30
40
50
60
00
100
200
300
400
500
600
700
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
4finance TBI Friendly Finance Quarterly costincome ratio
Operating cost driversbull Operating costs down 6 year-on-year vs revenue down 7
bull Q1 2020 costincome ratio at 527 compared to 520 in Q1 2019
bull Some cost reduction effect from IFRS 16 impacting comparison with 2018 data
bull Seasonal increase in marketing spend in Q4 reduced in Q1 with some early impact of Covid-19 reductions
bull Investment in TBI Bank to support growth
bull Cost efficiency projects ongoing with focus on costincome ratiobull Headcount reduction of 5 year-on-yearbull Lower above-the-line marketing spend due to efficiency savings
from econometric modelling
bull Additional actions taken post Covid-19 bull Further headcount reductions of c20 of online business
personnel costs to align cost structure with market and product footprint
Notes(1) Q4 2018 costs have been adjusted to reflect audited figures(2) Q4 2019 costs have been adjusted to reflect audited figures
Total operating costs (1)
eurom
2018(1)
See appendix for definitions of key metrics and ratios
2019 (2) 2020
11
135149
124
29 23
2017 2018 2019 Q1 2019 Q1 2020
eurom
81
11
53 51
120
2016 2017 2018 2019 Q1 2019 Q1 2020
Profit before tax
1814 16 17 16 17
2017 1 Jan2018
2018 2019 Q1 2019 Q1 2020
Strong financial profile ndash stability and profitabilityInterest income
448475
425
106 97
2017 2018 2019 Q1 2019 Q1 2020
Adjusted EBITDA Equity assets ratio
22x24x
22x20x 18x
2017 2018 2019 Q1 2019 Q1 2020
Adjusted interest coverage ratio (1)
32
2628 29 30 30
2017 1 Jan 2018 2018 2019 Q1 2019 Q1 2020
Equity net receivables (2)
eurom
eurom
Post IFRS 9
Post IFRS 9
Times
Note (1) The full covenant calculation of interest coverage ratio is based on proforma last twelve month figures and is currently 25x(2) The full covenant calculation of equitynet loans includes related party loans and finance leases and is currently 27
12
Funding strategy
Overview of funding structure 31 March 2020 (2)
2021 Notes194
2022 Notes335
4finance customer deposits
16
TBI customer deposits
442
TBI deposits from banks13
Notes(1) Represents the principal value of public bonds outstanding that comes due in each respective period net of buybacks and bonds owned by TBI Bank(2) The chart reflects the principal and accrued interest amounts of each of the instruments net of buybacks and bonds owned by TBI Bank
euro7277m
Strategy to diversify sources of funding and reduce overall funding cost over time
bull Strong cash generation and cash positionbull Cash generated from portfolio in Q1 and AprilMaybull Online cash ceuro90m at end May (after coupons and buybacks)bull TBI Bank increased deposit levels in Q1 and has strong liquidity ratios
bull Accessing TBI Bank balance sheet to fund online loansbull Successful initial portfolio sales of Polish instalment loans H2 2019bull Passport application for Lithuania to support portfolio sales from that
market submitted in April due to start in Q3
bull Further de-leveraging already achieved in 2020bull $359m of USD 2022 bonds and euro11m of EUR 2021 bonds purchased in
2020 year-to-datebull Proforma covenant interest expense reduced by 18 year-on-yearbull Retain ongoing flexibility to buy back bonds with spare liquidity
bull Strong capital positionbull 30 equity net receivables ratiobull TBI Bank capital adequacy c22 after adoption of 2019 profit in April
bull Consultations underway on potential extension to EUR 2021 bondsbull Allows financial results and markets to normalise prior to refinancing
Debt maturity schedule proforma for 31 May 2020 (1)
eurom
0
146
217
0
2020 2021 2022 2023+
13
195 167 170 171 162 150
3747 48 47 47 38
3940 35 23 21
17
6 7 10 12 811
7758 65 72 90
69
364328 341 341 342
293
Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020
Single Payment loans Line of Credit Instalment loans Near Prime TBI bank SME (Bank)
211 199 171 131 101 89
18 4537
34 51 48
159
242215
255 260 247
58
64
63 83 10398
47
42
42 49 6460492
591529 553 579
543
00
1500
3000
4500
6000
7500
2016 2017 1 Jan 2018 2018 2019 31 Mar 2020
Single Payment loans Line of Credit Cards Instalment loans Point of Sale SME (Bank)Baltics11
Nordics6
Poland16
Spain6
CZSK 2GEAM
1LatAm 05
BG (online)05
Bulgaria (TBI)25
Romania (TBI) 20
SME (TBI)11
Diversified loan portfolioNet receivables (1)
Net receivables 31 March 2020
Notes (1) Reflects reclassification of former SPL products in Sweden (from January 2016) Denmark (from January 2017) Armenia (from launch in July 2017) and Latvia (from January 2019) to Lines of Credit
bull Selective approach to new loan issuance
bull Overall net receivables totals euro542mbull 4 reduction during Q1 bull 89 consumer loansbull 43 online loans 57 banking
TBI Bank 57(funded clt2)
Online 43(funded c12)
eurom
See appendix for definitions of key metrics and ratios Includes TBI bank BG online and euro18m of purchased Poland portfolio Introduction of IFRS 9 as of 1-Jan-2018 reduced net receivables by euro62 million to euro529 million
Online loans issued (1)
eurom
14
486 464426 413
359 373 376 379 364
(55) (52) (42) (45) (36) (34) (34) (32) (31)
(67)(143)
(78) (77)
01
(57)(23) (41) (20)
364
269305 291
324281
319 307 312
-600
-500
-400
-300
-200
-100
00
100
200
300
400
-200
-150
-100
-50
00
50
100
150
200
250
300
350
400
450
500
550
600
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Analysis of net impairments and cost of risk
bull Q1 2020 net impairment charges remain fairly elevatedbull Most products in line with expectations Some additional
provisions in Armenia IL portfolio (in run-off)bull Overall impact of Covid-19 increased net impairments by
approximately euro3 million in Q1 (higher macro provisions delayed debt sales some impact on delay indicators)
bull Overall cost of risk relatively stablebull Overall cost of risk 174 (Q1 2020 including TBI Bank) vs 184
(Q1 2019)bull Online cost of risk 295 vs 289 (Q1 2019)bull Net impairment interest income 323 vs 304 (Q1 2019)
bull Proactive and ongoing adjustments to risk parameters across markets since mid-March
bull 63 changes to underwriting scorecardspoliciesbull 82 changes to debt collection scorecardspoliciesbull Ongoing regular reviews by market (eg Spain Poland)
Net impairment charges by quarter (1)
eurom
See appendix for definitions of key metrics and ratios
208 151
Gross impairments
Net impairment losses
Over provisioning on debt sales (net gainloss)
Recoveries from written off loans
174
2018166
Note (1) Q4 2018 and 2019 figures have been adjusted to reflect audited figures
2019184 160 Overall quarterly
cost of risk183 171 174
2020
15
Asset quality and provisioning bull Gross NPL ratios increased in lsquoonlinersquo due to delayed debt sales but asset quality relatively stable Coverage ratios remain over 100
bull Online gross NPL ratio 283 as of March 2020 compared with 249 as of December 2019bull Overall gross NPL ratio 222 as of March 2020 from 207 as of December 2019bull Some delayed debt sales already restarting in May including Poland
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Recent collections performancebull April and May repayment dynamics
in line with prior monthsbull April performance comparable
with Januarybull Improvement in May
bull Requests for payment deferrals either proactively offered by 4finance or offered in accordance with local regulation have been relatively limited
bull Main take-up in Czech Republic Armenia and TBI Bank
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
January Feb-Mar average April May
Repayment dynamics (single payment)
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
January Feb-Mar average April May
Repayment dynamics (instalment)
Repayment dynamics graphs represent cumulative sum of payments and extensions performed at under 30 DPD as a of amounts due in the prior month For example May line shows progress by day in May of repaymentextension of amounts that were due at any time in April and performed within 30 days of the due date
Payment deferral take-up in selected markets( of eligible portfolio by value)
Poland 2
Spain 3
Denmark 1
Baltics 1
Czech Republic 12
Armenia 17
TBI consumer 12
TBI SME 43
Day number in relevant month Day number in relevant month
17
Pro-active response to Covid-19 across the business with good resultsbull Rapidly adapted operations to home working ensuring employee safety and continuous services for customersbull Focus on risk management but remained ldquoopen for businessrdquo in AprilMay particularly for our returning customersbull Customer repayment behaviour within normal ranges in AprilMay with proactive support offered for customers who have
been impacted
Well positioned to lsquoweather the stormrsquo and take advantage of subsequent opportunitiesbull Key decisions taken to streamline footprint focus on larger markets and right-size cost basebull Continued development of near-prime business both on product side (Latvia Lithuania Sweden launches) and TBI Bank
funding side (Lithuania passport application)bull Encouraging demand and issuance trends in May (22 increase in online loans issued vs April) with improvement
expected to continue in June
Strong balance sheet and funding position with further action being takenbull Strong liquidity position in both lsquoonlinersquo and TBI Bankbull Strong cashflow generation deployed in significant bond buybacks to reduce leveragebull Consultations underway on potential extension to EUR 2021 bonds to allow financial results and markets to normalise
prior to long term refinancing
Summary
4finance a multi-segment multi-product consumer credit specialist
18
Thank you and Questions
19
Appendix ndash responsible lending and regulatory overview
20
Sustainability through good governance and responsible lendingOperating as a mainstream consumer finance business
bull ldquoBank-likerdquo policies and procedures with strong compliance function
bull Continued investment in AML GDPR and other strategic compliance priorities
bull Robust corporate governance with strong Supervisory Board
bull Increasingly regulated by main financial supervisory authorities
bull Diversification of portfolio and consequent reduction of reliance on single payment loans
bull Clear corporate values and code of conduct
bull Listed bond issues with quarterly financial reporting
Developing meaningful and constructive regulatory relationships
bull Ensuring we understand the regulatory arc
bull Helping regulators and legislators gain a solid understanding of our business
bull Ensuring we have a seat at the table
bull Contributing to EU Consumer Credit Directive consultation process
bull Continuous improvements in credit underwriting
bull Ensuring products are used appropriately
bull Working to ensure customers have safe landings when they signal difficulties
21
Regulatory overviewCountry
of interest income(Q1 2020)
Products (1) Regulator CB (2) Licenserequired (3)
Interest rate cap (1) Status
Argentina 1 SPL Consumer Protection Directorate - - -
Armenia 2 LOC Central Bank of the Republic of Armenia Yes Yes Nominal
Bulgaria ndash Online 2 SPL Bulgarian National BankYes Yes APR
(inc fees) Stable frameworkBulgaria ndash Bank 13 IL LOC POS SME
Czech Republic 5 SPL IL Czech National Bank Yes Yes - Stable framework
Denmark 11 LOC IL FSA and Consumer Ombudsman Yes YesAPR amp TCOC
being introduced
Danish FSA licensing process ongoing New regulations regarding interest rate caps (35 APR cap 100 cost of credit cap) and marketing restrictions in final stages of review Expected to start in July
Finland 1 IL(4) Finnish Competition and Consumer Authority - - Nominal
amp fees
New interest rate caps in force from September 2019 Further discussions on temporary reduction to 10 are ongoing
Latvia 5 MTP IL Consumer Rights Protection Centre - Yes Nominal fees amp TCOC
Stable framework since new interest rate caps in July 2019
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards MTP ndash Minimum to pay POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit(2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement(4) lsquoMini-ILrsquo (4 monthly instalments) from September 2019
22
Regulatory overview (continued)Country
of interest income
(Q1 2020)Products (1) Regulator CB (2) License
required (3)Interest rate
cap (1) Status
Lithuania 2 SPL IL Central Bank of Lithuania Yes Yes Nominal fees amp TCOC Stable framework
Mexico 1 IL National Financial Services Consumer Protection Commission - Yes - Stable framework
Poland 23 SPL IL Office of Competition and Consumer Protection - - Nominal fees
amp TCOC
Non-interest cost caps adjusted in April for one year to 15 fixed and 6 annual with a 45 total limit
Romania 10 IL LOC POS SME National Bank of Romania Yes Yes - Bill to introduce interest rate cap under discussion
Slovakia lt1 SPL National Bank of Slovakia Yes Yes APR (inc fees) Stable framework
Spain 22 SPL IL NA - - -
Sweden 1 LOC IL Swedish Financial Supervisory Authority Yes Yes Nominal amp
TCOCStable framework since new interest rate caps in September 2018
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit (2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement
23
Appendix ndash strategic evolution of portfolio
24
Evolving and broadening our business model
Prime
Sub-Prime
Near-Prime
Segments
Higher Duration Lower APR Products
SPL ILLOC POS
A multi-segment multi-product consumer credit specialist
1
1 Optimise
2 2 Diversify amp Grow
Illustrative
25
Evolution of product mix
Note (1) Reflects reclassification of Vivus brand products in Sweden (from January 2016) Denmark (from January 2017) Armenia (from launch in July 2017) and short-term products (SMS Credit amp Ondo) in Latvia (from January 2019) to Lines of Credit
68
17
3
9
29
45
18
11
0
25
50
75
100
30 Jun 2016 31 Mar 2020
SME (Bank)
Point of Sale
Instalment loans
Line of Credit Cards
Single Payment Loans
euro543meuro323m
Net receivables by product (1)
Online sub-prime only
Bank and onlinenear-prime
and sub-prime
76
48
4
14
20
29
7
0
25
50
75
100
Q1 2016 Q1 2020
Interest income by product (1)
euro97meuro90m
Date chosen to reflect the composition of loan portfolio immediately prior to purchase of TBI Bank
26
Funding near-prime growth via TBI Bank
Online acquisition Retail deposit funding
Initial portfolio development
Early stage customer acquisition and credit metrics monitored and
enhanced
Funding Platform
In-house IT funding platform ensuring ongoing automated
portfolio transfers
Bringing portfolios to scale
Market specific portfolios grow with ongoing sales to reach scale
True saleof portfolio(s)loan servicing
Indicative APRs
20-40
CostIncome ratio
c40
Cost of Risk
6-8
Cost of Funds
3-5
Return on Assets
3-5(2)
Illustrative near-prime
ldquounit economicsrdquo(1)
Notes(1) Illustrative metrics for near-prime portfolios and not indicative of a specific product or market(2) Illustrative potential returns in medium-term at scale
Payment of fair market value
bull Regular sales of Polish instalment loans since September 2019bull Passporting application submitted for Lithuania (largest near-prime portfolio)
Accessing TBI Bank deposit funding for lsquoonlinersquo portfolios via ongoing loan sales
27
Asset quality and provisioning ndash loan principal
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Interest Income 966 1065 (9)Interest Expense (127) (150) (16)Net Interest Income 839 915 (8)Net FampC Income 24 21 12Other operating income 23 22 7Non-Interest Income 47 43 10Operating Income (Revenue) 886 957 (7)Total operating costs (467) (498) (6)Pre-provision operating profit 419 459 (9)Net impairment charges (312) (324) (4)Post-provision operating profit 107 135 (21)Depreciation and amortisation (32) (32) +0Non-recurring income(expense) (39) (01) nmNet FX gain(loss) (34) 16 nmProfit before tax 02 119 nmIncome tax expense (27) (62) (57)Net profit(loss) after tax (25) 57 nm
Adjusted EBITDA 233 294 (21)
Income Statement
30
Balance sheetIn millions of euro
31 March 2020 (unaudited)
31 December 2019
Cash and cash equivalents of which 1560 1257- Online 834 767- TBI Bank 725 490
Placements with other banks 127 64Gross receivables due from customers 7042 7337Allowance for impairment (1616) (1548)Net receivables due from customers of which 5426 5789
- Principal 5147 5480- Accrued interest 277 309
Net investments in finance leases 45 47Net loans to related parties 594 607Property and equipment 182 178Financial investments 502 564Prepaid expenses 40 45Tax assets 174 213Deferred tax assets 353 330Intangible IT assets 168 178Goodwill 165 165Other assets 392 295Total assets 9727 9731Calculation for Presentation other assets (not loans Loans and borrowings 3849 3846Deposits from customers 3333 3222Deposits from banks 95 130Corporate income tax payable 124 95Other liabilities 718 780Total liabilities 8119 8074Share capital 358 358Retained earnings 1628 1657Reserves (378) (357)Total attributable equity 1608 1658Non-controlling interests 00 (00)Total equity 1608 1658Total shareholders equity and liabilities 9727 9731
Balance Sheet
31
Statement of Cash FlowsIn millions of euro
2020 2019Cash flows from operating activitiesProfit before taxes 02 119
Adjustments forDepreciation and amortisation 32 32
Impairment of goodwill and intangible assets - -
Net (gain) loss on foreign exchange from borrowings and other monetary items 131 63
Impairment losses on loans 364 359
Reversal of provision on debt portfolio sales (20) 01
Write-off and disposal of intangible and property and equipment assets 01 01
Interest income from non-customers loans (19) (19)
Interest expense on loans and borrowings and deposits from customers 127 150Non-recurring finance cost 32 -
Other non-cash items 14 0
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663 707
Adjustments forChange in financial instruments measured at fair value through profit or loss (137) (82)(Increase) decrease in other assets (including TBI statutory reserve placements amp leases) (09) (15)
Increase (decrease) in accounts payable to suppliers contractors and other creditors (39) (81)
Operating cash flow before movements in portfolio and deposits 479 530
Increase in loans due from customers (132) (468)
Proceeds from sale of portfolio 71 161
Increase in deposits (customer and bank deposits) 77 74
Deposit interest payments (15) (10)
Gross cash flows from operating activities 481 288
Corporate income tax paid (06) (63)
Net cash flows from operating activities 475 225
3 months to 31 March In millions of euro
2020 2019
Cash flows used in investing activitiesPurchase of property and equipment and intangible assets (15) (13)
Net cash from Purchase Sale of financial instruments 39 (118)
Loans issued to related parties - -
Loans repaid from related parties 0 40
Interest received from related parties 31 01
Disposal of subsidiaries net of cash disposed (13) -
(Acquisition)Disposal of equity investments (14) -
Acquisition of non-controlling interests (04) (04)
Net cash flows from investing activities 25 (94)
Cash flows from financing activitiesLoans received and notes issued - 0
Repayment and repurchase of loans and notes (164) (133)
Interest payments (06) (35)
FX hedging margin 14 82
Payment of lease liabilities (11) (1)
Dividend payments - -
Net cash flows used in financing activities (167) (95)
Net increase (decrease) in cash and cash equivalents 333 35
Cash and cash equivalents at the beginning of the period 985 1488
Effect of exchange rate fluctuations on cash (01) 0
Cash and cash equivalents at the end of the period 1318 1524
TBI Bank minimum statutory reserve 242 354
Total cash on hand and cash at central banks 1560 1878
3 months to 31 March
Cash Flow
Cash Flow (2)
Cash Flow
Cash Flow (2)
32
Key financial ratiosQ1 2020 Q1 2019
CapitalisationEquity assets 165 161Equity net receivables 296 299Adjusted interest coverage 18x 20xTBI Bank consolidated capital adequacy 188 210
ProfitabilityNet interest margin
- Online 764 802- TBI Bank 246 252- Overall group 500 557
Cost income ratio 527 520Normalised Profit before tax margin 111 127Normalised Return on average equity 118 104Normalised Return on average assets 20 17
Asset qualityCost of risk
- Online 295 289- TBI Bank 47 45- Overall group 174 184
Net impairment interest income 323 304Gross NPL ratio
- Online 283 227- TBI Bank 160 173- Overall group 222 204
Overall group NPL coverage ratio 1035 1064
See appendix for definitions of key metrics and ratios
key ratios
33
GlossaryDefinitionsbull Adjusted EBITDA ndash a non-IFRS measure that represents EBITDA (profit for the period plus tax plus interest expense plus depreciation and amortization) as adjusted by incomeloss from discontinued operations non-cash gains and losses
attributable to movement in the mark-to-market valuation of hedging obligations under IFRS goodwill write-offs and certain other one-off or non-cash items Adjusted EBITDA as presented here may not be comparable to similarly-titled measures that are reported by other companies due to differences in the way these measures are calculated Further details of covenant adjustments can be found in the relevant bond prospectuses available on our website
bull Adjusted interest coverage ndash Adjusted EBITDA interest expense for the relevant period (nb not equal to the full covenant coverage ratio calculation)
bull Cost of risk ndash Annualised net impairment loss average gross receivables (total gross receivables as of the start and end of each period divided by two)
bull Cost income ratio ndash Operating costs operating income (revenue)
bull Equity assets ratio ndash Total equity total assets
bull Equity net receivables ndash Total equity net customer receivables (including accrued interest)
bull Gross NPL ratio ndash Non-performing receivables (including accrued interest) with a delay of over 90 days gross receivables (including accrued interest)
bull Gross receivables ndash Total amount receivable from customers including principal and accrued interest after deduction of deferred income
bull Intangible assets ndash consists of deferred tax assets intangible IT assets and goodwill
bull Interest income ndash Interest and similar income generated from our customer loan portfolio
bull Loss given default ndash Loss on non-performing receivables (ie 1 - recovery rate) based on recoveries during the appropriate time window for the specific product reduced by costs of collection discounted at the weighted average effective interest rate
bull Net effective annualised yield ndash annualised interest income (excluding penalties) average net loan principal
bull Net impairment to interest income ratio ndash Net impairment losses on loans and receivables interest income
bull Net interest margin ndash Annualised net interest income average gross loan principal (total gross loan principal as of the start and end of each period divided by two)
bull Net receivables ndash Gross receivables (including accrued interest) less impairment provisions
bull Non-performing loans (NPLs) ndash Loan principal or receivables (as applicable) that are over 90 days past due (and for TBI Bank shown on a customer level basis)
bull Normalised ndash Adjusted to remove the effect of non-recurring items net FX and one-off adjustments to intangible assets and for 2018 ratios only adjusted to reflect the opening balance of 2018 balance sheet after IFRS 9 effects
bull Profit before tax margin ndash Profit before tax interest income
bull Return on Average Assets ndash Annualised profit from continuing operations average assets (total assets as of the start and end of each period divided by two)
bull Return on Average Equity ndash Annualised profit from continuing operations average equity (total equity as of the start and end of each period divided by two)
bull Return on Average Tangible Equity ndash Annualised profit from continuing operations average tangible equity (tangible equity as of the start and end of each period divided by two)
bull Tangible Equity ndash Total equity minus intangible assets
bull TBI Bank Capital adequacy ratio ndash (Tier One Capital + Tier Two Capital) Risk weighted assets (calculated according to the prevailing regulations of the Bulgarian National Bank)
34
Contacts
Investor Relationsinvestorrelations4financecom
James EtheringtonHead of Investor RelationsPhone +44 7766 697 950E-mail jamesetherington4financecom
Paul GoldfinchChief Financial OfficerPhone +371 2572 6422E-mail paulgoldfinch4financecom
Headquarters17a-8 Lielirbes street Riga LV-1046 Latvia
4finance Holding SA
Disclaimer
Agenda
Q1 2020 business and financial highlights
Slide Number 5
Current trading and outlook
Review of three month 2020 results
Summary of three month 2020 results
Interest income remains well diversified
Slide Number 10
Strong financial profile ndash stability and profitability
Funding strategy
Diversified loan portfolio
Analysis of net impairments and cost of risk
Asset quality and provisioning
Recent collections performance
Slide Number 17
Thank you and Questions
Appendix ndash responsible lending and regulatory overview
Sustainability through good governance and responsible lending
Regulatory overview
Regulatory overview (continued)
Appendix ndash strategic evolution of portfolio
Evolving and broadening our business model
Evolution of product mix
Slide Number 26
Asset quality and provisioning ndash loan principal
Appendix ndash financials and key ratios
Slide Number 29
Balance sheet
Statement of Cash Flows
Slide Number 32
GlossaryDefinitions
Contacts
Q12018
Q1 2020
9M 2018
Q1 2019
FY 2017
Net receivables (eurom) of which
5426
5408
5477
- Principal
272
5147
5144
5165
208
- Accrued interest
98
279
265
312
39
Total assets (eurom)
9724
10238
10147
Total equity (eurom)
221
1605
1607
1637
335
Capitalisation
Equity assets
147
165
157
161
127
Equity net receivables
195
296
297
299
267
Adjusted interest coverage
233
18x
25x
20x
223
TBI Bank consolidated capital adequacy
231
188
241
210
239
240
Profitability
Q12018
Net interest margin
- Online
764
882
802
- TBI Bank
246
280
252
- Overall group
500
648
557
Cost income ratio
527
520
520
Post-provision operating profit margin
145
166
177
Normalised Profit before tax margin
111
154
127
Normalised Return on average equity
118
375
104
Normalised Return on average assets
20
56
17
Asset quality
Cost of risk
- Online
295
237
289
- TBI Bank
47
86
45
- Overall group
174
181
184
Net impairment interest income
323
259
304
Gross NPL ratio
- Online
283
222
227
- TBI Bank
160
154
173
- Overall group
222
196
204
Overall group NPL coverage ratio
1035
1156
1064
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
505
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(06)
57
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
50
199
199
(248)
(301)
0800
Impairment losses on loans
1485
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(120)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(73)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
568
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
09
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2599
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
108
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(11)
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2637
2840
2840
1756
2279
00
Increase in loans due from customers
(2248)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1453
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1120
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(15)
(13)
(84)
(128)
(131)
(21)
Net cash from Purchase Sale of financial instruments
39
(118)
(136)
mdash
Repayment of financial instrument
-
-
Loans issued to related parties
-
-
(26)
(06)
(43)
(23)
Loans repaid from related parties
0
40
74
23
109
54
Interest received from related parties
31
01
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
00
(01)
0-
mdash
Disposal of subsidiaries net of cash disposed
(13)
-
(59)
(45)
(44)
mdash
(Acquisition)Disposal of equity investments
(14)
-
Acquisition of non-controlling interests
(04)
(04)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
-
-
mdash
0-
(00)
Prepayment for potential acquisition
-
00
208
0-
(208)
mdash
Acquisition of shares
-
00
00
Net cash flows from investing activities
25
(94)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
0
05
2999
1637
05
Repayment and repurchase of loans and notes
(164)
(133)
(272)
(1737)
(580)
(01)
Interest payments
(06)
(35)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
-
00
(00)
(192)
(58)
mdash
FX hedging margin
14
82
42
(140)
(88)
Payment of lease liabilities
(11)
(1)
mdash
Dividend payments
-
-
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(167)
(95)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
333
35
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
985
1488
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
(01)
0
01
10
10
03
Cash and cash equivalents at the end of the period
1318
1524
1488
2040
1319
681
TBI Bank minimum statutory reserve
242
354
234
230
230
242
Total cash on hand and cash at central banks
1560
1878
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
02
119
526
495
107
17000
Adjustments for
Depreciation and amortisation
32
32
121
64
83
1700
Impairment of goodwill and intangible assets
-
-
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
131
63
199
(248)
(301)
0800
Impairment losses on loans
364
359
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(20)
01
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
01
01
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(19)
(19)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
127
150
621
455
619
13300
Non-recurring finance cost
32
-
mdash
mdash
63
Other non-cash items
14
0
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663
707
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(137)
(82)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
(09)
(15)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(39)
(81)
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
479
530
2840
1756
2279
00
Increase in loans due from customers
(132)
(468)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
71
161
819
333
542
160
Increase in deposits (customer and bank deposits)
77
74
165
265
338
110
Deposit interest payments
(15)
(10)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
481
288
1233
524
442
(535)
Corporate income tax paid
(06)
(63)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
475
225
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(83)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(196)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
Q12018 (unaudited)
31 March 2020 (unaudited)
1 January 2018 (post IFRS 9 unaudited)
31 December 2019
Cash and cash equivalents of which
1538
1560
1549
1257
- Online
535
834
658
767
- TBI Bank
1003
725
892
490
Placements with other banks
57
127
70
64
Gross receivables due from customers
7156
7042
6588
7337
Allowance for impairment
(1665)
(1616)
(1575)
(1548)
Net receivables due from customers of which
5491
5426
5013
5789
- Principal
5147
5026
5480
- Accrued interest
277
264
309
Net investments in finance leases
93
45
105
47
Net loans to related parties
631
594
598
607
Property and equipment
96
182
101
178
Financial investments
183
502
184
564
Prepaid expenses
87
40
108
45
Tax assets
212
174
221
213
Deferred tax assets
371
353
368
330
Intangible IT assets
281
168
286
178
Goodwill
214
165
214
165
Other assets
678
392
573
295
Total assets
9932
9727
9390
9731
Calculation for Presentation - other assets (not loans or cash)
Loans and borrowings
4672
3849
3794
3846
Deposits from customers
2728
3333
2710
3222
Deposits from banks
94
95
mdash
130
Corporate income tax payable
178
124
198
95
Other liabilities
799
718
765
780
Total liabilities
8471
8119
7466
8074
Share capital
358
358
358
358
Retained earnings
1475
1628
1350
1657
Reserves
(343)
(378)
(323)
(357)
Total attributable equity
1490
1608
1385
1658
Non-controlling interests
(28)
00
(24)
(00)
Total equity
1461
1608
1362
1658
Total shareholders equity and liabilities
9932
9727
8828
9731
In millions of euro
Q1 2020 (unaudited)
Q1 2019 (unaudited)
change YoY
Interest Income
966
1065
(9)
Interest Expense
(127)
(150)
-(16)
1000000
Net Interest Income
839
915
(8)
Net FampC Income
24
21
12
Other operating income
23
22
7
Non-Interest Income
47
43
10
Operating Income (Revenue)
886
957
(7)
Personnel costs
(221)
(221)
(0
Discretionary bonus
(18)
(19)
(6)
Marketing
(91)
(96)
(5)
IT costs
(39)
(45)
(12)
DampA costs
(35)
(32)
+8
Other costs
(98)
(118)
(17)
Total operating costs
(467)
(498)
(6)
Pre-provision operating profit
419
459
(9)
Net impairment charges
(312)
(324)
-(4)
manual
Post-provision operating profit
107
135
(21)
Depreciation and amortisation
(32)
(32)
-+0
manual
Non-recurring income(expense)
(39)
(01)
nm
Non-recurring finance cost
mdash
mdash
+0
Net FX gain(loss)
(34)
16
nm
One-off adjustments to intangible assets
-
-
(0)
manual
Profit before tax
02
119
nm
Income tax expense
(27)
(62)
-(57)
manual
Net profit(loss) after tax
(25)
57
nm
manual
Adjusted EBITDA
233
294
-(21)
Costincome ratio
527
520
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online principal
Performing (1)
2347
(357)
1990
737
2634
(397)
2237
774
3177
(493)
2684
791
(22139)
3177
(302)
2875
681
(191)
150128837891005
Non-performing (2)
836
(656)
181
263
770
(590)
180
226
840
(664)
175
209
(74878)
36947
1488
(983)
505
319
-648
319
-64836054
-250544747891005
Online total
3184
(1013)
2171
1000
3404
(987)
2417
1000
4017
(1158)
2859
1000
4665
(1286)
3379
1000
(74878)
14808
TBI Bank principal
Performing (1)
2853
(121)
2732
840
2896
(118)
2778
838
2090
(68)
2022
873
(2586)
2090
(43)
2047
873
(25)
-251961477
Non-performing (2)
541
(298)
244
160
558
(274)
284
162
303
(158)
145
127
0437
303
(162)
141
127
04
42578177
TBI Bank total
3394
(418)
2976
1000
3454
(392)
3062
1000
2393
(226)
2167
1000
-
(2149)
2393
(205)
2188
1000
Overall group principal
Performing (1)
5200
(478)
4722
791
5529
(515)
5015
806
5267
(562)
4706
822
-
(24725)
5267
(345)
4922
746
Non-performing (2)
1378
(953)
424
209
1328
(864)
465
194
1142
(822)
320
178
(74878)
37384
1791
(1145)
646
254
Overall total
6578
(1431)
5147
1000
6858
(1378)
5480
1000
6410
(1384)
5026
1000
(74878)
12659
7058
(1490)
5567
1000
31122018 data updated post audit
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
IFRS 9 ADJ part
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online receivables
Performing (1)
2553
(412)
2141
717
2855
(456)
2399
751
3432
(567)
2864
778
(22139)
3432
(346)
3086
665
00
221
-150
Non-performing (2)
1006
(775)
232
283
946
(691)
255
249
977
(775)
201
222
(74878)
36947
1725
(1145)
580
335
749
(369)
250
Online total
3559
(1187)
2373
1000
3801
(1147)
2654
1000
4408
(1343)
3065
1000
5157
(1491)
3666
1000
(148)
NPL (90+)
(74878)
14808
TBI Bank receivables
Performing (1)
2927
(124)
2803
840
2964
(120)
2844
838
2145
(70)
2075
873
(2586)
2145
(44)
2101
873
00
26
120
Non-performing (2)
556
(305)
250
160
571
(280)
291
162
311
(162)
149
127
0437
311
(166)
145
127
00
(04)
-20
TBI Bank total
3482
(429)
3053
1000
3535
(401)
3135
1000
2456
(232)
2224
1000
-
(2149)
2456
(210)
2246
1000
21
Overall group receivables
Performing (1)
5480
(536)
4944
778
5819
(577)
5242
793
5577
(637)
4939
812
-
(24725)
5577
(390)
5187
733
Non-performing (2)
1562
(1080)
482
222
1517
(971)
546
207
1287
(937)
350
188
(74878)
37384
2036
(1311)
725
267
Overall total
7042
(1616)
5426
1000
7337
(1548)
5789
1000
6864
(1575)
5290
1000
(74878)
12659
7613
(1701)
5912
1000
31122018 changed to audited figures
3
Agenda
bull Business update
bull Review of three month 2020 results
bull Loan portfolio and asset quality
bull Summary
4
bull Solid initial start to year prior to impact of Covid-19bull Jan-Feb broadly in line with expectations strong start by TBI Bankbull Online near-prime traction with new product upgradeslaunchesbull Over half of net receivables (51) now lsquonear-primersquo
bull Rapid operational response to Covid-19bull Over 2000 staff in 16 countries moved to home workingbull Focus on employee safety and providing continuous servicebull Now gradually returning to offices depending on local situation
bull Continued to serve and support our loyal online customersbull Rapid adjustments to underwriting scorecards particularly for new
customers but maintained availability of credit to suitably qualified returning customers
bull Generally solid loan repayment data in AprilMaybull Proactive support for those who need it (payment deferrals etc)
supplemented by regulatory measures
bull Prudent balance sheet and liquidity managementbull Strong cash generation in April amp May with lower loan issuancebull Significant repurchases of bonds below parbull ceuro90m of lsquoonlinersquo cash at end Maybull Strong capital ratios and liquidity at TBI Bank
Q1 2020 business and financial highlights
(9) YoYeuro233m
Adjusted EBITDA
(21) YoY
+17
TBI consumer loan issuance
YoY increase+64
Online near-prime loan issuance
YoY increase
Interest income
euro966m
5
Operational overview for key marketsRegulatory measures of interest
income Q1 Operational response
Poland bull Temporary reduction in non-interest cost caps to 15 fixed 6 annual (from 25 amp 30)
bull Nominal interest rate cap to 72 (from 10)bull ldquoAnti crisis shieldrdquo regulations in development
(payment deferrals but for instalment loans only)
23 bull 1-3 month payment deferrals introduced voluntarily in line with association guidelines Limited requests so far
bull Adapted single payment product to new pricing overnightbull Relaunched instalment loan product as a 3-month loan
Current trading and outlookbull Early indications of demand in recent weeks have been
encouraging with May online issuance 23 above Aprilbull Issuance levels of shorter-term products for returning customers are
back to nearly 75 of Jan-Feb levelsbull Spain remained at a lower issuance level but improving in late Maybull Denmark demand already returned to more normal levels in May
Record for daily applications in 2020 set last week
bull Strong near-prime progress with product enhancements in Latvia Lithuania and Swedenbull Carefully moderated underwriting and marketing spend post Covid-19bull Development of funding via TBI Bank continuesbull 51 of net loan portfolio is near-prime consumer lending
bull Decisions taken already on business footprint and cost reductionbull Latin America and Finlandbull Significant headcount reductions across the network
bull Significant medium-term opportunitiesbull Potentially larger lsquonon-primersquo market sizebull Potential competitive dislocation in many markets
Weekly issuance of short-term products (rebased to 100 as Jan-Feb average)
Week number
FebruaryJanuary March April May
Includes single payment loans and lines of credit
7
Review of three month 2020 results
8
bull Solid initial start to the year with January and February largely in line with management expectationsbull Follows Q4 a naturally seasonally strong quarter especially at TBI Bank
bull Q1 2020 interest income down 9 Adjusted EBITDA of euro233m down 21 year-on-year bull Half of QoQ interest income change from products that have been discontinued
de-emphasised (eg instalment loans in Poland amp Armenia)bull Main Covid-19 impact on Q1 financials additional ceuro3m of net impairmentsbull Post-provision operating profit of euro107m vs euro135m in Q1 2019
bull Continued progress on cost reductionbull Year-on-year reduction in costs of 6 from existing cost efficiency programmesbull Additional measures taken post Covid-19
bull Strong operating cashflow and robust cash positionbull Operating cashflow before movements in portfolio amp deposits of euro479mbull Significant bond repurchases made in March and April ($359m of USD bonds)bull Current ldquoonlinerdquo cash levels after May coupons remain strong at ceuro90m
bull Overall stable risk performance although delayed debt sales did impact the NPL ratiobull Overall gross NPL ratio of 222 (vs 207 as of Dec 2019)bull Net impairmentinterest income at 323 for Q1 2020 (vs 304 in Q1 2019)
Adjusted EBITDAeurom
Summary of three month 2020 results
Interest Incomeeurom
See appendix for definitions of key metrics and ratios
Q4 2019 costs have been adjusted to reflect audited figuresEstimated Covid-19 impact comprises -euro1m of interest income reduction +euro02m marketing cost savings and -euro31m additional impairment
Year-on-year comparison
eurom
Quarter-on-quarter bridge for Adjusted EBITDA
294
233
Q1 2019 Q1 2020
1065
966
Q1 2019 Q1 2020
-9-21
9
7
13
23
22
25
8
2
Baltics
Nordics
Poland
Spain
BGRO
Other Europe
Latin America
Interest income remains well diversified
Interest income by country
1065
966
euro0m
euro20m
euro40m
euro60m
euro80m
euro100m
euro120m
Q1 2019 Q1 2020
Other MexicoArgentinaArmeniaSlovakiaCzech RepublicRomaniaBulgariaSpainPolandDenmarkSwedenFinlandLithuaniaLatvia
-9
2020 interest income euro966m
Other represents countries exited during 2018 (Dominican Republic and Georgia)
10
472 459
387 410 385 386 372 383341
10198
107112
113 117109
117
126
3733
1615
54 53
49
52 52 5250 51
53
0
10
20
30
40
50
60
00
100
200
300
400
500
600
700
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
4finance TBI Friendly Finance Quarterly costincome ratio
Operating cost driversbull Operating costs down 6 year-on-year vs revenue down 7
bull Q1 2020 costincome ratio at 527 compared to 520 in Q1 2019
bull Some cost reduction effect from IFRS 16 impacting comparison with 2018 data
bull Seasonal increase in marketing spend in Q4 reduced in Q1 with some early impact of Covid-19 reductions
bull Investment in TBI Bank to support growth
bull Cost efficiency projects ongoing with focus on costincome ratiobull Headcount reduction of 5 year-on-yearbull Lower above-the-line marketing spend due to efficiency savings
from econometric modelling
bull Additional actions taken post Covid-19 bull Further headcount reductions of c20 of online business
personnel costs to align cost structure with market and product footprint
Notes(1) Q4 2018 costs have been adjusted to reflect audited figures(2) Q4 2019 costs have been adjusted to reflect audited figures
Total operating costs (1)
eurom
2018(1)
See appendix for definitions of key metrics and ratios
2019 (2) 2020
11
135149
124
29 23
2017 2018 2019 Q1 2019 Q1 2020
eurom
81
11
53 51
120
2016 2017 2018 2019 Q1 2019 Q1 2020
Profit before tax
1814 16 17 16 17
2017 1 Jan2018
2018 2019 Q1 2019 Q1 2020
Strong financial profile ndash stability and profitabilityInterest income
448475
425
106 97
2017 2018 2019 Q1 2019 Q1 2020
Adjusted EBITDA Equity assets ratio
22x24x
22x20x 18x
2017 2018 2019 Q1 2019 Q1 2020
Adjusted interest coverage ratio (1)
32
2628 29 30 30
2017 1 Jan 2018 2018 2019 Q1 2019 Q1 2020
Equity net receivables (2)
eurom
eurom
Post IFRS 9
Post IFRS 9
Times
Note (1) The full covenant calculation of interest coverage ratio is based on proforma last twelve month figures and is currently 25x(2) The full covenant calculation of equitynet loans includes related party loans and finance leases and is currently 27
12
Funding strategy
Overview of funding structure 31 March 2020 (2)
2021 Notes194
2022 Notes335
4finance customer deposits
16
TBI customer deposits
442
TBI deposits from banks13
Notes(1) Represents the principal value of public bonds outstanding that comes due in each respective period net of buybacks and bonds owned by TBI Bank(2) The chart reflects the principal and accrued interest amounts of each of the instruments net of buybacks and bonds owned by TBI Bank
euro7277m
Strategy to diversify sources of funding and reduce overall funding cost over time
bull Strong cash generation and cash positionbull Cash generated from portfolio in Q1 and AprilMaybull Online cash ceuro90m at end May (after coupons and buybacks)bull TBI Bank increased deposit levels in Q1 and has strong liquidity ratios
bull Accessing TBI Bank balance sheet to fund online loansbull Successful initial portfolio sales of Polish instalment loans H2 2019bull Passport application for Lithuania to support portfolio sales from that
market submitted in April due to start in Q3
bull Further de-leveraging already achieved in 2020bull $359m of USD 2022 bonds and euro11m of EUR 2021 bonds purchased in
2020 year-to-datebull Proforma covenant interest expense reduced by 18 year-on-yearbull Retain ongoing flexibility to buy back bonds with spare liquidity
bull Strong capital positionbull 30 equity net receivables ratiobull TBI Bank capital adequacy c22 after adoption of 2019 profit in April
bull Consultations underway on potential extension to EUR 2021 bondsbull Allows financial results and markets to normalise prior to refinancing
Debt maturity schedule proforma for 31 May 2020 (1)
eurom
0
146
217
0
2020 2021 2022 2023+
13
195 167 170 171 162 150
3747 48 47 47 38
3940 35 23 21
17
6 7 10 12 811
7758 65 72 90
69
364328 341 341 342
293
Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020
Single Payment loans Line of Credit Instalment loans Near Prime TBI bank SME (Bank)
211 199 171 131 101 89
18 4537
34 51 48
159
242215
255 260 247
58
64
63 83 10398
47
42
42 49 6460492
591529 553 579
543
00
1500
3000
4500
6000
7500
2016 2017 1 Jan 2018 2018 2019 31 Mar 2020
Single Payment loans Line of Credit Cards Instalment loans Point of Sale SME (Bank)Baltics11
Nordics6
Poland16
Spain6
CZSK 2GEAM
1LatAm 05
BG (online)05
Bulgaria (TBI)25
Romania (TBI) 20
SME (TBI)11
Diversified loan portfolioNet receivables (1)
Net receivables 31 March 2020
Notes (1) Reflects reclassification of former SPL products in Sweden (from January 2016) Denmark (from January 2017) Armenia (from launch in July 2017) and Latvia (from January 2019) to Lines of Credit
bull Selective approach to new loan issuance
bull Overall net receivables totals euro542mbull 4 reduction during Q1 bull 89 consumer loansbull 43 online loans 57 banking
TBI Bank 57(funded clt2)
Online 43(funded c12)
eurom
See appendix for definitions of key metrics and ratios Includes TBI bank BG online and euro18m of purchased Poland portfolio Introduction of IFRS 9 as of 1-Jan-2018 reduced net receivables by euro62 million to euro529 million
Online loans issued (1)
eurom
14
486 464426 413
359 373 376 379 364
(55) (52) (42) (45) (36) (34) (34) (32) (31)
(67)(143)
(78) (77)
01
(57)(23) (41) (20)
364
269305 291
324281
319 307 312
-600
-500
-400
-300
-200
-100
00
100
200
300
400
-200
-150
-100
-50
00
50
100
150
200
250
300
350
400
450
500
550
600
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Analysis of net impairments and cost of risk
bull Q1 2020 net impairment charges remain fairly elevatedbull Most products in line with expectations Some additional
provisions in Armenia IL portfolio (in run-off)bull Overall impact of Covid-19 increased net impairments by
approximately euro3 million in Q1 (higher macro provisions delayed debt sales some impact on delay indicators)
bull Overall cost of risk relatively stablebull Overall cost of risk 174 (Q1 2020 including TBI Bank) vs 184
(Q1 2019)bull Online cost of risk 295 vs 289 (Q1 2019)bull Net impairment interest income 323 vs 304 (Q1 2019)
bull Proactive and ongoing adjustments to risk parameters across markets since mid-March
bull 63 changes to underwriting scorecardspoliciesbull 82 changes to debt collection scorecardspoliciesbull Ongoing regular reviews by market (eg Spain Poland)
Net impairment charges by quarter (1)
eurom
See appendix for definitions of key metrics and ratios
208 151
Gross impairments
Net impairment losses
Over provisioning on debt sales (net gainloss)
Recoveries from written off loans
174
2018166
Note (1) Q4 2018 and 2019 figures have been adjusted to reflect audited figures
2019184 160 Overall quarterly
cost of risk183 171 174
2020
15
Asset quality and provisioning bull Gross NPL ratios increased in lsquoonlinersquo due to delayed debt sales but asset quality relatively stable Coverage ratios remain over 100
bull Online gross NPL ratio 283 as of March 2020 compared with 249 as of December 2019bull Overall gross NPL ratio 222 as of March 2020 from 207 as of December 2019bull Some delayed debt sales already restarting in May including Poland
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Recent collections performancebull April and May repayment dynamics
in line with prior monthsbull April performance comparable
with Januarybull Improvement in May
bull Requests for payment deferrals either proactively offered by 4finance or offered in accordance with local regulation have been relatively limited
bull Main take-up in Czech Republic Armenia and TBI Bank
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
January Feb-Mar average April May
Repayment dynamics (single payment)
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
January Feb-Mar average April May
Repayment dynamics (instalment)
Repayment dynamics graphs represent cumulative sum of payments and extensions performed at under 30 DPD as a of amounts due in the prior month For example May line shows progress by day in May of repaymentextension of amounts that were due at any time in April and performed within 30 days of the due date
Payment deferral take-up in selected markets( of eligible portfolio by value)
Poland 2
Spain 3
Denmark 1
Baltics 1
Czech Republic 12
Armenia 17
TBI consumer 12
TBI SME 43
Day number in relevant month Day number in relevant month
17
Pro-active response to Covid-19 across the business with good resultsbull Rapidly adapted operations to home working ensuring employee safety and continuous services for customersbull Focus on risk management but remained ldquoopen for businessrdquo in AprilMay particularly for our returning customersbull Customer repayment behaviour within normal ranges in AprilMay with proactive support offered for customers who have
been impacted
Well positioned to lsquoweather the stormrsquo and take advantage of subsequent opportunitiesbull Key decisions taken to streamline footprint focus on larger markets and right-size cost basebull Continued development of near-prime business both on product side (Latvia Lithuania Sweden launches) and TBI Bank
funding side (Lithuania passport application)bull Encouraging demand and issuance trends in May (22 increase in online loans issued vs April) with improvement
expected to continue in June
Strong balance sheet and funding position with further action being takenbull Strong liquidity position in both lsquoonlinersquo and TBI Bankbull Strong cashflow generation deployed in significant bond buybacks to reduce leveragebull Consultations underway on potential extension to EUR 2021 bonds to allow financial results and markets to normalise
prior to long term refinancing
Summary
4finance a multi-segment multi-product consumer credit specialist
18
Thank you and Questions
19
Appendix ndash responsible lending and regulatory overview
20
Sustainability through good governance and responsible lendingOperating as a mainstream consumer finance business
bull ldquoBank-likerdquo policies and procedures with strong compliance function
bull Continued investment in AML GDPR and other strategic compliance priorities
bull Robust corporate governance with strong Supervisory Board
bull Increasingly regulated by main financial supervisory authorities
bull Diversification of portfolio and consequent reduction of reliance on single payment loans
bull Clear corporate values and code of conduct
bull Listed bond issues with quarterly financial reporting
Developing meaningful and constructive regulatory relationships
bull Ensuring we understand the regulatory arc
bull Helping regulators and legislators gain a solid understanding of our business
bull Ensuring we have a seat at the table
bull Contributing to EU Consumer Credit Directive consultation process
bull Continuous improvements in credit underwriting
bull Ensuring products are used appropriately
bull Working to ensure customers have safe landings when they signal difficulties
21
Regulatory overviewCountry
of interest income(Q1 2020)
Products (1) Regulator CB (2) Licenserequired (3)
Interest rate cap (1) Status
Argentina 1 SPL Consumer Protection Directorate - - -
Armenia 2 LOC Central Bank of the Republic of Armenia Yes Yes Nominal
Bulgaria ndash Online 2 SPL Bulgarian National BankYes Yes APR
(inc fees) Stable frameworkBulgaria ndash Bank 13 IL LOC POS SME
Czech Republic 5 SPL IL Czech National Bank Yes Yes - Stable framework
Denmark 11 LOC IL FSA and Consumer Ombudsman Yes YesAPR amp TCOC
being introduced
Danish FSA licensing process ongoing New regulations regarding interest rate caps (35 APR cap 100 cost of credit cap) and marketing restrictions in final stages of review Expected to start in July
Finland 1 IL(4) Finnish Competition and Consumer Authority - - Nominal
amp fees
New interest rate caps in force from September 2019 Further discussions on temporary reduction to 10 are ongoing
Latvia 5 MTP IL Consumer Rights Protection Centre - Yes Nominal fees amp TCOC
Stable framework since new interest rate caps in July 2019
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards MTP ndash Minimum to pay POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit(2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement(4) lsquoMini-ILrsquo (4 monthly instalments) from September 2019
22
Regulatory overview (continued)Country
of interest income
(Q1 2020)Products (1) Regulator CB (2) License
required (3)Interest rate
cap (1) Status
Lithuania 2 SPL IL Central Bank of Lithuania Yes Yes Nominal fees amp TCOC Stable framework
Mexico 1 IL National Financial Services Consumer Protection Commission - Yes - Stable framework
Poland 23 SPL IL Office of Competition and Consumer Protection - - Nominal fees
amp TCOC
Non-interest cost caps adjusted in April for one year to 15 fixed and 6 annual with a 45 total limit
Romania 10 IL LOC POS SME National Bank of Romania Yes Yes - Bill to introduce interest rate cap under discussion
Slovakia lt1 SPL National Bank of Slovakia Yes Yes APR (inc fees) Stable framework
Spain 22 SPL IL NA - - -
Sweden 1 LOC IL Swedish Financial Supervisory Authority Yes Yes Nominal amp
TCOCStable framework since new interest rate caps in September 2018
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit (2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement
23
Appendix ndash strategic evolution of portfolio
24
Evolving and broadening our business model
Prime
Sub-Prime
Near-Prime
Segments
Higher Duration Lower APR Products
SPL ILLOC POS
A multi-segment multi-product consumer credit specialist
1
1 Optimise
2 2 Diversify amp Grow
Illustrative
25
Evolution of product mix
Note (1) Reflects reclassification of Vivus brand products in Sweden (from January 2016) Denmark (from January 2017) Armenia (from launch in July 2017) and short-term products (SMS Credit amp Ondo) in Latvia (from January 2019) to Lines of Credit
68
17
3
9
29
45
18
11
0
25
50
75
100
30 Jun 2016 31 Mar 2020
SME (Bank)
Point of Sale
Instalment loans
Line of Credit Cards
Single Payment Loans
euro543meuro323m
Net receivables by product (1)
Online sub-prime only
Bank and onlinenear-prime
and sub-prime
76
48
4
14
20
29
7
0
25
50
75
100
Q1 2016 Q1 2020
Interest income by product (1)
euro97meuro90m
Date chosen to reflect the composition of loan portfolio immediately prior to purchase of TBI Bank
26
Funding near-prime growth via TBI Bank
Online acquisition Retail deposit funding
Initial portfolio development
Early stage customer acquisition and credit metrics monitored and
enhanced
Funding Platform
In-house IT funding platform ensuring ongoing automated
portfolio transfers
Bringing portfolios to scale
Market specific portfolios grow with ongoing sales to reach scale
True saleof portfolio(s)loan servicing
Indicative APRs
20-40
CostIncome ratio
c40
Cost of Risk
6-8
Cost of Funds
3-5
Return on Assets
3-5(2)
Illustrative near-prime
ldquounit economicsrdquo(1)
Notes(1) Illustrative metrics for near-prime portfolios and not indicative of a specific product or market(2) Illustrative potential returns in medium-term at scale
Payment of fair market value
bull Regular sales of Polish instalment loans since September 2019bull Passporting application submitted for Lithuania (largest near-prime portfolio)
Accessing TBI Bank deposit funding for lsquoonlinersquo portfolios via ongoing loan sales
27
Asset quality and provisioning ndash loan principal
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Interest Income 966 1065 (9)Interest Expense (127) (150) (16)Net Interest Income 839 915 (8)Net FampC Income 24 21 12Other operating income 23 22 7Non-Interest Income 47 43 10Operating Income (Revenue) 886 957 (7)Total operating costs (467) (498) (6)Pre-provision operating profit 419 459 (9)Net impairment charges (312) (324) (4)Post-provision operating profit 107 135 (21)Depreciation and amortisation (32) (32) +0Non-recurring income(expense) (39) (01) nmNet FX gain(loss) (34) 16 nmProfit before tax 02 119 nmIncome tax expense (27) (62) (57)Net profit(loss) after tax (25) 57 nm
Adjusted EBITDA 233 294 (21)
Income Statement
30
Balance sheetIn millions of euro
31 March 2020 (unaudited)
31 December 2019
Cash and cash equivalents of which 1560 1257- Online 834 767- TBI Bank 725 490
Placements with other banks 127 64Gross receivables due from customers 7042 7337Allowance for impairment (1616) (1548)Net receivables due from customers of which 5426 5789
- Principal 5147 5480- Accrued interest 277 309
Net investments in finance leases 45 47Net loans to related parties 594 607Property and equipment 182 178Financial investments 502 564Prepaid expenses 40 45Tax assets 174 213Deferred tax assets 353 330Intangible IT assets 168 178Goodwill 165 165Other assets 392 295Total assets 9727 9731Calculation for Presentation other assets (not loans Loans and borrowings 3849 3846Deposits from customers 3333 3222Deposits from banks 95 130Corporate income tax payable 124 95Other liabilities 718 780Total liabilities 8119 8074Share capital 358 358Retained earnings 1628 1657Reserves (378) (357)Total attributable equity 1608 1658Non-controlling interests 00 (00)Total equity 1608 1658Total shareholders equity and liabilities 9727 9731
Balance Sheet
31
Statement of Cash FlowsIn millions of euro
2020 2019Cash flows from operating activitiesProfit before taxes 02 119
Adjustments forDepreciation and amortisation 32 32
Impairment of goodwill and intangible assets - -
Net (gain) loss on foreign exchange from borrowings and other monetary items 131 63
Impairment losses on loans 364 359
Reversal of provision on debt portfolio sales (20) 01
Write-off and disposal of intangible and property and equipment assets 01 01
Interest income from non-customers loans (19) (19)
Interest expense on loans and borrowings and deposits from customers 127 150Non-recurring finance cost 32 -
Other non-cash items 14 0
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663 707
Adjustments forChange in financial instruments measured at fair value through profit or loss (137) (82)(Increase) decrease in other assets (including TBI statutory reserve placements amp leases) (09) (15)
Increase (decrease) in accounts payable to suppliers contractors and other creditors (39) (81)
Operating cash flow before movements in portfolio and deposits 479 530
Increase in loans due from customers (132) (468)
Proceeds from sale of portfolio 71 161
Increase in deposits (customer and bank deposits) 77 74
Deposit interest payments (15) (10)
Gross cash flows from operating activities 481 288
Corporate income tax paid (06) (63)
Net cash flows from operating activities 475 225
3 months to 31 March In millions of euro
2020 2019
Cash flows used in investing activitiesPurchase of property and equipment and intangible assets (15) (13)
Net cash from Purchase Sale of financial instruments 39 (118)
Loans issued to related parties - -
Loans repaid from related parties 0 40
Interest received from related parties 31 01
Disposal of subsidiaries net of cash disposed (13) -
(Acquisition)Disposal of equity investments (14) -
Acquisition of non-controlling interests (04) (04)
Net cash flows from investing activities 25 (94)
Cash flows from financing activitiesLoans received and notes issued - 0
Repayment and repurchase of loans and notes (164) (133)
Interest payments (06) (35)
FX hedging margin 14 82
Payment of lease liabilities (11) (1)
Dividend payments - -
Net cash flows used in financing activities (167) (95)
Net increase (decrease) in cash and cash equivalents 333 35
Cash and cash equivalents at the beginning of the period 985 1488
Effect of exchange rate fluctuations on cash (01) 0
Cash and cash equivalents at the end of the period 1318 1524
TBI Bank minimum statutory reserve 242 354
Total cash on hand and cash at central banks 1560 1878
3 months to 31 March
Cash Flow
Cash Flow (2)
Cash Flow
Cash Flow (2)
32
Key financial ratiosQ1 2020 Q1 2019
CapitalisationEquity assets 165 161Equity net receivables 296 299Adjusted interest coverage 18x 20xTBI Bank consolidated capital adequacy 188 210
ProfitabilityNet interest margin
- Online 764 802- TBI Bank 246 252- Overall group 500 557
Cost income ratio 527 520Normalised Profit before tax margin 111 127Normalised Return on average equity 118 104Normalised Return on average assets 20 17
Asset qualityCost of risk
- Online 295 289- TBI Bank 47 45- Overall group 174 184
Net impairment interest income 323 304Gross NPL ratio
- Online 283 227- TBI Bank 160 173- Overall group 222 204
Overall group NPL coverage ratio 1035 1064
See appendix for definitions of key metrics and ratios
key ratios
33
GlossaryDefinitionsbull Adjusted EBITDA ndash a non-IFRS measure that represents EBITDA (profit for the period plus tax plus interest expense plus depreciation and amortization) as adjusted by incomeloss from discontinued operations non-cash gains and losses
attributable to movement in the mark-to-market valuation of hedging obligations under IFRS goodwill write-offs and certain other one-off or non-cash items Adjusted EBITDA as presented here may not be comparable to similarly-titled measures that are reported by other companies due to differences in the way these measures are calculated Further details of covenant adjustments can be found in the relevant bond prospectuses available on our website
bull Adjusted interest coverage ndash Adjusted EBITDA interest expense for the relevant period (nb not equal to the full covenant coverage ratio calculation)
bull Cost of risk ndash Annualised net impairment loss average gross receivables (total gross receivables as of the start and end of each period divided by two)
bull Cost income ratio ndash Operating costs operating income (revenue)
bull Equity assets ratio ndash Total equity total assets
bull Equity net receivables ndash Total equity net customer receivables (including accrued interest)
bull Gross NPL ratio ndash Non-performing receivables (including accrued interest) with a delay of over 90 days gross receivables (including accrued interest)
bull Gross receivables ndash Total amount receivable from customers including principal and accrued interest after deduction of deferred income
bull Intangible assets ndash consists of deferred tax assets intangible IT assets and goodwill
bull Interest income ndash Interest and similar income generated from our customer loan portfolio
bull Loss given default ndash Loss on non-performing receivables (ie 1 - recovery rate) based on recoveries during the appropriate time window for the specific product reduced by costs of collection discounted at the weighted average effective interest rate
bull Net effective annualised yield ndash annualised interest income (excluding penalties) average net loan principal
bull Net impairment to interest income ratio ndash Net impairment losses on loans and receivables interest income
bull Net interest margin ndash Annualised net interest income average gross loan principal (total gross loan principal as of the start and end of each period divided by two)
bull Net receivables ndash Gross receivables (including accrued interest) less impairment provisions
bull Non-performing loans (NPLs) ndash Loan principal or receivables (as applicable) that are over 90 days past due (and for TBI Bank shown on a customer level basis)
bull Normalised ndash Adjusted to remove the effect of non-recurring items net FX and one-off adjustments to intangible assets and for 2018 ratios only adjusted to reflect the opening balance of 2018 balance sheet after IFRS 9 effects
bull Profit before tax margin ndash Profit before tax interest income
bull Return on Average Assets ndash Annualised profit from continuing operations average assets (total assets as of the start and end of each period divided by two)
bull Return on Average Equity ndash Annualised profit from continuing operations average equity (total equity as of the start and end of each period divided by two)
bull Return on Average Tangible Equity ndash Annualised profit from continuing operations average tangible equity (tangible equity as of the start and end of each period divided by two)
bull Tangible Equity ndash Total equity minus intangible assets
bull TBI Bank Capital adequacy ratio ndash (Tier One Capital + Tier Two Capital) Risk weighted assets (calculated according to the prevailing regulations of the Bulgarian National Bank)
34
Contacts
Investor Relationsinvestorrelations4financecom
James EtheringtonHead of Investor RelationsPhone +44 7766 697 950E-mail jamesetherington4financecom
Paul GoldfinchChief Financial OfficerPhone +371 2572 6422E-mail paulgoldfinch4financecom
Headquarters17a-8 Lielirbes street Riga LV-1046 Latvia
4finance Holding SA
Disclaimer
Agenda
Q1 2020 business and financial highlights
Slide Number 5
Current trading and outlook
Review of three month 2020 results
Summary of three month 2020 results
Interest income remains well diversified
Slide Number 10
Strong financial profile ndash stability and profitability
Funding strategy
Diversified loan portfolio
Analysis of net impairments and cost of risk
Asset quality and provisioning
Recent collections performance
Slide Number 17
Thank you and Questions
Appendix ndash responsible lending and regulatory overview
Sustainability through good governance and responsible lending
Regulatory overview
Regulatory overview (continued)
Appendix ndash strategic evolution of portfolio
Evolving and broadening our business model
Evolution of product mix
Slide Number 26
Asset quality and provisioning ndash loan principal
Appendix ndash financials and key ratios
Slide Number 29
Balance sheet
Statement of Cash Flows
Slide Number 32
GlossaryDefinitions
Contacts
Q12018
Q1 2020
9M 2018
Q1 2019
FY 2017
Net receivables (eurom) of which
5426
5408
5477
- Principal
272
5147
5144
5165
208
- Accrued interest
98
279
265
312
39
Total assets (eurom)
9724
10238
10147
Total equity (eurom)
221
1605
1607
1637
335
Capitalisation
Equity assets
147
165
157
161
127
Equity net receivables
195
296
297
299
267
Adjusted interest coverage
233
18x
25x
20x
223
TBI Bank consolidated capital adequacy
231
188
241
210
239
240
Profitability
Q12018
Net interest margin
- Online
764
882
802
- TBI Bank
246
280
252
- Overall group
500
648
557
Cost income ratio
527
520
520
Post-provision operating profit margin
145
166
177
Normalised Profit before tax margin
111
154
127
Normalised Return on average equity
118
375
104
Normalised Return on average assets
20
56
17
Asset quality
Cost of risk
- Online
295
237
289
- TBI Bank
47
86
45
- Overall group
174
181
184
Net impairment interest income
323
259
304
Gross NPL ratio
- Online
283
222
227
- TBI Bank
160
154
173
- Overall group
222
196
204
Overall group NPL coverage ratio
1035
1156
1064
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
505
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(06)
57
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
50
199
199
(248)
(301)
0800
Impairment losses on loans
1485
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(120)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(73)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
568
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
09
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2599
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
108
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(11)
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2637
2840
2840
1756
2279
00
Increase in loans due from customers
(2248)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1453
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1120
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(15)
(13)
(84)
(128)
(131)
(21)
Net cash from Purchase Sale of financial instruments
39
(118)
(136)
mdash
Repayment of financial instrument
-
-
Loans issued to related parties
-
-
(26)
(06)
(43)
(23)
Loans repaid from related parties
0
40
74
23
109
54
Interest received from related parties
31
01
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
00
(01)
0-
mdash
Disposal of subsidiaries net of cash disposed
(13)
-
(59)
(45)
(44)
mdash
(Acquisition)Disposal of equity investments
(14)
-
Acquisition of non-controlling interests
(04)
(04)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
-
-
mdash
0-
(00)
Prepayment for potential acquisition
-
00
208
0-
(208)
mdash
Acquisition of shares
-
00
00
Net cash flows from investing activities
25
(94)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
0
05
2999
1637
05
Repayment and repurchase of loans and notes
(164)
(133)
(272)
(1737)
(580)
(01)
Interest payments
(06)
(35)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
-
00
(00)
(192)
(58)
mdash
FX hedging margin
14
82
42
(140)
(88)
Payment of lease liabilities
(11)
(1)
mdash
Dividend payments
-
-
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(167)
(95)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
333
35
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
985
1488
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
(01)
0
01
10
10
03
Cash and cash equivalents at the end of the period
1318
1524
1488
2040
1319
681
TBI Bank minimum statutory reserve
242
354
234
230
230
242
Total cash on hand and cash at central banks
1560
1878
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
02
119
526
495
107
17000
Adjustments for
Depreciation and amortisation
32
32
121
64
83
1700
Impairment of goodwill and intangible assets
-
-
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
131
63
199
(248)
(301)
0800
Impairment losses on loans
364
359
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(20)
01
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
01
01
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(19)
(19)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
127
150
621
455
619
13300
Non-recurring finance cost
32
-
mdash
mdash
63
Other non-cash items
14
0
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663
707
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(137)
(82)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
(09)
(15)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(39)
(81)
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
479
530
2840
1756
2279
00
Increase in loans due from customers
(132)
(468)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
71
161
819
333
542
160
Increase in deposits (customer and bank deposits)
77
74
165
265
338
110
Deposit interest payments
(15)
(10)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
481
288
1233
524
442
(535)
Corporate income tax paid
(06)
(63)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
475
225
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(83)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(196)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
Q12018 (unaudited)
31 March 2020 (unaudited)
1 January 2018 (post IFRS 9 unaudited)
31 December 2019
Cash and cash equivalents of which
1538
1560
1549
1257
- Online
535
834
658
767
- TBI Bank
1003
725
892
490
Placements with other banks
57
127
70
64
Gross receivables due from customers
7156
7042
6588
7337
Allowance for impairment
(1665)
(1616)
(1575)
(1548)
Net receivables due from customers of which
5491
5426
5013
5789
- Principal
5147
5026
5480
- Accrued interest
277
264
309
Net investments in finance leases
93
45
105
47
Net loans to related parties
631
594
598
607
Property and equipment
96
182
101
178
Financial investments
183
502
184
564
Prepaid expenses
87
40
108
45
Tax assets
212
174
221
213
Deferred tax assets
371
353
368
330
Intangible IT assets
281
168
286
178
Goodwill
214
165
214
165
Other assets
678
392
573
295
Total assets
9932
9727
9390
9731
Calculation for Presentation - other assets (not loans or cash)
Loans and borrowings
4672
3849
3794
3846
Deposits from customers
2728
3333
2710
3222
Deposits from banks
94
95
mdash
130
Corporate income tax payable
178
124
198
95
Other liabilities
799
718
765
780
Total liabilities
8471
8119
7466
8074
Share capital
358
358
358
358
Retained earnings
1475
1628
1350
1657
Reserves
(343)
(378)
(323)
(357)
Total attributable equity
1490
1608
1385
1658
Non-controlling interests
(28)
00
(24)
(00)
Total equity
1461
1608
1362
1658
Total shareholders equity and liabilities
9932
9727
8828
9731
In millions of euro
Q1 2020 (unaudited)
Q1 2019 (unaudited)
change YoY
Interest Income
966
1065
(9)
Interest Expense
(127)
(150)
-(16)
1000000
Net Interest Income
839
915
(8)
Net FampC Income
24
21
12
Other operating income
23
22
7
Non-Interest Income
47
43
10
Operating Income (Revenue)
886
957
(7)
Personnel costs
(221)
(221)
(0
Discretionary bonus
(18)
(19)
(6)
Marketing
(91)
(96)
(5)
IT costs
(39)
(45)
(12)
DampA costs
(35)
(32)
+8
Other costs
(98)
(118)
(17)
Total operating costs
(467)
(498)
(6)
Pre-provision operating profit
419
459
(9)
Net impairment charges
(312)
(324)
-(4)
manual
Post-provision operating profit
107
135
(21)
Depreciation and amortisation
(32)
(32)
-+0
manual
Non-recurring income(expense)
(39)
(01)
nm
Non-recurring finance cost
mdash
mdash
+0
Net FX gain(loss)
(34)
16
nm
One-off adjustments to intangible assets
-
-
(0)
manual
Profit before tax
02
119
nm
Income tax expense
(27)
(62)
-(57)
manual
Net profit(loss) after tax
(25)
57
nm
manual
Adjusted EBITDA
233
294
-(21)
Costincome ratio
527
520
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online principal
Performing (1)
2347
(357)
1990
737
2634
(397)
2237
774
3177
(493)
2684
791
(22139)
3177
(302)
2875
681
(191)
150128837891005
Non-performing (2)
836
(656)
181
263
770
(590)
180
226
840
(664)
175
209
(74878)
36947
1488
(983)
505
319
-648
319
-64836054
-250544747891005
Online total
3184
(1013)
2171
1000
3404
(987)
2417
1000
4017
(1158)
2859
1000
4665
(1286)
3379
1000
(74878)
14808
TBI Bank principal
Performing (1)
2853
(121)
2732
840
2896
(118)
2778
838
2090
(68)
2022
873
(2586)
2090
(43)
2047
873
(25)
-251961477
Non-performing (2)
541
(298)
244
160
558
(274)
284
162
303
(158)
145
127
0437
303
(162)
141
127
04
42578177
TBI Bank total
3394
(418)
2976
1000
3454
(392)
3062
1000
2393
(226)
2167
1000
-
(2149)
2393
(205)
2188
1000
Overall group principal
Performing (1)
5200
(478)
4722
791
5529
(515)
5015
806
5267
(562)
4706
822
-
(24725)
5267
(345)
4922
746
Non-performing (2)
1378
(953)
424
209
1328
(864)
465
194
1142
(822)
320
178
(74878)
37384
1791
(1145)
646
254
Overall total
6578
(1431)
5147
1000
6858
(1378)
5480
1000
6410
(1384)
5026
1000
(74878)
12659
7058
(1490)
5567
1000
31122018 data updated post audit
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
IFRS 9 ADJ part
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online receivables
Performing (1)
2553
(412)
2141
717
2855
(456)
2399
751
3432
(567)
2864
778
(22139)
3432
(346)
3086
665
00
221
-150
Non-performing (2)
1006
(775)
232
283
946
(691)
255
249
977
(775)
201
222
(74878)
36947
1725
(1145)
580
335
749
(369)
250
Online total
3559
(1187)
2373
1000
3801
(1147)
2654
1000
4408
(1343)
3065
1000
5157
(1491)
3666
1000
(148)
NPL (90+)
(74878)
14808
TBI Bank receivables
Performing (1)
2927
(124)
2803
840
2964
(120)
2844
838
2145
(70)
2075
873
(2586)
2145
(44)
2101
873
00
26
120
Non-performing (2)
556
(305)
250
160
571
(280)
291
162
311
(162)
149
127
0437
311
(166)
145
127
00
(04)
-20
TBI Bank total
3482
(429)
3053
1000
3535
(401)
3135
1000
2456
(232)
2224
1000
-
(2149)
2456
(210)
2246
1000
21
Overall group receivables
Performing (1)
5480
(536)
4944
778
5819
(577)
5242
793
5577
(637)
4939
812
-
(24725)
5577
(390)
5187
733
Non-performing (2)
1562
(1080)
482
222
1517
(971)
546
207
1287
(937)
350
188
(74878)
37384
2036
(1311)
725
267
Overall total
7042
(1616)
5426
1000
7337
(1548)
5789
1000
6864
(1575)
5290
1000
(74878)
12659
7613
(1701)
5912
1000
31122018 changed to audited figures
4
bull Solid initial start to year prior to impact of Covid-19bull Jan-Feb broadly in line with expectations strong start by TBI Bankbull Online near-prime traction with new product upgradeslaunchesbull Over half of net receivables (51) now lsquonear-primersquo
bull Rapid operational response to Covid-19bull Over 2000 staff in 16 countries moved to home workingbull Focus on employee safety and providing continuous servicebull Now gradually returning to offices depending on local situation
bull Continued to serve and support our loyal online customersbull Rapid adjustments to underwriting scorecards particularly for new
customers but maintained availability of credit to suitably qualified returning customers
bull Generally solid loan repayment data in AprilMaybull Proactive support for those who need it (payment deferrals etc)
supplemented by regulatory measures
bull Prudent balance sheet and liquidity managementbull Strong cash generation in April amp May with lower loan issuancebull Significant repurchases of bonds below parbull ceuro90m of lsquoonlinersquo cash at end Maybull Strong capital ratios and liquidity at TBI Bank
Q1 2020 business and financial highlights
(9) YoYeuro233m
Adjusted EBITDA
(21) YoY
+17
TBI consumer loan issuance
YoY increase+64
Online near-prime loan issuance
YoY increase
Interest income
euro966m
5
Operational overview for key marketsRegulatory measures of interest
income Q1 Operational response
Poland bull Temporary reduction in non-interest cost caps to 15 fixed 6 annual (from 25 amp 30)
bull Nominal interest rate cap to 72 (from 10)bull ldquoAnti crisis shieldrdquo regulations in development
(payment deferrals but for instalment loans only)
23 bull 1-3 month payment deferrals introduced voluntarily in line with association guidelines Limited requests so far
bull Adapted single payment product to new pricing overnightbull Relaunched instalment loan product as a 3-month loan
Current trading and outlookbull Early indications of demand in recent weeks have been
encouraging with May online issuance 23 above Aprilbull Issuance levels of shorter-term products for returning customers are
back to nearly 75 of Jan-Feb levelsbull Spain remained at a lower issuance level but improving in late Maybull Denmark demand already returned to more normal levels in May
Record for daily applications in 2020 set last week
bull Strong near-prime progress with product enhancements in Latvia Lithuania and Swedenbull Carefully moderated underwriting and marketing spend post Covid-19bull Development of funding via TBI Bank continuesbull 51 of net loan portfolio is near-prime consumer lending
bull Decisions taken already on business footprint and cost reductionbull Latin America and Finlandbull Significant headcount reductions across the network
bull Significant medium-term opportunitiesbull Potentially larger lsquonon-primersquo market sizebull Potential competitive dislocation in many markets
Weekly issuance of short-term products (rebased to 100 as Jan-Feb average)
Week number
FebruaryJanuary March April May
Includes single payment loans and lines of credit
7
Review of three month 2020 results
8
bull Solid initial start to the year with January and February largely in line with management expectationsbull Follows Q4 a naturally seasonally strong quarter especially at TBI Bank
bull Q1 2020 interest income down 9 Adjusted EBITDA of euro233m down 21 year-on-year bull Half of QoQ interest income change from products that have been discontinued
de-emphasised (eg instalment loans in Poland amp Armenia)bull Main Covid-19 impact on Q1 financials additional ceuro3m of net impairmentsbull Post-provision operating profit of euro107m vs euro135m in Q1 2019
bull Continued progress on cost reductionbull Year-on-year reduction in costs of 6 from existing cost efficiency programmesbull Additional measures taken post Covid-19
bull Strong operating cashflow and robust cash positionbull Operating cashflow before movements in portfolio amp deposits of euro479mbull Significant bond repurchases made in March and April ($359m of USD bonds)bull Current ldquoonlinerdquo cash levels after May coupons remain strong at ceuro90m
bull Overall stable risk performance although delayed debt sales did impact the NPL ratiobull Overall gross NPL ratio of 222 (vs 207 as of Dec 2019)bull Net impairmentinterest income at 323 for Q1 2020 (vs 304 in Q1 2019)
Adjusted EBITDAeurom
Summary of three month 2020 results
Interest Incomeeurom
See appendix for definitions of key metrics and ratios
Q4 2019 costs have been adjusted to reflect audited figuresEstimated Covid-19 impact comprises -euro1m of interest income reduction +euro02m marketing cost savings and -euro31m additional impairment
Year-on-year comparison
eurom
Quarter-on-quarter bridge for Adjusted EBITDA
294
233
Q1 2019 Q1 2020
1065
966
Q1 2019 Q1 2020
-9-21
9
7
13
23
22
25
8
2
Baltics
Nordics
Poland
Spain
BGRO
Other Europe
Latin America
Interest income remains well diversified
Interest income by country
1065
966
euro0m
euro20m
euro40m
euro60m
euro80m
euro100m
euro120m
Q1 2019 Q1 2020
Other MexicoArgentinaArmeniaSlovakiaCzech RepublicRomaniaBulgariaSpainPolandDenmarkSwedenFinlandLithuaniaLatvia
-9
2020 interest income euro966m
Other represents countries exited during 2018 (Dominican Republic and Georgia)
10
472 459
387 410 385 386 372 383341
10198
107112
113 117109
117
126
3733
1615
54 53
49
52 52 5250 51
53
0
10
20
30
40
50
60
00
100
200
300
400
500
600
700
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
4finance TBI Friendly Finance Quarterly costincome ratio
Operating cost driversbull Operating costs down 6 year-on-year vs revenue down 7
bull Q1 2020 costincome ratio at 527 compared to 520 in Q1 2019
bull Some cost reduction effect from IFRS 16 impacting comparison with 2018 data
bull Seasonal increase in marketing spend in Q4 reduced in Q1 with some early impact of Covid-19 reductions
bull Investment in TBI Bank to support growth
bull Cost efficiency projects ongoing with focus on costincome ratiobull Headcount reduction of 5 year-on-yearbull Lower above-the-line marketing spend due to efficiency savings
from econometric modelling
bull Additional actions taken post Covid-19 bull Further headcount reductions of c20 of online business
personnel costs to align cost structure with market and product footprint
Notes(1) Q4 2018 costs have been adjusted to reflect audited figures(2) Q4 2019 costs have been adjusted to reflect audited figures
Total operating costs (1)
eurom
2018(1)
See appendix for definitions of key metrics and ratios
2019 (2) 2020
11
135149
124
29 23
2017 2018 2019 Q1 2019 Q1 2020
eurom
81
11
53 51
120
2016 2017 2018 2019 Q1 2019 Q1 2020
Profit before tax
1814 16 17 16 17
2017 1 Jan2018
2018 2019 Q1 2019 Q1 2020
Strong financial profile ndash stability and profitabilityInterest income
448475
425
106 97
2017 2018 2019 Q1 2019 Q1 2020
Adjusted EBITDA Equity assets ratio
22x24x
22x20x 18x
2017 2018 2019 Q1 2019 Q1 2020
Adjusted interest coverage ratio (1)
32
2628 29 30 30
2017 1 Jan 2018 2018 2019 Q1 2019 Q1 2020
Equity net receivables (2)
eurom
eurom
Post IFRS 9
Post IFRS 9
Times
Note (1) The full covenant calculation of interest coverage ratio is based on proforma last twelve month figures and is currently 25x(2) The full covenant calculation of equitynet loans includes related party loans and finance leases and is currently 27
12
Funding strategy
Overview of funding structure 31 March 2020 (2)
2021 Notes194
2022 Notes335
4finance customer deposits
16
TBI customer deposits
442
TBI deposits from banks13
Notes(1) Represents the principal value of public bonds outstanding that comes due in each respective period net of buybacks and bonds owned by TBI Bank(2) The chart reflects the principal and accrued interest amounts of each of the instruments net of buybacks and bonds owned by TBI Bank
euro7277m
Strategy to diversify sources of funding and reduce overall funding cost over time
bull Strong cash generation and cash positionbull Cash generated from portfolio in Q1 and AprilMaybull Online cash ceuro90m at end May (after coupons and buybacks)bull TBI Bank increased deposit levels in Q1 and has strong liquidity ratios
bull Accessing TBI Bank balance sheet to fund online loansbull Successful initial portfolio sales of Polish instalment loans H2 2019bull Passport application for Lithuania to support portfolio sales from that
market submitted in April due to start in Q3
bull Further de-leveraging already achieved in 2020bull $359m of USD 2022 bonds and euro11m of EUR 2021 bonds purchased in
2020 year-to-datebull Proforma covenant interest expense reduced by 18 year-on-yearbull Retain ongoing flexibility to buy back bonds with spare liquidity
bull Strong capital positionbull 30 equity net receivables ratiobull TBI Bank capital adequacy c22 after adoption of 2019 profit in April
bull Consultations underway on potential extension to EUR 2021 bondsbull Allows financial results and markets to normalise prior to refinancing
Debt maturity schedule proforma for 31 May 2020 (1)
eurom
0
146
217
0
2020 2021 2022 2023+
13
195 167 170 171 162 150
3747 48 47 47 38
3940 35 23 21
17
6 7 10 12 811
7758 65 72 90
69
364328 341 341 342
293
Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020
Single Payment loans Line of Credit Instalment loans Near Prime TBI bank SME (Bank)
211 199 171 131 101 89
18 4537
34 51 48
159
242215
255 260 247
58
64
63 83 10398
47
42
42 49 6460492
591529 553 579
543
00
1500
3000
4500
6000
7500
2016 2017 1 Jan 2018 2018 2019 31 Mar 2020
Single Payment loans Line of Credit Cards Instalment loans Point of Sale SME (Bank)Baltics11
Nordics6
Poland16
Spain6
CZSK 2GEAM
1LatAm 05
BG (online)05
Bulgaria (TBI)25
Romania (TBI) 20
SME (TBI)11
Diversified loan portfolioNet receivables (1)
Net receivables 31 March 2020
Notes (1) Reflects reclassification of former SPL products in Sweden (from January 2016) Denmark (from January 2017) Armenia (from launch in July 2017) and Latvia (from January 2019) to Lines of Credit
bull Selective approach to new loan issuance
bull Overall net receivables totals euro542mbull 4 reduction during Q1 bull 89 consumer loansbull 43 online loans 57 banking
TBI Bank 57(funded clt2)
Online 43(funded c12)
eurom
See appendix for definitions of key metrics and ratios Includes TBI bank BG online and euro18m of purchased Poland portfolio Introduction of IFRS 9 as of 1-Jan-2018 reduced net receivables by euro62 million to euro529 million
Online loans issued (1)
eurom
14
486 464426 413
359 373 376 379 364
(55) (52) (42) (45) (36) (34) (34) (32) (31)
(67)(143)
(78) (77)
01
(57)(23) (41) (20)
364
269305 291
324281
319 307 312
-600
-500
-400
-300
-200
-100
00
100
200
300
400
-200
-150
-100
-50
00
50
100
150
200
250
300
350
400
450
500
550
600
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Analysis of net impairments and cost of risk
bull Q1 2020 net impairment charges remain fairly elevatedbull Most products in line with expectations Some additional
provisions in Armenia IL portfolio (in run-off)bull Overall impact of Covid-19 increased net impairments by
approximately euro3 million in Q1 (higher macro provisions delayed debt sales some impact on delay indicators)
bull Overall cost of risk relatively stablebull Overall cost of risk 174 (Q1 2020 including TBI Bank) vs 184
(Q1 2019)bull Online cost of risk 295 vs 289 (Q1 2019)bull Net impairment interest income 323 vs 304 (Q1 2019)
bull Proactive and ongoing adjustments to risk parameters across markets since mid-March
bull 63 changes to underwriting scorecardspoliciesbull 82 changes to debt collection scorecardspoliciesbull Ongoing regular reviews by market (eg Spain Poland)
Net impairment charges by quarter (1)
eurom
See appendix for definitions of key metrics and ratios
208 151
Gross impairments
Net impairment losses
Over provisioning on debt sales (net gainloss)
Recoveries from written off loans
174
2018166
Note (1) Q4 2018 and 2019 figures have been adjusted to reflect audited figures
2019184 160 Overall quarterly
cost of risk183 171 174
2020
15
Asset quality and provisioning bull Gross NPL ratios increased in lsquoonlinersquo due to delayed debt sales but asset quality relatively stable Coverage ratios remain over 100
bull Online gross NPL ratio 283 as of March 2020 compared with 249 as of December 2019bull Overall gross NPL ratio 222 as of March 2020 from 207 as of December 2019bull Some delayed debt sales already restarting in May including Poland
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Recent collections performancebull April and May repayment dynamics
in line with prior monthsbull April performance comparable
with Januarybull Improvement in May
bull Requests for payment deferrals either proactively offered by 4finance or offered in accordance with local regulation have been relatively limited
bull Main take-up in Czech Republic Armenia and TBI Bank
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
January Feb-Mar average April May
Repayment dynamics (single payment)
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
January Feb-Mar average April May
Repayment dynamics (instalment)
Repayment dynamics graphs represent cumulative sum of payments and extensions performed at under 30 DPD as a of amounts due in the prior month For example May line shows progress by day in May of repaymentextension of amounts that were due at any time in April and performed within 30 days of the due date
Payment deferral take-up in selected markets( of eligible portfolio by value)
Poland 2
Spain 3
Denmark 1
Baltics 1
Czech Republic 12
Armenia 17
TBI consumer 12
TBI SME 43
Day number in relevant month Day number in relevant month
17
Pro-active response to Covid-19 across the business with good resultsbull Rapidly adapted operations to home working ensuring employee safety and continuous services for customersbull Focus on risk management but remained ldquoopen for businessrdquo in AprilMay particularly for our returning customersbull Customer repayment behaviour within normal ranges in AprilMay with proactive support offered for customers who have
been impacted
Well positioned to lsquoweather the stormrsquo and take advantage of subsequent opportunitiesbull Key decisions taken to streamline footprint focus on larger markets and right-size cost basebull Continued development of near-prime business both on product side (Latvia Lithuania Sweden launches) and TBI Bank
funding side (Lithuania passport application)bull Encouraging demand and issuance trends in May (22 increase in online loans issued vs April) with improvement
expected to continue in June
Strong balance sheet and funding position with further action being takenbull Strong liquidity position in both lsquoonlinersquo and TBI Bankbull Strong cashflow generation deployed in significant bond buybacks to reduce leveragebull Consultations underway on potential extension to EUR 2021 bonds to allow financial results and markets to normalise
prior to long term refinancing
Summary
4finance a multi-segment multi-product consumer credit specialist
18
Thank you and Questions
19
Appendix ndash responsible lending and regulatory overview
20
Sustainability through good governance and responsible lendingOperating as a mainstream consumer finance business
bull ldquoBank-likerdquo policies and procedures with strong compliance function
bull Continued investment in AML GDPR and other strategic compliance priorities
bull Robust corporate governance with strong Supervisory Board
bull Increasingly regulated by main financial supervisory authorities
bull Diversification of portfolio and consequent reduction of reliance on single payment loans
bull Clear corporate values and code of conduct
bull Listed bond issues with quarterly financial reporting
Developing meaningful and constructive regulatory relationships
bull Ensuring we understand the regulatory arc
bull Helping regulators and legislators gain a solid understanding of our business
bull Ensuring we have a seat at the table
bull Contributing to EU Consumer Credit Directive consultation process
bull Continuous improvements in credit underwriting
bull Ensuring products are used appropriately
bull Working to ensure customers have safe landings when they signal difficulties
21
Regulatory overviewCountry
of interest income(Q1 2020)
Products (1) Regulator CB (2) Licenserequired (3)
Interest rate cap (1) Status
Argentina 1 SPL Consumer Protection Directorate - - -
Armenia 2 LOC Central Bank of the Republic of Armenia Yes Yes Nominal
Bulgaria ndash Online 2 SPL Bulgarian National BankYes Yes APR
(inc fees) Stable frameworkBulgaria ndash Bank 13 IL LOC POS SME
Czech Republic 5 SPL IL Czech National Bank Yes Yes - Stable framework
Denmark 11 LOC IL FSA and Consumer Ombudsman Yes YesAPR amp TCOC
being introduced
Danish FSA licensing process ongoing New regulations regarding interest rate caps (35 APR cap 100 cost of credit cap) and marketing restrictions in final stages of review Expected to start in July
Finland 1 IL(4) Finnish Competition and Consumer Authority - - Nominal
amp fees
New interest rate caps in force from September 2019 Further discussions on temporary reduction to 10 are ongoing
Latvia 5 MTP IL Consumer Rights Protection Centre - Yes Nominal fees amp TCOC
Stable framework since new interest rate caps in July 2019
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards MTP ndash Minimum to pay POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit(2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement(4) lsquoMini-ILrsquo (4 monthly instalments) from September 2019
22
Regulatory overview (continued)Country
of interest income
(Q1 2020)Products (1) Regulator CB (2) License
required (3)Interest rate
cap (1) Status
Lithuania 2 SPL IL Central Bank of Lithuania Yes Yes Nominal fees amp TCOC Stable framework
Mexico 1 IL National Financial Services Consumer Protection Commission - Yes - Stable framework
Poland 23 SPL IL Office of Competition and Consumer Protection - - Nominal fees
amp TCOC
Non-interest cost caps adjusted in April for one year to 15 fixed and 6 annual with a 45 total limit
Romania 10 IL LOC POS SME National Bank of Romania Yes Yes - Bill to introduce interest rate cap under discussion
Slovakia lt1 SPL National Bank of Slovakia Yes Yes APR (inc fees) Stable framework
Spain 22 SPL IL NA - - -
Sweden 1 LOC IL Swedish Financial Supervisory Authority Yes Yes Nominal amp
TCOCStable framework since new interest rate caps in September 2018
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit (2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement
23
Appendix ndash strategic evolution of portfolio
24
Evolving and broadening our business model
Prime
Sub-Prime
Near-Prime
Segments
Higher Duration Lower APR Products
SPL ILLOC POS
A multi-segment multi-product consumer credit specialist
1
1 Optimise
2 2 Diversify amp Grow
Illustrative
25
Evolution of product mix
Note (1) Reflects reclassification of Vivus brand products in Sweden (from January 2016) Denmark (from January 2017) Armenia (from launch in July 2017) and short-term products (SMS Credit amp Ondo) in Latvia (from January 2019) to Lines of Credit
68
17
3
9
29
45
18
11
0
25
50
75
100
30 Jun 2016 31 Mar 2020
SME (Bank)
Point of Sale
Instalment loans
Line of Credit Cards
Single Payment Loans
euro543meuro323m
Net receivables by product (1)
Online sub-prime only
Bank and onlinenear-prime
and sub-prime
76
48
4
14
20
29
7
0
25
50
75
100
Q1 2016 Q1 2020
Interest income by product (1)
euro97meuro90m
Date chosen to reflect the composition of loan portfolio immediately prior to purchase of TBI Bank
26
Funding near-prime growth via TBI Bank
Online acquisition Retail deposit funding
Initial portfolio development
Early stage customer acquisition and credit metrics monitored and
enhanced
Funding Platform
In-house IT funding platform ensuring ongoing automated
portfolio transfers
Bringing portfolios to scale
Market specific portfolios grow with ongoing sales to reach scale
True saleof portfolio(s)loan servicing
Indicative APRs
20-40
CostIncome ratio
c40
Cost of Risk
6-8
Cost of Funds
3-5
Return on Assets
3-5(2)
Illustrative near-prime
ldquounit economicsrdquo(1)
Notes(1) Illustrative metrics for near-prime portfolios and not indicative of a specific product or market(2) Illustrative potential returns in medium-term at scale
Payment of fair market value
bull Regular sales of Polish instalment loans since September 2019bull Passporting application submitted for Lithuania (largest near-prime portfolio)
Accessing TBI Bank deposit funding for lsquoonlinersquo portfolios via ongoing loan sales
27
Asset quality and provisioning ndash loan principal
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Interest Income 966 1065 (9)Interest Expense (127) (150) (16)Net Interest Income 839 915 (8)Net FampC Income 24 21 12Other operating income 23 22 7Non-Interest Income 47 43 10Operating Income (Revenue) 886 957 (7)Total operating costs (467) (498) (6)Pre-provision operating profit 419 459 (9)Net impairment charges (312) (324) (4)Post-provision operating profit 107 135 (21)Depreciation and amortisation (32) (32) +0Non-recurring income(expense) (39) (01) nmNet FX gain(loss) (34) 16 nmProfit before tax 02 119 nmIncome tax expense (27) (62) (57)Net profit(loss) after tax (25) 57 nm
Adjusted EBITDA 233 294 (21)
Income Statement
30
Balance sheetIn millions of euro
31 March 2020 (unaudited)
31 December 2019
Cash and cash equivalents of which 1560 1257- Online 834 767- TBI Bank 725 490
Placements with other banks 127 64Gross receivables due from customers 7042 7337Allowance for impairment (1616) (1548)Net receivables due from customers of which 5426 5789
- Principal 5147 5480- Accrued interest 277 309
Net investments in finance leases 45 47Net loans to related parties 594 607Property and equipment 182 178Financial investments 502 564Prepaid expenses 40 45Tax assets 174 213Deferred tax assets 353 330Intangible IT assets 168 178Goodwill 165 165Other assets 392 295Total assets 9727 9731Calculation for Presentation other assets (not loans Loans and borrowings 3849 3846Deposits from customers 3333 3222Deposits from banks 95 130Corporate income tax payable 124 95Other liabilities 718 780Total liabilities 8119 8074Share capital 358 358Retained earnings 1628 1657Reserves (378) (357)Total attributable equity 1608 1658Non-controlling interests 00 (00)Total equity 1608 1658Total shareholders equity and liabilities 9727 9731
Balance Sheet
31
Statement of Cash FlowsIn millions of euro
2020 2019Cash flows from operating activitiesProfit before taxes 02 119
Adjustments forDepreciation and amortisation 32 32
Impairment of goodwill and intangible assets - -
Net (gain) loss on foreign exchange from borrowings and other monetary items 131 63
Impairment losses on loans 364 359
Reversal of provision on debt portfolio sales (20) 01
Write-off and disposal of intangible and property and equipment assets 01 01
Interest income from non-customers loans (19) (19)
Interest expense on loans and borrowings and deposits from customers 127 150Non-recurring finance cost 32 -
Other non-cash items 14 0
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663 707
Adjustments forChange in financial instruments measured at fair value through profit or loss (137) (82)(Increase) decrease in other assets (including TBI statutory reserve placements amp leases) (09) (15)
Increase (decrease) in accounts payable to suppliers contractors and other creditors (39) (81)
Operating cash flow before movements in portfolio and deposits 479 530
Increase in loans due from customers (132) (468)
Proceeds from sale of portfolio 71 161
Increase in deposits (customer and bank deposits) 77 74
Deposit interest payments (15) (10)
Gross cash flows from operating activities 481 288
Corporate income tax paid (06) (63)
Net cash flows from operating activities 475 225
3 months to 31 March In millions of euro
2020 2019
Cash flows used in investing activitiesPurchase of property and equipment and intangible assets (15) (13)
Net cash from Purchase Sale of financial instruments 39 (118)
Loans issued to related parties - -
Loans repaid from related parties 0 40
Interest received from related parties 31 01
Disposal of subsidiaries net of cash disposed (13) -
(Acquisition)Disposal of equity investments (14) -
Acquisition of non-controlling interests (04) (04)
Net cash flows from investing activities 25 (94)
Cash flows from financing activitiesLoans received and notes issued - 0
Repayment and repurchase of loans and notes (164) (133)
Interest payments (06) (35)
FX hedging margin 14 82
Payment of lease liabilities (11) (1)
Dividend payments - -
Net cash flows used in financing activities (167) (95)
Net increase (decrease) in cash and cash equivalents 333 35
Cash and cash equivalents at the beginning of the period 985 1488
Effect of exchange rate fluctuations on cash (01) 0
Cash and cash equivalents at the end of the period 1318 1524
TBI Bank minimum statutory reserve 242 354
Total cash on hand and cash at central banks 1560 1878
3 months to 31 March
Cash Flow
Cash Flow (2)
Cash Flow
Cash Flow (2)
32
Key financial ratiosQ1 2020 Q1 2019
CapitalisationEquity assets 165 161Equity net receivables 296 299Adjusted interest coverage 18x 20xTBI Bank consolidated capital adequacy 188 210
ProfitabilityNet interest margin
- Online 764 802- TBI Bank 246 252- Overall group 500 557
Cost income ratio 527 520Normalised Profit before tax margin 111 127Normalised Return on average equity 118 104Normalised Return on average assets 20 17
Asset qualityCost of risk
- Online 295 289- TBI Bank 47 45- Overall group 174 184
Net impairment interest income 323 304Gross NPL ratio
- Online 283 227- TBI Bank 160 173- Overall group 222 204
Overall group NPL coverage ratio 1035 1064
See appendix for definitions of key metrics and ratios
key ratios
33
GlossaryDefinitionsbull Adjusted EBITDA ndash a non-IFRS measure that represents EBITDA (profit for the period plus tax plus interest expense plus depreciation and amortization) as adjusted by incomeloss from discontinued operations non-cash gains and losses
attributable to movement in the mark-to-market valuation of hedging obligations under IFRS goodwill write-offs and certain other one-off or non-cash items Adjusted EBITDA as presented here may not be comparable to similarly-titled measures that are reported by other companies due to differences in the way these measures are calculated Further details of covenant adjustments can be found in the relevant bond prospectuses available on our website
bull Adjusted interest coverage ndash Adjusted EBITDA interest expense for the relevant period (nb not equal to the full covenant coverage ratio calculation)
bull Cost of risk ndash Annualised net impairment loss average gross receivables (total gross receivables as of the start and end of each period divided by two)
bull Cost income ratio ndash Operating costs operating income (revenue)
bull Equity assets ratio ndash Total equity total assets
bull Equity net receivables ndash Total equity net customer receivables (including accrued interest)
bull Gross NPL ratio ndash Non-performing receivables (including accrued interest) with a delay of over 90 days gross receivables (including accrued interest)
bull Gross receivables ndash Total amount receivable from customers including principal and accrued interest after deduction of deferred income
bull Intangible assets ndash consists of deferred tax assets intangible IT assets and goodwill
bull Interest income ndash Interest and similar income generated from our customer loan portfolio
bull Loss given default ndash Loss on non-performing receivables (ie 1 - recovery rate) based on recoveries during the appropriate time window for the specific product reduced by costs of collection discounted at the weighted average effective interest rate
bull Net effective annualised yield ndash annualised interest income (excluding penalties) average net loan principal
bull Net impairment to interest income ratio ndash Net impairment losses on loans and receivables interest income
bull Net interest margin ndash Annualised net interest income average gross loan principal (total gross loan principal as of the start and end of each period divided by two)
bull Net receivables ndash Gross receivables (including accrued interest) less impairment provisions
bull Non-performing loans (NPLs) ndash Loan principal or receivables (as applicable) that are over 90 days past due (and for TBI Bank shown on a customer level basis)
bull Normalised ndash Adjusted to remove the effect of non-recurring items net FX and one-off adjustments to intangible assets and for 2018 ratios only adjusted to reflect the opening balance of 2018 balance sheet after IFRS 9 effects
bull Profit before tax margin ndash Profit before tax interest income
bull Return on Average Assets ndash Annualised profit from continuing operations average assets (total assets as of the start and end of each period divided by two)
bull Return on Average Equity ndash Annualised profit from continuing operations average equity (total equity as of the start and end of each period divided by two)
bull Return on Average Tangible Equity ndash Annualised profit from continuing operations average tangible equity (tangible equity as of the start and end of each period divided by two)
bull Tangible Equity ndash Total equity minus intangible assets
bull TBI Bank Capital adequacy ratio ndash (Tier One Capital + Tier Two Capital) Risk weighted assets (calculated according to the prevailing regulations of the Bulgarian National Bank)
34
Contacts
Investor Relationsinvestorrelations4financecom
James EtheringtonHead of Investor RelationsPhone +44 7766 697 950E-mail jamesetherington4financecom
Paul GoldfinchChief Financial OfficerPhone +371 2572 6422E-mail paulgoldfinch4financecom
Headquarters17a-8 Lielirbes street Riga LV-1046 Latvia
4finance Holding SA
Disclaimer
Agenda
Q1 2020 business and financial highlights
Slide Number 5
Current trading and outlook
Review of three month 2020 results
Summary of three month 2020 results
Interest income remains well diversified
Slide Number 10
Strong financial profile ndash stability and profitability
Funding strategy
Diversified loan portfolio
Analysis of net impairments and cost of risk
Asset quality and provisioning
Recent collections performance
Slide Number 17
Thank you and Questions
Appendix ndash responsible lending and regulatory overview
Sustainability through good governance and responsible lending
Regulatory overview
Regulatory overview (continued)
Appendix ndash strategic evolution of portfolio
Evolving and broadening our business model
Evolution of product mix
Slide Number 26
Asset quality and provisioning ndash loan principal
Appendix ndash financials and key ratios
Slide Number 29
Balance sheet
Statement of Cash Flows
Slide Number 32
GlossaryDefinitions
Contacts
Q12018
Q1 2020
9M 2018
Q1 2019
FY 2017
Net receivables (eurom) of which
5426
5408
5477
- Principal
272
5147
5144
5165
208
- Accrued interest
98
279
265
312
39
Total assets (eurom)
9724
10238
10147
Total equity (eurom)
221
1605
1607
1637
335
Capitalisation
Equity assets
147
165
157
161
127
Equity net receivables
195
296
297
299
267
Adjusted interest coverage
233
18x
25x
20x
223
TBI Bank consolidated capital adequacy
231
188
241
210
239
240
Profitability
Q12018
Net interest margin
- Online
764
882
802
- TBI Bank
246
280
252
- Overall group
500
648
557
Cost income ratio
527
520
520
Post-provision operating profit margin
145
166
177
Normalised Profit before tax margin
111
154
127
Normalised Return on average equity
118
375
104
Normalised Return on average assets
20
56
17
Asset quality
Cost of risk
- Online
295
237
289
- TBI Bank
47
86
45
- Overall group
174
181
184
Net impairment interest income
323
259
304
Gross NPL ratio
- Online
283
222
227
- TBI Bank
160
154
173
- Overall group
222
196
204
Overall group NPL coverage ratio
1035
1156
1064
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
505
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(06)
57
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
50
199
199
(248)
(301)
0800
Impairment losses on loans
1485
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(120)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(73)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
568
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
09
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2599
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
108
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(11)
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2637
2840
2840
1756
2279
00
Increase in loans due from customers
(2248)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1453
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1120
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(15)
(13)
(84)
(128)
(131)
(21)
Net cash from Purchase Sale of financial instruments
39
(118)
(136)
mdash
Repayment of financial instrument
-
-
Loans issued to related parties
-
-
(26)
(06)
(43)
(23)
Loans repaid from related parties
0
40
74
23
109
54
Interest received from related parties
31
01
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
00
(01)
0-
mdash
Disposal of subsidiaries net of cash disposed
(13)
-
(59)
(45)
(44)
mdash
(Acquisition)Disposal of equity investments
(14)
-
Acquisition of non-controlling interests
(04)
(04)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
-
-
mdash
0-
(00)
Prepayment for potential acquisition
-
00
208
0-
(208)
mdash
Acquisition of shares
-
00
00
Net cash flows from investing activities
25
(94)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
0
05
2999
1637
05
Repayment and repurchase of loans and notes
(164)
(133)
(272)
(1737)
(580)
(01)
Interest payments
(06)
(35)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
-
00
(00)
(192)
(58)
mdash
FX hedging margin
14
82
42
(140)
(88)
Payment of lease liabilities
(11)
(1)
mdash
Dividend payments
-
-
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(167)
(95)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
333
35
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
985
1488
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
(01)
0
01
10
10
03
Cash and cash equivalents at the end of the period
1318
1524
1488
2040
1319
681
TBI Bank minimum statutory reserve
242
354
234
230
230
242
Total cash on hand and cash at central banks
1560
1878
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
02
119
526
495
107
17000
Adjustments for
Depreciation and amortisation
32
32
121
64
83
1700
Impairment of goodwill and intangible assets
-
-
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
131
63
199
(248)
(301)
0800
Impairment losses on loans
364
359
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(20)
01
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
01
01
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(19)
(19)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
127
150
621
455
619
13300
Non-recurring finance cost
32
-
mdash
mdash
63
Other non-cash items
14
0
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663
707
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(137)
(82)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
(09)
(15)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(39)
(81)
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
479
530
2840
1756
2279
00
Increase in loans due from customers
(132)
(468)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
71
161
819
333
542
160
Increase in deposits (customer and bank deposits)
77
74
165
265
338
110
Deposit interest payments
(15)
(10)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
481
288
1233
524
442
(535)
Corporate income tax paid
(06)
(63)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
475
225
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(83)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(196)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
Q12018 (unaudited)
31 March 2020 (unaudited)
1 January 2018 (post IFRS 9 unaudited)
31 December 2019
Cash and cash equivalents of which
1538
1560
1549
1257
- Online
535
834
658
767
- TBI Bank
1003
725
892
490
Placements with other banks
57
127
70
64
Gross receivables due from customers
7156
7042
6588
7337
Allowance for impairment
(1665)
(1616)
(1575)
(1548)
Net receivables due from customers of which
5491
5426
5013
5789
- Principal
5147
5026
5480
- Accrued interest
277
264
309
Net investments in finance leases
93
45
105
47
Net loans to related parties
631
594
598
607
Property and equipment
96
182
101
178
Financial investments
183
502
184
564
Prepaid expenses
87
40
108
45
Tax assets
212
174
221
213
Deferred tax assets
371
353
368
330
Intangible IT assets
281
168
286
178
Goodwill
214
165
214
165
Other assets
678
392
573
295
Total assets
9932
9727
9390
9731
Calculation for Presentation - other assets (not loans or cash)
Loans and borrowings
4672
3849
3794
3846
Deposits from customers
2728
3333
2710
3222
Deposits from banks
94
95
mdash
130
Corporate income tax payable
178
124
198
95
Other liabilities
799
718
765
780
Total liabilities
8471
8119
7466
8074
Share capital
358
358
358
358
Retained earnings
1475
1628
1350
1657
Reserves
(343)
(378)
(323)
(357)
Total attributable equity
1490
1608
1385
1658
Non-controlling interests
(28)
00
(24)
(00)
Total equity
1461
1608
1362
1658
Total shareholders equity and liabilities
9932
9727
8828
9731
In millions of euro
Q1 2020 (unaudited)
Q1 2019 (unaudited)
change YoY
Interest Income
966
1065
(9)
Interest Expense
(127)
(150)
-(16)
1000000
Net Interest Income
839
915
(8)
Net FampC Income
24
21
12
Other operating income
23
22
7
Non-Interest Income
47
43
10
Operating Income (Revenue)
886
957
(7)
Personnel costs
(221)
(221)
(0
Discretionary bonus
(18)
(19)
(6)
Marketing
(91)
(96)
(5)
IT costs
(39)
(45)
(12)
DampA costs
(35)
(32)
+8
Other costs
(98)
(118)
(17)
Total operating costs
(467)
(498)
(6)
Pre-provision operating profit
419
459
(9)
Net impairment charges
(312)
(324)
-(4)
manual
Post-provision operating profit
107
135
(21)
Depreciation and amortisation
(32)
(32)
-+0
manual
Non-recurring income(expense)
(39)
(01)
nm
Non-recurring finance cost
mdash
mdash
+0
Net FX gain(loss)
(34)
16
nm
One-off adjustments to intangible assets
-
-
(0)
manual
Profit before tax
02
119
nm
Income tax expense
(27)
(62)
-(57)
manual
Net profit(loss) after tax
(25)
57
nm
manual
Adjusted EBITDA
233
294
-(21)
Costincome ratio
527
520
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online principal
Performing (1)
2347
(357)
1990
737
2634
(397)
2237
774
3177
(493)
2684
791
(22139)
3177
(302)
2875
681
(191)
150128837891005
Non-performing (2)
836
(656)
181
263
770
(590)
180
226
840
(664)
175
209
(74878)
36947
1488
(983)
505
319
-648
319
-64836054
-250544747891005
Online total
3184
(1013)
2171
1000
3404
(987)
2417
1000
4017
(1158)
2859
1000
4665
(1286)
3379
1000
(74878)
14808
TBI Bank principal
Performing (1)
2853
(121)
2732
840
2896
(118)
2778
838
2090
(68)
2022
873
(2586)
2090
(43)
2047
873
(25)
-251961477
Non-performing (2)
541
(298)
244
160
558
(274)
284
162
303
(158)
145
127
0437
303
(162)
141
127
04
42578177
TBI Bank total
3394
(418)
2976
1000
3454
(392)
3062
1000
2393
(226)
2167
1000
-
(2149)
2393
(205)
2188
1000
Overall group principal
Performing (1)
5200
(478)
4722
791
5529
(515)
5015
806
5267
(562)
4706
822
-
(24725)
5267
(345)
4922
746
Non-performing (2)
1378
(953)
424
209
1328
(864)
465
194
1142
(822)
320
178
(74878)
37384
1791
(1145)
646
254
Overall total
6578
(1431)
5147
1000
6858
(1378)
5480
1000
6410
(1384)
5026
1000
(74878)
12659
7058
(1490)
5567
1000
31122018 data updated post audit
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
IFRS 9 ADJ part
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online receivables
Performing (1)
2553
(412)
2141
717
2855
(456)
2399
751
3432
(567)
2864
778
(22139)
3432
(346)
3086
665
00
221
-150
Non-performing (2)
1006
(775)
232
283
946
(691)
255
249
977
(775)
201
222
(74878)
36947
1725
(1145)
580
335
749
(369)
250
Online total
3559
(1187)
2373
1000
3801
(1147)
2654
1000
4408
(1343)
3065
1000
5157
(1491)
3666
1000
(148)
NPL (90+)
(74878)
14808
TBI Bank receivables
Performing (1)
2927
(124)
2803
840
2964
(120)
2844
838
2145
(70)
2075
873
(2586)
2145
(44)
2101
873
00
26
120
Non-performing (2)
556
(305)
250
160
571
(280)
291
162
311
(162)
149
127
0437
311
(166)
145
127
00
(04)
-20
TBI Bank total
3482
(429)
3053
1000
3535
(401)
3135
1000
2456
(232)
2224
1000
-
(2149)
2456
(210)
2246
1000
21
Overall group receivables
Performing (1)
5480
(536)
4944
778
5819
(577)
5242
793
5577
(637)
4939
812
-
(24725)
5577
(390)
5187
733
Non-performing (2)
1562
(1080)
482
222
1517
(971)
546
207
1287
(937)
350
188
(74878)
37384
2036
(1311)
725
267
Overall total
7042
(1616)
5426
1000
7337
(1548)
5789
1000
6864
(1575)
5290
1000
(74878)
12659
7613
(1701)
5912
1000
31122018 changed to audited figures
5
Operational overview for key marketsRegulatory measures of interest
income Q1 Operational response
Poland bull Temporary reduction in non-interest cost caps to 15 fixed 6 annual (from 25 amp 30)
bull Nominal interest rate cap to 72 (from 10)bull ldquoAnti crisis shieldrdquo regulations in development
(payment deferrals but for instalment loans only)
23 bull 1-3 month payment deferrals introduced voluntarily in line with association guidelines Limited requests so far
bull Adapted single payment product to new pricing overnightbull Relaunched instalment loan product as a 3-month loan
Current trading and outlookbull Early indications of demand in recent weeks have been
encouraging with May online issuance 23 above Aprilbull Issuance levels of shorter-term products for returning customers are
back to nearly 75 of Jan-Feb levelsbull Spain remained at a lower issuance level but improving in late Maybull Denmark demand already returned to more normal levels in May
Record for daily applications in 2020 set last week
bull Strong near-prime progress with product enhancements in Latvia Lithuania and Swedenbull Carefully moderated underwriting and marketing spend post Covid-19bull Development of funding via TBI Bank continuesbull 51 of net loan portfolio is near-prime consumer lending
bull Decisions taken already on business footprint and cost reductionbull Latin America and Finlandbull Significant headcount reductions across the network
bull Significant medium-term opportunitiesbull Potentially larger lsquonon-primersquo market sizebull Potential competitive dislocation in many markets
Weekly issuance of short-term products (rebased to 100 as Jan-Feb average)
Week number
FebruaryJanuary March April May
Includes single payment loans and lines of credit
7
Review of three month 2020 results
8
bull Solid initial start to the year with January and February largely in line with management expectationsbull Follows Q4 a naturally seasonally strong quarter especially at TBI Bank
bull Q1 2020 interest income down 9 Adjusted EBITDA of euro233m down 21 year-on-year bull Half of QoQ interest income change from products that have been discontinued
de-emphasised (eg instalment loans in Poland amp Armenia)bull Main Covid-19 impact on Q1 financials additional ceuro3m of net impairmentsbull Post-provision operating profit of euro107m vs euro135m in Q1 2019
bull Continued progress on cost reductionbull Year-on-year reduction in costs of 6 from existing cost efficiency programmesbull Additional measures taken post Covid-19
bull Strong operating cashflow and robust cash positionbull Operating cashflow before movements in portfolio amp deposits of euro479mbull Significant bond repurchases made in March and April ($359m of USD bonds)bull Current ldquoonlinerdquo cash levels after May coupons remain strong at ceuro90m
bull Overall stable risk performance although delayed debt sales did impact the NPL ratiobull Overall gross NPL ratio of 222 (vs 207 as of Dec 2019)bull Net impairmentinterest income at 323 for Q1 2020 (vs 304 in Q1 2019)
Adjusted EBITDAeurom
Summary of three month 2020 results
Interest Incomeeurom
See appendix for definitions of key metrics and ratios
Q4 2019 costs have been adjusted to reflect audited figuresEstimated Covid-19 impact comprises -euro1m of interest income reduction +euro02m marketing cost savings and -euro31m additional impairment
Year-on-year comparison
eurom
Quarter-on-quarter bridge for Adjusted EBITDA
294
233
Q1 2019 Q1 2020
1065
966
Q1 2019 Q1 2020
-9-21
9
7
13
23
22
25
8
2
Baltics
Nordics
Poland
Spain
BGRO
Other Europe
Latin America
Interest income remains well diversified
Interest income by country
1065
966
euro0m
euro20m
euro40m
euro60m
euro80m
euro100m
euro120m
Q1 2019 Q1 2020
Other MexicoArgentinaArmeniaSlovakiaCzech RepublicRomaniaBulgariaSpainPolandDenmarkSwedenFinlandLithuaniaLatvia
-9
2020 interest income euro966m
Other represents countries exited during 2018 (Dominican Republic and Georgia)
10
472 459
387 410 385 386 372 383341
10198
107112
113 117109
117
126
3733
1615
54 53
49
52 52 5250 51
53
0
10
20
30
40
50
60
00
100
200
300
400
500
600
700
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
4finance TBI Friendly Finance Quarterly costincome ratio
Operating cost driversbull Operating costs down 6 year-on-year vs revenue down 7
bull Q1 2020 costincome ratio at 527 compared to 520 in Q1 2019
bull Some cost reduction effect from IFRS 16 impacting comparison with 2018 data
bull Seasonal increase in marketing spend in Q4 reduced in Q1 with some early impact of Covid-19 reductions
bull Investment in TBI Bank to support growth
bull Cost efficiency projects ongoing with focus on costincome ratiobull Headcount reduction of 5 year-on-yearbull Lower above-the-line marketing spend due to efficiency savings
from econometric modelling
bull Additional actions taken post Covid-19 bull Further headcount reductions of c20 of online business
personnel costs to align cost structure with market and product footprint
Notes(1) Q4 2018 costs have been adjusted to reflect audited figures(2) Q4 2019 costs have been adjusted to reflect audited figures
Total operating costs (1)
eurom
2018(1)
See appendix for definitions of key metrics and ratios
2019 (2) 2020
11
135149
124
29 23
2017 2018 2019 Q1 2019 Q1 2020
eurom
81
11
53 51
120
2016 2017 2018 2019 Q1 2019 Q1 2020
Profit before tax
1814 16 17 16 17
2017 1 Jan2018
2018 2019 Q1 2019 Q1 2020
Strong financial profile ndash stability and profitabilityInterest income
448475
425
106 97
2017 2018 2019 Q1 2019 Q1 2020
Adjusted EBITDA Equity assets ratio
22x24x
22x20x 18x
2017 2018 2019 Q1 2019 Q1 2020
Adjusted interest coverage ratio (1)
32
2628 29 30 30
2017 1 Jan 2018 2018 2019 Q1 2019 Q1 2020
Equity net receivables (2)
eurom
eurom
Post IFRS 9
Post IFRS 9
Times
Note (1) The full covenant calculation of interest coverage ratio is based on proforma last twelve month figures and is currently 25x(2) The full covenant calculation of equitynet loans includes related party loans and finance leases and is currently 27
12
Funding strategy
Overview of funding structure 31 March 2020 (2)
2021 Notes194
2022 Notes335
4finance customer deposits
16
TBI customer deposits
442
TBI deposits from banks13
Notes(1) Represents the principal value of public bonds outstanding that comes due in each respective period net of buybacks and bonds owned by TBI Bank(2) The chart reflects the principal and accrued interest amounts of each of the instruments net of buybacks and bonds owned by TBI Bank
euro7277m
Strategy to diversify sources of funding and reduce overall funding cost over time
bull Strong cash generation and cash positionbull Cash generated from portfolio in Q1 and AprilMaybull Online cash ceuro90m at end May (after coupons and buybacks)bull TBI Bank increased deposit levels in Q1 and has strong liquidity ratios
bull Accessing TBI Bank balance sheet to fund online loansbull Successful initial portfolio sales of Polish instalment loans H2 2019bull Passport application for Lithuania to support portfolio sales from that
market submitted in April due to start in Q3
bull Further de-leveraging already achieved in 2020bull $359m of USD 2022 bonds and euro11m of EUR 2021 bonds purchased in
2020 year-to-datebull Proforma covenant interest expense reduced by 18 year-on-yearbull Retain ongoing flexibility to buy back bonds with spare liquidity
bull Strong capital positionbull 30 equity net receivables ratiobull TBI Bank capital adequacy c22 after adoption of 2019 profit in April
bull Consultations underway on potential extension to EUR 2021 bondsbull Allows financial results and markets to normalise prior to refinancing
Debt maturity schedule proforma for 31 May 2020 (1)
eurom
0
146
217
0
2020 2021 2022 2023+
13
195 167 170 171 162 150
3747 48 47 47 38
3940 35 23 21
17
6 7 10 12 811
7758 65 72 90
69
364328 341 341 342
293
Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020
Single Payment loans Line of Credit Instalment loans Near Prime TBI bank SME (Bank)
211 199 171 131 101 89
18 4537
34 51 48
159
242215
255 260 247
58
64
63 83 10398
47
42
42 49 6460492
591529 553 579
543
00
1500
3000
4500
6000
7500
2016 2017 1 Jan 2018 2018 2019 31 Mar 2020
Single Payment loans Line of Credit Cards Instalment loans Point of Sale SME (Bank)Baltics11
Nordics6
Poland16
Spain6
CZSK 2GEAM
1LatAm 05
BG (online)05
Bulgaria (TBI)25
Romania (TBI) 20
SME (TBI)11
Diversified loan portfolioNet receivables (1)
Net receivables 31 March 2020
Notes (1) Reflects reclassification of former SPL products in Sweden (from January 2016) Denmark (from January 2017) Armenia (from launch in July 2017) and Latvia (from January 2019) to Lines of Credit
bull Selective approach to new loan issuance
bull Overall net receivables totals euro542mbull 4 reduction during Q1 bull 89 consumer loansbull 43 online loans 57 banking
TBI Bank 57(funded clt2)
Online 43(funded c12)
eurom
See appendix for definitions of key metrics and ratios Includes TBI bank BG online and euro18m of purchased Poland portfolio Introduction of IFRS 9 as of 1-Jan-2018 reduced net receivables by euro62 million to euro529 million
Online loans issued (1)
eurom
14
486 464426 413
359 373 376 379 364
(55) (52) (42) (45) (36) (34) (34) (32) (31)
(67)(143)
(78) (77)
01
(57)(23) (41) (20)
364
269305 291
324281
319 307 312
-600
-500
-400
-300
-200
-100
00
100
200
300
400
-200
-150
-100
-50
00
50
100
150
200
250
300
350
400
450
500
550
600
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Analysis of net impairments and cost of risk
bull Q1 2020 net impairment charges remain fairly elevatedbull Most products in line with expectations Some additional
provisions in Armenia IL portfolio (in run-off)bull Overall impact of Covid-19 increased net impairments by
approximately euro3 million in Q1 (higher macro provisions delayed debt sales some impact on delay indicators)
bull Overall cost of risk relatively stablebull Overall cost of risk 174 (Q1 2020 including TBI Bank) vs 184
(Q1 2019)bull Online cost of risk 295 vs 289 (Q1 2019)bull Net impairment interest income 323 vs 304 (Q1 2019)
bull Proactive and ongoing adjustments to risk parameters across markets since mid-March
bull 63 changes to underwriting scorecardspoliciesbull 82 changes to debt collection scorecardspoliciesbull Ongoing regular reviews by market (eg Spain Poland)
Net impairment charges by quarter (1)
eurom
See appendix for definitions of key metrics and ratios
208 151
Gross impairments
Net impairment losses
Over provisioning on debt sales (net gainloss)
Recoveries from written off loans
174
2018166
Note (1) Q4 2018 and 2019 figures have been adjusted to reflect audited figures
2019184 160 Overall quarterly
cost of risk183 171 174
2020
15
Asset quality and provisioning bull Gross NPL ratios increased in lsquoonlinersquo due to delayed debt sales but asset quality relatively stable Coverage ratios remain over 100
bull Online gross NPL ratio 283 as of March 2020 compared with 249 as of December 2019bull Overall gross NPL ratio 222 as of March 2020 from 207 as of December 2019bull Some delayed debt sales already restarting in May including Poland
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Recent collections performancebull April and May repayment dynamics
in line with prior monthsbull April performance comparable
with Januarybull Improvement in May
bull Requests for payment deferrals either proactively offered by 4finance or offered in accordance with local regulation have been relatively limited
bull Main take-up in Czech Republic Armenia and TBI Bank
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
January Feb-Mar average April May
Repayment dynamics (single payment)
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
January Feb-Mar average April May
Repayment dynamics (instalment)
Repayment dynamics graphs represent cumulative sum of payments and extensions performed at under 30 DPD as a of amounts due in the prior month For example May line shows progress by day in May of repaymentextension of amounts that were due at any time in April and performed within 30 days of the due date
Payment deferral take-up in selected markets( of eligible portfolio by value)
Poland 2
Spain 3
Denmark 1
Baltics 1
Czech Republic 12
Armenia 17
TBI consumer 12
TBI SME 43
Day number in relevant month Day number in relevant month
17
Pro-active response to Covid-19 across the business with good resultsbull Rapidly adapted operations to home working ensuring employee safety and continuous services for customersbull Focus on risk management but remained ldquoopen for businessrdquo in AprilMay particularly for our returning customersbull Customer repayment behaviour within normal ranges in AprilMay with proactive support offered for customers who have
been impacted
Well positioned to lsquoweather the stormrsquo and take advantage of subsequent opportunitiesbull Key decisions taken to streamline footprint focus on larger markets and right-size cost basebull Continued development of near-prime business both on product side (Latvia Lithuania Sweden launches) and TBI Bank
funding side (Lithuania passport application)bull Encouraging demand and issuance trends in May (22 increase in online loans issued vs April) with improvement
expected to continue in June
Strong balance sheet and funding position with further action being takenbull Strong liquidity position in both lsquoonlinersquo and TBI Bankbull Strong cashflow generation deployed in significant bond buybacks to reduce leveragebull Consultations underway on potential extension to EUR 2021 bonds to allow financial results and markets to normalise
prior to long term refinancing
Summary
4finance a multi-segment multi-product consumer credit specialist
18
Thank you and Questions
19
Appendix ndash responsible lending and regulatory overview
20
Sustainability through good governance and responsible lendingOperating as a mainstream consumer finance business
bull ldquoBank-likerdquo policies and procedures with strong compliance function
bull Continued investment in AML GDPR and other strategic compliance priorities
bull Robust corporate governance with strong Supervisory Board
bull Increasingly regulated by main financial supervisory authorities
bull Diversification of portfolio and consequent reduction of reliance on single payment loans
bull Clear corporate values and code of conduct
bull Listed bond issues with quarterly financial reporting
Developing meaningful and constructive regulatory relationships
bull Ensuring we understand the regulatory arc
bull Helping regulators and legislators gain a solid understanding of our business
bull Ensuring we have a seat at the table
bull Contributing to EU Consumer Credit Directive consultation process
bull Continuous improvements in credit underwriting
bull Ensuring products are used appropriately
bull Working to ensure customers have safe landings when they signal difficulties
21
Regulatory overviewCountry
of interest income(Q1 2020)
Products (1) Regulator CB (2) Licenserequired (3)
Interest rate cap (1) Status
Argentina 1 SPL Consumer Protection Directorate - - -
Armenia 2 LOC Central Bank of the Republic of Armenia Yes Yes Nominal
Bulgaria ndash Online 2 SPL Bulgarian National BankYes Yes APR
(inc fees) Stable frameworkBulgaria ndash Bank 13 IL LOC POS SME
Czech Republic 5 SPL IL Czech National Bank Yes Yes - Stable framework
Denmark 11 LOC IL FSA and Consumer Ombudsman Yes YesAPR amp TCOC
being introduced
Danish FSA licensing process ongoing New regulations regarding interest rate caps (35 APR cap 100 cost of credit cap) and marketing restrictions in final stages of review Expected to start in July
Finland 1 IL(4) Finnish Competition and Consumer Authority - - Nominal
amp fees
New interest rate caps in force from September 2019 Further discussions on temporary reduction to 10 are ongoing
Latvia 5 MTP IL Consumer Rights Protection Centre - Yes Nominal fees amp TCOC
Stable framework since new interest rate caps in July 2019
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards MTP ndash Minimum to pay POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit(2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement(4) lsquoMini-ILrsquo (4 monthly instalments) from September 2019
22
Regulatory overview (continued)Country
of interest income
(Q1 2020)Products (1) Regulator CB (2) License
required (3)Interest rate
cap (1) Status
Lithuania 2 SPL IL Central Bank of Lithuania Yes Yes Nominal fees amp TCOC Stable framework
Mexico 1 IL National Financial Services Consumer Protection Commission - Yes - Stable framework
Poland 23 SPL IL Office of Competition and Consumer Protection - - Nominal fees
amp TCOC
Non-interest cost caps adjusted in April for one year to 15 fixed and 6 annual with a 45 total limit
Romania 10 IL LOC POS SME National Bank of Romania Yes Yes - Bill to introduce interest rate cap under discussion
Slovakia lt1 SPL National Bank of Slovakia Yes Yes APR (inc fees) Stable framework
Spain 22 SPL IL NA - - -
Sweden 1 LOC IL Swedish Financial Supervisory Authority Yes Yes Nominal amp
TCOCStable framework since new interest rate caps in September 2018
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit (2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement
23
Appendix ndash strategic evolution of portfolio
24
Evolving and broadening our business model
Prime
Sub-Prime
Near-Prime
Segments
Higher Duration Lower APR Products
SPL ILLOC POS
A multi-segment multi-product consumer credit specialist
1
1 Optimise
2 2 Diversify amp Grow
Illustrative
25
Evolution of product mix
Note (1) Reflects reclassification of Vivus brand products in Sweden (from January 2016) Denmark (from January 2017) Armenia (from launch in July 2017) and short-term products (SMS Credit amp Ondo) in Latvia (from January 2019) to Lines of Credit
68
17
3
9
29
45
18
11
0
25
50
75
100
30 Jun 2016 31 Mar 2020
SME (Bank)
Point of Sale
Instalment loans
Line of Credit Cards
Single Payment Loans
euro543meuro323m
Net receivables by product (1)
Online sub-prime only
Bank and onlinenear-prime
and sub-prime
76
48
4
14
20
29
7
0
25
50
75
100
Q1 2016 Q1 2020
Interest income by product (1)
euro97meuro90m
Date chosen to reflect the composition of loan portfolio immediately prior to purchase of TBI Bank
26
Funding near-prime growth via TBI Bank
Online acquisition Retail deposit funding
Initial portfolio development
Early stage customer acquisition and credit metrics monitored and
enhanced
Funding Platform
In-house IT funding platform ensuring ongoing automated
portfolio transfers
Bringing portfolios to scale
Market specific portfolios grow with ongoing sales to reach scale
True saleof portfolio(s)loan servicing
Indicative APRs
20-40
CostIncome ratio
c40
Cost of Risk
6-8
Cost of Funds
3-5
Return on Assets
3-5(2)
Illustrative near-prime
ldquounit economicsrdquo(1)
Notes(1) Illustrative metrics for near-prime portfolios and not indicative of a specific product or market(2) Illustrative potential returns in medium-term at scale
Payment of fair market value
bull Regular sales of Polish instalment loans since September 2019bull Passporting application submitted for Lithuania (largest near-prime portfolio)
Accessing TBI Bank deposit funding for lsquoonlinersquo portfolios via ongoing loan sales
27
Asset quality and provisioning ndash loan principal
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Interest Income 966 1065 (9)Interest Expense (127) (150) (16)Net Interest Income 839 915 (8)Net FampC Income 24 21 12Other operating income 23 22 7Non-Interest Income 47 43 10Operating Income (Revenue) 886 957 (7)Total operating costs (467) (498) (6)Pre-provision operating profit 419 459 (9)Net impairment charges (312) (324) (4)Post-provision operating profit 107 135 (21)Depreciation and amortisation (32) (32) +0Non-recurring income(expense) (39) (01) nmNet FX gain(loss) (34) 16 nmProfit before tax 02 119 nmIncome tax expense (27) (62) (57)Net profit(loss) after tax (25) 57 nm
Adjusted EBITDA 233 294 (21)
Income Statement
30
Balance sheetIn millions of euro
31 March 2020 (unaudited)
31 December 2019
Cash and cash equivalents of which 1560 1257- Online 834 767- TBI Bank 725 490
Placements with other banks 127 64Gross receivables due from customers 7042 7337Allowance for impairment (1616) (1548)Net receivables due from customers of which 5426 5789
- Principal 5147 5480- Accrued interest 277 309
Net investments in finance leases 45 47Net loans to related parties 594 607Property and equipment 182 178Financial investments 502 564Prepaid expenses 40 45Tax assets 174 213Deferred tax assets 353 330Intangible IT assets 168 178Goodwill 165 165Other assets 392 295Total assets 9727 9731Calculation for Presentation other assets (not loans Loans and borrowings 3849 3846Deposits from customers 3333 3222Deposits from banks 95 130Corporate income tax payable 124 95Other liabilities 718 780Total liabilities 8119 8074Share capital 358 358Retained earnings 1628 1657Reserves (378) (357)Total attributable equity 1608 1658Non-controlling interests 00 (00)Total equity 1608 1658Total shareholders equity and liabilities 9727 9731
Balance Sheet
31
Statement of Cash FlowsIn millions of euro
2020 2019Cash flows from operating activitiesProfit before taxes 02 119
Adjustments forDepreciation and amortisation 32 32
Impairment of goodwill and intangible assets - -
Net (gain) loss on foreign exchange from borrowings and other monetary items 131 63
Impairment losses on loans 364 359
Reversal of provision on debt portfolio sales (20) 01
Write-off and disposal of intangible and property and equipment assets 01 01
Interest income from non-customers loans (19) (19)
Interest expense on loans and borrowings and deposits from customers 127 150Non-recurring finance cost 32 -
Other non-cash items 14 0
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663 707
Adjustments forChange in financial instruments measured at fair value through profit or loss (137) (82)(Increase) decrease in other assets (including TBI statutory reserve placements amp leases) (09) (15)
Increase (decrease) in accounts payable to suppliers contractors and other creditors (39) (81)
Operating cash flow before movements in portfolio and deposits 479 530
Increase in loans due from customers (132) (468)
Proceeds from sale of portfolio 71 161
Increase in deposits (customer and bank deposits) 77 74
Deposit interest payments (15) (10)
Gross cash flows from operating activities 481 288
Corporate income tax paid (06) (63)
Net cash flows from operating activities 475 225
3 months to 31 March In millions of euro
2020 2019
Cash flows used in investing activitiesPurchase of property and equipment and intangible assets (15) (13)
Net cash from Purchase Sale of financial instruments 39 (118)
Loans issued to related parties - -
Loans repaid from related parties 0 40
Interest received from related parties 31 01
Disposal of subsidiaries net of cash disposed (13) -
(Acquisition)Disposal of equity investments (14) -
Acquisition of non-controlling interests (04) (04)
Net cash flows from investing activities 25 (94)
Cash flows from financing activitiesLoans received and notes issued - 0
Repayment and repurchase of loans and notes (164) (133)
Interest payments (06) (35)
FX hedging margin 14 82
Payment of lease liabilities (11) (1)
Dividend payments - -
Net cash flows used in financing activities (167) (95)
Net increase (decrease) in cash and cash equivalents 333 35
Cash and cash equivalents at the beginning of the period 985 1488
Effect of exchange rate fluctuations on cash (01) 0
Cash and cash equivalents at the end of the period 1318 1524
TBI Bank minimum statutory reserve 242 354
Total cash on hand and cash at central banks 1560 1878
3 months to 31 March
Cash Flow
Cash Flow (2)
Cash Flow
Cash Flow (2)
32
Key financial ratiosQ1 2020 Q1 2019
CapitalisationEquity assets 165 161Equity net receivables 296 299Adjusted interest coverage 18x 20xTBI Bank consolidated capital adequacy 188 210
ProfitabilityNet interest margin
- Online 764 802- TBI Bank 246 252- Overall group 500 557
Cost income ratio 527 520Normalised Profit before tax margin 111 127Normalised Return on average equity 118 104Normalised Return on average assets 20 17
Asset qualityCost of risk
- Online 295 289- TBI Bank 47 45- Overall group 174 184
Net impairment interest income 323 304Gross NPL ratio
- Online 283 227- TBI Bank 160 173- Overall group 222 204
Overall group NPL coverage ratio 1035 1064
See appendix for definitions of key metrics and ratios
key ratios
33
GlossaryDefinitionsbull Adjusted EBITDA ndash a non-IFRS measure that represents EBITDA (profit for the period plus tax plus interest expense plus depreciation and amortization) as adjusted by incomeloss from discontinued operations non-cash gains and losses
attributable to movement in the mark-to-market valuation of hedging obligations under IFRS goodwill write-offs and certain other one-off or non-cash items Adjusted EBITDA as presented here may not be comparable to similarly-titled measures that are reported by other companies due to differences in the way these measures are calculated Further details of covenant adjustments can be found in the relevant bond prospectuses available on our website
bull Adjusted interest coverage ndash Adjusted EBITDA interest expense for the relevant period (nb not equal to the full covenant coverage ratio calculation)
bull Cost of risk ndash Annualised net impairment loss average gross receivables (total gross receivables as of the start and end of each period divided by two)
bull Cost income ratio ndash Operating costs operating income (revenue)
bull Equity assets ratio ndash Total equity total assets
bull Equity net receivables ndash Total equity net customer receivables (including accrued interest)
bull Gross NPL ratio ndash Non-performing receivables (including accrued interest) with a delay of over 90 days gross receivables (including accrued interest)
bull Gross receivables ndash Total amount receivable from customers including principal and accrued interest after deduction of deferred income
bull Intangible assets ndash consists of deferred tax assets intangible IT assets and goodwill
bull Interest income ndash Interest and similar income generated from our customer loan portfolio
bull Loss given default ndash Loss on non-performing receivables (ie 1 - recovery rate) based on recoveries during the appropriate time window for the specific product reduced by costs of collection discounted at the weighted average effective interest rate
bull Net effective annualised yield ndash annualised interest income (excluding penalties) average net loan principal
bull Net impairment to interest income ratio ndash Net impairment losses on loans and receivables interest income
bull Net interest margin ndash Annualised net interest income average gross loan principal (total gross loan principal as of the start and end of each period divided by two)
bull Net receivables ndash Gross receivables (including accrued interest) less impairment provisions
bull Non-performing loans (NPLs) ndash Loan principal or receivables (as applicable) that are over 90 days past due (and for TBI Bank shown on a customer level basis)
bull Normalised ndash Adjusted to remove the effect of non-recurring items net FX and one-off adjustments to intangible assets and for 2018 ratios only adjusted to reflect the opening balance of 2018 balance sheet after IFRS 9 effects
bull Profit before tax margin ndash Profit before tax interest income
bull Return on Average Assets ndash Annualised profit from continuing operations average assets (total assets as of the start and end of each period divided by two)
bull Return on Average Equity ndash Annualised profit from continuing operations average equity (total equity as of the start and end of each period divided by two)
bull Return on Average Tangible Equity ndash Annualised profit from continuing operations average tangible equity (tangible equity as of the start and end of each period divided by two)
bull Tangible Equity ndash Total equity minus intangible assets
bull TBI Bank Capital adequacy ratio ndash (Tier One Capital + Tier Two Capital) Risk weighted assets (calculated according to the prevailing regulations of the Bulgarian National Bank)
34
Contacts
Investor Relationsinvestorrelations4financecom
James EtheringtonHead of Investor RelationsPhone +44 7766 697 950E-mail jamesetherington4financecom
Paul GoldfinchChief Financial OfficerPhone +371 2572 6422E-mail paulgoldfinch4financecom
Headquarters17a-8 Lielirbes street Riga LV-1046 Latvia
4finance Holding SA
Disclaimer
Agenda
Q1 2020 business and financial highlights
Slide Number 5
Current trading and outlook
Review of three month 2020 results
Summary of three month 2020 results
Interest income remains well diversified
Slide Number 10
Strong financial profile ndash stability and profitability
Funding strategy
Diversified loan portfolio
Analysis of net impairments and cost of risk
Asset quality and provisioning
Recent collections performance
Slide Number 17
Thank you and Questions
Appendix ndash responsible lending and regulatory overview
Sustainability through good governance and responsible lending
Regulatory overview
Regulatory overview (continued)
Appendix ndash strategic evolution of portfolio
Evolving and broadening our business model
Evolution of product mix
Slide Number 26
Asset quality and provisioning ndash loan principal
Appendix ndash financials and key ratios
Slide Number 29
Balance sheet
Statement of Cash Flows
Slide Number 32
GlossaryDefinitions
Contacts
Q12018
Q1 2020
9M 2018
Q1 2019
FY 2017
Net receivables (eurom) of which
5426
5408
5477
- Principal
272
5147
5144
5165
208
- Accrued interest
98
279
265
312
39
Total assets (eurom)
9724
10238
10147
Total equity (eurom)
221
1605
1607
1637
335
Capitalisation
Equity assets
147
165
157
161
127
Equity net receivables
195
296
297
299
267
Adjusted interest coverage
233
18x
25x
20x
223
TBI Bank consolidated capital adequacy
231
188
241
210
239
240
Profitability
Q12018
Net interest margin
- Online
764
882
802
- TBI Bank
246
280
252
- Overall group
500
648
557
Cost income ratio
527
520
520
Post-provision operating profit margin
145
166
177
Normalised Profit before tax margin
111
154
127
Normalised Return on average equity
118
375
104
Normalised Return on average assets
20
56
17
Asset quality
Cost of risk
- Online
295
237
289
- TBI Bank
47
86
45
- Overall group
174
181
184
Net impairment interest income
323
259
304
Gross NPL ratio
- Online
283
222
227
- TBI Bank
160
154
173
- Overall group
222
196
204
Overall group NPL coverage ratio
1035
1156
1064
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
505
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(06)
57
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
50
199
199
(248)
(301)
0800
Impairment losses on loans
1485
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(120)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(73)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
568
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
09
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2599
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
108
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(11)
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2637
2840
2840
1756
2279
00
Increase in loans due from customers
(2248)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1453
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1120
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(15)
(13)
(84)
(128)
(131)
(21)
Net cash from Purchase Sale of financial instruments
39
(118)
(136)
mdash
Repayment of financial instrument
-
-
Loans issued to related parties
-
-
(26)
(06)
(43)
(23)
Loans repaid from related parties
0
40
74
23
109
54
Interest received from related parties
31
01
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
00
(01)
0-
mdash
Disposal of subsidiaries net of cash disposed
(13)
-
(59)
(45)
(44)
mdash
(Acquisition)Disposal of equity investments
(14)
-
Acquisition of non-controlling interests
(04)
(04)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
-
-
mdash
0-
(00)
Prepayment for potential acquisition
-
00
208
0-
(208)
mdash
Acquisition of shares
-
00
00
Net cash flows from investing activities
25
(94)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
0
05
2999
1637
05
Repayment and repurchase of loans and notes
(164)
(133)
(272)
(1737)
(580)
(01)
Interest payments
(06)
(35)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
-
00
(00)
(192)
(58)
mdash
FX hedging margin
14
82
42
(140)
(88)
Payment of lease liabilities
(11)
(1)
mdash
Dividend payments
-
-
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(167)
(95)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
333
35
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
985
1488
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
(01)
0
01
10
10
03
Cash and cash equivalents at the end of the period
1318
1524
1488
2040
1319
681
TBI Bank minimum statutory reserve
242
354
234
230
230
242
Total cash on hand and cash at central banks
1560
1878
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
02
119
526
495
107
17000
Adjustments for
Depreciation and amortisation
32
32
121
64
83
1700
Impairment of goodwill and intangible assets
-
-
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
131
63
199
(248)
(301)
0800
Impairment losses on loans
364
359
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(20)
01
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
01
01
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(19)
(19)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
127
150
621
455
619
13300
Non-recurring finance cost
32
-
mdash
mdash
63
Other non-cash items
14
0
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663
707
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(137)
(82)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
(09)
(15)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(39)
(81)
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
479
530
2840
1756
2279
00
Increase in loans due from customers
(132)
(468)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
71
161
819
333
542
160
Increase in deposits (customer and bank deposits)
77
74
165
265
338
110
Deposit interest payments
(15)
(10)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
481
288
1233
524
442
(535)
Corporate income tax paid
(06)
(63)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
475
225
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(83)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(196)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
Q12018 (unaudited)
31 March 2020 (unaudited)
1 January 2018 (post IFRS 9 unaudited)
31 December 2019
Cash and cash equivalents of which
1538
1560
1549
1257
- Online
535
834
658
767
- TBI Bank
1003
725
892
490
Placements with other banks
57
127
70
64
Gross receivables due from customers
7156
7042
6588
7337
Allowance for impairment
(1665)
(1616)
(1575)
(1548)
Net receivables due from customers of which
5491
5426
5013
5789
- Principal
5147
5026
5480
- Accrued interest
277
264
309
Net investments in finance leases
93
45
105
47
Net loans to related parties
631
594
598
607
Property and equipment
96
182
101
178
Financial investments
183
502
184
564
Prepaid expenses
87
40
108
45
Tax assets
212
174
221
213
Deferred tax assets
371
353
368
330
Intangible IT assets
281
168
286
178
Goodwill
214
165
214
165
Other assets
678
392
573
295
Total assets
9932
9727
9390
9731
Calculation for Presentation - other assets (not loans or cash)
Loans and borrowings
4672
3849
3794
3846
Deposits from customers
2728
3333
2710
3222
Deposits from banks
94
95
mdash
130
Corporate income tax payable
178
124
198
95
Other liabilities
799
718
765
780
Total liabilities
8471
8119
7466
8074
Share capital
358
358
358
358
Retained earnings
1475
1628
1350
1657
Reserves
(343)
(378)
(323)
(357)
Total attributable equity
1490
1608
1385
1658
Non-controlling interests
(28)
00
(24)
(00)
Total equity
1461
1608
1362
1658
Total shareholders equity and liabilities
9932
9727
8828
9731
In millions of euro
Q1 2020 (unaudited)
Q1 2019 (unaudited)
change YoY
Interest Income
966
1065
(9)
Interest Expense
(127)
(150)
-(16)
1000000
Net Interest Income
839
915
(8)
Net FampC Income
24
21
12
Other operating income
23
22
7
Non-Interest Income
47
43
10
Operating Income (Revenue)
886
957
(7)
Personnel costs
(221)
(221)
(0
Discretionary bonus
(18)
(19)
(6)
Marketing
(91)
(96)
(5)
IT costs
(39)
(45)
(12)
DampA costs
(35)
(32)
+8
Other costs
(98)
(118)
(17)
Total operating costs
(467)
(498)
(6)
Pre-provision operating profit
419
459
(9)
Net impairment charges
(312)
(324)
-(4)
manual
Post-provision operating profit
107
135
(21)
Depreciation and amortisation
(32)
(32)
-+0
manual
Non-recurring income(expense)
(39)
(01)
nm
Non-recurring finance cost
mdash
mdash
+0
Net FX gain(loss)
(34)
16
nm
One-off adjustments to intangible assets
-
-
(0)
manual
Profit before tax
02
119
nm
Income tax expense
(27)
(62)
-(57)
manual
Net profit(loss) after tax
(25)
57
nm
manual
Adjusted EBITDA
233
294
-(21)
Costincome ratio
527
520
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online principal
Performing (1)
2347
(357)
1990
737
2634
(397)
2237
774
3177
(493)
2684
791
(22139)
3177
(302)
2875
681
(191)
150128837891005
Non-performing (2)
836
(656)
181
263
770
(590)
180
226
840
(664)
175
209
(74878)
36947
1488
(983)
505
319
-648
319
-64836054
-250544747891005
Online total
3184
(1013)
2171
1000
3404
(987)
2417
1000
4017
(1158)
2859
1000
4665
(1286)
3379
1000
(74878)
14808
TBI Bank principal
Performing (1)
2853
(121)
2732
840
2896
(118)
2778
838
2090
(68)
2022
873
(2586)
2090
(43)
2047
873
(25)
-251961477
Non-performing (2)
541
(298)
244
160
558
(274)
284
162
303
(158)
145
127
0437
303
(162)
141
127
04
42578177
TBI Bank total
3394
(418)
2976
1000
3454
(392)
3062
1000
2393
(226)
2167
1000
-
(2149)
2393
(205)
2188
1000
Overall group principal
Performing (1)
5200
(478)
4722
791
5529
(515)
5015
806
5267
(562)
4706
822
-
(24725)
5267
(345)
4922
746
Non-performing (2)
1378
(953)
424
209
1328
(864)
465
194
1142
(822)
320
178
(74878)
37384
1791
(1145)
646
254
Overall total
6578
(1431)
5147
1000
6858
(1378)
5480
1000
6410
(1384)
5026
1000
(74878)
12659
7058
(1490)
5567
1000
31122018 data updated post audit
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
IFRS 9 ADJ part
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online receivables
Performing (1)
2553
(412)
2141
717
2855
(456)
2399
751
3432
(567)
2864
778
(22139)
3432
(346)
3086
665
00
221
-150
Non-performing (2)
1006
(775)
232
283
946
(691)
255
249
977
(775)
201
222
(74878)
36947
1725
(1145)
580
335
749
(369)
250
Online total
3559
(1187)
2373
1000
3801
(1147)
2654
1000
4408
(1343)
3065
1000
5157
(1491)
3666
1000
(148)
NPL (90+)
(74878)
14808
TBI Bank receivables
Performing (1)
2927
(124)
2803
840
2964
(120)
2844
838
2145
(70)
2075
873
(2586)
2145
(44)
2101
873
00
26
120
Non-performing (2)
556
(305)
250
160
571
(280)
291
162
311
(162)
149
127
0437
311
(166)
145
127
00
(04)
-20
TBI Bank total
3482
(429)
3053
1000
3535
(401)
3135
1000
2456
(232)
2224
1000
-
(2149)
2456
(210)
2246
1000
21
Overall group receivables
Performing (1)
5480
(536)
4944
778
5819
(577)
5242
793
5577
(637)
4939
812
-
(24725)
5577
(390)
5187
733
Non-performing (2)
1562
(1080)
482
222
1517
(971)
546
207
1287
(937)
350
188
(74878)
37384
2036
(1311)
725
267
Overall total
7042
(1616)
5426
1000
7337
(1548)
5789
1000
6864
(1575)
5290
1000
(74878)
12659
7613
(1701)
5912
1000
31122018 changed to audited figures
6
Current trading and outlookbull Early indications of demand in recent weeks have been
encouraging with May online issuance 23 above Aprilbull Issuance levels of shorter-term products for returning customers are
back to nearly 75 of Jan-Feb levelsbull Spain remained at a lower issuance level but improving in late Maybull Denmark demand already returned to more normal levels in May
Record for daily applications in 2020 set last week
bull Strong near-prime progress with product enhancements in Latvia Lithuania and Swedenbull Carefully moderated underwriting and marketing spend post Covid-19bull Development of funding via TBI Bank continuesbull 51 of net loan portfolio is near-prime consumer lending
bull Decisions taken already on business footprint and cost reductionbull Latin America and Finlandbull Significant headcount reductions across the network
bull Significant medium-term opportunitiesbull Potentially larger lsquonon-primersquo market sizebull Potential competitive dislocation in many markets
Weekly issuance of short-term products (rebased to 100 as Jan-Feb average)
Week number
FebruaryJanuary March April May
Includes single payment loans and lines of credit
7
Review of three month 2020 results
8
bull Solid initial start to the year with January and February largely in line with management expectationsbull Follows Q4 a naturally seasonally strong quarter especially at TBI Bank
bull Q1 2020 interest income down 9 Adjusted EBITDA of euro233m down 21 year-on-year bull Half of QoQ interest income change from products that have been discontinued
de-emphasised (eg instalment loans in Poland amp Armenia)bull Main Covid-19 impact on Q1 financials additional ceuro3m of net impairmentsbull Post-provision operating profit of euro107m vs euro135m in Q1 2019
bull Continued progress on cost reductionbull Year-on-year reduction in costs of 6 from existing cost efficiency programmesbull Additional measures taken post Covid-19
bull Strong operating cashflow and robust cash positionbull Operating cashflow before movements in portfolio amp deposits of euro479mbull Significant bond repurchases made in March and April ($359m of USD bonds)bull Current ldquoonlinerdquo cash levels after May coupons remain strong at ceuro90m
bull Overall stable risk performance although delayed debt sales did impact the NPL ratiobull Overall gross NPL ratio of 222 (vs 207 as of Dec 2019)bull Net impairmentinterest income at 323 for Q1 2020 (vs 304 in Q1 2019)
Adjusted EBITDAeurom
Summary of three month 2020 results
Interest Incomeeurom
See appendix for definitions of key metrics and ratios
Q4 2019 costs have been adjusted to reflect audited figuresEstimated Covid-19 impact comprises -euro1m of interest income reduction +euro02m marketing cost savings and -euro31m additional impairment
Year-on-year comparison
eurom
Quarter-on-quarter bridge for Adjusted EBITDA
294
233
Q1 2019 Q1 2020
1065
966
Q1 2019 Q1 2020
-9-21
9
7
13
23
22
25
8
2
Baltics
Nordics
Poland
Spain
BGRO
Other Europe
Latin America
Interest income remains well diversified
Interest income by country
1065
966
euro0m
euro20m
euro40m
euro60m
euro80m
euro100m
euro120m
Q1 2019 Q1 2020
Other MexicoArgentinaArmeniaSlovakiaCzech RepublicRomaniaBulgariaSpainPolandDenmarkSwedenFinlandLithuaniaLatvia
-9
2020 interest income euro966m
Other represents countries exited during 2018 (Dominican Republic and Georgia)
10
472 459
387 410 385 386 372 383341
10198
107112
113 117109
117
126
3733
1615
54 53
49
52 52 5250 51
53
0
10
20
30
40
50
60
00
100
200
300
400
500
600
700
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
4finance TBI Friendly Finance Quarterly costincome ratio
Operating cost driversbull Operating costs down 6 year-on-year vs revenue down 7
bull Q1 2020 costincome ratio at 527 compared to 520 in Q1 2019
bull Some cost reduction effect from IFRS 16 impacting comparison with 2018 data
bull Seasonal increase in marketing spend in Q4 reduced in Q1 with some early impact of Covid-19 reductions
bull Investment in TBI Bank to support growth
bull Cost efficiency projects ongoing with focus on costincome ratiobull Headcount reduction of 5 year-on-yearbull Lower above-the-line marketing spend due to efficiency savings
from econometric modelling
bull Additional actions taken post Covid-19 bull Further headcount reductions of c20 of online business
personnel costs to align cost structure with market and product footprint
Notes(1) Q4 2018 costs have been adjusted to reflect audited figures(2) Q4 2019 costs have been adjusted to reflect audited figures
Total operating costs (1)
eurom
2018(1)
See appendix for definitions of key metrics and ratios
2019 (2) 2020
11
135149
124
29 23
2017 2018 2019 Q1 2019 Q1 2020
eurom
81
11
53 51
120
2016 2017 2018 2019 Q1 2019 Q1 2020
Profit before tax
1814 16 17 16 17
2017 1 Jan2018
2018 2019 Q1 2019 Q1 2020
Strong financial profile ndash stability and profitabilityInterest income
448475
425
106 97
2017 2018 2019 Q1 2019 Q1 2020
Adjusted EBITDA Equity assets ratio
22x24x
22x20x 18x
2017 2018 2019 Q1 2019 Q1 2020
Adjusted interest coverage ratio (1)
32
2628 29 30 30
2017 1 Jan 2018 2018 2019 Q1 2019 Q1 2020
Equity net receivables (2)
eurom
eurom
Post IFRS 9
Post IFRS 9
Times
Note (1) The full covenant calculation of interest coverage ratio is based on proforma last twelve month figures and is currently 25x(2) The full covenant calculation of equitynet loans includes related party loans and finance leases and is currently 27
12
Funding strategy
Overview of funding structure 31 March 2020 (2)
2021 Notes194
2022 Notes335
4finance customer deposits
16
TBI customer deposits
442
TBI deposits from banks13
Notes(1) Represents the principal value of public bonds outstanding that comes due in each respective period net of buybacks and bonds owned by TBI Bank(2) The chart reflects the principal and accrued interest amounts of each of the instruments net of buybacks and bonds owned by TBI Bank
euro7277m
Strategy to diversify sources of funding and reduce overall funding cost over time
bull Strong cash generation and cash positionbull Cash generated from portfolio in Q1 and AprilMaybull Online cash ceuro90m at end May (after coupons and buybacks)bull TBI Bank increased deposit levels in Q1 and has strong liquidity ratios
bull Accessing TBI Bank balance sheet to fund online loansbull Successful initial portfolio sales of Polish instalment loans H2 2019bull Passport application for Lithuania to support portfolio sales from that
market submitted in April due to start in Q3
bull Further de-leveraging already achieved in 2020bull $359m of USD 2022 bonds and euro11m of EUR 2021 bonds purchased in
2020 year-to-datebull Proforma covenant interest expense reduced by 18 year-on-yearbull Retain ongoing flexibility to buy back bonds with spare liquidity
bull Strong capital positionbull 30 equity net receivables ratiobull TBI Bank capital adequacy c22 after adoption of 2019 profit in April
bull Consultations underway on potential extension to EUR 2021 bondsbull Allows financial results and markets to normalise prior to refinancing
Debt maturity schedule proforma for 31 May 2020 (1)
eurom
0
146
217
0
2020 2021 2022 2023+
13
195 167 170 171 162 150
3747 48 47 47 38
3940 35 23 21
17
6 7 10 12 811
7758 65 72 90
69
364328 341 341 342
293
Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020
Single Payment loans Line of Credit Instalment loans Near Prime TBI bank SME (Bank)
211 199 171 131 101 89
18 4537
34 51 48
159
242215
255 260 247
58
64
63 83 10398
47
42
42 49 6460492
591529 553 579
543
00
1500
3000
4500
6000
7500
2016 2017 1 Jan 2018 2018 2019 31 Mar 2020
Single Payment loans Line of Credit Cards Instalment loans Point of Sale SME (Bank)Baltics11
Nordics6
Poland16
Spain6
CZSK 2GEAM
1LatAm 05
BG (online)05
Bulgaria (TBI)25
Romania (TBI) 20
SME (TBI)11
Diversified loan portfolioNet receivables (1)
Net receivables 31 March 2020
Notes (1) Reflects reclassification of former SPL products in Sweden (from January 2016) Denmark (from January 2017) Armenia (from launch in July 2017) and Latvia (from January 2019) to Lines of Credit
bull Selective approach to new loan issuance
bull Overall net receivables totals euro542mbull 4 reduction during Q1 bull 89 consumer loansbull 43 online loans 57 banking
TBI Bank 57(funded clt2)
Online 43(funded c12)
eurom
See appendix for definitions of key metrics and ratios Includes TBI bank BG online and euro18m of purchased Poland portfolio Introduction of IFRS 9 as of 1-Jan-2018 reduced net receivables by euro62 million to euro529 million
Online loans issued (1)
eurom
14
486 464426 413
359 373 376 379 364
(55) (52) (42) (45) (36) (34) (34) (32) (31)
(67)(143)
(78) (77)
01
(57)(23) (41) (20)
364
269305 291
324281
319 307 312
-600
-500
-400
-300
-200
-100
00
100
200
300
400
-200
-150
-100
-50
00
50
100
150
200
250
300
350
400
450
500
550
600
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Analysis of net impairments and cost of risk
bull Q1 2020 net impairment charges remain fairly elevatedbull Most products in line with expectations Some additional
provisions in Armenia IL portfolio (in run-off)bull Overall impact of Covid-19 increased net impairments by
approximately euro3 million in Q1 (higher macro provisions delayed debt sales some impact on delay indicators)
bull Overall cost of risk relatively stablebull Overall cost of risk 174 (Q1 2020 including TBI Bank) vs 184
(Q1 2019)bull Online cost of risk 295 vs 289 (Q1 2019)bull Net impairment interest income 323 vs 304 (Q1 2019)
bull Proactive and ongoing adjustments to risk parameters across markets since mid-March
bull 63 changes to underwriting scorecardspoliciesbull 82 changes to debt collection scorecardspoliciesbull Ongoing regular reviews by market (eg Spain Poland)
Net impairment charges by quarter (1)
eurom
See appendix for definitions of key metrics and ratios
208 151
Gross impairments
Net impairment losses
Over provisioning on debt sales (net gainloss)
Recoveries from written off loans
174
2018166
Note (1) Q4 2018 and 2019 figures have been adjusted to reflect audited figures
2019184 160 Overall quarterly
cost of risk183 171 174
2020
15
Asset quality and provisioning bull Gross NPL ratios increased in lsquoonlinersquo due to delayed debt sales but asset quality relatively stable Coverage ratios remain over 100
bull Online gross NPL ratio 283 as of March 2020 compared with 249 as of December 2019bull Overall gross NPL ratio 222 as of March 2020 from 207 as of December 2019bull Some delayed debt sales already restarting in May including Poland
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Recent collections performancebull April and May repayment dynamics
in line with prior monthsbull April performance comparable
with Januarybull Improvement in May
bull Requests for payment deferrals either proactively offered by 4finance or offered in accordance with local regulation have been relatively limited
bull Main take-up in Czech Republic Armenia and TBI Bank
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
January Feb-Mar average April May
Repayment dynamics (single payment)
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
January Feb-Mar average April May
Repayment dynamics (instalment)
Repayment dynamics graphs represent cumulative sum of payments and extensions performed at under 30 DPD as a of amounts due in the prior month For example May line shows progress by day in May of repaymentextension of amounts that were due at any time in April and performed within 30 days of the due date
Payment deferral take-up in selected markets( of eligible portfolio by value)
Poland 2
Spain 3
Denmark 1
Baltics 1
Czech Republic 12
Armenia 17
TBI consumer 12
TBI SME 43
Day number in relevant month Day number in relevant month
17
Pro-active response to Covid-19 across the business with good resultsbull Rapidly adapted operations to home working ensuring employee safety and continuous services for customersbull Focus on risk management but remained ldquoopen for businessrdquo in AprilMay particularly for our returning customersbull Customer repayment behaviour within normal ranges in AprilMay with proactive support offered for customers who have
been impacted
Well positioned to lsquoweather the stormrsquo and take advantage of subsequent opportunitiesbull Key decisions taken to streamline footprint focus on larger markets and right-size cost basebull Continued development of near-prime business both on product side (Latvia Lithuania Sweden launches) and TBI Bank
funding side (Lithuania passport application)bull Encouraging demand and issuance trends in May (22 increase in online loans issued vs April) with improvement
expected to continue in June
Strong balance sheet and funding position with further action being takenbull Strong liquidity position in both lsquoonlinersquo and TBI Bankbull Strong cashflow generation deployed in significant bond buybacks to reduce leveragebull Consultations underway on potential extension to EUR 2021 bonds to allow financial results and markets to normalise
prior to long term refinancing
Summary
4finance a multi-segment multi-product consumer credit specialist
18
Thank you and Questions
19
Appendix ndash responsible lending and regulatory overview
20
Sustainability through good governance and responsible lendingOperating as a mainstream consumer finance business
bull ldquoBank-likerdquo policies and procedures with strong compliance function
bull Continued investment in AML GDPR and other strategic compliance priorities
bull Robust corporate governance with strong Supervisory Board
bull Increasingly regulated by main financial supervisory authorities
bull Diversification of portfolio and consequent reduction of reliance on single payment loans
bull Clear corporate values and code of conduct
bull Listed bond issues with quarterly financial reporting
Developing meaningful and constructive regulatory relationships
bull Ensuring we understand the regulatory arc
bull Helping regulators and legislators gain a solid understanding of our business
bull Ensuring we have a seat at the table
bull Contributing to EU Consumer Credit Directive consultation process
bull Continuous improvements in credit underwriting
bull Ensuring products are used appropriately
bull Working to ensure customers have safe landings when they signal difficulties
21
Regulatory overviewCountry
of interest income(Q1 2020)
Products (1) Regulator CB (2) Licenserequired (3)
Interest rate cap (1) Status
Argentina 1 SPL Consumer Protection Directorate - - -
Armenia 2 LOC Central Bank of the Republic of Armenia Yes Yes Nominal
Bulgaria ndash Online 2 SPL Bulgarian National BankYes Yes APR
(inc fees) Stable frameworkBulgaria ndash Bank 13 IL LOC POS SME
Czech Republic 5 SPL IL Czech National Bank Yes Yes - Stable framework
Denmark 11 LOC IL FSA and Consumer Ombudsman Yes YesAPR amp TCOC
being introduced
Danish FSA licensing process ongoing New regulations regarding interest rate caps (35 APR cap 100 cost of credit cap) and marketing restrictions in final stages of review Expected to start in July
Finland 1 IL(4) Finnish Competition and Consumer Authority - - Nominal
amp fees
New interest rate caps in force from September 2019 Further discussions on temporary reduction to 10 are ongoing
Latvia 5 MTP IL Consumer Rights Protection Centre - Yes Nominal fees amp TCOC
Stable framework since new interest rate caps in July 2019
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards MTP ndash Minimum to pay POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit(2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement(4) lsquoMini-ILrsquo (4 monthly instalments) from September 2019
22
Regulatory overview (continued)Country
of interest income
(Q1 2020)Products (1) Regulator CB (2) License
required (3)Interest rate
cap (1) Status
Lithuania 2 SPL IL Central Bank of Lithuania Yes Yes Nominal fees amp TCOC Stable framework
Mexico 1 IL National Financial Services Consumer Protection Commission - Yes - Stable framework
Poland 23 SPL IL Office of Competition and Consumer Protection - - Nominal fees
amp TCOC
Non-interest cost caps adjusted in April for one year to 15 fixed and 6 annual with a 45 total limit
Romania 10 IL LOC POS SME National Bank of Romania Yes Yes - Bill to introduce interest rate cap under discussion
Slovakia lt1 SPL National Bank of Slovakia Yes Yes APR (inc fees) Stable framework
Spain 22 SPL IL NA - - -
Sweden 1 LOC IL Swedish Financial Supervisory Authority Yes Yes Nominal amp
TCOCStable framework since new interest rate caps in September 2018
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit (2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement
23
Appendix ndash strategic evolution of portfolio
24
Evolving and broadening our business model
Prime
Sub-Prime
Near-Prime
Segments
Higher Duration Lower APR Products
SPL ILLOC POS
A multi-segment multi-product consumer credit specialist
1
1 Optimise
2 2 Diversify amp Grow
Illustrative
25
Evolution of product mix
Note (1) Reflects reclassification of Vivus brand products in Sweden (from January 2016) Denmark (from January 2017) Armenia (from launch in July 2017) and short-term products (SMS Credit amp Ondo) in Latvia (from January 2019) to Lines of Credit
68
17
3
9
29
45
18
11
0
25
50
75
100
30 Jun 2016 31 Mar 2020
SME (Bank)
Point of Sale
Instalment loans
Line of Credit Cards
Single Payment Loans
euro543meuro323m
Net receivables by product (1)
Online sub-prime only
Bank and onlinenear-prime
and sub-prime
76
48
4
14
20
29
7
0
25
50
75
100
Q1 2016 Q1 2020
Interest income by product (1)
euro97meuro90m
Date chosen to reflect the composition of loan portfolio immediately prior to purchase of TBI Bank
26
Funding near-prime growth via TBI Bank
Online acquisition Retail deposit funding
Initial portfolio development
Early stage customer acquisition and credit metrics monitored and
enhanced
Funding Platform
In-house IT funding platform ensuring ongoing automated
portfolio transfers
Bringing portfolios to scale
Market specific portfolios grow with ongoing sales to reach scale
True saleof portfolio(s)loan servicing
Indicative APRs
20-40
CostIncome ratio
c40
Cost of Risk
6-8
Cost of Funds
3-5
Return on Assets
3-5(2)
Illustrative near-prime
ldquounit economicsrdquo(1)
Notes(1) Illustrative metrics for near-prime portfolios and not indicative of a specific product or market(2) Illustrative potential returns in medium-term at scale
Payment of fair market value
bull Regular sales of Polish instalment loans since September 2019bull Passporting application submitted for Lithuania (largest near-prime portfolio)
Accessing TBI Bank deposit funding for lsquoonlinersquo portfolios via ongoing loan sales
27
Asset quality and provisioning ndash loan principal
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Interest Income 966 1065 (9)Interest Expense (127) (150) (16)Net Interest Income 839 915 (8)Net FampC Income 24 21 12Other operating income 23 22 7Non-Interest Income 47 43 10Operating Income (Revenue) 886 957 (7)Total operating costs (467) (498) (6)Pre-provision operating profit 419 459 (9)Net impairment charges (312) (324) (4)Post-provision operating profit 107 135 (21)Depreciation and amortisation (32) (32) +0Non-recurring income(expense) (39) (01) nmNet FX gain(loss) (34) 16 nmProfit before tax 02 119 nmIncome tax expense (27) (62) (57)Net profit(loss) after tax (25) 57 nm
Adjusted EBITDA 233 294 (21)
Income Statement
30
Balance sheetIn millions of euro
31 March 2020 (unaudited)
31 December 2019
Cash and cash equivalents of which 1560 1257- Online 834 767- TBI Bank 725 490
Placements with other banks 127 64Gross receivables due from customers 7042 7337Allowance for impairment (1616) (1548)Net receivables due from customers of which 5426 5789
- Principal 5147 5480- Accrued interest 277 309
Net investments in finance leases 45 47Net loans to related parties 594 607Property and equipment 182 178Financial investments 502 564Prepaid expenses 40 45Tax assets 174 213Deferred tax assets 353 330Intangible IT assets 168 178Goodwill 165 165Other assets 392 295Total assets 9727 9731Calculation for Presentation other assets (not loans Loans and borrowings 3849 3846Deposits from customers 3333 3222Deposits from banks 95 130Corporate income tax payable 124 95Other liabilities 718 780Total liabilities 8119 8074Share capital 358 358Retained earnings 1628 1657Reserves (378) (357)Total attributable equity 1608 1658Non-controlling interests 00 (00)Total equity 1608 1658Total shareholders equity and liabilities 9727 9731
Balance Sheet
31
Statement of Cash FlowsIn millions of euro
2020 2019Cash flows from operating activitiesProfit before taxes 02 119
Adjustments forDepreciation and amortisation 32 32
Impairment of goodwill and intangible assets - -
Net (gain) loss on foreign exchange from borrowings and other monetary items 131 63
Impairment losses on loans 364 359
Reversal of provision on debt portfolio sales (20) 01
Write-off and disposal of intangible and property and equipment assets 01 01
Interest income from non-customers loans (19) (19)
Interest expense on loans and borrowings and deposits from customers 127 150Non-recurring finance cost 32 -
Other non-cash items 14 0
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663 707
Adjustments forChange in financial instruments measured at fair value through profit or loss (137) (82)(Increase) decrease in other assets (including TBI statutory reserve placements amp leases) (09) (15)
Increase (decrease) in accounts payable to suppliers contractors and other creditors (39) (81)
Operating cash flow before movements in portfolio and deposits 479 530
Increase in loans due from customers (132) (468)
Proceeds from sale of portfolio 71 161
Increase in deposits (customer and bank deposits) 77 74
Deposit interest payments (15) (10)
Gross cash flows from operating activities 481 288
Corporate income tax paid (06) (63)
Net cash flows from operating activities 475 225
3 months to 31 March In millions of euro
2020 2019
Cash flows used in investing activitiesPurchase of property and equipment and intangible assets (15) (13)
Net cash from Purchase Sale of financial instruments 39 (118)
Loans issued to related parties - -
Loans repaid from related parties 0 40
Interest received from related parties 31 01
Disposal of subsidiaries net of cash disposed (13) -
(Acquisition)Disposal of equity investments (14) -
Acquisition of non-controlling interests (04) (04)
Net cash flows from investing activities 25 (94)
Cash flows from financing activitiesLoans received and notes issued - 0
Repayment and repurchase of loans and notes (164) (133)
Interest payments (06) (35)
FX hedging margin 14 82
Payment of lease liabilities (11) (1)
Dividend payments - -
Net cash flows used in financing activities (167) (95)
Net increase (decrease) in cash and cash equivalents 333 35
Cash and cash equivalents at the beginning of the period 985 1488
Effect of exchange rate fluctuations on cash (01) 0
Cash and cash equivalents at the end of the period 1318 1524
TBI Bank minimum statutory reserve 242 354
Total cash on hand and cash at central banks 1560 1878
3 months to 31 March
Cash Flow
Cash Flow (2)
Cash Flow
Cash Flow (2)
32
Key financial ratiosQ1 2020 Q1 2019
CapitalisationEquity assets 165 161Equity net receivables 296 299Adjusted interest coverage 18x 20xTBI Bank consolidated capital adequacy 188 210
ProfitabilityNet interest margin
- Online 764 802- TBI Bank 246 252- Overall group 500 557
Cost income ratio 527 520Normalised Profit before tax margin 111 127Normalised Return on average equity 118 104Normalised Return on average assets 20 17
Asset qualityCost of risk
- Online 295 289- TBI Bank 47 45- Overall group 174 184
Net impairment interest income 323 304Gross NPL ratio
- Online 283 227- TBI Bank 160 173- Overall group 222 204
Overall group NPL coverage ratio 1035 1064
See appendix for definitions of key metrics and ratios
key ratios
33
GlossaryDefinitionsbull Adjusted EBITDA ndash a non-IFRS measure that represents EBITDA (profit for the period plus tax plus interest expense plus depreciation and amortization) as adjusted by incomeloss from discontinued operations non-cash gains and losses
attributable to movement in the mark-to-market valuation of hedging obligations under IFRS goodwill write-offs and certain other one-off or non-cash items Adjusted EBITDA as presented here may not be comparable to similarly-titled measures that are reported by other companies due to differences in the way these measures are calculated Further details of covenant adjustments can be found in the relevant bond prospectuses available on our website
bull Adjusted interest coverage ndash Adjusted EBITDA interest expense for the relevant period (nb not equal to the full covenant coverage ratio calculation)
bull Cost of risk ndash Annualised net impairment loss average gross receivables (total gross receivables as of the start and end of each period divided by two)
bull Cost income ratio ndash Operating costs operating income (revenue)
bull Equity assets ratio ndash Total equity total assets
bull Equity net receivables ndash Total equity net customer receivables (including accrued interest)
bull Gross NPL ratio ndash Non-performing receivables (including accrued interest) with a delay of over 90 days gross receivables (including accrued interest)
bull Gross receivables ndash Total amount receivable from customers including principal and accrued interest after deduction of deferred income
bull Intangible assets ndash consists of deferred tax assets intangible IT assets and goodwill
bull Interest income ndash Interest and similar income generated from our customer loan portfolio
bull Loss given default ndash Loss on non-performing receivables (ie 1 - recovery rate) based on recoveries during the appropriate time window for the specific product reduced by costs of collection discounted at the weighted average effective interest rate
bull Net effective annualised yield ndash annualised interest income (excluding penalties) average net loan principal
bull Net impairment to interest income ratio ndash Net impairment losses on loans and receivables interest income
bull Net interest margin ndash Annualised net interest income average gross loan principal (total gross loan principal as of the start and end of each period divided by two)
bull Net receivables ndash Gross receivables (including accrued interest) less impairment provisions
bull Non-performing loans (NPLs) ndash Loan principal or receivables (as applicable) that are over 90 days past due (and for TBI Bank shown on a customer level basis)
bull Normalised ndash Adjusted to remove the effect of non-recurring items net FX and one-off adjustments to intangible assets and for 2018 ratios only adjusted to reflect the opening balance of 2018 balance sheet after IFRS 9 effects
bull Profit before tax margin ndash Profit before tax interest income
bull Return on Average Assets ndash Annualised profit from continuing operations average assets (total assets as of the start and end of each period divided by two)
bull Return on Average Equity ndash Annualised profit from continuing operations average equity (total equity as of the start and end of each period divided by two)
bull Return on Average Tangible Equity ndash Annualised profit from continuing operations average tangible equity (tangible equity as of the start and end of each period divided by two)
bull Tangible Equity ndash Total equity minus intangible assets
bull TBI Bank Capital adequacy ratio ndash (Tier One Capital + Tier Two Capital) Risk weighted assets (calculated according to the prevailing regulations of the Bulgarian National Bank)
34
Contacts
Investor Relationsinvestorrelations4financecom
James EtheringtonHead of Investor RelationsPhone +44 7766 697 950E-mail jamesetherington4financecom
Paul GoldfinchChief Financial OfficerPhone +371 2572 6422E-mail paulgoldfinch4financecom
Headquarters17a-8 Lielirbes street Riga LV-1046 Latvia
4finance Holding SA
Disclaimer
Agenda
Q1 2020 business and financial highlights
Slide Number 5
Current trading and outlook
Review of three month 2020 results
Summary of three month 2020 results
Interest income remains well diversified
Slide Number 10
Strong financial profile ndash stability and profitability
Funding strategy
Diversified loan portfolio
Analysis of net impairments and cost of risk
Asset quality and provisioning
Recent collections performance
Slide Number 17
Thank you and Questions
Appendix ndash responsible lending and regulatory overview
Sustainability through good governance and responsible lending
Regulatory overview
Regulatory overview (continued)
Appendix ndash strategic evolution of portfolio
Evolving and broadening our business model
Evolution of product mix
Slide Number 26
Asset quality and provisioning ndash loan principal
Appendix ndash financials and key ratios
Slide Number 29
Balance sheet
Statement of Cash Flows
Slide Number 32
GlossaryDefinitions
Contacts
Q12018
Q1 2020
9M 2018
Q1 2019
FY 2017
Net receivables (eurom) of which
5426
5408
5477
- Principal
272
5147
5144
5165
208
- Accrued interest
98
279
265
312
39
Total assets (eurom)
9724
10238
10147
Total equity (eurom)
221
1605
1607
1637
335
Capitalisation
Equity assets
147
165
157
161
127
Equity net receivables
195
296
297
299
267
Adjusted interest coverage
233
18x
25x
20x
223
TBI Bank consolidated capital adequacy
231
188
241
210
239
240
Profitability
Q12018
Net interest margin
- Online
764
882
802
- TBI Bank
246
280
252
- Overall group
500
648
557
Cost income ratio
527
520
520
Post-provision operating profit margin
145
166
177
Normalised Profit before tax margin
111
154
127
Normalised Return on average equity
118
375
104
Normalised Return on average assets
20
56
17
Asset quality
Cost of risk
- Online
295
237
289
- TBI Bank
47
86
45
- Overall group
174
181
184
Net impairment interest income
323
259
304
Gross NPL ratio
- Online
283
222
227
- TBI Bank
160
154
173
- Overall group
222
196
204
Overall group NPL coverage ratio
1035
1156
1064
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
505
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(06)
57
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
50
199
199
(248)
(301)
0800
Impairment losses on loans
1485
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(120)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(73)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
568
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
09
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2599
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
108
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(11)
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2637
2840
2840
1756
2279
00
Increase in loans due from customers
(2248)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1453
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1120
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(15)
(13)
(84)
(128)
(131)
(21)
Net cash from Purchase Sale of financial instruments
39
(118)
(136)
mdash
Repayment of financial instrument
-
-
Loans issued to related parties
-
-
(26)
(06)
(43)
(23)
Loans repaid from related parties
0
40
74
23
109
54
Interest received from related parties
31
01
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
00
(01)
0-
mdash
Disposal of subsidiaries net of cash disposed
(13)
-
(59)
(45)
(44)
mdash
(Acquisition)Disposal of equity investments
(14)
-
Acquisition of non-controlling interests
(04)
(04)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
-
-
mdash
0-
(00)
Prepayment for potential acquisition
-
00
208
0-
(208)
mdash
Acquisition of shares
-
00
00
Net cash flows from investing activities
25
(94)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
0
05
2999
1637
05
Repayment and repurchase of loans and notes
(164)
(133)
(272)
(1737)
(580)
(01)
Interest payments
(06)
(35)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
-
00
(00)
(192)
(58)
mdash
FX hedging margin
14
82
42
(140)
(88)
Payment of lease liabilities
(11)
(1)
mdash
Dividend payments
-
-
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(167)
(95)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
333
35
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
985
1488
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
(01)
0
01
10
10
03
Cash and cash equivalents at the end of the period
1318
1524
1488
2040
1319
681
TBI Bank minimum statutory reserve
242
354
234
230
230
242
Total cash on hand and cash at central banks
1560
1878
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
02
119
526
495
107
17000
Adjustments for
Depreciation and amortisation
32
32
121
64
83
1700
Impairment of goodwill and intangible assets
-
-
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
131
63
199
(248)
(301)
0800
Impairment losses on loans
364
359
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(20)
01
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
01
01
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(19)
(19)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
127
150
621
455
619
13300
Non-recurring finance cost
32
-
mdash
mdash
63
Other non-cash items
14
0
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663
707
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(137)
(82)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
(09)
(15)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(39)
(81)
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
479
530
2840
1756
2279
00
Increase in loans due from customers
(132)
(468)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
71
161
819
333
542
160
Increase in deposits (customer and bank deposits)
77
74
165
265
338
110
Deposit interest payments
(15)
(10)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
481
288
1233
524
442
(535)
Corporate income tax paid
(06)
(63)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
475
225
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(83)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(196)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
Q12018 (unaudited)
31 March 2020 (unaudited)
1 January 2018 (post IFRS 9 unaudited)
31 December 2019
Cash and cash equivalents of which
1538
1560
1549
1257
- Online
535
834
658
767
- TBI Bank
1003
725
892
490
Placements with other banks
57
127
70
64
Gross receivables due from customers
7156
7042
6588
7337
Allowance for impairment
(1665)
(1616)
(1575)
(1548)
Net receivables due from customers of which
5491
5426
5013
5789
- Principal
5147
5026
5480
- Accrued interest
277
264
309
Net investments in finance leases
93
45
105
47
Net loans to related parties
631
594
598
607
Property and equipment
96
182
101
178
Financial investments
183
502
184
564
Prepaid expenses
87
40
108
45
Tax assets
212
174
221
213
Deferred tax assets
371
353
368
330
Intangible IT assets
281
168
286
178
Goodwill
214
165
214
165
Other assets
678
392
573
295
Total assets
9932
9727
9390
9731
Calculation for Presentation - other assets (not loans or cash)
Loans and borrowings
4672
3849
3794
3846
Deposits from customers
2728
3333
2710
3222
Deposits from banks
94
95
mdash
130
Corporate income tax payable
178
124
198
95
Other liabilities
799
718
765
780
Total liabilities
8471
8119
7466
8074
Share capital
358
358
358
358
Retained earnings
1475
1628
1350
1657
Reserves
(343)
(378)
(323)
(357)
Total attributable equity
1490
1608
1385
1658
Non-controlling interests
(28)
00
(24)
(00)
Total equity
1461
1608
1362
1658
Total shareholders equity and liabilities
9932
9727
8828
9731
In millions of euro
Q1 2020 (unaudited)
Q1 2019 (unaudited)
change YoY
Interest Income
966
1065
(9)
Interest Expense
(127)
(150)
-(16)
1000000
Net Interest Income
839
915
(8)
Net FampC Income
24
21
12
Other operating income
23
22
7
Non-Interest Income
47
43
10
Operating Income (Revenue)
886
957
(7)
Personnel costs
(221)
(221)
(0
Discretionary bonus
(18)
(19)
(6)
Marketing
(91)
(96)
(5)
IT costs
(39)
(45)
(12)
DampA costs
(35)
(32)
+8
Other costs
(98)
(118)
(17)
Total operating costs
(467)
(498)
(6)
Pre-provision operating profit
419
459
(9)
Net impairment charges
(312)
(324)
-(4)
manual
Post-provision operating profit
107
135
(21)
Depreciation and amortisation
(32)
(32)
-+0
manual
Non-recurring income(expense)
(39)
(01)
nm
Non-recurring finance cost
mdash
mdash
+0
Net FX gain(loss)
(34)
16
nm
One-off adjustments to intangible assets
-
-
(0)
manual
Profit before tax
02
119
nm
Income tax expense
(27)
(62)
-(57)
manual
Net profit(loss) after tax
(25)
57
nm
manual
Adjusted EBITDA
233
294
-(21)
Costincome ratio
527
520
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online principal
Performing (1)
2347
(357)
1990
737
2634
(397)
2237
774
3177
(493)
2684
791
(22139)
3177
(302)
2875
681
(191)
150128837891005
Non-performing (2)
836
(656)
181
263
770
(590)
180
226
840
(664)
175
209
(74878)
36947
1488
(983)
505
319
-648
319
-64836054
-250544747891005
Online total
3184
(1013)
2171
1000
3404
(987)
2417
1000
4017
(1158)
2859
1000
4665
(1286)
3379
1000
(74878)
14808
TBI Bank principal
Performing (1)
2853
(121)
2732
840
2896
(118)
2778
838
2090
(68)
2022
873
(2586)
2090
(43)
2047
873
(25)
-251961477
Non-performing (2)
541
(298)
244
160
558
(274)
284
162
303
(158)
145
127
0437
303
(162)
141
127
04
42578177
TBI Bank total
3394
(418)
2976
1000
3454
(392)
3062
1000
2393
(226)
2167
1000
-
(2149)
2393
(205)
2188
1000
Overall group principal
Performing (1)
5200
(478)
4722
791
5529
(515)
5015
806
5267
(562)
4706
822
-
(24725)
5267
(345)
4922
746
Non-performing (2)
1378
(953)
424
209
1328
(864)
465
194
1142
(822)
320
178
(74878)
37384
1791
(1145)
646
254
Overall total
6578
(1431)
5147
1000
6858
(1378)
5480
1000
6410
(1384)
5026
1000
(74878)
12659
7058
(1490)
5567
1000
31122018 data updated post audit
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
IFRS 9 ADJ part
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online receivables
Performing (1)
2553
(412)
2141
717
2855
(456)
2399
751
3432
(567)
2864
778
(22139)
3432
(346)
3086
665
00
221
-150
Non-performing (2)
1006
(775)
232
283
946
(691)
255
249
977
(775)
201
222
(74878)
36947
1725
(1145)
580
335
749
(369)
250
Online total
3559
(1187)
2373
1000
3801
(1147)
2654
1000
4408
(1343)
3065
1000
5157
(1491)
3666
1000
(148)
NPL (90+)
(74878)
14808
TBI Bank receivables
Performing (1)
2927
(124)
2803
840
2964
(120)
2844
838
2145
(70)
2075
873
(2586)
2145
(44)
2101
873
00
26
120
Non-performing (2)
556
(305)
250
160
571
(280)
291
162
311
(162)
149
127
0437
311
(166)
145
127
00
(04)
-20
TBI Bank total
3482
(429)
3053
1000
3535
(401)
3135
1000
2456
(232)
2224
1000
-
(2149)
2456
(210)
2246
1000
21
Overall group receivables
Performing (1)
5480
(536)
4944
778
5819
(577)
5242
793
5577
(637)
4939
812
-
(24725)
5577
(390)
5187
733
Non-performing (2)
1562
(1080)
482
222
1517
(971)
546
207
1287
(937)
350
188
(74878)
37384
2036
(1311)
725
267
Overall total
7042
(1616)
5426
1000
7337
(1548)
5789
1000
6864
(1575)
5290
1000
(74878)
12659
7613
(1701)
5912
1000
31122018 changed to audited figures
7
Review of three month 2020 results
8
bull Solid initial start to the year with January and February largely in line with management expectationsbull Follows Q4 a naturally seasonally strong quarter especially at TBI Bank
bull Q1 2020 interest income down 9 Adjusted EBITDA of euro233m down 21 year-on-year bull Half of QoQ interest income change from products that have been discontinued
de-emphasised (eg instalment loans in Poland amp Armenia)bull Main Covid-19 impact on Q1 financials additional ceuro3m of net impairmentsbull Post-provision operating profit of euro107m vs euro135m in Q1 2019
bull Continued progress on cost reductionbull Year-on-year reduction in costs of 6 from existing cost efficiency programmesbull Additional measures taken post Covid-19
bull Strong operating cashflow and robust cash positionbull Operating cashflow before movements in portfolio amp deposits of euro479mbull Significant bond repurchases made in March and April ($359m of USD bonds)bull Current ldquoonlinerdquo cash levels after May coupons remain strong at ceuro90m
bull Overall stable risk performance although delayed debt sales did impact the NPL ratiobull Overall gross NPL ratio of 222 (vs 207 as of Dec 2019)bull Net impairmentinterest income at 323 for Q1 2020 (vs 304 in Q1 2019)
Adjusted EBITDAeurom
Summary of three month 2020 results
Interest Incomeeurom
See appendix for definitions of key metrics and ratios
Q4 2019 costs have been adjusted to reflect audited figuresEstimated Covid-19 impact comprises -euro1m of interest income reduction +euro02m marketing cost savings and -euro31m additional impairment
Year-on-year comparison
eurom
Quarter-on-quarter bridge for Adjusted EBITDA
294
233
Q1 2019 Q1 2020
1065
966
Q1 2019 Q1 2020
-9-21
9
7
13
23
22
25
8
2
Baltics
Nordics
Poland
Spain
BGRO
Other Europe
Latin America
Interest income remains well diversified
Interest income by country
1065
966
euro0m
euro20m
euro40m
euro60m
euro80m
euro100m
euro120m
Q1 2019 Q1 2020
Other MexicoArgentinaArmeniaSlovakiaCzech RepublicRomaniaBulgariaSpainPolandDenmarkSwedenFinlandLithuaniaLatvia
-9
2020 interest income euro966m
Other represents countries exited during 2018 (Dominican Republic and Georgia)
10
472 459
387 410 385 386 372 383341
10198
107112
113 117109
117
126
3733
1615
54 53
49
52 52 5250 51
53
0
10
20
30
40
50
60
00
100
200
300
400
500
600
700
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
4finance TBI Friendly Finance Quarterly costincome ratio
Operating cost driversbull Operating costs down 6 year-on-year vs revenue down 7
bull Q1 2020 costincome ratio at 527 compared to 520 in Q1 2019
bull Some cost reduction effect from IFRS 16 impacting comparison with 2018 data
bull Seasonal increase in marketing spend in Q4 reduced in Q1 with some early impact of Covid-19 reductions
bull Investment in TBI Bank to support growth
bull Cost efficiency projects ongoing with focus on costincome ratiobull Headcount reduction of 5 year-on-yearbull Lower above-the-line marketing spend due to efficiency savings
from econometric modelling
bull Additional actions taken post Covid-19 bull Further headcount reductions of c20 of online business
personnel costs to align cost structure with market and product footprint
Notes(1) Q4 2018 costs have been adjusted to reflect audited figures(2) Q4 2019 costs have been adjusted to reflect audited figures
Total operating costs (1)
eurom
2018(1)
See appendix for definitions of key metrics and ratios
2019 (2) 2020
11
135149
124
29 23
2017 2018 2019 Q1 2019 Q1 2020
eurom
81
11
53 51
120
2016 2017 2018 2019 Q1 2019 Q1 2020
Profit before tax
1814 16 17 16 17
2017 1 Jan2018
2018 2019 Q1 2019 Q1 2020
Strong financial profile ndash stability and profitabilityInterest income
448475
425
106 97
2017 2018 2019 Q1 2019 Q1 2020
Adjusted EBITDA Equity assets ratio
22x24x
22x20x 18x
2017 2018 2019 Q1 2019 Q1 2020
Adjusted interest coverage ratio (1)
32
2628 29 30 30
2017 1 Jan 2018 2018 2019 Q1 2019 Q1 2020
Equity net receivables (2)
eurom
eurom
Post IFRS 9
Post IFRS 9
Times
Note (1) The full covenant calculation of interest coverage ratio is based on proforma last twelve month figures and is currently 25x(2) The full covenant calculation of equitynet loans includes related party loans and finance leases and is currently 27
12
Funding strategy
Overview of funding structure 31 March 2020 (2)
2021 Notes194
2022 Notes335
4finance customer deposits
16
TBI customer deposits
442
TBI deposits from banks13
Notes(1) Represents the principal value of public bonds outstanding that comes due in each respective period net of buybacks and bonds owned by TBI Bank(2) The chart reflects the principal and accrued interest amounts of each of the instruments net of buybacks and bonds owned by TBI Bank
euro7277m
Strategy to diversify sources of funding and reduce overall funding cost over time
bull Strong cash generation and cash positionbull Cash generated from portfolio in Q1 and AprilMaybull Online cash ceuro90m at end May (after coupons and buybacks)bull TBI Bank increased deposit levels in Q1 and has strong liquidity ratios
bull Accessing TBI Bank balance sheet to fund online loansbull Successful initial portfolio sales of Polish instalment loans H2 2019bull Passport application for Lithuania to support portfolio sales from that
market submitted in April due to start in Q3
bull Further de-leveraging already achieved in 2020bull $359m of USD 2022 bonds and euro11m of EUR 2021 bonds purchased in
2020 year-to-datebull Proforma covenant interest expense reduced by 18 year-on-yearbull Retain ongoing flexibility to buy back bonds with spare liquidity
bull Strong capital positionbull 30 equity net receivables ratiobull TBI Bank capital adequacy c22 after adoption of 2019 profit in April
bull Consultations underway on potential extension to EUR 2021 bondsbull Allows financial results and markets to normalise prior to refinancing
Debt maturity schedule proforma for 31 May 2020 (1)
eurom
0
146
217
0
2020 2021 2022 2023+
13
195 167 170 171 162 150
3747 48 47 47 38
3940 35 23 21
17
6 7 10 12 811
7758 65 72 90
69
364328 341 341 342
293
Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020
Single Payment loans Line of Credit Instalment loans Near Prime TBI bank SME (Bank)
211 199 171 131 101 89
18 4537
34 51 48
159
242215
255 260 247
58
64
63 83 10398
47
42
42 49 6460492
591529 553 579
543
00
1500
3000
4500
6000
7500
2016 2017 1 Jan 2018 2018 2019 31 Mar 2020
Single Payment loans Line of Credit Cards Instalment loans Point of Sale SME (Bank)Baltics11
Nordics6
Poland16
Spain6
CZSK 2GEAM
1LatAm 05
BG (online)05
Bulgaria (TBI)25
Romania (TBI) 20
SME (TBI)11
Diversified loan portfolioNet receivables (1)
Net receivables 31 March 2020
Notes (1) Reflects reclassification of former SPL products in Sweden (from January 2016) Denmark (from January 2017) Armenia (from launch in July 2017) and Latvia (from January 2019) to Lines of Credit
bull Selective approach to new loan issuance
bull Overall net receivables totals euro542mbull 4 reduction during Q1 bull 89 consumer loansbull 43 online loans 57 banking
TBI Bank 57(funded clt2)
Online 43(funded c12)
eurom
See appendix for definitions of key metrics and ratios Includes TBI bank BG online and euro18m of purchased Poland portfolio Introduction of IFRS 9 as of 1-Jan-2018 reduced net receivables by euro62 million to euro529 million
Online loans issued (1)
eurom
14
486 464426 413
359 373 376 379 364
(55) (52) (42) (45) (36) (34) (34) (32) (31)
(67)(143)
(78) (77)
01
(57)(23) (41) (20)
364
269305 291
324281
319 307 312
-600
-500
-400
-300
-200
-100
00
100
200
300
400
-200
-150
-100
-50
00
50
100
150
200
250
300
350
400
450
500
550
600
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Analysis of net impairments and cost of risk
bull Q1 2020 net impairment charges remain fairly elevatedbull Most products in line with expectations Some additional
provisions in Armenia IL portfolio (in run-off)bull Overall impact of Covid-19 increased net impairments by
approximately euro3 million in Q1 (higher macro provisions delayed debt sales some impact on delay indicators)
bull Overall cost of risk relatively stablebull Overall cost of risk 174 (Q1 2020 including TBI Bank) vs 184
(Q1 2019)bull Online cost of risk 295 vs 289 (Q1 2019)bull Net impairment interest income 323 vs 304 (Q1 2019)
bull Proactive and ongoing adjustments to risk parameters across markets since mid-March
bull 63 changes to underwriting scorecardspoliciesbull 82 changes to debt collection scorecardspoliciesbull Ongoing regular reviews by market (eg Spain Poland)
Net impairment charges by quarter (1)
eurom
See appendix for definitions of key metrics and ratios
208 151
Gross impairments
Net impairment losses
Over provisioning on debt sales (net gainloss)
Recoveries from written off loans
174
2018166
Note (1) Q4 2018 and 2019 figures have been adjusted to reflect audited figures
2019184 160 Overall quarterly
cost of risk183 171 174
2020
15
Asset quality and provisioning bull Gross NPL ratios increased in lsquoonlinersquo due to delayed debt sales but asset quality relatively stable Coverage ratios remain over 100
bull Online gross NPL ratio 283 as of March 2020 compared with 249 as of December 2019bull Overall gross NPL ratio 222 as of March 2020 from 207 as of December 2019bull Some delayed debt sales already restarting in May including Poland
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Recent collections performancebull April and May repayment dynamics
in line with prior monthsbull April performance comparable
with Januarybull Improvement in May
bull Requests for payment deferrals either proactively offered by 4finance or offered in accordance with local regulation have been relatively limited
bull Main take-up in Czech Republic Armenia and TBI Bank
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
January Feb-Mar average April May
Repayment dynamics (single payment)
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
January Feb-Mar average April May
Repayment dynamics (instalment)
Repayment dynamics graphs represent cumulative sum of payments and extensions performed at under 30 DPD as a of amounts due in the prior month For example May line shows progress by day in May of repaymentextension of amounts that were due at any time in April and performed within 30 days of the due date
Payment deferral take-up in selected markets( of eligible portfolio by value)
Poland 2
Spain 3
Denmark 1
Baltics 1
Czech Republic 12
Armenia 17
TBI consumer 12
TBI SME 43
Day number in relevant month Day number in relevant month
17
Pro-active response to Covid-19 across the business with good resultsbull Rapidly adapted operations to home working ensuring employee safety and continuous services for customersbull Focus on risk management but remained ldquoopen for businessrdquo in AprilMay particularly for our returning customersbull Customer repayment behaviour within normal ranges in AprilMay with proactive support offered for customers who have
been impacted
Well positioned to lsquoweather the stormrsquo and take advantage of subsequent opportunitiesbull Key decisions taken to streamline footprint focus on larger markets and right-size cost basebull Continued development of near-prime business both on product side (Latvia Lithuania Sweden launches) and TBI Bank
funding side (Lithuania passport application)bull Encouraging demand and issuance trends in May (22 increase in online loans issued vs April) with improvement
expected to continue in June
Strong balance sheet and funding position with further action being takenbull Strong liquidity position in both lsquoonlinersquo and TBI Bankbull Strong cashflow generation deployed in significant bond buybacks to reduce leveragebull Consultations underway on potential extension to EUR 2021 bonds to allow financial results and markets to normalise
prior to long term refinancing
Summary
4finance a multi-segment multi-product consumer credit specialist
18
Thank you and Questions
19
Appendix ndash responsible lending and regulatory overview
20
Sustainability through good governance and responsible lendingOperating as a mainstream consumer finance business
bull ldquoBank-likerdquo policies and procedures with strong compliance function
bull Continued investment in AML GDPR and other strategic compliance priorities
bull Robust corporate governance with strong Supervisory Board
bull Increasingly regulated by main financial supervisory authorities
bull Diversification of portfolio and consequent reduction of reliance on single payment loans
bull Clear corporate values and code of conduct
bull Listed bond issues with quarterly financial reporting
Developing meaningful and constructive regulatory relationships
bull Ensuring we understand the regulatory arc
bull Helping regulators and legislators gain a solid understanding of our business
bull Ensuring we have a seat at the table
bull Contributing to EU Consumer Credit Directive consultation process
bull Continuous improvements in credit underwriting
bull Ensuring products are used appropriately
bull Working to ensure customers have safe landings when they signal difficulties
21
Regulatory overviewCountry
of interest income(Q1 2020)
Products (1) Regulator CB (2) Licenserequired (3)
Interest rate cap (1) Status
Argentina 1 SPL Consumer Protection Directorate - - -
Armenia 2 LOC Central Bank of the Republic of Armenia Yes Yes Nominal
Bulgaria ndash Online 2 SPL Bulgarian National BankYes Yes APR
(inc fees) Stable frameworkBulgaria ndash Bank 13 IL LOC POS SME
Czech Republic 5 SPL IL Czech National Bank Yes Yes - Stable framework
Denmark 11 LOC IL FSA and Consumer Ombudsman Yes YesAPR amp TCOC
being introduced
Danish FSA licensing process ongoing New regulations regarding interest rate caps (35 APR cap 100 cost of credit cap) and marketing restrictions in final stages of review Expected to start in July
Finland 1 IL(4) Finnish Competition and Consumer Authority - - Nominal
amp fees
New interest rate caps in force from September 2019 Further discussions on temporary reduction to 10 are ongoing
Latvia 5 MTP IL Consumer Rights Protection Centre - Yes Nominal fees amp TCOC
Stable framework since new interest rate caps in July 2019
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards MTP ndash Minimum to pay POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit(2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement(4) lsquoMini-ILrsquo (4 monthly instalments) from September 2019
22
Regulatory overview (continued)Country
of interest income
(Q1 2020)Products (1) Regulator CB (2) License
required (3)Interest rate
cap (1) Status
Lithuania 2 SPL IL Central Bank of Lithuania Yes Yes Nominal fees amp TCOC Stable framework
Mexico 1 IL National Financial Services Consumer Protection Commission - Yes - Stable framework
Poland 23 SPL IL Office of Competition and Consumer Protection - - Nominal fees
amp TCOC
Non-interest cost caps adjusted in April for one year to 15 fixed and 6 annual with a 45 total limit
Romania 10 IL LOC POS SME National Bank of Romania Yes Yes - Bill to introduce interest rate cap under discussion
Slovakia lt1 SPL National Bank of Slovakia Yes Yes APR (inc fees) Stable framework
Spain 22 SPL IL NA - - -
Sweden 1 LOC IL Swedish Financial Supervisory Authority Yes Yes Nominal amp
TCOCStable framework since new interest rate caps in September 2018
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit (2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement
23
Appendix ndash strategic evolution of portfolio
24
Evolving and broadening our business model
Prime
Sub-Prime
Near-Prime
Segments
Higher Duration Lower APR Products
SPL ILLOC POS
A multi-segment multi-product consumer credit specialist
1
1 Optimise
2 2 Diversify amp Grow
Illustrative
25
Evolution of product mix
Note (1) Reflects reclassification of Vivus brand products in Sweden (from January 2016) Denmark (from January 2017) Armenia (from launch in July 2017) and short-term products (SMS Credit amp Ondo) in Latvia (from January 2019) to Lines of Credit
68
17
3
9
29
45
18
11
0
25
50
75
100
30 Jun 2016 31 Mar 2020
SME (Bank)
Point of Sale
Instalment loans
Line of Credit Cards
Single Payment Loans
euro543meuro323m
Net receivables by product (1)
Online sub-prime only
Bank and onlinenear-prime
and sub-prime
76
48
4
14
20
29
7
0
25
50
75
100
Q1 2016 Q1 2020
Interest income by product (1)
euro97meuro90m
Date chosen to reflect the composition of loan portfolio immediately prior to purchase of TBI Bank
26
Funding near-prime growth via TBI Bank
Online acquisition Retail deposit funding
Initial portfolio development
Early stage customer acquisition and credit metrics monitored and
enhanced
Funding Platform
In-house IT funding platform ensuring ongoing automated
portfolio transfers
Bringing portfolios to scale
Market specific portfolios grow with ongoing sales to reach scale
True saleof portfolio(s)loan servicing
Indicative APRs
20-40
CostIncome ratio
c40
Cost of Risk
6-8
Cost of Funds
3-5
Return on Assets
3-5(2)
Illustrative near-prime
ldquounit economicsrdquo(1)
Notes(1) Illustrative metrics for near-prime portfolios and not indicative of a specific product or market(2) Illustrative potential returns in medium-term at scale
Payment of fair market value
bull Regular sales of Polish instalment loans since September 2019bull Passporting application submitted for Lithuania (largest near-prime portfolio)
Accessing TBI Bank deposit funding for lsquoonlinersquo portfolios via ongoing loan sales
27
Asset quality and provisioning ndash loan principal
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Interest Income 966 1065 (9)Interest Expense (127) (150) (16)Net Interest Income 839 915 (8)Net FampC Income 24 21 12Other operating income 23 22 7Non-Interest Income 47 43 10Operating Income (Revenue) 886 957 (7)Total operating costs (467) (498) (6)Pre-provision operating profit 419 459 (9)Net impairment charges (312) (324) (4)Post-provision operating profit 107 135 (21)Depreciation and amortisation (32) (32) +0Non-recurring income(expense) (39) (01) nmNet FX gain(loss) (34) 16 nmProfit before tax 02 119 nmIncome tax expense (27) (62) (57)Net profit(loss) after tax (25) 57 nm
Adjusted EBITDA 233 294 (21)
Income Statement
30
Balance sheetIn millions of euro
31 March 2020 (unaudited)
31 December 2019
Cash and cash equivalents of which 1560 1257- Online 834 767- TBI Bank 725 490
Placements with other banks 127 64Gross receivables due from customers 7042 7337Allowance for impairment (1616) (1548)Net receivables due from customers of which 5426 5789
- Principal 5147 5480- Accrued interest 277 309
Net investments in finance leases 45 47Net loans to related parties 594 607Property and equipment 182 178Financial investments 502 564Prepaid expenses 40 45Tax assets 174 213Deferred tax assets 353 330Intangible IT assets 168 178Goodwill 165 165Other assets 392 295Total assets 9727 9731Calculation for Presentation other assets (not loans Loans and borrowings 3849 3846Deposits from customers 3333 3222Deposits from banks 95 130Corporate income tax payable 124 95Other liabilities 718 780Total liabilities 8119 8074Share capital 358 358Retained earnings 1628 1657Reserves (378) (357)Total attributable equity 1608 1658Non-controlling interests 00 (00)Total equity 1608 1658Total shareholders equity and liabilities 9727 9731
Balance Sheet
31
Statement of Cash FlowsIn millions of euro
2020 2019Cash flows from operating activitiesProfit before taxes 02 119
Adjustments forDepreciation and amortisation 32 32
Impairment of goodwill and intangible assets - -
Net (gain) loss on foreign exchange from borrowings and other monetary items 131 63
Impairment losses on loans 364 359
Reversal of provision on debt portfolio sales (20) 01
Write-off and disposal of intangible and property and equipment assets 01 01
Interest income from non-customers loans (19) (19)
Interest expense on loans and borrowings and deposits from customers 127 150Non-recurring finance cost 32 -
Other non-cash items 14 0
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663 707
Adjustments forChange in financial instruments measured at fair value through profit or loss (137) (82)(Increase) decrease in other assets (including TBI statutory reserve placements amp leases) (09) (15)
Increase (decrease) in accounts payable to suppliers contractors and other creditors (39) (81)
Operating cash flow before movements in portfolio and deposits 479 530
Increase in loans due from customers (132) (468)
Proceeds from sale of portfolio 71 161
Increase in deposits (customer and bank deposits) 77 74
Deposit interest payments (15) (10)
Gross cash flows from operating activities 481 288
Corporate income tax paid (06) (63)
Net cash flows from operating activities 475 225
3 months to 31 March In millions of euro
2020 2019
Cash flows used in investing activitiesPurchase of property and equipment and intangible assets (15) (13)
Net cash from Purchase Sale of financial instruments 39 (118)
Loans issued to related parties - -
Loans repaid from related parties 0 40
Interest received from related parties 31 01
Disposal of subsidiaries net of cash disposed (13) -
(Acquisition)Disposal of equity investments (14) -
Acquisition of non-controlling interests (04) (04)
Net cash flows from investing activities 25 (94)
Cash flows from financing activitiesLoans received and notes issued - 0
Repayment and repurchase of loans and notes (164) (133)
Interest payments (06) (35)
FX hedging margin 14 82
Payment of lease liabilities (11) (1)
Dividend payments - -
Net cash flows used in financing activities (167) (95)
Net increase (decrease) in cash and cash equivalents 333 35
Cash and cash equivalents at the beginning of the period 985 1488
Effect of exchange rate fluctuations on cash (01) 0
Cash and cash equivalents at the end of the period 1318 1524
TBI Bank minimum statutory reserve 242 354
Total cash on hand and cash at central banks 1560 1878
3 months to 31 March
Cash Flow
Cash Flow (2)
Cash Flow
Cash Flow (2)
32
Key financial ratiosQ1 2020 Q1 2019
CapitalisationEquity assets 165 161Equity net receivables 296 299Adjusted interest coverage 18x 20xTBI Bank consolidated capital adequacy 188 210
ProfitabilityNet interest margin
- Online 764 802- TBI Bank 246 252- Overall group 500 557
Cost income ratio 527 520Normalised Profit before tax margin 111 127Normalised Return on average equity 118 104Normalised Return on average assets 20 17
Asset qualityCost of risk
- Online 295 289- TBI Bank 47 45- Overall group 174 184
Net impairment interest income 323 304Gross NPL ratio
- Online 283 227- TBI Bank 160 173- Overall group 222 204
Overall group NPL coverage ratio 1035 1064
See appendix for definitions of key metrics and ratios
key ratios
33
GlossaryDefinitionsbull Adjusted EBITDA ndash a non-IFRS measure that represents EBITDA (profit for the period plus tax plus interest expense plus depreciation and amortization) as adjusted by incomeloss from discontinued operations non-cash gains and losses
attributable to movement in the mark-to-market valuation of hedging obligations under IFRS goodwill write-offs and certain other one-off or non-cash items Adjusted EBITDA as presented here may not be comparable to similarly-titled measures that are reported by other companies due to differences in the way these measures are calculated Further details of covenant adjustments can be found in the relevant bond prospectuses available on our website
bull Adjusted interest coverage ndash Adjusted EBITDA interest expense for the relevant period (nb not equal to the full covenant coverage ratio calculation)
bull Cost of risk ndash Annualised net impairment loss average gross receivables (total gross receivables as of the start and end of each period divided by two)
bull Cost income ratio ndash Operating costs operating income (revenue)
bull Equity assets ratio ndash Total equity total assets
bull Equity net receivables ndash Total equity net customer receivables (including accrued interest)
bull Gross NPL ratio ndash Non-performing receivables (including accrued interest) with a delay of over 90 days gross receivables (including accrued interest)
bull Gross receivables ndash Total amount receivable from customers including principal and accrued interest after deduction of deferred income
bull Intangible assets ndash consists of deferred tax assets intangible IT assets and goodwill
bull Interest income ndash Interest and similar income generated from our customer loan portfolio
bull Loss given default ndash Loss on non-performing receivables (ie 1 - recovery rate) based on recoveries during the appropriate time window for the specific product reduced by costs of collection discounted at the weighted average effective interest rate
bull Net effective annualised yield ndash annualised interest income (excluding penalties) average net loan principal
bull Net impairment to interest income ratio ndash Net impairment losses on loans and receivables interest income
bull Net interest margin ndash Annualised net interest income average gross loan principal (total gross loan principal as of the start and end of each period divided by two)
bull Net receivables ndash Gross receivables (including accrued interest) less impairment provisions
bull Non-performing loans (NPLs) ndash Loan principal or receivables (as applicable) that are over 90 days past due (and for TBI Bank shown on a customer level basis)
bull Normalised ndash Adjusted to remove the effect of non-recurring items net FX and one-off adjustments to intangible assets and for 2018 ratios only adjusted to reflect the opening balance of 2018 balance sheet after IFRS 9 effects
bull Profit before tax margin ndash Profit before tax interest income
bull Return on Average Assets ndash Annualised profit from continuing operations average assets (total assets as of the start and end of each period divided by two)
bull Return on Average Equity ndash Annualised profit from continuing operations average equity (total equity as of the start and end of each period divided by two)
bull Return on Average Tangible Equity ndash Annualised profit from continuing operations average tangible equity (tangible equity as of the start and end of each period divided by two)
bull Tangible Equity ndash Total equity minus intangible assets
bull TBI Bank Capital adequacy ratio ndash (Tier One Capital + Tier Two Capital) Risk weighted assets (calculated according to the prevailing regulations of the Bulgarian National Bank)
34
Contacts
Investor Relationsinvestorrelations4financecom
James EtheringtonHead of Investor RelationsPhone +44 7766 697 950E-mail jamesetherington4financecom
Paul GoldfinchChief Financial OfficerPhone +371 2572 6422E-mail paulgoldfinch4financecom
Headquarters17a-8 Lielirbes street Riga LV-1046 Latvia
4finance Holding SA
Disclaimer
Agenda
Q1 2020 business and financial highlights
Slide Number 5
Current trading and outlook
Review of three month 2020 results
Summary of three month 2020 results
Interest income remains well diversified
Slide Number 10
Strong financial profile ndash stability and profitability
Funding strategy
Diversified loan portfolio
Analysis of net impairments and cost of risk
Asset quality and provisioning
Recent collections performance
Slide Number 17
Thank you and Questions
Appendix ndash responsible lending and regulatory overview
Sustainability through good governance and responsible lending
Regulatory overview
Regulatory overview (continued)
Appendix ndash strategic evolution of portfolio
Evolving and broadening our business model
Evolution of product mix
Slide Number 26
Asset quality and provisioning ndash loan principal
Appendix ndash financials and key ratios
Slide Number 29
Balance sheet
Statement of Cash Flows
Slide Number 32
GlossaryDefinitions
Contacts
Q12018
Q1 2020
9M 2018
Q1 2019
FY 2017
Net receivables (eurom) of which
5426
5408
5477
- Principal
272
5147
5144
5165
208
- Accrued interest
98
279
265
312
39
Total assets (eurom)
9724
10238
10147
Total equity (eurom)
221
1605
1607
1637
335
Capitalisation
Equity assets
147
165
157
161
127
Equity net receivables
195
296
297
299
267
Adjusted interest coverage
233
18x
25x
20x
223
TBI Bank consolidated capital adequacy
231
188
241
210
239
240
Profitability
Q12018
Net interest margin
- Online
764
882
802
- TBI Bank
246
280
252
- Overall group
500
648
557
Cost income ratio
527
520
520
Post-provision operating profit margin
145
166
177
Normalised Profit before tax margin
111
154
127
Normalised Return on average equity
118
375
104
Normalised Return on average assets
20
56
17
Asset quality
Cost of risk
- Online
295
237
289
- TBI Bank
47
86
45
- Overall group
174
181
184
Net impairment interest income
323
259
304
Gross NPL ratio
- Online
283
222
227
- TBI Bank
160
154
173
- Overall group
222
196
204
Overall group NPL coverage ratio
1035
1156
1064
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
505
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(06)
57
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
50
199
199
(248)
(301)
0800
Impairment losses on loans
1485
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(120)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(73)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
568
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
09
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2599
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
108
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(11)
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2637
2840
2840
1756
2279
00
Increase in loans due from customers
(2248)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1453
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1120
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(15)
(13)
(84)
(128)
(131)
(21)
Net cash from Purchase Sale of financial instruments
39
(118)
(136)
mdash
Repayment of financial instrument
-
-
Loans issued to related parties
-
-
(26)
(06)
(43)
(23)
Loans repaid from related parties
0
40
74
23
109
54
Interest received from related parties
31
01
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
00
(01)
0-
mdash
Disposal of subsidiaries net of cash disposed
(13)
-
(59)
(45)
(44)
mdash
(Acquisition)Disposal of equity investments
(14)
-
Acquisition of non-controlling interests
(04)
(04)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
-
-
mdash
0-
(00)
Prepayment for potential acquisition
-
00
208
0-
(208)
mdash
Acquisition of shares
-
00
00
Net cash flows from investing activities
25
(94)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
0
05
2999
1637
05
Repayment and repurchase of loans and notes
(164)
(133)
(272)
(1737)
(580)
(01)
Interest payments
(06)
(35)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
-
00
(00)
(192)
(58)
mdash
FX hedging margin
14
82
42
(140)
(88)
Payment of lease liabilities
(11)
(1)
mdash
Dividend payments
-
-
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(167)
(95)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
333
35
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
985
1488
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
(01)
0
01
10
10
03
Cash and cash equivalents at the end of the period
1318
1524
1488
2040
1319
681
TBI Bank minimum statutory reserve
242
354
234
230
230
242
Total cash on hand and cash at central banks
1560
1878
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
02
119
526
495
107
17000
Adjustments for
Depreciation and amortisation
32
32
121
64
83
1700
Impairment of goodwill and intangible assets
-
-
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
131
63
199
(248)
(301)
0800
Impairment losses on loans
364
359
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(20)
01
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
01
01
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(19)
(19)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
127
150
621
455
619
13300
Non-recurring finance cost
32
-
mdash
mdash
63
Other non-cash items
14
0
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663
707
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(137)
(82)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
(09)
(15)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(39)
(81)
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
479
530
2840
1756
2279
00
Increase in loans due from customers
(132)
(468)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
71
161
819
333
542
160
Increase in deposits (customer and bank deposits)
77
74
165
265
338
110
Deposit interest payments
(15)
(10)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
481
288
1233
524
442
(535)
Corporate income tax paid
(06)
(63)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
475
225
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(83)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(196)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
Q12018 (unaudited)
31 March 2020 (unaudited)
1 January 2018 (post IFRS 9 unaudited)
31 December 2019
Cash and cash equivalents of which
1538
1560
1549
1257
- Online
535
834
658
767
- TBI Bank
1003
725
892
490
Placements with other banks
57
127
70
64
Gross receivables due from customers
7156
7042
6588
7337
Allowance for impairment
(1665)
(1616)
(1575)
(1548)
Net receivables due from customers of which
5491
5426
5013
5789
- Principal
5147
5026
5480
- Accrued interest
277
264
309
Net investments in finance leases
93
45
105
47
Net loans to related parties
631
594
598
607
Property and equipment
96
182
101
178
Financial investments
183
502
184
564
Prepaid expenses
87
40
108
45
Tax assets
212
174
221
213
Deferred tax assets
371
353
368
330
Intangible IT assets
281
168
286
178
Goodwill
214
165
214
165
Other assets
678
392
573
295
Total assets
9932
9727
9390
9731
Calculation for Presentation - other assets (not loans or cash)
Loans and borrowings
4672
3849
3794
3846
Deposits from customers
2728
3333
2710
3222
Deposits from banks
94
95
mdash
130
Corporate income tax payable
178
124
198
95
Other liabilities
799
718
765
780
Total liabilities
8471
8119
7466
8074
Share capital
358
358
358
358
Retained earnings
1475
1628
1350
1657
Reserves
(343)
(378)
(323)
(357)
Total attributable equity
1490
1608
1385
1658
Non-controlling interests
(28)
00
(24)
(00)
Total equity
1461
1608
1362
1658
Total shareholders equity and liabilities
9932
9727
8828
9731
In millions of euro
Q1 2020 (unaudited)
Q1 2019 (unaudited)
change YoY
Interest Income
966
1065
(9)
Interest Expense
(127)
(150)
-(16)
1000000
Net Interest Income
839
915
(8)
Net FampC Income
24
21
12
Other operating income
23
22
7
Non-Interest Income
47
43
10
Operating Income (Revenue)
886
957
(7)
Personnel costs
(221)
(221)
(0
Discretionary bonus
(18)
(19)
(6)
Marketing
(91)
(96)
(5)
IT costs
(39)
(45)
(12)
DampA costs
(35)
(32)
+8
Other costs
(98)
(118)
(17)
Total operating costs
(467)
(498)
(6)
Pre-provision operating profit
419
459
(9)
Net impairment charges
(312)
(324)
-(4)
manual
Post-provision operating profit
107
135
(21)
Depreciation and amortisation
(32)
(32)
-+0
manual
Non-recurring income(expense)
(39)
(01)
nm
Non-recurring finance cost
mdash
mdash
+0
Net FX gain(loss)
(34)
16
nm
One-off adjustments to intangible assets
-
-
(0)
manual
Profit before tax
02
119
nm
Income tax expense
(27)
(62)
-(57)
manual
Net profit(loss) after tax
(25)
57
nm
manual
Adjusted EBITDA
233
294
-(21)
Costincome ratio
527
520
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online principal
Performing (1)
2347
(357)
1990
737
2634
(397)
2237
774
3177
(493)
2684
791
(22139)
3177
(302)
2875
681
(191)
150128837891005
Non-performing (2)
836
(656)
181
263
770
(590)
180
226
840
(664)
175
209
(74878)
36947
1488
(983)
505
319
-648
319
-64836054
-250544747891005
Online total
3184
(1013)
2171
1000
3404
(987)
2417
1000
4017
(1158)
2859
1000
4665
(1286)
3379
1000
(74878)
14808
TBI Bank principal
Performing (1)
2853
(121)
2732
840
2896
(118)
2778
838
2090
(68)
2022
873
(2586)
2090
(43)
2047
873
(25)
-251961477
Non-performing (2)
541
(298)
244
160
558
(274)
284
162
303
(158)
145
127
0437
303
(162)
141
127
04
42578177
TBI Bank total
3394
(418)
2976
1000
3454
(392)
3062
1000
2393
(226)
2167
1000
-
(2149)
2393
(205)
2188
1000
Overall group principal
Performing (1)
5200
(478)
4722
791
5529
(515)
5015
806
5267
(562)
4706
822
-
(24725)
5267
(345)
4922
746
Non-performing (2)
1378
(953)
424
209
1328
(864)
465
194
1142
(822)
320
178
(74878)
37384
1791
(1145)
646
254
Overall total
6578
(1431)
5147
1000
6858
(1378)
5480
1000
6410
(1384)
5026
1000
(74878)
12659
7058
(1490)
5567
1000
31122018 data updated post audit
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
IFRS 9 ADJ part
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online receivables
Performing (1)
2553
(412)
2141
717
2855
(456)
2399
751
3432
(567)
2864
778
(22139)
3432
(346)
3086
665
00
221
-150
Non-performing (2)
1006
(775)
232
283
946
(691)
255
249
977
(775)
201
222
(74878)
36947
1725
(1145)
580
335
749
(369)
250
Online total
3559
(1187)
2373
1000
3801
(1147)
2654
1000
4408
(1343)
3065
1000
5157
(1491)
3666
1000
(148)
NPL (90+)
(74878)
14808
TBI Bank receivables
Performing (1)
2927
(124)
2803
840
2964
(120)
2844
838
2145
(70)
2075
873
(2586)
2145
(44)
2101
873
00
26
120
Non-performing (2)
556
(305)
250
160
571
(280)
291
162
311
(162)
149
127
0437
311
(166)
145
127
00
(04)
-20
TBI Bank total
3482
(429)
3053
1000
3535
(401)
3135
1000
2456
(232)
2224
1000
-
(2149)
2456
(210)
2246
1000
21
Overall group receivables
Performing (1)
5480
(536)
4944
778
5819
(577)
5242
793
5577
(637)
4939
812
-
(24725)
5577
(390)
5187
733
Non-performing (2)
1562
(1080)
482
222
1517
(971)
546
207
1287
(937)
350
188
(74878)
37384
2036
(1311)
725
267
Overall total
7042
(1616)
5426
1000
7337
(1548)
5789
1000
6864
(1575)
5290
1000
(74878)
12659
7613
(1701)
5912
1000
31122018 changed to audited figures
8
bull Solid initial start to the year with January and February largely in line with management expectationsbull Follows Q4 a naturally seasonally strong quarter especially at TBI Bank
bull Q1 2020 interest income down 9 Adjusted EBITDA of euro233m down 21 year-on-year bull Half of QoQ interest income change from products that have been discontinued
de-emphasised (eg instalment loans in Poland amp Armenia)bull Main Covid-19 impact on Q1 financials additional ceuro3m of net impairmentsbull Post-provision operating profit of euro107m vs euro135m in Q1 2019
bull Continued progress on cost reductionbull Year-on-year reduction in costs of 6 from existing cost efficiency programmesbull Additional measures taken post Covid-19
bull Strong operating cashflow and robust cash positionbull Operating cashflow before movements in portfolio amp deposits of euro479mbull Significant bond repurchases made in March and April ($359m of USD bonds)bull Current ldquoonlinerdquo cash levels after May coupons remain strong at ceuro90m
bull Overall stable risk performance although delayed debt sales did impact the NPL ratiobull Overall gross NPL ratio of 222 (vs 207 as of Dec 2019)bull Net impairmentinterest income at 323 for Q1 2020 (vs 304 in Q1 2019)
Adjusted EBITDAeurom
Summary of three month 2020 results
Interest Incomeeurom
See appendix for definitions of key metrics and ratios
Q4 2019 costs have been adjusted to reflect audited figuresEstimated Covid-19 impact comprises -euro1m of interest income reduction +euro02m marketing cost savings and -euro31m additional impairment
Year-on-year comparison
eurom
Quarter-on-quarter bridge for Adjusted EBITDA
294
233
Q1 2019 Q1 2020
1065
966
Q1 2019 Q1 2020
-9-21
9
7
13
23
22
25
8
2
Baltics
Nordics
Poland
Spain
BGRO
Other Europe
Latin America
Interest income remains well diversified
Interest income by country
1065
966
euro0m
euro20m
euro40m
euro60m
euro80m
euro100m
euro120m
Q1 2019 Q1 2020
Other MexicoArgentinaArmeniaSlovakiaCzech RepublicRomaniaBulgariaSpainPolandDenmarkSwedenFinlandLithuaniaLatvia
-9
2020 interest income euro966m
Other represents countries exited during 2018 (Dominican Republic and Georgia)
10
472 459
387 410 385 386 372 383341
10198
107112
113 117109
117
126
3733
1615
54 53
49
52 52 5250 51
53
0
10
20
30
40
50
60
00
100
200
300
400
500
600
700
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
4finance TBI Friendly Finance Quarterly costincome ratio
Operating cost driversbull Operating costs down 6 year-on-year vs revenue down 7
bull Q1 2020 costincome ratio at 527 compared to 520 in Q1 2019
bull Some cost reduction effect from IFRS 16 impacting comparison with 2018 data
bull Seasonal increase in marketing spend in Q4 reduced in Q1 with some early impact of Covid-19 reductions
bull Investment in TBI Bank to support growth
bull Cost efficiency projects ongoing with focus on costincome ratiobull Headcount reduction of 5 year-on-yearbull Lower above-the-line marketing spend due to efficiency savings
from econometric modelling
bull Additional actions taken post Covid-19 bull Further headcount reductions of c20 of online business
personnel costs to align cost structure with market and product footprint
Notes(1) Q4 2018 costs have been adjusted to reflect audited figures(2) Q4 2019 costs have been adjusted to reflect audited figures
Total operating costs (1)
eurom
2018(1)
See appendix for definitions of key metrics and ratios
2019 (2) 2020
11
135149
124
29 23
2017 2018 2019 Q1 2019 Q1 2020
eurom
81
11
53 51
120
2016 2017 2018 2019 Q1 2019 Q1 2020
Profit before tax
1814 16 17 16 17
2017 1 Jan2018
2018 2019 Q1 2019 Q1 2020
Strong financial profile ndash stability and profitabilityInterest income
448475
425
106 97
2017 2018 2019 Q1 2019 Q1 2020
Adjusted EBITDA Equity assets ratio
22x24x
22x20x 18x
2017 2018 2019 Q1 2019 Q1 2020
Adjusted interest coverage ratio (1)
32
2628 29 30 30
2017 1 Jan 2018 2018 2019 Q1 2019 Q1 2020
Equity net receivables (2)
eurom
eurom
Post IFRS 9
Post IFRS 9
Times
Note (1) The full covenant calculation of interest coverage ratio is based on proforma last twelve month figures and is currently 25x(2) The full covenant calculation of equitynet loans includes related party loans and finance leases and is currently 27
12
Funding strategy
Overview of funding structure 31 March 2020 (2)
2021 Notes194
2022 Notes335
4finance customer deposits
16
TBI customer deposits
442
TBI deposits from banks13
Notes(1) Represents the principal value of public bonds outstanding that comes due in each respective period net of buybacks and bonds owned by TBI Bank(2) The chart reflects the principal and accrued interest amounts of each of the instruments net of buybacks and bonds owned by TBI Bank
euro7277m
Strategy to diversify sources of funding and reduce overall funding cost over time
bull Strong cash generation and cash positionbull Cash generated from portfolio in Q1 and AprilMaybull Online cash ceuro90m at end May (after coupons and buybacks)bull TBI Bank increased deposit levels in Q1 and has strong liquidity ratios
bull Accessing TBI Bank balance sheet to fund online loansbull Successful initial portfolio sales of Polish instalment loans H2 2019bull Passport application for Lithuania to support portfolio sales from that
market submitted in April due to start in Q3
bull Further de-leveraging already achieved in 2020bull $359m of USD 2022 bonds and euro11m of EUR 2021 bonds purchased in
2020 year-to-datebull Proforma covenant interest expense reduced by 18 year-on-yearbull Retain ongoing flexibility to buy back bonds with spare liquidity
bull Strong capital positionbull 30 equity net receivables ratiobull TBI Bank capital adequacy c22 after adoption of 2019 profit in April
bull Consultations underway on potential extension to EUR 2021 bondsbull Allows financial results and markets to normalise prior to refinancing
Debt maturity schedule proforma for 31 May 2020 (1)
eurom
0
146
217
0
2020 2021 2022 2023+
13
195 167 170 171 162 150
3747 48 47 47 38
3940 35 23 21
17
6 7 10 12 811
7758 65 72 90
69
364328 341 341 342
293
Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020
Single Payment loans Line of Credit Instalment loans Near Prime TBI bank SME (Bank)
211 199 171 131 101 89
18 4537
34 51 48
159
242215
255 260 247
58
64
63 83 10398
47
42
42 49 6460492
591529 553 579
543
00
1500
3000
4500
6000
7500
2016 2017 1 Jan 2018 2018 2019 31 Mar 2020
Single Payment loans Line of Credit Cards Instalment loans Point of Sale SME (Bank)Baltics11
Nordics6
Poland16
Spain6
CZSK 2GEAM
1LatAm 05
BG (online)05
Bulgaria (TBI)25
Romania (TBI) 20
SME (TBI)11
Diversified loan portfolioNet receivables (1)
Net receivables 31 March 2020
Notes (1) Reflects reclassification of former SPL products in Sweden (from January 2016) Denmark (from January 2017) Armenia (from launch in July 2017) and Latvia (from January 2019) to Lines of Credit
bull Selective approach to new loan issuance
bull Overall net receivables totals euro542mbull 4 reduction during Q1 bull 89 consumer loansbull 43 online loans 57 banking
TBI Bank 57(funded clt2)
Online 43(funded c12)
eurom
See appendix for definitions of key metrics and ratios Includes TBI bank BG online and euro18m of purchased Poland portfolio Introduction of IFRS 9 as of 1-Jan-2018 reduced net receivables by euro62 million to euro529 million
Online loans issued (1)
eurom
14
486 464426 413
359 373 376 379 364
(55) (52) (42) (45) (36) (34) (34) (32) (31)
(67)(143)
(78) (77)
01
(57)(23) (41) (20)
364
269305 291
324281
319 307 312
-600
-500
-400
-300
-200
-100
00
100
200
300
400
-200
-150
-100
-50
00
50
100
150
200
250
300
350
400
450
500
550
600
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Analysis of net impairments and cost of risk
bull Q1 2020 net impairment charges remain fairly elevatedbull Most products in line with expectations Some additional
provisions in Armenia IL portfolio (in run-off)bull Overall impact of Covid-19 increased net impairments by
approximately euro3 million in Q1 (higher macro provisions delayed debt sales some impact on delay indicators)
bull Overall cost of risk relatively stablebull Overall cost of risk 174 (Q1 2020 including TBI Bank) vs 184
(Q1 2019)bull Online cost of risk 295 vs 289 (Q1 2019)bull Net impairment interest income 323 vs 304 (Q1 2019)
bull Proactive and ongoing adjustments to risk parameters across markets since mid-March
bull 63 changes to underwriting scorecardspoliciesbull 82 changes to debt collection scorecardspoliciesbull Ongoing regular reviews by market (eg Spain Poland)
Net impairment charges by quarter (1)
eurom
See appendix for definitions of key metrics and ratios
208 151
Gross impairments
Net impairment losses
Over provisioning on debt sales (net gainloss)
Recoveries from written off loans
174
2018166
Note (1) Q4 2018 and 2019 figures have been adjusted to reflect audited figures
2019184 160 Overall quarterly
cost of risk183 171 174
2020
15
Asset quality and provisioning bull Gross NPL ratios increased in lsquoonlinersquo due to delayed debt sales but asset quality relatively stable Coverage ratios remain over 100
bull Online gross NPL ratio 283 as of March 2020 compared with 249 as of December 2019bull Overall gross NPL ratio 222 as of March 2020 from 207 as of December 2019bull Some delayed debt sales already restarting in May including Poland
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Recent collections performancebull April and May repayment dynamics
in line with prior monthsbull April performance comparable
with Januarybull Improvement in May
bull Requests for payment deferrals either proactively offered by 4finance or offered in accordance with local regulation have been relatively limited
bull Main take-up in Czech Republic Armenia and TBI Bank
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
January Feb-Mar average April May
Repayment dynamics (single payment)
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
January Feb-Mar average April May
Repayment dynamics (instalment)
Repayment dynamics graphs represent cumulative sum of payments and extensions performed at under 30 DPD as a of amounts due in the prior month For example May line shows progress by day in May of repaymentextension of amounts that were due at any time in April and performed within 30 days of the due date
Payment deferral take-up in selected markets( of eligible portfolio by value)
Poland 2
Spain 3
Denmark 1
Baltics 1
Czech Republic 12
Armenia 17
TBI consumer 12
TBI SME 43
Day number in relevant month Day number in relevant month
17
Pro-active response to Covid-19 across the business with good resultsbull Rapidly adapted operations to home working ensuring employee safety and continuous services for customersbull Focus on risk management but remained ldquoopen for businessrdquo in AprilMay particularly for our returning customersbull Customer repayment behaviour within normal ranges in AprilMay with proactive support offered for customers who have
been impacted
Well positioned to lsquoweather the stormrsquo and take advantage of subsequent opportunitiesbull Key decisions taken to streamline footprint focus on larger markets and right-size cost basebull Continued development of near-prime business both on product side (Latvia Lithuania Sweden launches) and TBI Bank
funding side (Lithuania passport application)bull Encouraging demand and issuance trends in May (22 increase in online loans issued vs April) with improvement
expected to continue in June
Strong balance sheet and funding position with further action being takenbull Strong liquidity position in both lsquoonlinersquo and TBI Bankbull Strong cashflow generation deployed in significant bond buybacks to reduce leveragebull Consultations underway on potential extension to EUR 2021 bonds to allow financial results and markets to normalise
prior to long term refinancing
Summary
4finance a multi-segment multi-product consumer credit specialist
18
Thank you and Questions
19
Appendix ndash responsible lending and regulatory overview
20
Sustainability through good governance and responsible lendingOperating as a mainstream consumer finance business
bull ldquoBank-likerdquo policies and procedures with strong compliance function
bull Continued investment in AML GDPR and other strategic compliance priorities
bull Robust corporate governance with strong Supervisory Board
bull Increasingly regulated by main financial supervisory authorities
bull Diversification of portfolio and consequent reduction of reliance on single payment loans
bull Clear corporate values and code of conduct
bull Listed bond issues with quarterly financial reporting
Developing meaningful and constructive regulatory relationships
bull Ensuring we understand the regulatory arc
bull Helping regulators and legislators gain a solid understanding of our business
bull Ensuring we have a seat at the table
bull Contributing to EU Consumer Credit Directive consultation process
bull Continuous improvements in credit underwriting
bull Ensuring products are used appropriately
bull Working to ensure customers have safe landings when they signal difficulties
21
Regulatory overviewCountry
of interest income(Q1 2020)
Products (1) Regulator CB (2) Licenserequired (3)
Interest rate cap (1) Status
Argentina 1 SPL Consumer Protection Directorate - - -
Armenia 2 LOC Central Bank of the Republic of Armenia Yes Yes Nominal
Bulgaria ndash Online 2 SPL Bulgarian National BankYes Yes APR
(inc fees) Stable frameworkBulgaria ndash Bank 13 IL LOC POS SME
Czech Republic 5 SPL IL Czech National Bank Yes Yes - Stable framework
Denmark 11 LOC IL FSA and Consumer Ombudsman Yes YesAPR amp TCOC
being introduced
Danish FSA licensing process ongoing New regulations regarding interest rate caps (35 APR cap 100 cost of credit cap) and marketing restrictions in final stages of review Expected to start in July
Finland 1 IL(4) Finnish Competition and Consumer Authority - - Nominal
amp fees
New interest rate caps in force from September 2019 Further discussions on temporary reduction to 10 are ongoing
Latvia 5 MTP IL Consumer Rights Protection Centre - Yes Nominal fees amp TCOC
Stable framework since new interest rate caps in July 2019
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards MTP ndash Minimum to pay POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit(2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement(4) lsquoMini-ILrsquo (4 monthly instalments) from September 2019
22
Regulatory overview (continued)Country
of interest income
(Q1 2020)Products (1) Regulator CB (2) License
required (3)Interest rate
cap (1) Status
Lithuania 2 SPL IL Central Bank of Lithuania Yes Yes Nominal fees amp TCOC Stable framework
Mexico 1 IL National Financial Services Consumer Protection Commission - Yes - Stable framework
Poland 23 SPL IL Office of Competition and Consumer Protection - - Nominal fees
amp TCOC
Non-interest cost caps adjusted in April for one year to 15 fixed and 6 annual with a 45 total limit
Romania 10 IL LOC POS SME National Bank of Romania Yes Yes - Bill to introduce interest rate cap under discussion
Slovakia lt1 SPL National Bank of Slovakia Yes Yes APR (inc fees) Stable framework
Spain 22 SPL IL NA - - -
Sweden 1 LOC IL Swedish Financial Supervisory Authority Yes Yes Nominal amp
TCOCStable framework since new interest rate caps in September 2018
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit (2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement
23
Appendix ndash strategic evolution of portfolio
24
Evolving and broadening our business model
Prime
Sub-Prime
Near-Prime
Segments
Higher Duration Lower APR Products
SPL ILLOC POS
A multi-segment multi-product consumer credit specialist
1
1 Optimise
2 2 Diversify amp Grow
Illustrative
25
Evolution of product mix
Note (1) Reflects reclassification of Vivus brand products in Sweden (from January 2016) Denmark (from January 2017) Armenia (from launch in July 2017) and short-term products (SMS Credit amp Ondo) in Latvia (from January 2019) to Lines of Credit
68
17
3
9
29
45
18
11
0
25
50
75
100
30 Jun 2016 31 Mar 2020
SME (Bank)
Point of Sale
Instalment loans
Line of Credit Cards
Single Payment Loans
euro543meuro323m
Net receivables by product (1)
Online sub-prime only
Bank and onlinenear-prime
and sub-prime
76
48
4
14
20
29
7
0
25
50
75
100
Q1 2016 Q1 2020
Interest income by product (1)
euro97meuro90m
Date chosen to reflect the composition of loan portfolio immediately prior to purchase of TBI Bank
26
Funding near-prime growth via TBI Bank
Online acquisition Retail deposit funding
Initial portfolio development
Early stage customer acquisition and credit metrics monitored and
enhanced
Funding Platform
In-house IT funding platform ensuring ongoing automated
portfolio transfers
Bringing portfolios to scale
Market specific portfolios grow with ongoing sales to reach scale
True saleof portfolio(s)loan servicing
Indicative APRs
20-40
CostIncome ratio
c40
Cost of Risk
6-8
Cost of Funds
3-5
Return on Assets
3-5(2)
Illustrative near-prime
ldquounit economicsrdquo(1)
Notes(1) Illustrative metrics for near-prime portfolios and not indicative of a specific product or market(2) Illustrative potential returns in medium-term at scale
Payment of fair market value
bull Regular sales of Polish instalment loans since September 2019bull Passporting application submitted for Lithuania (largest near-prime portfolio)
Accessing TBI Bank deposit funding for lsquoonlinersquo portfolios via ongoing loan sales
27
Asset quality and provisioning ndash loan principal
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Interest Income 966 1065 (9)Interest Expense (127) (150) (16)Net Interest Income 839 915 (8)Net FampC Income 24 21 12Other operating income 23 22 7Non-Interest Income 47 43 10Operating Income (Revenue) 886 957 (7)Total operating costs (467) (498) (6)Pre-provision operating profit 419 459 (9)Net impairment charges (312) (324) (4)Post-provision operating profit 107 135 (21)Depreciation and amortisation (32) (32) +0Non-recurring income(expense) (39) (01) nmNet FX gain(loss) (34) 16 nmProfit before tax 02 119 nmIncome tax expense (27) (62) (57)Net profit(loss) after tax (25) 57 nm
Adjusted EBITDA 233 294 (21)
Income Statement
30
Balance sheetIn millions of euro
31 March 2020 (unaudited)
31 December 2019
Cash and cash equivalents of which 1560 1257- Online 834 767- TBI Bank 725 490
Placements with other banks 127 64Gross receivables due from customers 7042 7337Allowance for impairment (1616) (1548)Net receivables due from customers of which 5426 5789
- Principal 5147 5480- Accrued interest 277 309
Net investments in finance leases 45 47Net loans to related parties 594 607Property and equipment 182 178Financial investments 502 564Prepaid expenses 40 45Tax assets 174 213Deferred tax assets 353 330Intangible IT assets 168 178Goodwill 165 165Other assets 392 295Total assets 9727 9731Calculation for Presentation other assets (not loans Loans and borrowings 3849 3846Deposits from customers 3333 3222Deposits from banks 95 130Corporate income tax payable 124 95Other liabilities 718 780Total liabilities 8119 8074Share capital 358 358Retained earnings 1628 1657Reserves (378) (357)Total attributable equity 1608 1658Non-controlling interests 00 (00)Total equity 1608 1658Total shareholders equity and liabilities 9727 9731
Balance Sheet
31
Statement of Cash FlowsIn millions of euro
2020 2019Cash flows from operating activitiesProfit before taxes 02 119
Adjustments forDepreciation and amortisation 32 32
Impairment of goodwill and intangible assets - -
Net (gain) loss on foreign exchange from borrowings and other monetary items 131 63
Impairment losses on loans 364 359
Reversal of provision on debt portfolio sales (20) 01
Write-off and disposal of intangible and property and equipment assets 01 01
Interest income from non-customers loans (19) (19)
Interest expense on loans and borrowings and deposits from customers 127 150Non-recurring finance cost 32 -
Other non-cash items 14 0
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663 707
Adjustments forChange in financial instruments measured at fair value through profit or loss (137) (82)(Increase) decrease in other assets (including TBI statutory reserve placements amp leases) (09) (15)
Increase (decrease) in accounts payable to suppliers contractors and other creditors (39) (81)
Operating cash flow before movements in portfolio and deposits 479 530
Increase in loans due from customers (132) (468)
Proceeds from sale of portfolio 71 161
Increase in deposits (customer and bank deposits) 77 74
Deposit interest payments (15) (10)
Gross cash flows from operating activities 481 288
Corporate income tax paid (06) (63)
Net cash flows from operating activities 475 225
3 months to 31 March In millions of euro
2020 2019
Cash flows used in investing activitiesPurchase of property and equipment and intangible assets (15) (13)
Net cash from Purchase Sale of financial instruments 39 (118)
Loans issued to related parties - -
Loans repaid from related parties 0 40
Interest received from related parties 31 01
Disposal of subsidiaries net of cash disposed (13) -
(Acquisition)Disposal of equity investments (14) -
Acquisition of non-controlling interests (04) (04)
Net cash flows from investing activities 25 (94)
Cash flows from financing activitiesLoans received and notes issued - 0
Repayment and repurchase of loans and notes (164) (133)
Interest payments (06) (35)
FX hedging margin 14 82
Payment of lease liabilities (11) (1)
Dividend payments - -
Net cash flows used in financing activities (167) (95)
Net increase (decrease) in cash and cash equivalents 333 35
Cash and cash equivalents at the beginning of the period 985 1488
Effect of exchange rate fluctuations on cash (01) 0
Cash and cash equivalents at the end of the period 1318 1524
TBI Bank minimum statutory reserve 242 354
Total cash on hand and cash at central banks 1560 1878
3 months to 31 March
Cash Flow
Cash Flow (2)
Cash Flow
Cash Flow (2)
32
Key financial ratiosQ1 2020 Q1 2019
CapitalisationEquity assets 165 161Equity net receivables 296 299Adjusted interest coverage 18x 20xTBI Bank consolidated capital adequacy 188 210
ProfitabilityNet interest margin
- Online 764 802- TBI Bank 246 252- Overall group 500 557
Cost income ratio 527 520Normalised Profit before tax margin 111 127Normalised Return on average equity 118 104Normalised Return on average assets 20 17
Asset qualityCost of risk
- Online 295 289- TBI Bank 47 45- Overall group 174 184
Net impairment interest income 323 304Gross NPL ratio
- Online 283 227- TBI Bank 160 173- Overall group 222 204
Overall group NPL coverage ratio 1035 1064
See appendix for definitions of key metrics and ratios
key ratios
33
GlossaryDefinitionsbull Adjusted EBITDA ndash a non-IFRS measure that represents EBITDA (profit for the period plus tax plus interest expense plus depreciation and amortization) as adjusted by incomeloss from discontinued operations non-cash gains and losses
attributable to movement in the mark-to-market valuation of hedging obligations under IFRS goodwill write-offs and certain other one-off or non-cash items Adjusted EBITDA as presented here may not be comparable to similarly-titled measures that are reported by other companies due to differences in the way these measures are calculated Further details of covenant adjustments can be found in the relevant bond prospectuses available on our website
bull Adjusted interest coverage ndash Adjusted EBITDA interest expense for the relevant period (nb not equal to the full covenant coverage ratio calculation)
bull Cost of risk ndash Annualised net impairment loss average gross receivables (total gross receivables as of the start and end of each period divided by two)
bull Cost income ratio ndash Operating costs operating income (revenue)
bull Equity assets ratio ndash Total equity total assets
bull Equity net receivables ndash Total equity net customer receivables (including accrued interest)
bull Gross NPL ratio ndash Non-performing receivables (including accrued interest) with a delay of over 90 days gross receivables (including accrued interest)
bull Gross receivables ndash Total amount receivable from customers including principal and accrued interest after deduction of deferred income
bull Intangible assets ndash consists of deferred tax assets intangible IT assets and goodwill
bull Interest income ndash Interest and similar income generated from our customer loan portfolio
bull Loss given default ndash Loss on non-performing receivables (ie 1 - recovery rate) based on recoveries during the appropriate time window for the specific product reduced by costs of collection discounted at the weighted average effective interest rate
bull Net effective annualised yield ndash annualised interest income (excluding penalties) average net loan principal
bull Net impairment to interest income ratio ndash Net impairment losses on loans and receivables interest income
bull Net interest margin ndash Annualised net interest income average gross loan principal (total gross loan principal as of the start and end of each period divided by two)
bull Net receivables ndash Gross receivables (including accrued interest) less impairment provisions
bull Non-performing loans (NPLs) ndash Loan principal or receivables (as applicable) that are over 90 days past due (and for TBI Bank shown on a customer level basis)
bull Normalised ndash Adjusted to remove the effect of non-recurring items net FX and one-off adjustments to intangible assets and for 2018 ratios only adjusted to reflect the opening balance of 2018 balance sheet after IFRS 9 effects
bull Profit before tax margin ndash Profit before tax interest income
bull Return on Average Assets ndash Annualised profit from continuing operations average assets (total assets as of the start and end of each period divided by two)
bull Return on Average Equity ndash Annualised profit from continuing operations average equity (total equity as of the start and end of each period divided by two)
bull Return on Average Tangible Equity ndash Annualised profit from continuing operations average tangible equity (tangible equity as of the start and end of each period divided by two)
bull Tangible Equity ndash Total equity minus intangible assets
bull TBI Bank Capital adequacy ratio ndash (Tier One Capital + Tier Two Capital) Risk weighted assets (calculated according to the prevailing regulations of the Bulgarian National Bank)
34
Contacts
Investor Relationsinvestorrelations4financecom
James EtheringtonHead of Investor RelationsPhone +44 7766 697 950E-mail jamesetherington4financecom
Paul GoldfinchChief Financial OfficerPhone +371 2572 6422E-mail paulgoldfinch4financecom
Headquarters17a-8 Lielirbes street Riga LV-1046 Latvia
4finance Holding SA
Disclaimer
Agenda
Q1 2020 business and financial highlights
Slide Number 5
Current trading and outlook
Review of three month 2020 results
Summary of three month 2020 results
Interest income remains well diversified
Slide Number 10
Strong financial profile ndash stability and profitability
Funding strategy
Diversified loan portfolio
Analysis of net impairments and cost of risk
Asset quality and provisioning
Recent collections performance
Slide Number 17
Thank you and Questions
Appendix ndash responsible lending and regulatory overview
Sustainability through good governance and responsible lending
Regulatory overview
Regulatory overview (continued)
Appendix ndash strategic evolution of portfolio
Evolving and broadening our business model
Evolution of product mix
Slide Number 26
Asset quality and provisioning ndash loan principal
Appendix ndash financials and key ratios
Slide Number 29
Balance sheet
Statement of Cash Flows
Slide Number 32
GlossaryDefinitions
Contacts
Q12018
Q1 2020
9M 2018
Q1 2019
FY 2017
Net receivables (eurom) of which
5426
5408
5477
- Principal
272
5147
5144
5165
208
- Accrued interest
98
279
265
312
39
Total assets (eurom)
9724
10238
10147
Total equity (eurom)
221
1605
1607
1637
335
Capitalisation
Equity assets
147
165
157
161
127
Equity net receivables
195
296
297
299
267
Adjusted interest coverage
233
18x
25x
20x
223
TBI Bank consolidated capital adequacy
231
188
241
210
239
240
Profitability
Q12018
Net interest margin
- Online
764
882
802
- TBI Bank
246
280
252
- Overall group
500
648
557
Cost income ratio
527
520
520
Post-provision operating profit margin
145
166
177
Normalised Profit before tax margin
111
154
127
Normalised Return on average equity
118
375
104
Normalised Return on average assets
20
56
17
Asset quality
Cost of risk
- Online
295
237
289
- TBI Bank
47
86
45
- Overall group
174
181
184
Net impairment interest income
323
259
304
Gross NPL ratio
- Online
283
222
227
- TBI Bank
160
154
173
- Overall group
222
196
204
Overall group NPL coverage ratio
1035
1156
1064
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
505
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(06)
57
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
50
199
199
(248)
(301)
0800
Impairment losses on loans
1485
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(120)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(73)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
568
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
09
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2599
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
108
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(11)
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2637
2840
2840
1756
2279
00
Increase in loans due from customers
(2248)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1453
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1120
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(15)
(13)
(84)
(128)
(131)
(21)
Net cash from Purchase Sale of financial instruments
39
(118)
(136)
mdash
Repayment of financial instrument
-
-
Loans issued to related parties
-
-
(26)
(06)
(43)
(23)
Loans repaid from related parties
0
40
74
23
109
54
Interest received from related parties
31
01
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
00
(01)
0-
mdash
Disposal of subsidiaries net of cash disposed
(13)
-
(59)
(45)
(44)
mdash
(Acquisition)Disposal of equity investments
(14)
-
Acquisition of non-controlling interests
(04)
(04)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
-
-
mdash
0-
(00)
Prepayment for potential acquisition
-
00
208
0-
(208)
mdash
Acquisition of shares
-
00
00
Net cash flows from investing activities
25
(94)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
0
05
2999
1637
05
Repayment and repurchase of loans and notes
(164)
(133)
(272)
(1737)
(580)
(01)
Interest payments
(06)
(35)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
-
00
(00)
(192)
(58)
mdash
FX hedging margin
14
82
42
(140)
(88)
Payment of lease liabilities
(11)
(1)
mdash
Dividend payments
-
-
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(167)
(95)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
333
35
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
985
1488
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
(01)
0
01
10
10
03
Cash and cash equivalents at the end of the period
1318
1524
1488
2040
1319
681
TBI Bank minimum statutory reserve
242
354
234
230
230
242
Total cash on hand and cash at central banks
1560
1878
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
02
119
526
495
107
17000
Adjustments for
Depreciation and amortisation
32
32
121
64
83
1700
Impairment of goodwill and intangible assets
-
-
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
131
63
199
(248)
(301)
0800
Impairment losses on loans
364
359
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(20)
01
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
01
01
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(19)
(19)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
127
150
621
455
619
13300
Non-recurring finance cost
32
-
mdash
mdash
63
Other non-cash items
14
0
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663
707
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(137)
(82)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
(09)
(15)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(39)
(81)
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
479
530
2840
1756
2279
00
Increase in loans due from customers
(132)
(468)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
71
161
819
333
542
160
Increase in deposits (customer and bank deposits)
77
74
165
265
338
110
Deposit interest payments
(15)
(10)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
481
288
1233
524
442
(535)
Corporate income tax paid
(06)
(63)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
475
225
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(83)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(196)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
Q12018 (unaudited)
31 March 2020 (unaudited)
1 January 2018 (post IFRS 9 unaudited)
31 December 2019
Cash and cash equivalents of which
1538
1560
1549
1257
- Online
535
834
658
767
- TBI Bank
1003
725
892
490
Placements with other banks
57
127
70
64
Gross receivables due from customers
7156
7042
6588
7337
Allowance for impairment
(1665)
(1616)
(1575)
(1548)
Net receivables due from customers of which
5491
5426
5013
5789
- Principal
5147
5026
5480
- Accrued interest
277
264
309
Net investments in finance leases
93
45
105
47
Net loans to related parties
631
594
598
607
Property and equipment
96
182
101
178
Financial investments
183
502
184
564
Prepaid expenses
87
40
108
45
Tax assets
212
174
221
213
Deferred tax assets
371
353
368
330
Intangible IT assets
281
168
286
178
Goodwill
214
165
214
165
Other assets
678
392
573
295
Total assets
9932
9727
9390
9731
Calculation for Presentation - other assets (not loans or cash)
Loans and borrowings
4672
3849
3794
3846
Deposits from customers
2728
3333
2710
3222
Deposits from banks
94
95
mdash
130
Corporate income tax payable
178
124
198
95
Other liabilities
799
718
765
780
Total liabilities
8471
8119
7466
8074
Share capital
358
358
358
358
Retained earnings
1475
1628
1350
1657
Reserves
(343)
(378)
(323)
(357)
Total attributable equity
1490
1608
1385
1658
Non-controlling interests
(28)
00
(24)
(00)
Total equity
1461
1608
1362
1658
Total shareholders equity and liabilities
9932
9727
8828
9731
In millions of euro
Q1 2020 (unaudited)
Q1 2019 (unaudited)
change YoY
Interest Income
966
1065
(9)
Interest Expense
(127)
(150)
-(16)
1000000
Net Interest Income
839
915
(8)
Net FampC Income
24
21
12
Other operating income
23
22
7
Non-Interest Income
47
43
10
Operating Income (Revenue)
886
957
(7)
Personnel costs
(221)
(221)
(0
Discretionary bonus
(18)
(19)
(6)
Marketing
(91)
(96)
(5)
IT costs
(39)
(45)
(12)
DampA costs
(35)
(32)
+8
Other costs
(98)
(118)
(17)
Total operating costs
(467)
(498)
(6)
Pre-provision operating profit
419
459
(9)
Net impairment charges
(312)
(324)
-(4)
manual
Post-provision operating profit
107
135
(21)
Depreciation and amortisation
(32)
(32)
-+0
manual
Non-recurring income(expense)
(39)
(01)
nm
Non-recurring finance cost
mdash
mdash
+0
Net FX gain(loss)
(34)
16
nm
One-off adjustments to intangible assets
-
-
(0)
manual
Profit before tax
02
119
nm
Income tax expense
(27)
(62)
-(57)
manual
Net profit(loss) after tax
(25)
57
nm
manual
Adjusted EBITDA
233
294
-(21)
Costincome ratio
527
520
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online principal
Performing (1)
2347
(357)
1990
737
2634
(397)
2237
774
3177
(493)
2684
791
(22139)
3177
(302)
2875
681
(191)
150128837891005
Non-performing (2)
836
(656)
181
263
770
(590)
180
226
840
(664)
175
209
(74878)
36947
1488
(983)
505
319
-648
319
-64836054
-250544747891005
Online total
3184
(1013)
2171
1000
3404
(987)
2417
1000
4017
(1158)
2859
1000
4665
(1286)
3379
1000
(74878)
14808
TBI Bank principal
Performing (1)
2853
(121)
2732
840
2896
(118)
2778
838
2090
(68)
2022
873
(2586)
2090
(43)
2047
873
(25)
-251961477
Non-performing (2)
541
(298)
244
160
558
(274)
284
162
303
(158)
145
127
0437
303
(162)
141
127
04
42578177
TBI Bank total
3394
(418)
2976
1000
3454
(392)
3062
1000
2393
(226)
2167
1000
-
(2149)
2393
(205)
2188
1000
Overall group principal
Performing (1)
5200
(478)
4722
791
5529
(515)
5015
806
5267
(562)
4706
822
-
(24725)
5267
(345)
4922
746
Non-performing (2)
1378
(953)
424
209
1328
(864)
465
194
1142
(822)
320
178
(74878)
37384
1791
(1145)
646
254
Overall total
6578
(1431)
5147
1000
6858
(1378)
5480
1000
6410
(1384)
5026
1000
(74878)
12659
7058
(1490)
5567
1000
31122018 data updated post audit
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
IFRS 9 ADJ part
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online receivables
Performing (1)
2553
(412)
2141
717
2855
(456)
2399
751
3432
(567)
2864
778
(22139)
3432
(346)
3086
665
00
221
-150
Non-performing (2)
1006
(775)
232
283
946
(691)
255
249
977
(775)
201
222
(74878)
36947
1725
(1145)
580
335
749
(369)
250
Online total
3559
(1187)
2373
1000
3801
(1147)
2654
1000
4408
(1343)
3065
1000
5157
(1491)
3666
1000
(148)
NPL (90+)
(74878)
14808
TBI Bank receivables
Performing (1)
2927
(124)
2803
840
2964
(120)
2844
838
2145
(70)
2075
873
(2586)
2145
(44)
2101
873
00
26
120
Non-performing (2)
556
(305)
250
160
571
(280)
291
162
311
(162)
149
127
0437
311
(166)
145
127
00
(04)
-20
TBI Bank total
3482
(429)
3053
1000
3535
(401)
3135
1000
2456
(232)
2224
1000
-
(2149)
2456
(210)
2246
1000
21
Overall group receivables
Performing (1)
5480
(536)
4944
778
5819
(577)
5242
793
5577
(637)
4939
812
-
(24725)
5577
(390)
5187
733
Non-performing (2)
1562
(1080)
482
222
1517
(971)
546
207
1287
(937)
350
188
(74878)
37384
2036
(1311)
725
267
Overall total
7042
(1616)
5426
1000
7337
(1548)
5789
1000
6864
(1575)
5290
1000
(74878)
12659
7613
(1701)
5912
1000
31122018 changed to audited figures
9
7
13
23
22
25
8
2
Baltics
Nordics
Poland
Spain
BGRO
Other Europe
Latin America
Interest income remains well diversified
Interest income by country
1065
966
euro0m
euro20m
euro40m
euro60m
euro80m
euro100m
euro120m
Q1 2019 Q1 2020
Other MexicoArgentinaArmeniaSlovakiaCzech RepublicRomaniaBulgariaSpainPolandDenmarkSwedenFinlandLithuaniaLatvia
-9
2020 interest income euro966m
Other represents countries exited during 2018 (Dominican Republic and Georgia)
10
472 459
387 410 385 386 372 383341
10198
107112
113 117109
117
126
3733
1615
54 53
49
52 52 5250 51
53
0
10
20
30
40
50
60
00
100
200
300
400
500
600
700
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
4finance TBI Friendly Finance Quarterly costincome ratio
Operating cost driversbull Operating costs down 6 year-on-year vs revenue down 7
bull Q1 2020 costincome ratio at 527 compared to 520 in Q1 2019
bull Some cost reduction effect from IFRS 16 impacting comparison with 2018 data
bull Seasonal increase in marketing spend in Q4 reduced in Q1 with some early impact of Covid-19 reductions
bull Investment in TBI Bank to support growth
bull Cost efficiency projects ongoing with focus on costincome ratiobull Headcount reduction of 5 year-on-yearbull Lower above-the-line marketing spend due to efficiency savings
from econometric modelling
bull Additional actions taken post Covid-19 bull Further headcount reductions of c20 of online business
personnel costs to align cost structure with market and product footprint
Notes(1) Q4 2018 costs have been adjusted to reflect audited figures(2) Q4 2019 costs have been adjusted to reflect audited figures
Total operating costs (1)
eurom
2018(1)
See appendix for definitions of key metrics and ratios
2019 (2) 2020
11
135149
124
29 23
2017 2018 2019 Q1 2019 Q1 2020
eurom
81
11
53 51
120
2016 2017 2018 2019 Q1 2019 Q1 2020
Profit before tax
1814 16 17 16 17
2017 1 Jan2018
2018 2019 Q1 2019 Q1 2020
Strong financial profile ndash stability and profitabilityInterest income
448475
425
106 97
2017 2018 2019 Q1 2019 Q1 2020
Adjusted EBITDA Equity assets ratio
22x24x
22x20x 18x
2017 2018 2019 Q1 2019 Q1 2020
Adjusted interest coverage ratio (1)
32
2628 29 30 30
2017 1 Jan 2018 2018 2019 Q1 2019 Q1 2020
Equity net receivables (2)
eurom
eurom
Post IFRS 9
Post IFRS 9
Times
Note (1) The full covenant calculation of interest coverage ratio is based on proforma last twelve month figures and is currently 25x(2) The full covenant calculation of equitynet loans includes related party loans and finance leases and is currently 27
12
Funding strategy
Overview of funding structure 31 March 2020 (2)
2021 Notes194
2022 Notes335
4finance customer deposits
16
TBI customer deposits
442
TBI deposits from banks13
Notes(1) Represents the principal value of public bonds outstanding that comes due in each respective period net of buybacks and bonds owned by TBI Bank(2) The chart reflects the principal and accrued interest amounts of each of the instruments net of buybacks and bonds owned by TBI Bank
euro7277m
Strategy to diversify sources of funding and reduce overall funding cost over time
bull Strong cash generation and cash positionbull Cash generated from portfolio in Q1 and AprilMaybull Online cash ceuro90m at end May (after coupons and buybacks)bull TBI Bank increased deposit levels in Q1 and has strong liquidity ratios
bull Accessing TBI Bank balance sheet to fund online loansbull Successful initial portfolio sales of Polish instalment loans H2 2019bull Passport application for Lithuania to support portfolio sales from that
market submitted in April due to start in Q3
bull Further de-leveraging already achieved in 2020bull $359m of USD 2022 bonds and euro11m of EUR 2021 bonds purchased in
2020 year-to-datebull Proforma covenant interest expense reduced by 18 year-on-yearbull Retain ongoing flexibility to buy back bonds with spare liquidity
bull Strong capital positionbull 30 equity net receivables ratiobull TBI Bank capital adequacy c22 after adoption of 2019 profit in April
bull Consultations underway on potential extension to EUR 2021 bondsbull Allows financial results and markets to normalise prior to refinancing
Debt maturity schedule proforma for 31 May 2020 (1)
eurom
0
146
217
0
2020 2021 2022 2023+
13
195 167 170 171 162 150
3747 48 47 47 38
3940 35 23 21
17
6 7 10 12 811
7758 65 72 90
69
364328 341 341 342
293
Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020
Single Payment loans Line of Credit Instalment loans Near Prime TBI bank SME (Bank)
211 199 171 131 101 89
18 4537
34 51 48
159
242215
255 260 247
58
64
63 83 10398
47
42
42 49 6460492
591529 553 579
543
00
1500
3000
4500
6000
7500
2016 2017 1 Jan 2018 2018 2019 31 Mar 2020
Single Payment loans Line of Credit Cards Instalment loans Point of Sale SME (Bank)Baltics11
Nordics6
Poland16
Spain6
CZSK 2GEAM
1LatAm 05
BG (online)05
Bulgaria (TBI)25
Romania (TBI) 20
SME (TBI)11
Diversified loan portfolioNet receivables (1)
Net receivables 31 March 2020
Notes (1) Reflects reclassification of former SPL products in Sweden (from January 2016) Denmark (from January 2017) Armenia (from launch in July 2017) and Latvia (from January 2019) to Lines of Credit
bull Selective approach to new loan issuance
bull Overall net receivables totals euro542mbull 4 reduction during Q1 bull 89 consumer loansbull 43 online loans 57 banking
TBI Bank 57(funded clt2)
Online 43(funded c12)
eurom
See appendix for definitions of key metrics and ratios Includes TBI bank BG online and euro18m of purchased Poland portfolio Introduction of IFRS 9 as of 1-Jan-2018 reduced net receivables by euro62 million to euro529 million
Online loans issued (1)
eurom
14
486 464426 413
359 373 376 379 364
(55) (52) (42) (45) (36) (34) (34) (32) (31)
(67)(143)
(78) (77)
01
(57)(23) (41) (20)
364
269305 291
324281
319 307 312
-600
-500
-400
-300
-200
-100
00
100
200
300
400
-200
-150
-100
-50
00
50
100
150
200
250
300
350
400
450
500
550
600
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Analysis of net impairments and cost of risk
bull Q1 2020 net impairment charges remain fairly elevatedbull Most products in line with expectations Some additional
provisions in Armenia IL portfolio (in run-off)bull Overall impact of Covid-19 increased net impairments by
approximately euro3 million in Q1 (higher macro provisions delayed debt sales some impact on delay indicators)
bull Overall cost of risk relatively stablebull Overall cost of risk 174 (Q1 2020 including TBI Bank) vs 184
(Q1 2019)bull Online cost of risk 295 vs 289 (Q1 2019)bull Net impairment interest income 323 vs 304 (Q1 2019)
bull Proactive and ongoing adjustments to risk parameters across markets since mid-March
bull 63 changes to underwriting scorecardspoliciesbull 82 changes to debt collection scorecardspoliciesbull Ongoing regular reviews by market (eg Spain Poland)
Net impairment charges by quarter (1)
eurom
See appendix for definitions of key metrics and ratios
208 151
Gross impairments
Net impairment losses
Over provisioning on debt sales (net gainloss)
Recoveries from written off loans
174
2018166
Note (1) Q4 2018 and 2019 figures have been adjusted to reflect audited figures
2019184 160 Overall quarterly
cost of risk183 171 174
2020
15
Asset quality and provisioning bull Gross NPL ratios increased in lsquoonlinersquo due to delayed debt sales but asset quality relatively stable Coverage ratios remain over 100
bull Online gross NPL ratio 283 as of March 2020 compared with 249 as of December 2019bull Overall gross NPL ratio 222 as of March 2020 from 207 as of December 2019bull Some delayed debt sales already restarting in May including Poland
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Recent collections performancebull April and May repayment dynamics
in line with prior monthsbull April performance comparable
with Januarybull Improvement in May
bull Requests for payment deferrals either proactively offered by 4finance or offered in accordance with local regulation have been relatively limited
bull Main take-up in Czech Republic Armenia and TBI Bank
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
January Feb-Mar average April May
Repayment dynamics (single payment)
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
January Feb-Mar average April May
Repayment dynamics (instalment)
Repayment dynamics graphs represent cumulative sum of payments and extensions performed at under 30 DPD as a of amounts due in the prior month For example May line shows progress by day in May of repaymentextension of amounts that were due at any time in April and performed within 30 days of the due date
Payment deferral take-up in selected markets( of eligible portfolio by value)
Poland 2
Spain 3
Denmark 1
Baltics 1
Czech Republic 12
Armenia 17
TBI consumer 12
TBI SME 43
Day number in relevant month Day number in relevant month
17
Pro-active response to Covid-19 across the business with good resultsbull Rapidly adapted operations to home working ensuring employee safety and continuous services for customersbull Focus on risk management but remained ldquoopen for businessrdquo in AprilMay particularly for our returning customersbull Customer repayment behaviour within normal ranges in AprilMay with proactive support offered for customers who have
been impacted
Well positioned to lsquoweather the stormrsquo and take advantage of subsequent opportunitiesbull Key decisions taken to streamline footprint focus on larger markets and right-size cost basebull Continued development of near-prime business both on product side (Latvia Lithuania Sweden launches) and TBI Bank
funding side (Lithuania passport application)bull Encouraging demand and issuance trends in May (22 increase in online loans issued vs April) with improvement
expected to continue in June
Strong balance sheet and funding position with further action being takenbull Strong liquidity position in both lsquoonlinersquo and TBI Bankbull Strong cashflow generation deployed in significant bond buybacks to reduce leveragebull Consultations underway on potential extension to EUR 2021 bonds to allow financial results and markets to normalise
prior to long term refinancing
Summary
4finance a multi-segment multi-product consumer credit specialist
18
Thank you and Questions
19
Appendix ndash responsible lending and regulatory overview
20
Sustainability through good governance and responsible lendingOperating as a mainstream consumer finance business
bull ldquoBank-likerdquo policies and procedures with strong compliance function
bull Continued investment in AML GDPR and other strategic compliance priorities
bull Robust corporate governance with strong Supervisory Board
bull Increasingly regulated by main financial supervisory authorities
bull Diversification of portfolio and consequent reduction of reliance on single payment loans
bull Clear corporate values and code of conduct
bull Listed bond issues with quarterly financial reporting
Developing meaningful and constructive regulatory relationships
bull Ensuring we understand the regulatory arc
bull Helping regulators and legislators gain a solid understanding of our business
bull Ensuring we have a seat at the table
bull Contributing to EU Consumer Credit Directive consultation process
bull Continuous improvements in credit underwriting
bull Ensuring products are used appropriately
bull Working to ensure customers have safe landings when they signal difficulties
21
Regulatory overviewCountry
of interest income(Q1 2020)
Products (1) Regulator CB (2) Licenserequired (3)
Interest rate cap (1) Status
Argentina 1 SPL Consumer Protection Directorate - - -
Armenia 2 LOC Central Bank of the Republic of Armenia Yes Yes Nominal
Bulgaria ndash Online 2 SPL Bulgarian National BankYes Yes APR
(inc fees) Stable frameworkBulgaria ndash Bank 13 IL LOC POS SME
Czech Republic 5 SPL IL Czech National Bank Yes Yes - Stable framework
Denmark 11 LOC IL FSA and Consumer Ombudsman Yes YesAPR amp TCOC
being introduced
Danish FSA licensing process ongoing New regulations regarding interest rate caps (35 APR cap 100 cost of credit cap) and marketing restrictions in final stages of review Expected to start in July
Finland 1 IL(4) Finnish Competition and Consumer Authority - - Nominal
amp fees
New interest rate caps in force from September 2019 Further discussions on temporary reduction to 10 are ongoing
Latvia 5 MTP IL Consumer Rights Protection Centre - Yes Nominal fees amp TCOC
Stable framework since new interest rate caps in July 2019
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards MTP ndash Minimum to pay POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit(2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement(4) lsquoMini-ILrsquo (4 monthly instalments) from September 2019
22
Regulatory overview (continued)Country
of interest income
(Q1 2020)Products (1) Regulator CB (2) License
required (3)Interest rate
cap (1) Status
Lithuania 2 SPL IL Central Bank of Lithuania Yes Yes Nominal fees amp TCOC Stable framework
Mexico 1 IL National Financial Services Consumer Protection Commission - Yes - Stable framework
Poland 23 SPL IL Office of Competition and Consumer Protection - - Nominal fees
amp TCOC
Non-interest cost caps adjusted in April for one year to 15 fixed and 6 annual with a 45 total limit
Romania 10 IL LOC POS SME National Bank of Romania Yes Yes - Bill to introduce interest rate cap under discussion
Slovakia lt1 SPL National Bank of Slovakia Yes Yes APR (inc fees) Stable framework
Spain 22 SPL IL NA - - -
Sweden 1 LOC IL Swedish Financial Supervisory Authority Yes Yes Nominal amp
TCOCStable framework since new interest rate caps in September 2018
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit (2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement
23
Appendix ndash strategic evolution of portfolio
24
Evolving and broadening our business model
Prime
Sub-Prime
Near-Prime
Segments
Higher Duration Lower APR Products
SPL ILLOC POS
A multi-segment multi-product consumer credit specialist
1
1 Optimise
2 2 Diversify amp Grow
Illustrative
25
Evolution of product mix
Note (1) Reflects reclassification of Vivus brand products in Sweden (from January 2016) Denmark (from January 2017) Armenia (from launch in July 2017) and short-term products (SMS Credit amp Ondo) in Latvia (from January 2019) to Lines of Credit
68
17
3
9
29
45
18
11
0
25
50
75
100
30 Jun 2016 31 Mar 2020
SME (Bank)
Point of Sale
Instalment loans
Line of Credit Cards
Single Payment Loans
euro543meuro323m
Net receivables by product (1)
Online sub-prime only
Bank and onlinenear-prime
and sub-prime
76
48
4
14
20
29
7
0
25
50
75
100
Q1 2016 Q1 2020
Interest income by product (1)
euro97meuro90m
Date chosen to reflect the composition of loan portfolio immediately prior to purchase of TBI Bank
26
Funding near-prime growth via TBI Bank
Online acquisition Retail deposit funding
Initial portfolio development
Early stage customer acquisition and credit metrics monitored and
enhanced
Funding Platform
In-house IT funding platform ensuring ongoing automated
portfolio transfers
Bringing portfolios to scale
Market specific portfolios grow with ongoing sales to reach scale
True saleof portfolio(s)loan servicing
Indicative APRs
20-40
CostIncome ratio
c40
Cost of Risk
6-8
Cost of Funds
3-5
Return on Assets
3-5(2)
Illustrative near-prime
ldquounit economicsrdquo(1)
Notes(1) Illustrative metrics for near-prime portfolios and not indicative of a specific product or market(2) Illustrative potential returns in medium-term at scale
Payment of fair market value
bull Regular sales of Polish instalment loans since September 2019bull Passporting application submitted for Lithuania (largest near-prime portfolio)
Accessing TBI Bank deposit funding for lsquoonlinersquo portfolios via ongoing loan sales
27
Asset quality and provisioning ndash loan principal
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Interest Income 966 1065 (9)Interest Expense (127) (150) (16)Net Interest Income 839 915 (8)Net FampC Income 24 21 12Other operating income 23 22 7Non-Interest Income 47 43 10Operating Income (Revenue) 886 957 (7)Total operating costs (467) (498) (6)Pre-provision operating profit 419 459 (9)Net impairment charges (312) (324) (4)Post-provision operating profit 107 135 (21)Depreciation and amortisation (32) (32) +0Non-recurring income(expense) (39) (01) nmNet FX gain(loss) (34) 16 nmProfit before tax 02 119 nmIncome tax expense (27) (62) (57)Net profit(loss) after tax (25) 57 nm
Adjusted EBITDA 233 294 (21)
Income Statement
30
Balance sheetIn millions of euro
31 March 2020 (unaudited)
31 December 2019
Cash and cash equivalents of which 1560 1257- Online 834 767- TBI Bank 725 490
Placements with other banks 127 64Gross receivables due from customers 7042 7337Allowance for impairment (1616) (1548)Net receivables due from customers of which 5426 5789
- Principal 5147 5480- Accrued interest 277 309
Net investments in finance leases 45 47Net loans to related parties 594 607Property and equipment 182 178Financial investments 502 564Prepaid expenses 40 45Tax assets 174 213Deferred tax assets 353 330Intangible IT assets 168 178Goodwill 165 165Other assets 392 295Total assets 9727 9731Calculation for Presentation other assets (not loans Loans and borrowings 3849 3846Deposits from customers 3333 3222Deposits from banks 95 130Corporate income tax payable 124 95Other liabilities 718 780Total liabilities 8119 8074Share capital 358 358Retained earnings 1628 1657Reserves (378) (357)Total attributable equity 1608 1658Non-controlling interests 00 (00)Total equity 1608 1658Total shareholders equity and liabilities 9727 9731
Balance Sheet
31
Statement of Cash FlowsIn millions of euro
2020 2019Cash flows from operating activitiesProfit before taxes 02 119
Adjustments forDepreciation and amortisation 32 32
Impairment of goodwill and intangible assets - -
Net (gain) loss on foreign exchange from borrowings and other monetary items 131 63
Impairment losses on loans 364 359
Reversal of provision on debt portfolio sales (20) 01
Write-off and disposal of intangible and property and equipment assets 01 01
Interest income from non-customers loans (19) (19)
Interest expense on loans and borrowings and deposits from customers 127 150Non-recurring finance cost 32 -
Other non-cash items 14 0
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663 707
Adjustments forChange in financial instruments measured at fair value through profit or loss (137) (82)(Increase) decrease in other assets (including TBI statutory reserve placements amp leases) (09) (15)
Increase (decrease) in accounts payable to suppliers contractors and other creditors (39) (81)
Operating cash flow before movements in portfolio and deposits 479 530
Increase in loans due from customers (132) (468)
Proceeds from sale of portfolio 71 161
Increase in deposits (customer and bank deposits) 77 74
Deposit interest payments (15) (10)
Gross cash flows from operating activities 481 288
Corporate income tax paid (06) (63)
Net cash flows from operating activities 475 225
3 months to 31 March In millions of euro
2020 2019
Cash flows used in investing activitiesPurchase of property and equipment and intangible assets (15) (13)
Net cash from Purchase Sale of financial instruments 39 (118)
Loans issued to related parties - -
Loans repaid from related parties 0 40
Interest received from related parties 31 01
Disposal of subsidiaries net of cash disposed (13) -
(Acquisition)Disposal of equity investments (14) -
Acquisition of non-controlling interests (04) (04)
Net cash flows from investing activities 25 (94)
Cash flows from financing activitiesLoans received and notes issued - 0
Repayment and repurchase of loans and notes (164) (133)
Interest payments (06) (35)
FX hedging margin 14 82
Payment of lease liabilities (11) (1)
Dividend payments - -
Net cash flows used in financing activities (167) (95)
Net increase (decrease) in cash and cash equivalents 333 35
Cash and cash equivalents at the beginning of the period 985 1488
Effect of exchange rate fluctuations on cash (01) 0
Cash and cash equivalents at the end of the period 1318 1524
TBI Bank minimum statutory reserve 242 354
Total cash on hand and cash at central banks 1560 1878
3 months to 31 March
Cash Flow
Cash Flow (2)
Cash Flow
Cash Flow (2)
32
Key financial ratiosQ1 2020 Q1 2019
CapitalisationEquity assets 165 161Equity net receivables 296 299Adjusted interest coverage 18x 20xTBI Bank consolidated capital adequacy 188 210
ProfitabilityNet interest margin
- Online 764 802- TBI Bank 246 252- Overall group 500 557
Cost income ratio 527 520Normalised Profit before tax margin 111 127Normalised Return on average equity 118 104Normalised Return on average assets 20 17
Asset qualityCost of risk
- Online 295 289- TBI Bank 47 45- Overall group 174 184
Net impairment interest income 323 304Gross NPL ratio
- Online 283 227- TBI Bank 160 173- Overall group 222 204
Overall group NPL coverage ratio 1035 1064
See appendix for definitions of key metrics and ratios
key ratios
33
GlossaryDefinitionsbull Adjusted EBITDA ndash a non-IFRS measure that represents EBITDA (profit for the period plus tax plus interest expense plus depreciation and amortization) as adjusted by incomeloss from discontinued operations non-cash gains and losses
attributable to movement in the mark-to-market valuation of hedging obligations under IFRS goodwill write-offs and certain other one-off or non-cash items Adjusted EBITDA as presented here may not be comparable to similarly-titled measures that are reported by other companies due to differences in the way these measures are calculated Further details of covenant adjustments can be found in the relevant bond prospectuses available on our website
bull Adjusted interest coverage ndash Adjusted EBITDA interest expense for the relevant period (nb not equal to the full covenant coverage ratio calculation)
bull Cost of risk ndash Annualised net impairment loss average gross receivables (total gross receivables as of the start and end of each period divided by two)
bull Cost income ratio ndash Operating costs operating income (revenue)
bull Equity assets ratio ndash Total equity total assets
bull Equity net receivables ndash Total equity net customer receivables (including accrued interest)
bull Gross NPL ratio ndash Non-performing receivables (including accrued interest) with a delay of over 90 days gross receivables (including accrued interest)
bull Gross receivables ndash Total amount receivable from customers including principal and accrued interest after deduction of deferred income
bull Intangible assets ndash consists of deferred tax assets intangible IT assets and goodwill
bull Interest income ndash Interest and similar income generated from our customer loan portfolio
bull Loss given default ndash Loss on non-performing receivables (ie 1 - recovery rate) based on recoveries during the appropriate time window for the specific product reduced by costs of collection discounted at the weighted average effective interest rate
bull Net effective annualised yield ndash annualised interest income (excluding penalties) average net loan principal
bull Net impairment to interest income ratio ndash Net impairment losses on loans and receivables interest income
bull Net interest margin ndash Annualised net interest income average gross loan principal (total gross loan principal as of the start and end of each period divided by two)
bull Net receivables ndash Gross receivables (including accrued interest) less impairment provisions
bull Non-performing loans (NPLs) ndash Loan principal or receivables (as applicable) that are over 90 days past due (and for TBI Bank shown on a customer level basis)
bull Normalised ndash Adjusted to remove the effect of non-recurring items net FX and one-off adjustments to intangible assets and for 2018 ratios only adjusted to reflect the opening balance of 2018 balance sheet after IFRS 9 effects
bull Profit before tax margin ndash Profit before tax interest income
bull Return on Average Assets ndash Annualised profit from continuing operations average assets (total assets as of the start and end of each period divided by two)
bull Return on Average Equity ndash Annualised profit from continuing operations average equity (total equity as of the start and end of each period divided by two)
bull Return on Average Tangible Equity ndash Annualised profit from continuing operations average tangible equity (tangible equity as of the start and end of each period divided by two)
bull Tangible Equity ndash Total equity minus intangible assets
bull TBI Bank Capital adequacy ratio ndash (Tier One Capital + Tier Two Capital) Risk weighted assets (calculated according to the prevailing regulations of the Bulgarian National Bank)
34
Contacts
Investor Relationsinvestorrelations4financecom
James EtheringtonHead of Investor RelationsPhone +44 7766 697 950E-mail jamesetherington4financecom
Paul GoldfinchChief Financial OfficerPhone +371 2572 6422E-mail paulgoldfinch4financecom
Headquarters17a-8 Lielirbes street Riga LV-1046 Latvia
4finance Holding SA
Disclaimer
Agenda
Q1 2020 business and financial highlights
Slide Number 5
Current trading and outlook
Review of three month 2020 results
Summary of three month 2020 results
Interest income remains well diversified
Slide Number 10
Strong financial profile ndash stability and profitability
Funding strategy
Diversified loan portfolio
Analysis of net impairments and cost of risk
Asset quality and provisioning
Recent collections performance
Slide Number 17
Thank you and Questions
Appendix ndash responsible lending and regulatory overview
Sustainability through good governance and responsible lending
Regulatory overview
Regulatory overview (continued)
Appendix ndash strategic evolution of portfolio
Evolving and broadening our business model
Evolution of product mix
Slide Number 26
Asset quality and provisioning ndash loan principal
Appendix ndash financials and key ratios
Slide Number 29
Balance sheet
Statement of Cash Flows
Slide Number 32
GlossaryDefinitions
Contacts
Q12018
Q1 2020
9M 2018
Q1 2019
FY 2017
Net receivables (eurom) of which
5426
5408
5477
- Principal
272
5147
5144
5165
208
- Accrued interest
98
279
265
312
39
Total assets (eurom)
9724
10238
10147
Total equity (eurom)
221
1605
1607
1637
335
Capitalisation
Equity assets
147
165
157
161
127
Equity net receivables
195
296
297
299
267
Adjusted interest coverage
233
18x
25x
20x
223
TBI Bank consolidated capital adequacy
231
188
241
210
239
240
Profitability
Q12018
Net interest margin
- Online
764
882
802
- TBI Bank
246
280
252
- Overall group
500
648
557
Cost income ratio
527
520
520
Post-provision operating profit margin
145
166
177
Normalised Profit before tax margin
111
154
127
Normalised Return on average equity
118
375
104
Normalised Return on average assets
20
56
17
Asset quality
Cost of risk
- Online
295
237
289
- TBI Bank
47
86
45
- Overall group
174
181
184
Net impairment interest income
323
259
304
Gross NPL ratio
- Online
283
222
227
- TBI Bank
160
154
173
- Overall group
222
196
204
Overall group NPL coverage ratio
1035
1156
1064
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
505
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(06)
57
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
50
199
199
(248)
(301)
0800
Impairment losses on loans
1485
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(120)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(73)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
568
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
09
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2599
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
108
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(11)
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2637
2840
2840
1756
2279
00
Increase in loans due from customers
(2248)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1453
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1120
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(15)
(13)
(84)
(128)
(131)
(21)
Net cash from Purchase Sale of financial instruments
39
(118)
(136)
mdash
Repayment of financial instrument
-
-
Loans issued to related parties
-
-
(26)
(06)
(43)
(23)
Loans repaid from related parties
0
40
74
23
109
54
Interest received from related parties
31
01
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
00
(01)
0-
mdash
Disposal of subsidiaries net of cash disposed
(13)
-
(59)
(45)
(44)
mdash
(Acquisition)Disposal of equity investments
(14)
-
Acquisition of non-controlling interests
(04)
(04)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
-
-
mdash
0-
(00)
Prepayment for potential acquisition
-
00
208
0-
(208)
mdash
Acquisition of shares
-
00
00
Net cash flows from investing activities
25
(94)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
0
05
2999
1637
05
Repayment and repurchase of loans and notes
(164)
(133)
(272)
(1737)
(580)
(01)
Interest payments
(06)
(35)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
-
00
(00)
(192)
(58)
mdash
FX hedging margin
14
82
42
(140)
(88)
Payment of lease liabilities
(11)
(1)
mdash
Dividend payments
-
-
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(167)
(95)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
333
35
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
985
1488
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
(01)
0
01
10
10
03
Cash and cash equivalents at the end of the period
1318
1524
1488
2040
1319
681
TBI Bank minimum statutory reserve
242
354
234
230
230
242
Total cash on hand and cash at central banks
1560
1878
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
02
119
526
495
107
17000
Adjustments for
Depreciation and amortisation
32
32
121
64
83
1700
Impairment of goodwill and intangible assets
-
-
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
131
63
199
(248)
(301)
0800
Impairment losses on loans
364
359
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(20)
01
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
01
01
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(19)
(19)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
127
150
621
455
619
13300
Non-recurring finance cost
32
-
mdash
mdash
63
Other non-cash items
14
0
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663
707
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(137)
(82)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
(09)
(15)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(39)
(81)
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
479
530
2840
1756
2279
00
Increase in loans due from customers
(132)
(468)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
71
161
819
333
542
160
Increase in deposits (customer and bank deposits)
77
74
165
265
338
110
Deposit interest payments
(15)
(10)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
481
288
1233
524
442
(535)
Corporate income tax paid
(06)
(63)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
475
225
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(83)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(196)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
Q12018 (unaudited)
31 March 2020 (unaudited)
1 January 2018 (post IFRS 9 unaudited)
31 December 2019
Cash and cash equivalents of which
1538
1560
1549
1257
- Online
535
834
658
767
- TBI Bank
1003
725
892
490
Placements with other banks
57
127
70
64
Gross receivables due from customers
7156
7042
6588
7337
Allowance for impairment
(1665)
(1616)
(1575)
(1548)
Net receivables due from customers of which
5491
5426
5013
5789
- Principal
5147
5026
5480
- Accrued interest
277
264
309
Net investments in finance leases
93
45
105
47
Net loans to related parties
631
594
598
607
Property and equipment
96
182
101
178
Financial investments
183
502
184
564
Prepaid expenses
87
40
108
45
Tax assets
212
174
221
213
Deferred tax assets
371
353
368
330
Intangible IT assets
281
168
286
178
Goodwill
214
165
214
165
Other assets
678
392
573
295
Total assets
9932
9727
9390
9731
Calculation for Presentation - other assets (not loans or cash)
Loans and borrowings
4672
3849
3794
3846
Deposits from customers
2728
3333
2710
3222
Deposits from banks
94
95
mdash
130
Corporate income tax payable
178
124
198
95
Other liabilities
799
718
765
780
Total liabilities
8471
8119
7466
8074
Share capital
358
358
358
358
Retained earnings
1475
1628
1350
1657
Reserves
(343)
(378)
(323)
(357)
Total attributable equity
1490
1608
1385
1658
Non-controlling interests
(28)
00
(24)
(00)
Total equity
1461
1608
1362
1658
Total shareholders equity and liabilities
9932
9727
8828
9731
In millions of euro
Q1 2020 (unaudited)
Q1 2019 (unaudited)
change YoY
Interest Income
966
1065
(9)
Interest Expense
(127)
(150)
-(16)
1000000
Net Interest Income
839
915
(8)
Net FampC Income
24
21
12
Other operating income
23
22
7
Non-Interest Income
47
43
10
Operating Income (Revenue)
886
957
(7)
Personnel costs
(221)
(221)
(0
Discretionary bonus
(18)
(19)
(6)
Marketing
(91)
(96)
(5)
IT costs
(39)
(45)
(12)
DampA costs
(35)
(32)
+8
Other costs
(98)
(118)
(17)
Total operating costs
(467)
(498)
(6)
Pre-provision operating profit
419
459
(9)
Net impairment charges
(312)
(324)
-(4)
manual
Post-provision operating profit
107
135
(21)
Depreciation and amortisation
(32)
(32)
-+0
manual
Non-recurring income(expense)
(39)
(01)
nm
Non-recurring finance cost
mdash
mdash
+0
Net FX gain(loss)
(34)
16
nm
One-off adjustments to intangible assets
-
-
(0)
manual
Profit before tax
02
119
nm
Income tax expense
(27)
(62)
-(57)
manual
Net profit(loss) after tax
(25)
57
nm
manual
Adjusted EBITDA
233
294
-(21)
Costincome ratio
527
520
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online principal
Performing (1)
2347
(357)
1990
737
2634
(397)
2237
774
3177
(493)
2684
791
(22139)
3177
(302)
2875
681
(191)
150128837891005
Non-performing (2)
836
(656)
181
263
770
(590)
180
226
840
(664)
175
209
(74878)
36947
1488
(983)
505
319
-648
319
-64836054
-250544747891005
Online total
3184
(1013)
2171
1000
3404
(987)
2417
1000
4017
(1158)
2859
1000
4665
(1286)
3379
1000
(74878)
14808
TBI Bank principal
Performing (1)
2853
(121)
2732
840
2896
(118)
2778
838
2090
(68)
2022
873
(2586)
2090
(43)
2047
873
(25)
-251961477
Non-performing (2)
541
(298)
244
160
558
(274)
284
162
303
(158)
145
127
0437
303
(162)
141
127
04
42578177
TBI Bank total
3394
(418)
2976
1000
3454
(392)
3062
1000
2393
(226)
2167
1000
-
(2149)
2393
(205)
2188
1000
Overall group principal
Performing (1)
5200
(478)
4722
791
5529
(515)
5015
806
5267
(562)
4706
822
-
(24725)
5267
(345)
4922
746
Non-performing (2)
1378
(953)
424
209
1328
(864)
465
194
1142
(822)
320
178
(74878)
37384
1791
(1145)
646
254
Overall total
6578
(1431)
5147
1000
6858
(1378)
5480
1000
6410
(1384)
5026
1000
(74878)
12659
7058
(1490)
5567
1000
31122018 data updated post audit
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
IFRS 9 ADJ part
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online receivables
Performing (1)
2553
(412)
2141
717
2855
(456)
2399
751
3432
(567)
2864
778
(22139)
3432
(346)
3086
665
00
221
-150
Non-performing (2)
1006
(775)
232
283
946
(691)
255
249
977
(775)
201
222
(74878)
36947
1725
(1145)
580
335
749
(369)
250
Online total
3559
(1187)
2373
1000
3801
(1147)
2654
1000
4408
(1343)
3065
1000
5157
(1491)
3666
1000
(148)
NPL (90+)
(74878)
14808
TBI Bank receivables
Performing (1)
2927
(124)
2803
840
2964
(120)
2844
838
2145
(70)
2075
873
(2586)
2145
(44)
2101
873
00
26
120
Non-performing (2)
556
(305)
250
160
571
(280)
291
162
311
(162)
149
127
0437
311
(166)
145
127
00
(04)
-20
TBI Bank total
3482
(429)
3053
1000
3535
(401)
3135
1000
2456
(232)
2224
1000
-
(2149)
2456
(210)
2246
1000
21
Overall group receivables
Performing (1)
5480
(536)
4944
778
5819
(577)
5242
793
5577
(637)
4939
812
-
(24725)
5577
(390)
5187
733
Non-performing (2)
1562
(1080)
482
222
1517
(971)
546
207
1287
(937)
350
188
(74878)
37384
2036
(1311)
725
267
Overall total
7042
(1616)
5426
1000
7337
(1548)
5789
1000
6864
(1575)
5290
1000
(74878)
12659
7613
(1701)
5912
1000
31122018 changed to audited figures
10
472 459
387 410 385 386 372 383341
10198
107112
113 117109
117
126
3733
1615
54 53
49
52 52 5250 51
53
0
10
20
30
40
50
60
00
100
200
300
400
500
600
700
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
4finance TBI Friendly Finance Quarterly costincome ratio
Operating cost driversbull Operating costs down 6 year-on-year vs revenue down 7
bull Q1 2020 costincome ratio at 527 compared to 520 in Q1 2019
bull Some cost reduction effect from IFRS 16 impacting comparison with 2018 data
bull Seasonal increase in marketing spend in Q4 reduced in Q1 with some early impact of Covid-19 reductions
bull Investment in TBI Bank to support growth
bull Cost efficiency projects ongoing with focus on costincome ratiobull Headcount reduction of 5 year-on-yearbull Lower above-the-line marketing spend due to efficiency savings
from econometric modelling
bull Additional actions taken post Covid-19 bull Further headcount reductions of c20 of online business
personnel costs to align cost structure with market and product footprint
Notes(1) Q4 2018 costs have been adjusted to reflect audited figures(2) Q4 2019 costs have been adjusted to reflect audited figures
Total operating costs (1)
eurom
2018(1)
See appendix for definitions of key metrics and ratios
2019 (2) 2020
11
135149
124
29 23
2017 2018 2019 Q1 2019 Q1 2020
eurom
81
11
53 51
120
2016 2017 2018 2019 Q1 2019 Q1 2020
Profit before tax
1814 16 17 16 17
2017 1 Jan2018
2018 2019 Q1 2019 Q1 2020
Strong financial profile ndash stability and profitabilityInterest income
448475
425
106 97
2017 2018 2019 Q1 2019 Q1 2020
Adjusted EBITDA Equity assets ratio
22x24x
22x20x 18x
2017 2018 2019 Q1 2019 Q1 2020
Adjusted interest coverage ratio (1)
32
2628 29 30 30
2017 1 Jan 2018 2018 2019 Q1 2019 Q1 2020
Equity net receivables (2)
eurom
eurom
Post IFRS 9
Post IFRS 9
Times
Note (1) The full covenant calculation of interest coverage ratio is based on proforma last twelve month figures and is currently 25x(2) The full covenant calculation of equitynet loans includes related party loans and finance leases and is currently 27
12
Funding strategy
Overview of funding structure 31 March 2020 (2)
2021 Notes194
2022 Notes335
4finance customer deposits
16
TBI customer deposits
442
TBI deposits from banks13
Notes(1) Represents the principal value of public bonds outstanding that comes due in each respective period net of buybacks and bonds owned by TBI Bank(2) The chart reflects the principal and accrued interest amounts of each of the instruments net of buybacks and bonds owned by TBI Bank
euro7277m
Strategy to diversify sources of funding and reduce overall funding cost over time
bull Strong cash generation and cash positionbull Cash generated from portfolio in Q1 and AprilMaybull Online cash ceuro90m at end May (after coupons and buybacks)bull TBI Bank increased deposit levels in Q1 and has strong liquidity ratios
bull Accessing TBI Bank balance sheet to fund online loansbull Successful initial portfolio sales of Polish instalment loans H2 2019bull Passport application for Lithuania to support portfolio sales from that
market submitted in April due to start in Q3
bull Further de-leveraging already achieved in 2020bull $359m of USD 2022 bonds and euro11m of EUR 2021 bonds purchased in
2020 year-to-datebull Proforma covenant interest expense reduced by 18 year-on-yearbull Retain ongoing flexibility to buy back bonds with spare liquidity
bull Strong capital positionbull 30 equity net receivables ratiobull TBI Bank capital adequacy c22 after adoption of 2019 profit in April
bull Consultations underway on potential extension to EUR 2021 bondsbull Allows financial results and markets to normalise prior to refinancing
Debt maturity schedule proforma for 31 May 2020 (1)
eurom
0
146
217
0
2020 2021 2022 2023+
13
195 167 170 171 162 150
3747 48 47 47 38
3940 35 23 21
17
6 7 10 12 811
7758 65 72 90
69
364328 341 341 342
293
Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020
Single Payment loans Line of Credit Instalment loans Near Prime TBI bank SME (Bank)
211 199 171 131 101 89
18 4537
34 51 48
159
242215
255 260 247
58
64
63 83 10398
47
42
42 49 6460492
591529 553 579
543
00
1500
3000
4500
6000
7500
2016 2017 1 Jan 2018 2018 2019 31 Mar 2020
Single Payment loans Line of Credit Cards Instalment loans Point of Sale SME (Bank)Baltics11
Nordics6
Poland16
Spain6
CZSK 2GEAM
1LatAm 05
BG (online)05
Bulgaria (TBI)25
Romania (TBI) 20
SME (TBI)11
Diversified loan portfolioNet receivables (1)
Net receivables 31 March 2020
Notes (1) Reflects reclassification of former SPL products in Sweden (from January 2016) Denmark (from January 2017) Armenia (from launch in July 2017) and Latvia (from January 2019) to Lines of Credit
bull Selective approach to new loan issuance
bull Overall net receivables totals euro542mbull 4 reduction during Q1 bull 89 consumer loansbull 43 online loans 57 banking
TBI Bank 57(funded clt2)
Online 43(funded c12)
eurom
See appendix for definitions of key metrics and ratios Includes TBI bank BG online and euro18m of purchased Poland portfolio Introduction of IFRS 9 as of 1-Jan-2018 reduced net receivables by euro62 million to euro529 million
Online loans issued (1)
eurom
14
486 464426 413
359 373 376 379 364
(55) (52) (42) (45) (36) (34) (34) (32) (31)
(67)(143)
(78) (77)
01
(57)(23) (41) (20)
364
269305 291
324281
319 307 312
-600
-500
-400
-300
-200
-100
00
100
200
300
400
-200
-150
-100
-50
00
50
100
150
200
250
300
350
400
450
500
550
600
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Analysis of net impairments and cost of risk
bull Q1 2020 net impairment charges remain fairly elevatedbull Most products in line with expectations Some additional
provisions in Armenia IL portfolio (in run-off)bull Overall impact of Covid-19 increased net impairments by
approximately euro3 million in Q1 (higher macro provisions delayed debt sales some impact on delay indicators)
bull Overall cost of risk relatively stablebull Overall cost of risk 174 (Q1 2020 including TBI Bank) vs 184
(Q1 2019)bull Online cost of risk 295 vs 289 (Q1 2019)bull Net impairment interest income 323 vs 304 (Q1 2019)
bull Proactive and ongoing adjustments to risk parameters across markets since mid-March
bull 63 changes to underwriting scorecardspoliciesbull 82 changes to debt collection scorecardspoliciesbull Ongoing regular reviews by market (eg Spain Poland)
Net impairment charges by quarter (1)
eurom
See appendix for definitions of key metrics and ratios
208 151
Gross impairments
Net impairment losses
Over provisioning on debt sales (net gainloss)
Recoveries from written off loans
174
2018166
Note (1) Q4 2018 and 2019 figures have been adjusted to reflect audited figures
2019184 160 Overall quarterly
cost of risk183 171 174
2020
15
Asset quality and provisioning bull Gross NPL ratios increased in lsquoonlinersquo due to delayed debt sales but asset quality relatively stable Coverage ratios remain over 100
bull Online gross NPL ratio 283 as of March 2020 compared with 249 as of December 2019bull Overall gross NPL ratio 222 as of March 2020 from 207 as of December 2019bull Some delayed debt sales already restarting in May including Poland
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Recent collections performancebull April and May repayment dynamics
in line with prior monthsbull April performance comparable
with Januarybull Improvement in May
bull Requests for payment deferrals either proactively offered by 4finance or offered in accordance with local regulation have been relatively limited
bull Main take-up in Czech Republic Armenia and TBI Bank
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
January Feb-Mar average April May
Repayment dynamics (single payment)
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
January Feb-Mar average April May
Repayment dynamics (instalment)
Repayment dynamics graphs represent cumulative sum of payments and extensions performed at under 30 DPD as a of amounts due in the prior month For example May line shows progress by day in May of repaymentextension of amounts that were due at any time in April and performed within 30 days of the due date
Payment deferral take-up in selected markets( of eligible portfolio by value)
Poland 2
Spain 3
Denmark 1
Baltics 1
Czech Republic 12
Armenia 17
TBI consumer 12
TBI SME 43
Day number in relevant month Day number in relevant month
17
Pro-active response to Covid-19 across the business with good resultsbull Rapidly adapted operations to home working ensuring employee safety and continuous services for customersbull Focus on risk management but remained ldquoopen for businessrdquo in AprilMay particularly for our returning customersbull Customer repayment behaviour within normal ranges in AprilMay with proactive support offered for customers who have
been impacted
Well positioned to lsquoweather the stormrsquo and take advantage of subsequent opportunitiesbull Key decisions taken to streamline footprint focus on larger markets and right-size cost basebull Continued development of near-prime business both on product side (Latvia Lithuania Sweden launches) and TBI Bank
funding side (Lithuania passport application)bull Encouraging demand and issuance trends in May (22 increase in online loans issued vs April) with improvement
expected to continue in June
Strong balance sheet and funding position with further action being takenbull Strong liquidity position in both lsquoonlinersquo and TBI Bankbull Strong cashflow generation deployed in significant bond buybacks to reduce leveragebull Consultations underway on potential extension to EUR 2021 bonds to allow financial results and markets to normalise
prior to long term refinancing
Summary
4finance a multi-segment multi-product consumer credit specialist
18
Thank you and Questions
19
Appendix ndash responsible lending and regulatory overview
20
Sustainability through good governance and responsible lendingOperating as a mainstream consumer finance business
bull ldquoBank-likerdquo policies and procedures with strong compliance function
bull Continued investment in AML GDPR and other strategic compliance priorities
bull Robust corporate governance with strong Supervisory Board
bull Increasingly regulated by main financial supervisory authorities
bull Diversification of portfolio and consequent reduction of reliance on single payment loans
bull Clear corporate values and code of conduct
bull Listed bond issues with quarterly financial reporting
Developing meaningful and constructive regulatory relationships
bull Ensuring we understand the regulatory arc
bull Helping regulators and legislators gain a solid understanding of our business
bull Ensuring we have a seat at the table
bull Contributing to EU Consumer Credit Directive consultation process
bull Continuous improvements in credit underwriting
bull Ensuring products are used appropriately
bull Working to ensure customers have safe landings when they signal difficulties
21
Regulatory overviewCountry
of interest income(Q1 2020)
Products (1) Regulator CB (2) Licenserequired (3)
Interest rate cap (1) Status
Argentina 1 SPL Consumer Protection Directorate - - -
Armenia 2 LOC Central Bank of the Republic of Armenia Yes Yes Nominal
Bulgaria ndash Online 2 SPL Bulgarian National BankYes Yes APR
(inc fees) Stable frameworkBulgaria ndash Bank 13 IL LOC POS SME
Czech Republic 5 SPL IL Czech National Bank Yes Yes - Stable framework
Denmark 11 LOC IL FSA and Consumer Ombudsman Yes YesAPR amp TCOC
being introduced
Danish FSA licensing process ongoing New regulations regarding interest rate caps (35 APR cap 100 cost of credit cap) and marketing restrictions in final stages of review Expected to start in July
Finland 1 IL(4) Finnish Competition and Consumer Authority - - Nominal
amp fees
New interest rate caps in force from September 2019 Further discussions on temporary reduction to 10 are ongoing
Latvia 5 MTP IL Consumer Rights Protection Centre - Yes Nominal fees amp TCOC
Stable framework since new interest rate caps in July 2019
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards MTP ndash Minimum to pay POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit(2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement(4) lsquoMini-ILrsquo (4 monthly instalments) from September 2019
22
Regulatory overview (continued)Country
of interest income
(Q1 2020)Products (1) Regulator CB (2) License
required (3)Interest rate
cap (1) Status
Lithuania 2 SPL IL Central Bank of Lithuania Yes Yes Nominal fees amp TCOC Stable framework
Mexico 1 IL National Financial Services Consumer Protection Commission - Yes - Stable framework
Poland 23 SPL IL Office of Competition and Consumer Protection - - Nominal fees
amp TCOC
Non-interest cost caps adjusted in April for one year to 15 fixed and 6 annual with a 45 total limit
Romania 10 IL LOC POS SME National Bank of Romania Yes Yes - Bill to introduce interest rate cap under discussion
Slovakia lt1 SPL National Bank of Slovakia Yes Yes APR (inc fees) Stable framework
Spain 22 SPL IL NA - - -
Sweden 1 LOC IL Swedish Financial Supervisory Authority Yes Yes Nominal amp
TCOCStable framework since new interest rate caps in September 2018
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit (2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement
23
Appendix ndash strategic evolution of portfolio
24
Evolving and broadening our business model
Prime
Sub-Prime
Near-Prime
Segments
Higher Duration Lower APR Products
SPL ILLOC POS
A multi-segment multi-product consumer credit specialist
1
1 Optimise
2 2 Diversify amp Grow
Illustrative
25
Evolution of product mix
Note (1) Reflects reclassification of Vivus brand products in Sweden (from January 2016) Denmark (from January 2017) Armenia (from launch in July 2017) and short-term products (SMS Credit amp Ondo) in Latvia (from January 2019) to Lines of Credit
68
17
3
9
29
45
18
11
0
25
50
75
100
30 Jun 2016 31 Mar 2020
SME (Bank)
Point of Sale
Instalment loans
Line of Credit Cards
Single Payment Loans
euro543meuro323m
Net receivables by product (1)
Online sub-prime only
Bank and onlinenear-prime
and sub-prime
76
48
4
14
20
29
7
0
25
50
75
100
Q1 2016 Q1 2020
Interest income by product (1)
euro97meuro90m
Date chosen to reflect the composition of loan portfolio immediately prior to purchase of TBI Bank
26
Funding near-prime growth via TBI Bank
Online acquisition Retail deposit funding
Initial portfolio development
Early stage customer acquisition and credit metrics monitored and
enhanced
Funding Platform
In-house IT funding platform ensuring ongoing automated
portfolio transfers
Bringing portfolios to scale
Market specific portfolios grow with ongoing sales to reach scale
True saleof portfolio(s)loan servicing
Indicative APRs
20-40
CostIncome ratio
c40
Cost of Risk
6-8
Cost of Funds
3-5
Return on Assets
3-5(2)
Illustrative near-prime
ldquounit economicsrdquo(1)
Notes(1) Illustrative metrics for near-prime portfolios and not indicative of a specific product or market(2) Illustrative potential returns in medium-term at scale
Payment of fair market value
bull Regular sales of Polish instalment loans since September 2019bull Passporting application submitted for Lithuania (largest near-prime portfolio)
Accessing TBI Bank deposit funding for lsquoonlinersquo portfolios via ongoing loan sales
27
Asset quality and provisioning ndash loan principal
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Interest Income 966 1065 (9)Interest Expense (127) (150) (16)Net Interest Income 839 915 (8)Net FampC Income 24 21 12Other operating income 23 22 7Non-Interest Income 47 43 10Operating Income (Revenue) 886 957 (7)Total operating costs (467) (498) (6)Pre-provision operating profit 419 459 (9)Net impairment charges (312) (324) (4)Post-provision operating profit 107 135 (21)Depreciation and amortisation (32) (32) +0Non-recurring income(expense) (39) (01) nmNet FX gain(loss) (34) 16 nmProfit before tax 02 119 nmIncome tax expense (27) (62) (57)Net profit(loss) after tax (25) 57 nm
Adjusted EBITDA 233 294 (21)
Income Statement
30
Balance sheetIn millions of euro
31 March 2020 (unaudited)
31 December 2019
Cash and cash equivalents of which 1560 1257- Online 834 767- TBI Bank 725 490
Placements with other banks 127 64Gross receivables due from customers 7042 7337Allowance for impairment (1616) (1548)Net receivables due from customers of which 5426 5789
- Principal 5147 5480- Accrued interest 277 309
Net investments in finance leases 45 47Net loans to related parties 594 607Property and equipment 182 178Financial investments 502 564Prepaid expenses 40 45Tax assets 174 213Deferred tax assets 353 330Intangible IT assets 168 178Goodwill 165 165Other assets 392 295Total assets 9727 9731Calculation for Presentation other assets (not loans Loans and borrowings 3849 3846Deposits from customers 3333 3222Deposits from banks 95 130Corporate income tax payable 124 95Other liabilities 718 780Total liabilities 8119 8074Share capital 358 358Retained earnings 1628 1657Reserves (378) (357)Total attributable equity 1608 1658Non-controlling interests 00 (00)Total equity 1608 1658Total shareholders equity and liabilities 9727 9731
Balance Sheet
31
Statement of Cash FlowsIn millions of euro
2020 2019Cash flows from operating activitiesProfit before taxes 02 119
Adjustments forDepreciation and amortisation 32 32
Impairment of goodwill and intangible assets - -
Net (gain) loss on foreign exchange from borrowings and other monetary items 131 63
Impairment losses on loans 364 359
Reversal of provision on debt portfolio sales (20) 01
Write-off and disposal of intangible and property and equipment assets 01 01
Interest income from non-customers loans (19) (19)
Interest expense on loans and borrowings and deposits from customers 127 150Non-recurring finance cost 32 -
Other non-cash items 14 0
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663 707
Adjustments forChange in financial instruments measured at fair value through profit or loss (137) (82)(Increase) decrease in other assets (including TBI statutory reserve placements amp leases) (09) (15)
Increase (decrease) in accounts payable to suppliers contractors and other creditors (39) (81)
Operating cash flow before movements in portfolio and deposits 479 530
Increase in loans due from customers (132) (468)
Proceeds from sale of portfolio 71 161
Increase in deposits (customer and bank deposits) 77 74
Deposit interest payments (15) (10)
Gross cash flows from operating activities 481 288
Corporate income tax paid (06) (63)
Net cash flows from operating activities 475 225
3 months to 31 March In millions of euro
2020 2019
Cash flows used in investing activitiesPurchase of property and equipment and intangible assets (15) (13)
Net cash from Purchase Sale of financial instruments 39 (118)
Loans issued to related parties - -
Loans repaid from related parties 0 40
Interest received from related parties 31 01
Disposal of subsidiaries net of cash disposed (13) -
(Acquisition)Disposal of equity investments (14) -
Acquisition of non-controlling interests (04) (04)
Net cash flows from investing activities 25 (94)
Cash flows from financing activitiesLoans received and notes issued - 0
Repayment and repurchase of loans and notes (164) (133)
Interest payments (06) (35)
FX hedging margin 14 82
Payment of lease liabilities (11) (1)
Dividend payments - -
Net cash flows used in financing activities (167) (95)
Net increase (decrease) in cash and cash equivalents 333 35
Cash and cash equivalents at the beginning of the period 985 1488
Effect of exchange rate fluctuations on cash (01) 0
Cash and cash equivalents at the end of the period 1318 1524
TBI Bank minimum statutory reserve 242 354
Total cash on hand and cash at central banks 1560 1878
3 months to 31 March
Cash Flow
Cash Flow (2)
Cash Flow
Cash Flow (2)
32
Key financial ratiosQ1 2020 Q1 2019
CapitalisationEquity assets 165 161Equity net receivables 296 299Adjusted interest coverage 18x 20xTBI Bank consolidated capital adequacy 188 210
ProfitabilityNet interest margin
- Online 764 802- TBI Bank 246 252- Overall group 500 557
Cost income ratio 527 520Normalised Profit before tax margin 111 127Normalised Return on average equity 118 104Normalised Return on average assets 20 17
Asset qualityCost of risk
- Online 295 289- TBI Bank 47 45- Overall group 174 184
Net impairment interest income 323 304Gross NPL ratio
- Online 283 227- TBI Bank 160 173- Overall group 222 204
Overall group NPL coverage ratio 1035 1064
See appendix for definitions of key metrics and ratios
key ratios
33
GlossaryDefinitionsbull Adjusted EBITDA ndash a non-IFRS measure that represents EBITDA (profit for the period plus tax plus interest expense plus depreciation and amortization) as adjusted by incomeloss from discontinued operations non-cash gains and losses
attributable to movement in the mark-to-market valuation of hedging obligations under IFRS goodwill write-offs and certain other one-off or non-cash items Adjusted EBITDA as presented here may not be comparable to similarly-titled measures that are reported by other companies due to differences in the way these measures are calculated Further details of covenant adjustments can be found in the relevant bond prospectuses available on our website
bull Adjusted interest coverage ndash Adjusted EBITDA interest expense for the relevant period (nb not equal to the full covenant coverage ratio calculation)
bull Cost of risk ndash Annualised net impairment loss average gross receivables (total gross receivables as of the start and end of each period divided by two)
bull Cost income ratio ndash Operating costs operating income (revenue)
bull Equity assets ratio ndash Total equity total assets
bull Equity net receivables ndash Total equity net customer receivables (including accrued interest)
bull Gross NPL ratio ndash Non-performing receivables (including accrued interest) with a delay of over 90 days gross receivables (including accrued interest)
bull Gross receivables ndash Total amount receivable from customers including principal and accrued interest after deduction of deferred income
bull Intangible assets ndash consists of deferred tax assets intangible IT assets and goodwill
bull Interest income ndash Interest and similar income generated from our customer loan portfolio
bull Loss given default ndash Loss on non-performing receivables (ie 1 - recovery rate) based on recoveries during the appropriate time window for the specific product reduced by costs of collection discounted at the weighted average effective interest rate
bull Net effective annualised yield ndash annualised interest income (excluding penalties) average net loan principal
bull Net impairment to interest income ratio ndash Net impairment losses on loans and receivables interest income
bull Net interest margin ndash Annualised net interest income average gross loan principal (total gross loan principal as of the start and end of each period divided by two)
bull Net receivables ndash Gross receivables (including accrued interest) less impairment provisions
bull Non-performing loans (NPLs) ndash Loan principal or receivables (as applicable) that are over 90 days past due (and for TBI Bank shown on a customer level basis)
bull Normalised ndash Adjusted to remove the effect of non-recurring items net FX and one-off adjustments to intangible assets and for 2018 ratios only adjusted to reflect the opening balance of 2018 balance sheet after IFRS 9 effects
bull Profit before tax margin ndash Profit before tax interest income
bull Return on Average Assets ndash Annualised profit from continuing operations average assets (total assets as of the start and end of each period divided by two)
bull Return on Average Equity ndash Annualised profit from continuing operations average equity (total equity as of the start and end of each period divided by two)
bull Return on Average Tangible Equity ndash Annualised profit from continuing operations average tangible equity (tangible equity as of the start and end of each period divided by two)
bull Tangible Equity ndash Total equity minus intangible assets
bull TBI Bank Capital adequacy ratio ndash (Tier One Capital + Tier Two Capital) Risk weighted assets (calculated according to the prevailing regulations of the Bulgarian National Bank)
34
Contacts
Investor Relationsinvestorrelations4financecom
James EtheringtonHead of Investor RelationsPhone +44 7766 697 950E-mail jamesetherington4financecom
Paul GoldfinchChief Financial OfficerPhone +371 2572 6422E-mail paulgoldfinch4financecom
Headquarters17a-8 Lielirbes street Riga LV-1046 Latvia
4finance Holding SA
Disclaimer
Agenda
Q1 2020 business and financial highlights
Slide Number 5
Current trading and outlook
Review of three month 2020 results
Summary of three month 2020 results
Interest income remains well diversified
Slide Number 10
Strong financial profile ndash stability and profitability
Funding strategy
Diversified loan portfolio
Analysis of net impairments and cost of risk
Asset quality and provisioning
Recent collections performance
Slide Number 17
Thank you and Questions
Appendix ndash responsible lending and regulatory overview
Sustainability through good governance and responsible lending
Regulatory overview
Regulatory overview (continued)
Appendix ndash strategic evolution of portfolio
Evolving and broadening our business model
Evolution of product mix
Slide Number 26
Asset quality and provisioning ndash loan principal
Appendix ndash financials and key ratios
Slide Number 29
Balance sheet
Statement of Cash Flows
Slide Number 32
GlossaryDefinitions
Contacts
Q12018
Q1 2020
9M 2018
Q1 2019
FY 2017
Net receivables (eurom) of which
5426
5408
5477
- Principal
272
5147
5144
5165
208
- Accrued interest
98
279
265
312
39
Total assets (eurom)
9724
10238
10147
Total equity (eurom)
221
1605
1607
1637
335
Capitalisation
Equity assets
147
165
157
161
127
Equity net receivables
195
296
297
299
267
Adjusted interest coverage
233
18x
25x
20x
223
TBI Bank consolidated capital adequacy
231
188
241
210
239
240
Profitability
Q12018
Net interest margin
- Online
764
882
802
- TBI Bank
246
280
252
- Overall group
500
648
557
Cost income ratio
527
520
520
Post-provision operating profit margin
145
166
177
Normalised Profit before tax margin
111
154
127
Normalised Return on average equity
118
375
104
Normalised Return on average assets
20
56
17
Asset quality
Cost of risk
- Online
295
237
289
- TBI Bank
47
86
45
- Overall group
174
181
184
Net impairment interest income
323
259
304
Gross NPL ratio
- Online
283
222
227
- TBI Bank
160
154
173
- Overall group
222
196
204
Overall group NPL coverage ratio
1035
1156
1064
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
505
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(06)
57
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
50
199
199
(248)
(301)
0800
Impairment losses on loans
1485
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(120)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(73)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
568
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
09
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2599
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
108
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(11)
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2637
2840
2840
1756
2279
00
Increase in loans due from customers
(2248)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1453
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1120
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(15)
(13)
(84)
(128)
(131)
(21)
Net cash from Purchase Sale of financial instruments
39
(118)
(136)
mdash
Repayment of financial instrument
-
-
Loans issued to related parties
-
-
(26)
(06)
(43)
(23)
Loans repaid from related parties
0
40
74
23
109
54
Interest received from related parties
31
01
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
00
(01)
0-
mdash
Disposal of subsidiaries net of cash disposed
(13)
-
(59)
(45)
(44)
mdash
(Acquisition)Disposal of equity investments
(14)
-
Acquisition of non-controlling interests
(04)
(04)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
-
-
mdash
0-
(00)
Prepayment for potential acquisition
-
00
208
0-
(208)
mdash
Acquisition of shares
-
00
00
Net cash flows from investing activities
25
(94)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
0
05
2999
1637
05
Repayment and repurchase of loans and notes
(164)
(133)
(272)
(1737)
(580)
(01)
Interest payments
(06)
(35)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
-
00
(00)
(192)
(58)
mdash
FX hedging margin
14
82
42
(140)
(88)
Payment of lease liabilities
(11)
(1)
mdash
Dividend payments
-
-
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(167)
(95)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
333
35
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
985
1488
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
(01)
0
01
10
10
03
Cash and cash equivalents at the end of the period
1318
1524
1488
2040
1319
681
TBI Bank minimum statutory reserve
242
354
234
230
230
242
Total cash on hand and cash at central banks
1560
1878
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
02
119
526
495
107
17000
Adjustments for
Depreciation and amortisation
32
32
121
64
83
1700
Impairment of goodwill and intangible assets
-
-
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
131
63
199
(248)
(301)
0800
Impairment losses on loans
364
359
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(20)
01
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
01
01
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(19)
(19)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
127
150
621
455
619
13300
Non-recurring finance cost
32
-
mdash
mdash
63
Other non-cash items
14
0
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663
707
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(137)
(82)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
(09)
(15)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(39)
(81)
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
479
530
2840
1756
2279
00
Increase in loans due from customers
(132)
(468)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
71
161
819
333
542
160
Increase in deposits (customer and bank deposits)
77
74
165
265
338
110
Deposit interest payments
(15)
(10)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
481
288
1233
524
442
(535)
Corporate income tax paid
(06)
(63)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
475
225
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(83)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(196)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
Q12018 (unaudited)
31 March 2020 (unaudited)
1 January 2018 (post IFRS 9 unaudited)
31 December 2019
Cash and cash equivalents of which
1538
1560
1549
1257
- Online
535
834
658
767
- TBI Bank
1003
725
892
490
Placements with other banks
57
127
70
64
Gross receivables due from customers
7156
7042
6588
7337
Allowance for impairment
(1665)
(1616)
(1575)
(1548)
Net receivables due from customers of which
5491
5426
5013
5789
- Principal
5147
5026
5480
- Accrued interest
277
264
309
Net investments in finance leases
93
45
105
47
Net loans to related parties
631
594
598
607
Property and equipment
96
182
101
178
Financial investments
183
502
184
564
Prepaid expenses
87
40
108
45
Tax assets
212
174
221
213
Deferred tax assets
371
353
368
330
Intangible IT assets
281
168
286
178
Goodwill
214
165
214
165
Other assets
678
392
573
295
Total assets
9932
9727
9390
9731
Calculation for Presentation - other assets (not loans or cash)
Loans and borrowings
4672
3849
3794
3846
Deposits from customers
2728
3333
2710
3222
Deposits from banks
94
95
mdash
130
Corporate income tax payable
178
124
198
95
Other liabilities
799
718
765
780
Total liabilities
8471
8119
7466
8074
Share capital
358
358
358
358
Retained earnings
1475
1628
1350
1657
Reserves
(343)
(378)
(323)
(357)
Total attributable equity
1490
1608
1385
1658
Non-controlling interests
(28)
00
(24)
(00)
Total equity
1461
1608
1362
1658
Total shareholders equity and liabilities
9932
9727
8828
9731
In millions of euro
Q1 2020 (unaudited)
Q1 2019 (unaudited)
change YoY
Interest Income
966
1065
(9)
Interest Expense
(127)
(150)
-(16)
1000000
Net Interest Income
839
915
(8)
Net FampC Income
24
21
12
Other operating income
23
22
7
Non-Interest Income
47
43
10
Operating Income (Revenue)
886
957
(7)
Personnel costs
(221)
(221)
(0
Discretionary bonus
(18)
(19)
(6)
Marketing
(91)
(96)
(5)
IT costs
(39)
(45)
(12)
DampA costs
(35)
(32)
+8
Other costs
(98)
(118)
(17)
Total operating costs
(467)
(498)
(6)
Pre-provision operating profit
419
459
(9)
Net impairment charges
(312)
(324)
-(4)
manual
Post-provision operating profit
107
135
(21)
Depreciation and amortisation
(32)
(32)
-+0
manual
Non-recurring income(expense)
(39)
(01)
nm
Non-recurring finance cost
mdash
mdash
+0
Net FX gain(loss)
(34)
16
nm
One-off adjustments to intangible assets
-
-
(0)
manual
Profit before tax
02
119
nm
Income tax expense
(27)
(62)
-(57)
manual
Net profit(loss) after tax
(25)
57
nm
manual
Adjusted EBITDA
233
294
-(21)
Costincome ratio
527
520
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online principal
Performing (1)
2347
(357)
1990
737
2634
(397)
2237
774
3177
(493)
2684
791
(22139)
3177
(302)
2875
681
(191)
150128837891005
Non-performing (2)
836
(656)
181
263
770
(590)
180
226
840
(664)
175
209
(74878)
36947
1488
(983)
505
319
-648
319
-64836054
-250544747891005
Online total
3184
(1013)
2171
1000
3404
(987)
2417
1000
4017
(1158)
2859
1000
4665
(1286)
3379
1000
(74878)
14808
TBI Bank principal
Performing (1)
2853
(121)
2732
840
2896
(118)
2778
838
2090
(68)
2022
873
(2586)
2090
(43)
2047
873
(25)
-251961477
Non-performing (2)
541
(298)
244
160
558
(274)
284
162
303
(158)
145
127
0437
303
(162)
141
127
04
42578177
TBI Bank total
3394
(418)
2976
1000
3454
(392)
3062
1000
2393
(226)
2167
1000
-
(2149)
2393
(205)
2188
1000
Overall group principal
Performing (1)
5200
(478)
4722
791
5529
(515)
5015
806
5267
(562)
4706
822
-
(24725)
5267
(345)
4922
746
Non-performing (2)
1378
(953)
424
209
1328
(864)
465
194
1142
(822)
320
178
(74878)
37384
1791
(1145)
646
254
Overall total
6578
(1431)
5147
1000
6858
(1378)
5480
1000
6410
(1384)
5026
1000
(74878)
12659
7058
(1490)
5567
1000
31122018 data updated post audit
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
IFRS 9 ADJ part
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online receivables
Performing (1)
2553
(412)
2141
717
2855
(456)
2399
751
3432
(567)
2864
778
(22139)
3432
(346)
3086
665
00
221
-150
Non-performing (2)
1006
(775)
232
283
946
(691)
255
249
977
(775)
201
222
(74878)
36947
1725
(1145)
580
335
749
(369)
250
Online total
3559
(1187)
2373
1000
3801
(1147)
2654
1000
4408
(1343)
3065
1000
5157
(1491)
3666
1000
(148)
NPL (90+)
(74878)
14808
TBI Bank receivables
Performing (1)
2927
(124)
2803
840
2964
(120)
2844
838
2145
(70)
2075
873
(2586)
2145
(44)
2101
873
00
26
120
Non-performing (2)
556
(305)
250
160
571
(280)
291
162
311
(162)
149
127
0437
311
(166)
145
127
00
(04)
-20
TBI Bank total
3482
(429)
3053
1000
3535
(401)
3135
1000
2456
(232)
2224
1000
-
(2149)
2456
(210)
2246
1000
21
Overall group receivables
Performing (1)
5480
(536)
4944
778
5819
(577)
5242
793
5577
(637)
4939
812
-
(24725)
5577
(390)
5187
733
Non-performing (2)
1562
(1080)
482
222
1517
(971)
546
207
1287
(937)
350
188
(74878)
37384
2036
(1311)
725
267
Overall total
7042
(1616)
5426
1000
7337
(1548)
5789
1000
6864
(1575)
5290
1000
(74878)
12659
7613
(1701)
5912
1000
31122018 changed to audited figures
11
135149
124
29 23
2017 2018 2019 Q1 2019 Q1 2020
eurom
81
11
53 51
120
2016 2017 2018 2019 Q1 2019 Q1 2020
Profit before tax
1814 16 17 16 17
2017 1 Jan2018
2018 2019 Q1 2019 Q1 2020
Strong financial profile ndash stability and profitabilityInterest income
448475
425
106 97
2017 2018 2019 Q1 2019 Q1 2020
Adjusted EBITDA Equity assets ratio
22x24x
22x20x 18x
2017 2018 2019 Q1 2019 Q1 2020
Adjusted interest coverage ratio (1)
32
2628 29 30 30
2017 1 Jan 2018 2018 2019 Q1 2019 Q1 2020
Equity net receivables (2)
eurom
eurom
Post IFRS 9
Post IFRS 9
Times
Note (1) The full covenant calculation of interest coverage ratio is based on proforma last twelve month figures and is currently 25x(2) The full covenant calculation of equitynet loans includes related party loans and finance leases and is currently 27
12
Funding strategy
Overview of funding structure 31 March 2020 (2)
2021 Notes194
2022 Notes335
4finance customer deposits
16
TBI customer deposits
442
TBI deposits from banks13
Notes(1) Represents the principal value of public bonds outstanding that comes due in each respective period net of buybacks and bonds owned by TBI Bank(2) The chart reflects the principal and accrued interest amounts of each of the instruments net of buybacks and bonds owned by TBI Bank
euro7277m
Strategy to diversify sources of funding and reduce overall funding cost over time
bull Strong cash generation and cash positionbull Cash generated from portfolio in Q1 and AprilMaybull Online cash ceuro90m at end May (after coupons and buybacks)bull TBI Bank increased deposit levels in Q1 and has strong liquidity ratios
bull Accessing TBI Bank balance sheet to fund online loansbull Successful initial portfolio sales of Polish instalment loans H2 2019bull Passport application for Lithuania to support portfolio sales from that
market submitted in April due to start in Q3
bull Further de-leveraging already achieved in 2020bull $359m of USD 2022 bonds and euro11m of EUR 2021 bonds purchased in
2020 year-to-datebull Proforma covenant interest expense reduced by 18 year-on-yearbull Retain ongoing flexibility to buy back bonds with spare liquidity
bull Strong capital positionbull 30 equity net receivables ratiobull TBI Bank capital adequacy c22 after adoption of 2019 profit in April
bull Consultations underway on potential extension to EUR 2021 bondsbull Allows financial results and markets to normalise prior to refinancing
Debt maturity schedule proforma for 31 May 2020 (1)
eurom
0
146
217
0
2020 2021 2022 2023+
13
195 167 170 171 162 150
3747 48 47 47 38
3940 35 23 21
17
6 7 10 12 811
7758 65 72 90
69
364328 341 341 342
293
Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020
Single Payment loans Line of Credit Instalment loans Near Prime TBI bank SME (Bank)
211 199 171 131 101 89
18 4537
34 51 48
159
242215
255 260 247
58
64
63 83 10398
47
42
42 49 6460492
591529 553 579
543
00
1500
3000
4500
6000
7500
2016 2017 1 Jan 2018 2018 2019 31 Mar 2020
Single Payment loans Line of Credit Cards Instalment loans Point of Sale SME (Bank)Baltics11
Nordics6
Poland16
Spain6
CZSK 2GEAM
1LatAm 05
BG (online)05
Bulgaria (TBI)25
Romania (TBI) 20
SME (TBI)11
Diversified loan portfolioNet receivables (1)
Net receivables 31 March 2020
Notes (1) Reflects reclassification of former SPL products in Sweden (from January 2016) Denmark (from January 2017) Armenia (from launch in July 2017) and Latvia (from January 2019) to Lines of Credit
bull Selective approach to new loan issuance
bull Overall net receivables totals euro542mbull 4 reduction during Q1 bull 89 consumer loansbull 43 online loans 57 banking
TBI Bank 57(funded clt2)
Online 43(funded c12)
eurom
See appendix for definitions of key metrics and ratios Includes TBI bank BG online and euro18m of purchased Poland portfolio Introduction of IFRS 9 as of 1-Jan-2018 reduced net receivables by euro62 million to euro529 million
Online loans issued (1)
eurom
14
486 464426 413
359 373 376 379 364
(55) (52) (42) (45) (36) (34) (34) (32) (31)
(67)(143)
(78) (77)
01
(57)(23) (41) (20)
364
269305 291
324281
319 307 312
-600
-500
-400
-300
-200
-100
00
100
200
300
400
-200
-150
-100
-50
00
50
100
150
200
250
300
350
400
450
500
550
600
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Analysis of net impairments and cost of risk
bull Q1 2020 net impairment charges remain fairly elevatedbull Most products in line with expectations Some additional
provisions in Armenia IL portfolio (in run-off)bull Overall impact of Covid-19 increased net impairments by
approximately euro3 million in Q1 (higher macro provisions delayed debt sales some impact on delay indicators)
bull Overall cost of risk relatively stablebull Overall cost of risk 174 (Q1 2020 including TBI Bank) vs 184
(Q1 2019)bull Online cost of risk 295 vs 289 (Q1 2019)bull Net impairment interest income 323 vs 304 (Q1 2019)
bull Proactive and ongoing adjustments to risk parameters across markets since mid-March
bull 63 changes to underwriting scorecardspoliciesbull 82 changes to debt collection scorecardspoliciesbull Ongoing regular reviews by market (eg Spain Poland)
Net impairment charges by quarter (1)
eurom
See appendix for definitions of key metrics and ratios
208 151
Gross impairments
Net impairment losses
Over provisioning on debt sales (net gainloss)
Recoveries from written off loans
174
2018166
Note (1) Q4 2018 and 2019 figures have been adjusted to reflect audited figures
2019184 160 Overall quarterly
cost of risk183 171 174
2020
15
Asset quality and provisioning bull Gross NPL ratios increased in lsquoonlinersquo due to delayed debt sales but asset quality relatively stable Coverage ratios remain over 100
bull Online gross NPL ratio 283 as of March 2020 compared with 249 as of December 2019bull Overall gross NPL ratio 222 as of March 2020 from 207 as of December 2019bull Some delayed debt sales already restarting in May including Poland
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Recent collections performancebull April and May repayment dynamics
in line with prior monthsbull April performance comparable
with Januarybull Improvement in May
bull Requests for payment deferrals either proactively offered by 4finance or offered in accordance with local regulation have been relatively limited
bull Main take-up in Czech Republic Armenia and TBI Bank
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
January Feb-Mar average April May
Repayment dynamics (single payment)
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
January Feb-Mar average April May
Repayment dynamics (instalment)
Repayment dynamics graphs represent cumulative sum of payments and extensions performed at under 30 DPD as a of amounts due in the prior month For example May line shows progress by day in May of repaymentextension of amounts that were due at any time in April and performed within 30 days of the due date
Payment deferral take-up in selected markets( of eligible portfolio by value)
Poland 2
Spain 3
Denmark 1
Baltics 1
Czech Republic 12
Armenia 17
TBI consumer 12
TBI SME 43
Day number in relevant month Day number in relevant month
17
Pro-active response to Covid-19 across the business with good resultsbull Rapidly adapted operations to home working ensuring employee safety and continuous services for customersbull Focus on risk management but remained ldquoopen for businessrdquo in AprilMay particularly for our returning customersbull Customer repayment behaviour within normal ranges in AprilMay with proactive support offered for customers who have
been impacted
Well positioned to lsquoweather the stormrsquo and take advantage of subsequent opportunitiesbull Key decisions taken to streamline footprint focus on larger markets and right-size cost basebull Continued development of near-prime business both on product side (Latvia Lithuania Sweden launches) and TBI Bank
funding side (Lithuania passport application)bull Encouraging demand and issuance trends in May (22 increase in online loans issued vs April) with improvement
expected to continue in June
Strong balance sheet and funding position with further action being takenbull Strong liquidity position in both lsquoonlinersquo and TBI Bankbull Strong cashflow generation deployed in significant bond buybacks to reduce leveragebull Consultations underway on potential extension to EUR 2021 bonds to allow financial results and markets to normalise
prior to long term refinancing
Summary
4finance a multi-segment multi-product consumer credit specialist
18
Thank you and Questions
19
Appendix ndash responsible lending and regulatory overview
20
Sustainability through good governance and responsible lendingOperating as a mainstream consumer finance business
bull ldquoBank-likerdquo policies and procedures with strong compliance function
bull Continued investment in AML GDPR and other strategic compliance priorities
bull Robust corporate governance with strong Supervisory Board
bull Increasingly regulated by main financial supervisory authorities
bull Diversification of portfolio and consequent reduction of reliance on single payment loans
bull Clear corporate values and code of conduct
bull Listed bond issues with quarterly financial reporting
Developing meaningful and constructive regulatory relationships
bull Ensuring we understand the regulatory arc
bull Helping regulators and legislators gain a solid understanding of our business
bull Ensuring we have a seat at the table
bull Contributing to EU Consumer Credit Directive consultation process
bull Continuous improvements in credit underwriting
bull Ensuring products are used appropriately
bull Working to ensure customers have safe landings when they signal difficulties
21
Regulatory overviewCountry
of interest income(Q1 2020)
Products (1) Regulator CB (2) Licenserequired (3)
Interest rate cap (1) Status
Argentina 1 SPL Consumer Protection Directorate - - -
Armenia 2 LOC Central Bank of the Republic of Armenia Yes Yes Nominal
Bulgaria ndash Online 2 SPL Bulgarian National BankYes Yes APR
(inc fees) Stable frameworkBulgaria ndash Bank 13 IL LOC POS SME
Czech Republic 5 SPL IL Czech National Bank Yes Yes - Stable framework
Denmark 11 LOC IL FSA and Consumer Ombudsman Yes YesAPR amp TCOC
being introduced
Danish FSA licensing process ongoing New regulations regarding interest rate caps (35 APR cap 100 cost of credit cap) and marketing restrictions in final stages of review Expected to start in July
Finland 1 IL(4) Finnish Competition and Consumer Authority - - Nominal
amp fees
New interest rate caps in force from September 2019 Further discussions on temporary reduction to 10 are ongoing
Latvia 5 MTP IL Consumer Rights Protection Centre - Yes Nominal fees amp TCOC
Stable framework since new interest rate caps in July 2019
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards MTP ndash Minimum to pay POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit(2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement(4) lsquoMini-ILrsquo (4 monthly instalments) from September 2019
22
Regulatory overview (continued)Country
of interest income
(Q1 2020)Products (1) Regulator CB (2) License
required (3)Interest rate
cap (1) Status
Lithuania 2 SPL IL Central Bank of Lithuania Yes Yes Nominal fees amp TCOC Stable framework
Mexico 1 IL National Financial Services Consumer Protection Commission - Yes - Stable framework
Poland 23 SPL IL Office of Competition and Consumer Protection - - Nominal fees
amp TCOC
Non-interest cost caps adjusted in April for one year to 15 fixed and 6 annual with a 45 total limit
Romania 10 IL LOC POS SME National Bank of Romania Yes Yes - Bill to introduce interest rate cap under discussion
Slovakia lt1 SPL National Bank of Slovakia Yes Yes APR (inc fees) Stable framework
Spain 22 SPL IL NA - - -
Sweden 1 LOC IL Swedish Financial Supervisory Authority Yes Yes Nominal amp
TCOCStable framework since new interest rate caps in September 2018
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit (2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement
23
Appendix ndash strategic evolution of portfolio
24
Evolving and broadening our business model
Prime
Sub-Prime
Near-Prime
Segments
Higher Duration Lower APR Products
SPL ILLOC POS
A multi-segment multi-product consumer credit specialist
1
1 Optimise
2 2 Diversify amp Grow
Illustrative
25
Evolution of product mix
Note (1) Reflects reclassification of Vivus brand products in Sweden (from January 2016) Denmark (from January 2017) Armenia (from launch in July 2017) and short-term products (SMS Credit amp Ondo) in Latvia (from January 2019) to Lines of Credit
68
17
3
9
29
45
18
11
0
25
50
75
100
30 Jun 2016 31 Mar 2020
SME (Bank)
Point of Sale
Instalment loans
Line of Credit Cards
Single Payment Loans
euro543meuro323m
Net receivables by product (1)
Online sub-prime only
Bank and onlinenear-prime
and sub-prime
76
48
4
14
20
29
7
0
25
50
75
100
Q1 2016 Q1 2020
Interest income by product (1)
euro97meuro90m
Date chosen to reflect the composition of loan portfolio immediately prior to purchase of TBI Bank
26
Funding near-prime growth via TBI Bank
Online acquisition Retail deposit funding
Initial portfolio development
Early stage customer acquisition and credit metrics monitored and
enhanced
Funding Platform
In-house IT funding platform ensuring ongoing automated
portfolio transfers
Bringing portfolios to scale
Market specific portfolios grow with ongoing sales to reach scale
True saleof portfolio(s)loan servicing
Indicative APRs
20-40
CostIncome ratio
c40
Cost of Risk
6-8
Cost of Funds
3-5
Return on Assets
3-5(2)
Illustrative near-prime
ldquounit economicsrdquo(1)
Notes(1) Illustrative metrics for near-prime portfolios and not indicative of a specific product or market(2) Illustrative potential returns in medium-term at scale
Payment of fair market value
bull Regular sales of Polish instalment loans since September 2019bull Passporting application submitted for Lithuania (largest near-prime portfolio)
Accessing TBI Bank deposit funding for lsquoonlinersquo portfolios via ongoing loan sales
27
Asset quality and provisioning ndash loan principal
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Interest Income 966 1065 (9)Interest Expense (127) (150) (16)Net Interest Income 839 915 (8)Net FampC Income 24 21 12Other operating income 23 22 7Non-Interest Income 47 43 10Operating Income (Revenue) 886 957 (7)Total operating costs (467) (498) (6)Pre-provision operating profit 419 459 (9)Net impairment charges (312) (324) (4)Post-provision operating profit 107 135 (21)Depreciation and amortisation (32) (32) +0Non-recurring income(expense) (39) (01) nmNet FX gain(loss) (34) 16 nmProfit before tax 02 119 nmIncome tax expense (27) (62) (57)Net profit(loss) after tax (25) 57 nm
Adjusted EBITDA 233 294 (21)
Income Statement
30
Balance sheetIn millions of euro
31 March 2020 (unaudited)
31 December 2019
Cash and cash equivalents of which 1560 1257- Online 834 767- TBI Bank 725 490
Placements with other banks 127 64Gross receivables due from customers 7042 7337Allowance for impairment (1616) (1548)Net receivables due from customers of which 5426 5789
- Principal 5147 5480- Accrued interest 277 309
Net investments in finance leases 45 47Net loans to related parties 594 607Property and equipment 182 178Financial investments 502 564Prepaid expenses 40 45Tax assets 174 213Deferred tax assets 353 330Intangible IT assets 168 178Goodwill 165 165Other assets 392 295Total assets 9727 9731Calculation for Presentation other assets (not loans Loans and borrowings 3849 3846Deposits from customers 3333 3222Deposits from banks 95 130Corporate income tax payable 124 95Other liabilities 718 780Total liabilities 8119 8074Share capital 358 358Retained earnings 1628 1657Reserves (378) (357)Total attributable equity 1608 1658Non-controlling interests 00 (00)Total equity 1608 1658Total shareholders equity and liabilities 9727 9731
Balance Sheet
31
Statement of Cash FlowsIn millions of euro
2020 2019Cash flows from operating activitiesProfit before taxes 02 119
Adjustments forDepreciation and amortisation 32 32
Impairment of goodwill and intangible assets - -
Net (gain) loss on foreign exchange from borrowings and other monetary items 131 63
Impairment losses on loans 364 359
Reversal of provision on debt portfolio sales (20) 01
Write-off and disposal of intangible and property and equipment assets 01 01
Interest income from non-customers loans (19) (19)
Interest expense on loans and borrowings and deposits from customers 127 150Non-recurring finance cost 32 -
Other non-cash items 14 0
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663 707
Adjustments forChange in financial instruments measured at fair value through profit or loss (137) (82)(Increase) decrease in other assets (including TBI statutory reserve placements amp leases) (09) (15)
Increase (decrease) in accounts payable to suppliers contractors and other creditors (39) (81)
Operating cash flow before movements in portfolio and deposits 479 530
Increase in loans due from customers (132) (468)
Proceeds from sale of portfolio 71 161
Increase in deposits (customer and bank deposits) 77 74
Deposit interest payments (15) (10)
Gross cash flows from operating activities 481 288
Corporate income tax paid (06) (63)
Net cash flows from operating activities 475 225
3 months to 31 March In millions of euro
2020 2019
Cash flows used in investing activitiesPurchase of property and equipment and intangible assets (15) (13)
Net cash from Purchase Sale of financial instruments 39 (118)
Loans issued to related parties - -
Loans repaid from related parties 0 40
Interest received from related parties 31 01
Disposal of subsidiaries net of cash disposed (13) -
(Acquisition)Disposal of equity investments (14) -
Acquisition of non-controlling interests (04) (04)
Net cash flows from investing activities 25 (94)
Cash flows from financing activitiesLoans received and notes issued - 0
Repayment and repurchase of loans and notes (164) (133)
Interest payments (06) (35)
FX hedging margin 14 82
Payment of lease liabilities (11) (1)
Dividend payments - -
Net cash flows used in financing activities (167) (95)
Net increase (decrease) in cash and cash equivalents 333 35
Cash and cash equivalents at the beginning of the period 985 1488
Effect of exchange rate fluctuations on cash (01) 0
Cash and cash equivalents at the end of the period 1318 1524
TBI Bank minimum statutory reserve 242 354
Total cash on hand and cash at central banks 1560 1878
3 months to 31 March
Cash Flow
Cash Flow (2)
Cash Flow
Cash Flow (2)
32
Key financial ratiosQ1 2020 Q1 2019
CapitalisationEquity assets 165 161Equity net receivables 296 299Adjusted interest coverage 18x 20xTBI Bank consolidated capital adequacy 188 210
ProfitabilityNet interest margin
- Online 764 802- TBI Bank 246 252- Overall group 500 557
Cost income ratio 527 520Normalised Profit before tax margin 111 127Normalised Return on average equity 118 104Normalised Return on average assets 20 17
Asset qualityCost of risk
- Online 295 289- TBI Bank 47 45- Overall group 174 184
Net impairment interest income 323 304Gross NPL ratio
- Online 283 227- TBI Bank 160 173- Overall group 222 204
Overall group NPL coverage ratio 1035 1064
See appendix for definitions of key metrics and ratios
key ratios
33
GlossaryDefinitionsbull Adjusted EBITDA ndash a non-IFRS measure that represents EBITDA (profit for the period plus tax plus interest expense plus depreciation and amortization) as adjusted by incomeloss from discontinued operations non-cash gains and losses
attributable to movement in the mark-to-market valuation of hedging obligations under IFRS goodwill write-offs and certain other one-off or non-cash items Adjusted EBITDA as presented here may not be comparable to similarly-titled measures that are reported by other companies due to differences in the way these measures are calculated Further details of covenant adjustments can be found in the relevant bond prospectuses available on our website
bull Adjusted interest coverage ndash Adjusted EBITDA interest expense for the relevant period (nb not equal to the full covenant coverage ratio calculation)
bull Cost of risk ndash Annualised net impairment loss average gross receivables (total gross receivables as of the start and end of each period divided by two)
bull Cost income ratio ndash Operating costs operating income (revenue)
bull Equity assets ratio ndash Total equity total assets
bull Equity net receivables ndash Total equity net customer receivables (including accrued interest)
bull Gross NPL ratio ndash Non-performing receivables (including accrued interest) with a delay of over 90 days gross receivables (including accrued interest)
bull Gross receivables ndash Total amount receivable from customers including principal and accrued interest after deduction of deferred income
bull Intangible assets ndash consists of deferred tax assets intangible IT assets and goodwill
bull Interest income ndash Interest and similar income generated from our customer loan portfolio
bull Loss given default ndash Loss on non-performing receivables (ie 1 - recovery rate) based on recoveries during the appropriate time window for the specific product reduced by costs of collection discounted at the weighted average effective interest rate
bull Net effective annualised yield ndash annualised interest income (excluding penalties) average net loan principal
bull Net impairment to interest income ratio ndash Net impairment losses on loans and receivables interest income
bull Net interest margin ndash Annualised net interest income average gross loan principal (total gross loan principal as of the start and end of each period divided by two)
bull Net receivables ndash Gross receivables (including accrued interest) less impairment provisions
bull Non-performing loans (NPLs) ndash Loan principal or receivables (as applicable) that are over 90 days past due (and for TBI Bank shown on a customer level basis)
bull Normalised ndash Adjusted to remove the effect of non-recurring items net FX and one-off adjustments to intangible assets and for 2018 ratios only adjusted to reflect the opening balance of 2018 balance sheet after IFRS 9 effects
bull Profit before tax margin ndash Profit before tax interest income
bull Return on Average Assets ndash Annualised profit from continuing operations average assets (total assets as of the start and end of each period divided by two)
bull Return on Average Equity ndash Annualised profit from continuing operations average equity (total equity as of the start and end of each period divided by two)
bull Return on Average Tangible Equity ndash Annualised profit from continuing operations average tangible equity (tangible equity as of the start and end of each period divided by two)
bull Tangible Equity ndash Total equity minus intangible assets
bull TBI Bank Capital adequacy ratio ndash (Tier One Capital + Tier Two Capital) Risk weighted assets (calculated according to the prevailing regulations of the Bulgarian National Bank)
34
Contacts
Investor Relationsinvestorrelations4financecom
James EtheringtonHead of Investor RelationsPhone +44 7766 697 950E-mail jamesetherington4financecom
Paul GoldfinchChief Financial OfficerPhone +371 2572 6422E-mail paulgoldfinch4financecom
Headquarters17a-8 Lielirbes street Riga LV-1046 Latvia
4finance Holding SA
Disclaimer
Agenda
Q1 2020 business and financial highlights
Slide Number 5
Current trading and outlook
Review of three month 2020 results
Summary of three month 2020 results
Interest income remains well diversified
Slide Number 10
Strong financial profile ndash stability and profitability
Funding strategy
Diversified loan portfolio
Analysis of net impairments and cost of risk
Asset quality and provisioning
Recent collections performance
Slide Number 17
Thank you and Questions
Appendix ndash responsible lending and regulatory overview
Sustainability through good governance and responsible lending
Regulatory overview
Regulatory overview (continued)
Appendix ndash strategic evolution of portfolio
Evolving and broadening our business model
Evolution of product mix
Slide Number 26
Asset quality and provisioning ndash loan principal
Appendix ndash financials and key ratios
Slide Number 29
Balance sheet
Statement of Cash Flows
Slide Number 32
GlossaryDefinitions
Contacts
Q12018
Q1 2020
9M 2018
Q1 2019
FY 2017
Net receivables (eurom) of which
5426
5408
5477
- Principal
272
5147
5144
5165
208
- Accrued interest
98
279
265
312
39
Total assets (eurom)
9724
10238
10147
Total equity (eurom)
221
1605
1607
1637
335
Capitalisation
Equity assets
147
165
157
161
127
Equity net receivables
195
296
297
299
267
Adjusted interest coverage
233
18x
25x
20x
223
TBI Bank consolidated capital adequacy
231
188
241
210
239
240
Profitability
Q12018
Net interest margin
- Online
764
882
802
- TBI Bank
246
280
252
- Overall group
500
648
557
Cost income ratio
527
520
520
Post-provision operating profit margin
145
166
177
Normalised Profit before tax margin
111
154
127
Normalised Return on average equity
118
375
104
Normalised Return on average assets
20
56
17
Asset quality
Cost of risk
- Online
295
237
289
- TBI Bank
47
86
45
- Overall group
174
181
184
Net impairment interest income
323
259
304
Gross NPL ratio
- Online
283
222
227
- TBI Bank
160
154
173
- Overall group
222
196
204
Overall group NPL coverage ratio
1035
1156
1064
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
505
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(06)
57
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
50
199
199
(248)
(301)
0800
Impairment losses on loans
1485
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(120)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(73)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
568
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
09
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2599
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
108
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(11)
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2637
2840
2840
1756
2279
00
Increase in loans due from customers
(2248)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1453
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1120
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(15)
(13)
(84)
(128)
(131)
(21)
Net cash from Purchase Sale of financial instruments
39
(118)
(136)
mdash
Repayment of financial instrument
-
-
Loans issued to related parties
-
-
(26)
(06)
(43)
(23)
Loans repaid from related parties
0
40
74
23
109
54
Interest received from related parties
31
01
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
00
(01)
0-
mdash
Disposal of subsidiaries net of cash disposed
(13)
-
(59)
(45)
(44)
mdash
(Acquisition)Disposal of equity investments
(14)
-
Acquisition of non-controlling interests
(04)
(04)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
-
-
mdash
0-
(00)
Prepayment for potential acquisition
-
00
208
0-
(208)
mdash
Acquisition of shares
-
00
00
Net cash flows from investing activities
25
(94)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
0
05
2999
1637
05
Repayment and repurchase of loans and notes
(164)
(133)
(272)
(1737)
(580)
(01)
Interest payments
(06)
(35)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
-
00
(00)
(192)
(58)
mdash
FX hedging margin
14
82
42
(140)
(88)
Payment of lease liabilities
(11)
(1)
mdash
Dividend payments
-
-
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(167)
(95)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
333
35
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
985
1488
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
(01)
0
01
10
10
03
Cash and cash equivalents at the end of the period
1318
1524
1488
2040
1319
681
TBI Bank minimum statutory reserve
242
354
234
230
230
242
Total cash on hand and cash at central banks
1560
1878
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
02
119
526
495
107
17000
Adjustments for
Depreciation and amortisation
32
32
121
64
83
1700
Impairment of goodwill and intangible assets
-
-
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
131
63
199
(248)
(301)
0800
Impairment losses on loans
364
359
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(20)
01
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
01
01
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(19)
(19)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
127
150
621
455
619
13300
Non-recurring finance cost
32
-
mdash
mdash
63
Other non-cash items
14
0
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663
707
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(137)
(82)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
(09)
(15)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(39)
(81)
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
479
530
2840
1756
2279
00
Increase in loans due from customers
(132)
(468)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
71
161
819
333
542
160
Increase in deposits (customer and bank deposits)
77
74
165
265
338
110
Deposit interest payments
(15)
(10)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
481
288
1233
524
442
(535)
Corporate income tax paid
(06)
(63)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
475
225
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(83)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(196)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
Q12018 (unaudited)
31 March 2020 (unaudited)
1 January 2018 (post IFRS 9 unaudited)
31 December 2019
Cash and cash equivalents of which
1538
1560
1549
1257
- Online
535
834
658
767
- TBI Bank
1003
725
892
490
Placements with other banks
57
127
70
64
Gross receivables due from customers
7156
7042
6588
7337
Allowance for impairment
(1665)
(1616)
(1575)
(1548)
Net receivables due from customers of which
5491
5426
5013
5789
- Principal
5147
5026
5480
- Accrued interest
277
264
309
Net investments in finance leases
93
45
105
47
Net loans to related parties
631
594
598
607
Property and equipment
96
182
101
178
Financial investments
183
502
184
564
Prepaid expenses
87
40
108
45
Tax assets
212
174
221
213
Deferred tax assets
371
353
368
330
Intangible IT assets
281
168
286
178
Goodwill
214
165
214
165
Other assets
678
392
573
295
Total assets
9932
9727
9390
9731
Calculation for Presentation - other assets (not loans or cash)
Loans and borrowings
4672
3849
3794
3846
Deposits from customers
2728
3333
2710
3222
Deposits from banks
94
95
mdash
130
Corporate income tax payable
178
124
198
95
Other liabilities
799
718
765
780
Total liabilities
8471
8119
7466
8074
Share capital
358
358
358
358
Retained earnings
1475
1628
1350
1657
Reserves
(343)
(378)
(323)
(357)
Total attributable equity
1490
1608
1385
1658
Non-controlling interests
(28)
00
(24)
(00)
Total equity
1461
1608
1362
1658
Total shareholders equity and liabilities
9932
9727
8828
9731
In millions of euro
Q1 2020 (unaudited)
Q1 2019 (unaudited)
change YoY
Interest Income
966
1065
(9)
Interest Expense
(127)
(150)
-(16)
1000000
Net Interest Income
839
915
(8)
Net FampC Income
24
21
12
Other operating income
23
22
7
Non-Interest Income
47
43
10
Operating Income (Revenue)
886
957
(7)
Personnel costs
(221)
(221)
(0
Discretionary bonus
(18)
(19)
(6)
Marketing
(91)
(96)
(5)
IT costs
(39)
(45)
(12)
DampA costs
(35)
(32)
+8
Other costs
(98)
(118)
(17)
Total operating costs
(467)
(498)
(6)
Pre-provision operating profit
419
459
(9)
Net impairment charges
(312)
(324)
-(4)
manual
Post-provision operating profit
107
135
(21)
Depreciation and amortisation
(32)
(32)
-+0
manual
Non-recurring income(expense)
(39)
(01)
nm
Non-recurring finance cost
mdash
mdash
+0
Net FX gain(loss)
(34)
16
nm
One-off adjustments to intangible assets
-
-
(0)
manual
Profit before tax
02
119
nm
Income tax expense
(27)
(62)
-(57)
manual
Net profit(loss) after tax
(25)
57
nm
manual
Adjusted EBITDA
233
294
-(21)
Costincome ratio
527
520
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online principal
Performing (1)
2347
(357)
1990
737
2634
(397)
2237
774
3177
(493)
2684
791
(22139)
3177
(302)
2875
681
(191)
150128837891005
Non-performing (2)
836
(656)
181
263
770
(590)
180
226
840
(664)
175
209
(74878)
36947
1488
(983)
505
319
-648
319
-64836054
-250544747891005
Online total
3184
(1013)
2171
1000
3404
(987)
2417
1000
4017
(1158)
2859
1000
4665
(1286)
3379
1000
(74878)
14808
TBI Bank principal
Performing (1)
2853
(121)
2732
840
2896
(118)
2778
838
2090
(68)
2022
873
(2586)
2090
(43)
2047
873
(25)
-251961477
Non-performing (2)
541
(298)
244
160
558
(274)
284
162
303
(158)
145
127
0437
303
(162)
141
127
04
42578177
TBI Bank total
3394
(418)
2976
1000
3454
(392)
3062
1000
2393
(226)
2167
1000
-
(2149)
2393
(205)
2188
1000
Overall group principal
Performing (1)
5200
(478)
4722
791
5529
(515)
5015
806
5267
(562)
4706
822
-
(24725)
5267
(345)
4922
746
Non-performing (2)
1378
(953)
424
209
1328
(864)
465
194
1142
(822)
320
178
(74878)
37384
1791
(1145)
646
254
Overall total
6578
(1431)
5147
1000
6858
(1378)
5480
1000
6410
(1384)
5026
1000
(74878)
12659
7058
(1490)
5567
1000
31122018 data updated post audit
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
IFRS 9 ADJ part
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online receivables
Performing (1)
2553
(412)
2141
717
2855
(456)
2399
751
3432
(567)
2864
778
(22139)
3432
(346)
3086
665
00
221
-150
Non-performing (2)
1006
(775)
232
283
946
(691)
255
249
977
(775)
201
222
(74878)
36947
1725
(1145)
580
335
749
(369)
250
Online total
3559
(1187)
2373
1000
3801
(1147)
2654
1000
4408
(1343)
3065
1000
5157
(1491)
3666
1000
(148)
NPL (90+)
(74878)
14808
TBI Bank receivables
Performing (1)
2927
(124)
2803
840
2964
(120)
2844
838
2145
(70)
2075
873
(2586)
2145
(44)
2101
873
00
26
120
Non-performing (2)
556
(305)
250
160
571
(280)
291
162
311
(162)
149
127
0437
311
(166)
145
127
00
(04)
-20
TBI Bank total
3482
(429)
3053
1000
3535
(401)
3135
1000
2456
(232)
2224
1000
-
(2149)
2456
(210)
2246
1000
21
Overall group receivables
Performing (1)
5480
(536)
4944
778
5819
(577)
5242
793
5577
(637)
4939
812
-
(24725)
5577
(390)
5187
733
Non-performing (2)
1562
(1080)
482
222
1517
(971)
546
207
1287
(937)
350
188
(74878)
37384
2036
(1311)
725
267
Overall total
7042
(1616)
5426
1000
7337
(1548)
5789
1000
6864
(1575)
5290
1000
(74878)
12659
7613
(1701)
5912
1000
31122018 changed to audited figures
12
Funding strategy
Overview of funding structure 31 March 2020 (2)
2021 Notes194
2022 Notes335
4finance customer deposits
16
TBI customer deposits
442
TBI deposits from banks13
Notes(1) Represents the principal value of public bonds outstanding that comes due in each respective period net of buybacks and bonds owned by TBI Bank(2) The chart reflects the principal and accrued interest amounts of each of the instruments net of buybacks and bonds owned by TBI Bank
euro7277m
Strategy to diversify sources of funding and reduce overall funding cost over time
bull Strong cash generation and cash positionbull Cash generated from portfolio in Q1 and AprilMaybull Online cash ceuro90m at end May (after coupons and buybacks)bull TBI Bank increased deposit levels in Q1 and has strong liquidity ratios
bull Accessing TBI Bank balance sheet to fund online loansbull Successful initial portfolio sales of Polish instalment loans H2 2019bull Passport application for Lithuania to support portfolio sales from that
market submitted in April due to start in Q3
bull Further de-leveraging already achieved in 2020bull $359m of USD 2022 bonds and euro11m of EUR 2021 bonds purchased in
2020 year-to-datebull Proforma covenant interest expense reduced by 18 year-on-yearbull Retain ongoing flexibility to buy back bonds with spare liquidity
bull Strong capital positionbull 30 equity net receivables ratiobull TBI Bank capital adequacy c22 after adoption of 2019 profit in April
bull Consultations underway on potential extension to EUR 2021 bondsbull Allows financial results and markets to normalise prior to refinancing
Debt maturity schedule proforma for 31 May 2020 (1)
eurom
0
146
217
0
2020 2021 2022 2023+
13
195 167 170 171 162 150
3747 48 47 47 38
3940 35 23 21
17
6 7 10 12 811
7758 65 72 90
69
364328 341 341 342
293
Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020
Single Payment loans Line of Credit Instalment loans Near Prime TBI bank SME (Bank)
211 199 171 131 101 89
18 4537
34 51 48
159
242215
255 260 247
58
64
63 83 10398
47
42
42 49 6460492
591529 553 579
543
00
1500
3000
4500
6000
7500
2016 2017 1 Jan 2018 2018 2019 31 Mar 2020
Single Payment loans Line of Credit Cards Instalment loans Point of Sale SME (Bank)Baltics11
Nordics6
Poland16
Spain6
CZSK 2GEAM
1LatAm 05
BG (online)05
Bulgaria (TBI)25
Romania (TBI) 20
SME (TBI)11
Diversified loan portfolioNet receivables (1)
Net receivables 31 March 2020
Notes (1) Reflects reclassification of former SPL products in Sweden (from January 2016) Denmark (from January 2017) Armenia (from launch in July 2017) and Latvia (from January 2019) to Lines of Credit
bull Selective approach to new loan issuance
bull Overall net receivables totals euro542mbull 4 reduction during Q1 bull 89 consumer loansbull 43 online loans 57 banking
TBI Bank 57(funded clt2)
Online 43(funded c12)
eurom
See appendix for definitions of key metrics and ratios Includes TBI bank BG online and euro18m of purchased Poland portfolio Introduction of IFRS 9 as of 1-Jan-2018 reduced net receivables by euro62 million to euro529 million
Online loans issued (1)
eurom
14
486 464426 413
359 373 376 379 364
(55) (52) (42) (45) (36) (34) (34) (32) (31)
(67)(143)
(78) (77)
01
(57)(23) (41) (20)
364
269305 291
324281
319 307 312
-600
-500
-400
-300
-200
-100
00
100
200
300
400
-200
-150
-100
-50
00
50
100
150
200
250
300
350
400
450
500
550
600
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Analysis of net impairments and cost of risk
bull Q1 2020 net impairment charges remain fairly elevatedbull Most products in line with expectations Some additional
provisions in Armenia IL portfolio (in run-off)bull Overall impact of Covid-19 increased net impairments by
approximately euro3 million in Q1 (higher macro provisions delayed debt sales some impact on delay indicators)
bull Overall cost of risk relatively stablebull Overall cost of risk 174 (Q1 2020 including TBI Bank) vs 184
(Q1 2019)bull Online cost of risk 295 vs 289 (Q1 2019)bull Net impairment interest income 323 vs 304 (Q1 2019)
bull Proactive and ongoing adjustments to risk parameters across markets since mid-March
bull 63 changes to underwriting scorecardspoliciesbull 82 changes to debt collection scorecardspoliciesbull Ongoing regular reviews by market (eg Spain Poland)
Net impairment charges by quarter (1)
eurom
See appendix for definitions of key metrics and ratios
208 151
Gross impairments
Net impairment losses
Over provisioning on debt sales (net gainloss)
Recoveries from written off loans
174
2018166
Note (1) Q4 2018 and 2019 figures have been adjusted to reflect audited figures
2019184 160 Overall quarterly
cost of risk183 171 174
2020
15
Asset quality and provisioning bull Gross NPL ratios increased in lsquoonlinersquo due to delayed debt sales but asset quality relatively stable Coverage ratios remain over 100
bull Online gross NPL ratio 283 as of March 2020 compared with 249 as of December 2019bull Overall gross NPL ratio 222 as of March 2020 from 207 as of December 2019bull Some delayed debt sales already restarting in May including Poland
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Recent collections performancebull April and May repayment dynamics
in line with prior monthsbull April performance comparable
with Januarybull Improvement in May
bull Requests for payment deferrals either proactively offered by 4finance or offered in accordance with local regulation have been relatively limited
bull Main take-up in Czech Republic Armenia and TBI Bank
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
January Feb-Mar average April May
Repayment dynamics (single payment)
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
January Feb-Mar average April May
Repayment dynamics (instalment)
Repayment dynamics graphs represent cumulative sum of payments and extensions performed at under 30 DPD as a of amounts due in the prior month For example May line shows progress by day in May of repaymentextension of amounts that were due at any time in April and performed within 30 days of the due date
Payment deferral take-up in selected markets( of eligible portfolio by value)
Poland 2
Spain 3
Denmark 1
Baltics 1
Czech Republic 12
Armenia 17
TBI consumer 12
TBI SME 43
Day number in relevant month Day number in relevant month
17
Pro-active response to Covid-19 across the business with good resultsbull Rapidly adapted operations to home working ensuring employee safety and continuous services for customersbull Focus on risk management but remained ldquoopen for businessrdquo in AprilMay particularly for our returning customersbull Customer repayment behaviour within normal ranges in AprilMay with proactive support offered for customers who have
been impacted
Well positioned to lsquoweather the stormrsquo and take advantage of subsequent opportunitiesbull Key decisions taken to streamline footprint focus on larger markets and right-size cost basebull Continued development of near-prime business both on product side (Latvia Lithuania Sweden launches) and TBI Bank
funding side (Lithuania passport application)bull Encouraging demand and issuance trends in May (22 increase in online loans issued vs April) with improvement
expected to continue in June
Strong balance sheet and funding position with further action being takenbull Strong liquidity position in both lsquoonlinersquo and TBI Bankbull Strong cashflow generation deployed in significant bond buybacks to reduce leveragebull Consultations underway on potential extension to EUR 2021 bonds to allow financial results and markets to normalise
prior to long term refinancing
Summary
4finance a multi-segment multi-product consumer credit specialist
18
Thank you and Questions
19
Appendix ndash responsible lending and regulatory overview
20
Sustainability through good governance and responsible lendingOperating as a mainstream consumer finance business
bull ldquoBank-likerdquo policies and procedures with strong compliance function
bull Continued investment in AML GDPR and other strategic compliance priorities
bull Robust corporate governance with strong Supervisory Board
bull Increasingly regulated by main financial supervisory authorities
bull Diversification of portfolio and consequent reduction of reliance on single payment loans
bull Clear corporate values and code of conduct
bull Listed bond issues with quarterly financial reporting
Developing meaningful and constructive regulatory relationships
bull Ensuring we understand the regulatory arc
bull Helping regulators and legislators gain a solid understanding of our business
bull Ensuring we have a seat at the table
bull Contributing to EU Consumer Credit Directive consultation process
bull Continuous improvements in credit underwriting
bull Ensuring products are used appropriately
bull Working to ensure customers have safe landings when they signal difficulties
21
Regulatory overviewCountry
of interest income(Q1 2020)
Products (1) Regulator CB (2) Licenserequired (3)
Interest rate cap (1) Status
Argentina 1 SPL Consumer Protection Directorate - - -
Armenia 2 LOC Central Bank of the Republic of Armenia Yes Yes Nominal
Bulgaria ndash Online 2 SPL Bulgarian National BankYes Yes APR
(inc fees) Stable frameworkBulgaria ndash Bank 13 IL LOC POS SME
Czech Republic 5 SPL IL Czech National Bank Yes Yes - Stable framework
Denmark 11 LOC IL FSA and Consumer Ombudsman Yes YesAPR amp TCOC
being introduced
Danish FSA licensing process ongoing New regulations regarding interest rate caps (35 APR cap 100 cost of credit cap) and marketing restrictions in final stages of review Expected to start in July
Finland 1 IL(4) Finnish Competition and Consumer Authority - - Nominal
amp fees
New interest rate caps in force from September 2019 Further discussions on temporary reduction to 10 are ongoing
Latvia 5 MTP IL Consumer Rights Protection Centre - Yes Nominal fees amp TCOC
Stable framework since new interest rate caps in July 2019
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards MTP ndash Minimum to pay POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit(2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement(4) lsquoMini-ILrsquo (4 monthly instalments) from September 2019
22
Regulatory overview (continued)Country
of interest income
(Q1 2020)Products (1) Regulator CB (2) License
required (3)Interest rate
cap (1) Status
Lithuania 2 SPL IL Central Bank of Lithuania Yes Yes Nominal fees amp TCOC Stable framework
Mexico 1 IL National Financial Services Consumer Protection Commission - Yes - Stable framework
Poland 23 SPL IL Office of Competition and Consumer Protection - - Nominal fees
amp TCOC
Non-interest cost caps adjusted in April for one year to 15 fixed and 6 annual with a 45 total limit
Romania 10 IL LOC POS SME National Bank of Romania Yes Yes - Bill to introduce interest rate cap under discussion
Slovakia lt1 SPL National Bank of Slovakia Yes Yes APR (inc fees) Stable framework
Spain 22 SPL IL NA - - -
Sweden 1 LOC IL Swedish Financial Supervisory Authority Yes Yes Nominal amp
TCOCStable framework since new interest rate caps in September 2018
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit (2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement
23
Appendix ndash strategic evolution of portfolio
24
Evolving and broadening our business model
Prime
Sub-Prime
Near-Prime
Segments
Higher Duration Lower APR Products
SPL ILLOC POS
A multi-segment multi-product consumer credit specialist
1
1 Optimise
2 2 Diversify amp Grow
Illustrative
25
Evolution of product mix
Note (1) Reflects reclassification of Vivus brand products in Sweden (from January 2016) Denmark (from January 2017) Armenia (from launch in July 2017) and short-term products (SMS Credit amp Ondo) in Latvia (from January 2019) to Lines of Credit
68
17
3
9
29
45
18
11
0
25
50
75
100
30 Jun 2016 31 Mar 2020
SME (Bank)
Point of Sale
Instalment loans
Line of Credit Cards
Single Payment Loans
euro543meuro323m
Net receivables by product (1)
Online sub-prime only
Bank and onlinenear-prime
and sub-prime
76
48
4
14
20
29
7
0
25
50
75
100
Q1 2016 Q1 2020
Interest income by product (1)
euro97meuro90m
Date chosen to reflect the composition of loan portfolio immediately prior to purchase of TBI Bank
26
Funding near-prime growth via TBI Bank
Online acquisition Retail deposit funding
Initial portfolio development
Early stage customer acquisition and credit metrics monitored and
enhanced
Funding Platform
In-house IT funding platform ensuring ongoing automated
portfolio transfers
Bringing portfolios to scale
Market specific portfolios grow with ongoing sales to reach scale
True saleof portfolio(s)loan servicing
Indicative APRs
20-40
CostIncome ratio
c40
Cost of Risk
6-8
Cost of Funds
3-5
Return on Assets
3-5(2)
Illustrative near-prime
ldquounit economicsrdquo(1)
Notes(1) Illustrative metrics for near-prime portfolios and not indicative of a specific product or market(2) Illustrative potential returns in medium-term at scale
Payment of fair market value
bull Regular sales of Polish instalment loans since September 2019bull Passporting application submitted for Lithuania (largest near-prime portfolio)
Accessing TBI Bank deposit funding for lsquoonlinersquo portfolios via ongoing loan sales
27
Asset quality and provisioning ndash loan principal
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Interest Income 966 1065 (9)Interest Expense (127) (150) (16)Net Interest Income 839 915 (8)Net FampC Income 24 21 12Other operating income 23 22 7Non-Interest Income 47 43 10Operating Income (Revenue) 886 957 (7)Total operating costs (467) (498) (6)Pre-provision operating profit 419 459 (9)Net impairment charges (312) (324) (4)Post-provision operating profit 107 135 (21)Depreciation and amortisation (32) (32) +0Non-recurring income(expense) (39) (01) nmNet FX gain(loss) (34) 16 nmProfit before tax 02 119 nmIncome tax expense (27) (62) (57)Net profit(loss) after tax (25) 57 nm
Adjusted EBITDA 233 294 (21)
Income Statement
30
Balance sheetIn millions of euro
31 March 2020 (unaudited)
31 December 2019
Cash and cash equivalents of which 1560 1257- Online 834 767- TBI Bank 725 490
Placements with other banks 127 64Gross receivables due from customers 7042 7337Allowance for impairment (1616) (1548)Net receivables due from customers of which 5426 5789
- Principal 5147 5480- Accrued interest 277 309
Net investments in finance leases 45 47Net loans to related parties 594 607Property and equipment 182 178Financial investments 502 564Prepaid expenses 40 45Tax assets 174 213Deferred tax assets 353 330Intangible IT assets 168 178Goodwill 165 165Other assets 392 295Total assets 9727 9731Calculation for Presentation other assets (not loans Loans and borrowings 3849 3846Deposits from customers 3333 3222Deposits from banks 95 130Corporate income tax payable 124 95Other liabilities 718 780Total liabilities 8119 8074Share capital 358 358Retained earnings 1628 1657Reserves (378) (357)Total attributable equity 1608 1658Non-controlling interests 00 (00)Total equity 1608 1658Total shareholders equity and liabilities 9727 9731
Balance Sheet
31
Statement of Cash FlowsIn millions of euro
2020 2019Cash flows from operating activitiesProfit before taxes 02 119
Adjustments forDepreciation and amortisation 32 32
Impairment of goodwill and intangible assets - -
Net (gain) loss on foreign exchange from borrowings and other monetary items 131 63
Impairment losses on loans 364 359
Reversal of provision on debt portfolio sales (20) 01
Write-off and disposal of intangible and property and equipment assets 01 01
Interest income from non-customers loans (19) (19)
Interest expense on loans and borrowings and deposits from customers 127 150Non-recurring finance cost 32 -
Other non-cash items 14 0
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663 707
Adjustments forChange in financial instruments measured at fair value through profit or loss (137) (82)(Increase) decrease in other assets (including TBI statutory reserve placements amp leases) (09) (15)
Increase (decrease) in accounts payable to suppliers contractors and other creditors (39) (81)
Operating cash flow before movements in portfolio and deposits 479 530
Increase in loans due from customers (132) (468)
Proceeds from sale of portfolio 71 161
Increase in deposits (customer and bank deposits) 77 74
Deposit interest payments (15) (10)
Gross cash flows from operating activities 481 288
Corporate income tax paid (06) (63)
Net cash flows from operating activities 475 225
3 months to 31 March In millions of euro
2020 2019
Cash flows used in investing activitiesPurchase of property and equipment and intangible assets (15) (13)
Net cash from Purchase Sale of financial instruments 39 (118)
Loans issued to related parties - -
Loans repaid from related parties 0 40
Interest received from related parties 31 01
Disposal of subsidiaries net of cash disposed (13) -
(Acquisition)Disposal of equity investments (14) -
Acquisition of non-controlling interests (04) (04)
Net cash flows from investing activities 25 (94)
Cash flows from financing activitiesLoans received and notes issued - 0
Repayment and repurchase of loans and notes (164) (133)
Interest payments (06) (35)
FX hedging margin 14 82
Payment of lease liabilities (11) (1)
Dividend payments - -
Net cash flows used in financing activities (167) (95)
Net increase (decrease) in cash and cash equivalents 333 35
Cash and cash equivalents at the beginning of the period 985 1488
Effect of exchange rate fluctuations on cash (01) 0
Cash and cash equivalents at the end of the period 1318 1524
TBI Bank minimum statutory reserve 242 354
Total cash on hand and cash at central banks 1560 1878
3 months to 31 March
Cash Flow
Cash Flow (2)
Cash Flow
Cash Flow (2)
32
Key financial ratiosQ1 2020 Q1 2019
CapitalisationEquity assets 165 161Equity net receivables 296 299Adjusted interest coverage 18x 20xTBI Bank consolidated capital adequacy 188 210
ProfitabilityNet interest margin
- Online 764 802- TBI Bank 246 252- Overall group 500 557
Cost income ratio 527 520Normalised Profit before tax margin 111 127Normalised Return on average equity 118 104Normalised Return on average assets 20 17
Asset qualityCost of risk
- Online 295 289- TBI Bank 47 45- Overall group 174 184
Net impairment interest income 323 304Gross NPL ratio
- Online 283 227- TBI Bank 160 173- Overall group 222 204
Overall group NPL coverage ratio 1035 1064
See appendix for definitions of key metrics and ratios
key ratios
33
GlossaryDefinitionsbull Adjusted EBITDA ndash a non-IFRS measure that represents EBITDA (profit for the period plus tax plus interest expense plus depreciation and amortization) as adjusted by incomeloss from discontinued operations non-cash gains and losses
attributable to movement in the mark-to-market valuation of hedging obligations under IFRS goodwill write-offs and certain other one-off or non-cash items Adjusted EBITDA as presented here may not be comparable to similarly-titled measures that are reported by other companies due to differences in the way these measures are calculated Further details of covenant adjustments can be found in the relevant bond prospectuses available on our website
bull Adjusted interest coverage ndash Adjusted EBITDA interest expense for the relevant period (nb not equal to the full covenant coverage ratio calculation)
bull Cost of risk ndash Annualised net impairment loss average gross receivables (total gross receivables as of the start and end of each period divided by two)
bull Cost income ratio ndash Operating costs operating income (revenue)
bull Equity assets ratio ndash Total equity total assets
bull Equity net receivables ndash Total equity net customer receivables (including accrued interest)
bull Gross NPL ratio ndash Non-performing receivables (including accrued interest) with a delay of over 90 days gross receivables (including accrued interest)
bull Gross receivables ndash Total amount receivable from customers including principal and accrued interest after deduction of deferred income
bull Intangible assets ndash consists of deferred tax assets intangible IT assets and goodwill
bull Interest income ndash Interest and similar income generated from our customer loan portfolio
bull Loss given default ndash Loss on non-performing receivables (ie 1 - recovery rate) based on recoveries during the appropriate time window for the specific product reduced by costs of collection discounted at the weighted average effective interest rate
bull Net effective annualised yield ndash annualised interest income (excluding penalties) average net loan principal
bull Net impairment to interest income ratio ndash Net impairment losses on loans and receivables interest income
bull Net interest margin ndash Annualised net interest income average gross loan principal (total gross loan principal as of the start and end of each period divided by two)
bull Net receivables ndash Gross receivables (including accrued interest) less impairment provisions
bull Non-performing loans (NPLs) ndash Loan principal or receivables (as applicable) that are over 90 days past due (and for TBI Bank shown on a customer level basis)
bull Normalised ndash Adjusted to remove the effect of non-recurring items net FX and one-off adjustments to intangible assets and for 2018 ratios only adjusted to reflect the opening balance of 2018 balance sheet after IFRS 9 effects
bull Profit before tax margin ndash Profit before tax interest income
bull Return on Average Assets ndash Annualised profit from continuing operations average assets (total assets as of the start and end of each period divided by two)
bull Return on Average Equity ndash Annualised profit from continuing operations average equity (total equity as of the start and end of each period divided by two)
bull Return on Average Tangible Equity ndash Annualised profit from continuing operations average tangible equity (tangible equity as of the start and end of each period divided by two)
bull Tangible Equity ndash Total equity minus intangible assets
bull TBI Bank Capital adequacy ratio ndash (Tier One Capital + Tier Two Capital) Risk weighted assets (calculated according to the prevailing regulations of the Bulgarian National Bank)
34
Contacts
Investor Relationsinvestorrelations4financecom
James EtheringtonHead of Investor RelationsPhone +44 7766 697 950E-mail jamesetherington4financecom
Paul GoldfinchChief Financial OfficerPhone +371 2572 6422E-mail paulgoldfinch4financecom
Headquarters17a-8 Lielirbes street Riga LV-1046 Latvia
4finance Holding SA
Disclaimer
Agenda
Q1 2020 business and financial highlights
Slide Number 5
Current trading and outlook
Review of three month 2020 results
Summary of three month 2020 results
Interest income remains well diversified
Slide Number 10
Strong financial profile ndash stability and profitability
Funding strategy
Diversified loan portfolio
Analysis of net impairments and cost of risk
Asset quality and provisioning
Recent collections performance
Slide Number 17
Thank you and Questions
Appendix ndash responsible lending and regulatory overview
Sustainability through good governance and responsible lending
Regulatory overview
Regulatory overview (continued)
Appendix ndash strategic evolution of portfolio
Evolving and broadening our business model
Evolution of product mix
Slide Number 26
Asset quality and provisioning ndash loan principal
Appendix ndash financials and key ratios
Slide Number 29
Balance sheet
Statement of Cash Flows
Slide Number 32
GlossaryDefinitions
Contacts
Q12018
Q1 2020
9M 2018
Q1 2019
FY 2017
Net receivables (eurom) of which
5426
5408
5477
- Principal
272
5147
5144
5165
208
- Accrued interest
98
279
265
312
39
Total assets (eurom)
9724
10238
10147
Total equity (eurom)
221
1605
1607
1637
335
Capitalisation
Equity assets
147
165
157
161
127
Equity net receivables
195
296
297
299
267
Adjusted interest coverage
233
18x
25x
20x
223
TBI Bank consolidated capital adequacy
231
188
241
210
239
240
Profitability
Q12018
Net interest margin
- Online
764
882
802
- TBI Bank
246
280
252
- Overall group
500
648
557
Cost income ratio
527
520
520
Post-provision operating profit margin
145
166
177
Normalised Profit before tax margin
111
154
127
Normalised Return on average equity
118
375
104
Normalised Return on average assets
20
56
17
Asset quality
Cost of risk
- Online
295
237
289
- TBI Bank
47
86
45
- Overall group
174
181
184
Net impairment interest income
323
259
304
Gross NPL ratio
- Online
283
222
227
- TBI Bank
160
154
173
- Overall group
222
196
204
Overall group NPL coverage ratio
1035
1156
1064
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
505
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(06)
57
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
50
199
199
(248)
(301)
0800
Impairment losses on loans
1485
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(120)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(73)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
568
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
09
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2599
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
108
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(11)
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2637
2840
2840
1756
2279
00
Increase in loans due from customers
(2248)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1453
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1120
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(15)
(13)
(84)
(128)
(131)
(21)
Net cash from Purchase Sale of financial instruments
39
(118)
(136)
mdash
Repayment of financial instrument
-
-
Loans issued to related parties
-
-
(26)
(06)
(43)
(23)
Loans repaid from related parties
0
40
74
23
109
54
Interest received from related parties
31
01
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
00
(01)
0-
mdash
Disposal of subsidiaries net of cash disposed
(13)
-
(59)
(45)
(44)
mdash
(Acquisition)Disposal of equity investments
(14)
-
Acquisition of non-controlling interests
(04)
(04)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
-
-
mdash
0-
(00)
Prepayment for potential acquisition
-
00
208
0-
(208)
mdash
Acquisition of shares
-
00
00
Net cash flows from investing activities
25
(94)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
0
05
2999
1637
05
Repayment and repurchase of loans and notes
(164)
(133)
(272)
(1737)
(580)
(01)
Interest payments
(06)
(35)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
-
00
(00)
(192)
(58)
mdash
FX hedging margin
14
82
42
(140)
(88)
Payment of lease liabilities
(11)
(1)
mdash
Dividend payments
-
-
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(167)
(95)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
333
35
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
985
1488
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
(01)
0
01
10
10
03
Cash and cash equivalents at the end of the period
1318
1524
1488
2040
1319
681
TBI Bank minimum statutory reserve
242
354
234
230
230
242
Total cash on hand and cash at central banks
1560
1878
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
02
119
526
495
107
17000
Adjustments for
Depreciation and amortisation
32
32
121
64
83
1700
Impairment of goodwill and intangible assets
-
-
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
131
63
199
(248)
(301)
0800
Impairment losses on loans
364
359
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(20)
01
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
01
01
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(19)
(19)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
127
150
621
455
619
13300
Non-recurring finance cost
32
-
mdash
mdash
63
Other non-cash items
14
0
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663
707
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(137)
(82)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
(09)
(15)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(39)
(81)
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
479
530
2840
1756
2279
00
Increase in loans due from customers
(132)
(468)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
71
161
819
333
542
160
Increase in deposits (customer and bank deposits)
77
74
165
265
338
110
Deposit interest payments
(15)
(10)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
481
288
1233
524
442
(535)
Corporate income tax paid
(06)
(63)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
475
225
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(83)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(196)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
Q12018 (unaudited)
31 March 2020 (unaudited)
1 January 2018 (post IFRS 9 unaudited)
31 December 2019
Cash and cash equivalents of which
1538
1560
1549
1257
- Online
535
834
658
767
- TBI Bank
1003
725
892
490
Placements with other banks
57
127
70
64
Gross receivables due from customers
7156
7042
6588
7337
Allowance for impairment
(1665)
(1616)
(1575)
(1548)
Net receivables due from customers of which
5491
5426
5013
5789
- Principal
5147
5026
5480
- Accrued interest
277
264
309
Net investments in finance leases
93
45
105
47
Net loans to related parties
631
594
598
607
Property and equipment
96
182
101
178
Financial investments
183
502
184
564
Prepaid expenses
87
40
108
45
Tax assets
212
174
221
213
Deferred tax assets
371
353
368
330
Intangible IT assets
281
168
286
178
Goodwill
214
165
214
165
Other assets
678
392
573
295
Total assets
9932
9727
9390
9731
Calculation for Presentation - other assets (not loans or cash)
Loans and borrowings
4672
3849
3794
3846
Deposits from customers
2728
3333
2710
3222
Deposits from banks
94
95
mdash
130
Corporate income tax payable
178
124
198
95
Other liabilities
799
718
765
780
Total liabilities
8471
8119
7466
8074
Share capital
358
358
358
358
Retained earnings
1475
1628
1350
1657
Reserves
(343)
(378)
(323)
(357)
Total attributable equity
1490
1608
1385
1658
Non-controlling interests
(28)
00
(24)
(00)
Total equity
1461
1608
1362
1658
Total shareholders equity and liabilities
9932
9727
8828
9731
In millions of euro
Q1 2020 (unaudited)
Q1 2019 (unaudited)
change YoY
Interest Income
966
1065
(9)
Interest Expense
(127)
(150)
-(16)
1000000
Net Interest Income
839
915
(8)
Net FampC Income
24
21
12
Other operating income
23
22
7
Non-Interest Income
47
43
10
Operating Income (Revenue)
886
957
(7)
Personnel costs
(221)
(221)
(0
Discretionary bonus
(18)
(19)
(6)
Marketing
(91)
(96)
(5)
IT costs
(39)
(45)
(12)
DampA costs
(35)
(32)
+8
Other costs
(98)
(118)
(17)
Total operating costs
(467)
(498)
(6)
Pre-provision operating profit
419
459
(9)
Net impairment charges
(312)
(324)
-(4)
manual
Post-provision operating profit
107
135
(21)
Depreciation and amortisation
(32)
(32)
-+0
manual
Non-recurring income(expense)
(39)
(01)
nm
Non-recurring finance cost
mdash
mdash
+0
Net FX gain(loss)
(34)
16
nm
One-off adjustments to intangible assets
-
-
(0)
manual
Profit before tax
02
119
nm
Income tax expense
(27)
(62)
-(57)
manual
Net profit(loss) after tax
(25)
57
nm
manual
Adjusted EBITDA
233
294
-(21)
Costincome ratio
527
520
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online principal
Performing (1)
2347
(357)
1990
737
2634
(397)
2237
774
3177
(493)
2684
791
(22139)
3177
(302)
2875
681
(191)
150128837891005
Non-performing (2)
836
(656)
181
263
770
(590)
180
226
840
(664)
175
209
(74878)
36947
1488
(983)
505
319
-648
319
-64836054
-250544747891005
Online total
3184
(1013)
2171
1000
3404
(987)
2417
1000
4017
(1158)
2859
1000
4665
(1286)
3379
1000
(74878)
14808
TBI Bank principal
Performing (1)
2853
(121)
2732
840
2896
(118)
2778
838
2090
(68)
2022
873
(2586)
2090
(43)
2047
873
(25)
-251961477
Non-performing (2)
541
(298)
244
160
558
(274)
284
162
303
(158)
145
127
0437
303
(162)
141
127
04
42578177
TBI Bank total
3394
(418)
2976
1000
3454
(392)
3062
1000
2393
(226)
2167
1000
-
(2149)
2393
(205)
2188
1000
Overall group principal
Performing (1)
5200
(478)
4722
791
5529
(515)
5015
806
5267
(562)
4706
822
-
(24725)
5267
(345)
4922
746
Non-performing (2)
1378
(953)
424
209
1328
(864)
465
194
1142
(822)
320
178
(74878)
37384
1791
(1145)
646
254
Overall total
6578
(1431)
5147
1000
6858
(1378)
5480
1000
6410
(1384)
5026
1000
(74878)
12659
7058
(1490)
5567
1000
31122018 data updated post audit
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
IFRS 9 ADJ part
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online receivables
Performing (1)
2553
(412)
2141
717
2855
(456)
2399
751
3432
(567)
2864
778
(22139)
3432
(346)
3086
665
00
221
-150
Non-performing (2)
1006
(775)
232
283
946
(691)
255
249
977
(775)
201
222
(74878)
36947
1725
(1145)
580
335
749
(369)
250
Online total
3559
(1187)
2373
1000
3801
(1147)
2654
1000
4408
(1343)
3065
1000
5157
(1491)
3666
1000
(148)
NPL (90+)
(74878)
14808
TBI Bank receivables
Performing (1)
2927
(124)
2803
840
2964
(120)
2844
838
2145
(70)
2075
873
(2586)
2145
(44)
2101
873
00
26
120
Non-performing (2)
556
(305)
250
160
571
(280)
291
162
311
(162)
149
127
0437
311
(166)
145
127
00
(04)
-20
TBI Bank total
3482
(429)
3053
1000
3535
(401)
3135
1000
2456
(232)
2224
1000
-
(2149)
2456
(210)
2246
1000
21
Overall group receivables
Performing (1)
5480
(536)
4944
778
5819
(577)
5242
793
5577
(637)
4939
812
-
(24725)
5577
(390)
5187
733
Non-performing (2)
1562
(1080)
482
222
1517
(971)
546
207
1287
(937)
350
188
(74878)
37384
2036
(1311)
725
267
Overall total
7042
(1616)
5426
1000
7337
(1548)
5789
1000
6864
(1575)
5290
1000
(74878)
12659
7613
(1701)
5912
1000
31122018 changed to audited figures
13
195 167 170 171 162 150
3747 48 47 47 38
3940 35 23 21
17
6 7 10 12 811
7758 65 72 90
69
364328 341 341 342
293
Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020
Single Payment loans Line of Credit Instalment loans Near Prime TBI bank SME (Bank)
211 199 171 131 101 89
18 4537
34 51 48
159
242215
255 260 247
58
64
63 83 10398
47
42
42 49 6460492
591529 553 579
543
00
1500
3000
4500
6000
7500
2016 2017 1 Jan 2018 2018 2019 31 Mar 2020
Single Payment loans Line of Credit Cards Instalment loans Point of Sale SME (Bank)Baltics11
Nordics6
Poland16
Spain6
CZSK 2GEAM
1LatAm 05
BG (online)05
Bulgaria (TBI)25
Romania (TBI) 20
SME (TBI)11
Diversified loan portfolioNet receivables (1)
Net receivables 31 March 2020
Notes (1) Reflects reclassification of former SPL products in Sweden (from January 2016) Denmark (from January 2017) Armenia (from launch in July 2017) and Latvia (from January 2019) to Lines of Credit
bull Selective approach to new loan issuance
bull Overall net receivables totals euro542mbull 4 reduction during Q1 bull 89 consumer loansbull 43 online loans 57 banking
TBI Bank 57(funded clt2)
Online 43(funded c12)
eurom
See appendix for definitions of key metrics and ratios Includes TBI bank BG online and euro18m of purchased Poland portfolio Introduction of IFRS 9 as of 1-Jan-2018 reduced net receivables by euro62 million to euro529 million
Online loans issued (1)
eurom
14
486 464426 413
359 373 376 379 364
(55) (52) (42) (45) (36) (34) (34) (32) (31)
(67)(143)
(78) (77)
01
(57)(23) (41) (20)
364
269305 291
324281
319 307 312
-600
-500
-400
-300
-200
-100
00
100
200
300
400
-200
-150
-100
-50
00
50
100
150
200
250
300
350
400
450
500
550
600
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Analysis of net impairments and cost of risk
bull Q1 2020 net impairment charges remain fairly elevatedbull Most products in line with expectations Some additional
provisions in Armenia IL portfolio (in run-off)bull Overall impact of Covid-19 increased net impairments by
approximately euro3 million in Q1 (higher macro provisions delayed debt sales some impact on delay indicators)
bull Overall cost of risk relatively stablebull Overall cost of risk 174 (Q1 2020 including TBI Bank) vs 184
(Q1 2019)bull Online cost of risk 295 vs 289 (Q1 2019)bull Net impairment interest income 323 vs 304 (Q1 2019)
bull Proactive and ongoing adjustments to risk parameters across markets since mid-March
bull 63 changes to underwriting scorecardspoliciesbull 82 changes to debt collection scorecardspoliciesbull Ongoing regular reviews by market (eg Spain Poland)
Net impairment charges by quarter (1)
eurom
See appendix for definitions of key metrics and ratios
208 151
Gross impairments
Net impairment losses
Over provisioning on debt sales (net gainloss)
Recoveries from written off loans
174
2018166
Note (1) Q4 2018 and 2019 figures have been adjusted to reflect audited figures
2019184 160 Overall quarterly
cost of risk183 171 174
2020
15
Asset quality and provisioning bull Gross NPL ratios increased in lsquoonlinersquo due to delayed debt sales but asset quality relatively stable Coverage ratios remain over 100
bull Online gross NPL ratio 283 as of March 2020 compared with 249 as of December 2019bull Overall gross NPL ratio 222 as of March 2020 from 207 as of December 2019bull Some delayed debt sales already restarting in May including Poland
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Recent collections performancebull April and May repayment dynamics
in line with prior monthsbull April performance comparable
with Januarybull Improvement in May
bull Requests for payment deferrals either proactively offered by 4finance or offered in accordance with local regulation have been relatively limited
bull Main take-up in Czech Republic Armenia and TBI Bank
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
January Feb-Mar average April May
Repayment dynamics (single payment)
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
January Feb-Mar average April May
Repayment dynamics (instalment)
Repayment dynamics graphs represent cumulative sum of payments and extensions performed at under 30 DPD as a of amounts due in the prior month For example May line shows progress by day in May of repaymentextension of amounts that were due at any time in April and performed within 30 days of the due date
Payment deferral take-up in selected markets( of eligible portfolio by value)
Poland 2
Spain 3
Denmark 1
Baltics 1
Czech Republic 12
Armenia 17
TBI consumer 12
TBI SME 43
Day number in relevant month Day number in relevant month
17
Pro-active response to Covid-19 across the business with good resultsbull Rapidly adapted operations to home working ensuring employee safety and continuous services for customersbull Focus on risk management but remained ldquoopen for businessrdquo in AprilMay particularly for our returning customersbull Customer repayment behaviour within normal ranges in AprilMay with proactive support offered for customers who have
been impacted
Well positioned to lsquoweather the stormrsquo and take advantage of subsequent opportunitiesbull Key decisions taken to streamline footprint focus on larger markets and right-size cost basebull Continued development of near-prime business both on product side (Latvia Lithuania Sweden launches) and TBI Bank
funding side (Lithuania passport application)bull Encouraging demand and issuance trends in May (22 increase in online loans issued vs April) with improvement
expected to continue in June
Strong balance sheet and funding position with further action being takenbull Strong liquidity position in both lsquoonlinersquo and TBI Bankbull Strong cashflow generation deployed in significant bond buybacks to reduce leveragebull Consultations underway on potential extension to EUR 2021 bonds to allow financial results and markets to normalise
prior to long term refinancing
Summary
4finance a multi-segment multi-product consumer credit specialist
18
Thank you and Questions
19
Appendix ndash responsible lending and regulatory overview
20
Sustainability through good governance and responsible lendingOperating as a mainstream consumer finance business
bull ldquoBank-likerdquo policies and procedures with strong compliance function
bull Continued investment in AML GDPR and other strategic compliance priorities
bull Robust corporate governance with strong Supervisory Board
bull Increasingly regulated by main financial supervisory authorities
bull Diversification of portfolio and consequent reduction of reliance on single payment loans
bull Clear corporate values and code of conduct
bull Listed bond issues with quarterly financial reporting
Developing meaningful and constructive regulatory relationships
bull Ensuring we understand the regulatory arc
bull Helping regulators and legislators gain a solid understanding of our business
bull Ensuring we have a seat at the table
bull Contributing to EU Consumer Credit Directive consultation process
bull Continuous improvements in credit underwriting
bull Ensuring products are used appropriately
bull Working to ensure customers have safe landings when they signal difficulties
21
Regulatory overviewCountry
of interest income(Q1 2020)
Products (1) Regulator CB (2) Licenserequired (3)
Interest rate cap (1) Status
Argentina 1 SPL Consumer Protection Directorate - - -
Armenia 2 LOC Central Bank of the Republic of Armenia Yes Yes Nominal
Bulgaria ndash Online 2 SPL Bulgarian National BankYes Yes APR
(inc fees) Stable frameworkBulgaria ndash Bank 13 IL LOC POS SME
Czech Republic 5 SPL IL Czech National Bank Yes Yes - Stable framework
Denmark 11 LOC IL FSA and Consumer Ombudsman Yes YesAPR amp TCOC
being introduced
Danish FSA licensing process ongoing New regulations regarding interest rate caps (35 APR cap 100 cost of credit cap) and marketing restrictions in final stages of review Expected to start in July
Finland 1 IL(4) Finnish Competition and Consumer Authority - - Nominal
amp fees
New interest rate caps in force from September 2019 Further discussions on temporary reduction to 10 are ongoing
Latvia 5 MTP IL Consumer Rights Protection Centre - Yes Nominal fees amp TCOC
Stable framework since new interest rate caps in July 2019
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards MTP ndash Minimum to pay POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit(2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement(4) lsquoMini-ILrsquo (4 monthly instalments) from September 2019
22
Regulatory overview (continued)Country
of interest income
(Q1 2020)Products (1) Regulator CB (2) License
required (3)Interest rate
cap (1) Status
Lithuania 2 SPL IL Central Bank of Lithuania Yes Yes Nominal fees amp TCOC Stable framework
Mexico 1 IL National Financial Services Consumer Protection Commission - Yes - Stable framework
Poland 23 SPL IL Office of Competition and Consumer Protection - - Nominal fees
amp TCOC
Non-interest cost caps adjusted in April for one year to 15 fixed and 6 annual with a 45 total limit
Romania 10 IL LOC POS SME National Bank of Romania Yes Yes - Bill to introduce interest rate cap under discussion
Slovakia lt1 SPL National Bank of Slovakia Yes Yes APR (inc fees) Stable framework
Spain 22 SPL IL NA - - -
Sweden 1 LOC IL Swedish Financial Supervisory Authority Yes Yes Nominal amp
TCOCStable framework since new interest rate caps in September 2018
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit (2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement
23
Appendix ndash strategic evolution of portfolio
24
Evolving and broadening our business model
Prime
Sub-Prime
Near-Prime
Segments
Higher Duration Lower APR Products
SPL ILLOC POS
A multi-segment multi-product consumer credit specialist
1
1 Optimise
2 2 Diversify amp Grow
Illustrative
25
Evolution of product mix
Note (1) Reflects reclassification of Vivus brand products in Sweden (from January 2016) Denmark (from January 2017) Armenia (from launch in July 2017) and short-term products (SMS Credit amp Ondo) in Latvia (from January 2019) to Lines of Credit
68
17
3
9
29
45
18
11
0
25
50
75
100
30 Jun 2016 31 Mar 2020
SME (Bank)
Point of Sale
Instalment loans
Line of Credit Cards
Single Payment Loans
euro543meuro323m
Net receivables by product (1)
Online sub-prime only
Bank and onlinenear-prime
and sub-prime
76
48
4
14
20
29
7
0
25
50
75
100
Q1 2016 Q1 2020
Interest income by product (1)
euro97meuro90m
Date chosen to reflect the composition of loan portfolio immediately prior to purchase of TBI Bank
26
Funding near-prime growth via TBI Bank
Online acquisition Retail deposit funding
Initial portfolio development
Early stage customer acquisition and credit metrics monitored and
enhanced
Funding Platform
In-house IT funding platform ensuring ongoing automated
portfolio transfers
Bringing portfolios to scale
Market specific portfolios grow with ongoing sales to reach scale
True saleof portfolio(s)loan servicing
Indicative APRs
20-40
CostIncome ratio
c40
Cost of Risk
6-8
Cost of Funds
3-5
Return on Assets
3-5(2)
Illustrative near-prime
ldquounit economicsrdquo(1)
Notes(1) Illustrative metrics for near-prime portfolios and not indicative of a specific product or market(2) Illustrative potential returns in medium-term at scale
Payment of fair market value
bull Regular sales of Polish instalment loans since September 2019bull Passporting application submitted for Lithuania (largest near-prime portfolio)
Accessing TBI Bank deposit funding for lsquoonlinersquo portfolios via ongoing loan sales
27
Asset quality and provisioning ndash loan principal
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Interest Income 966 1065 (9)Interest Expense (127) (150) (16)Net Interest Income 839 915 (8)Net FampC Income 24 21 12Other operating income 23 22 7Non-Interest Income 47 43 10Operating Income (Revenue) 886 957 (7)Total operating costs (467) (498) (6)Pre-provision operating profit 419 459 (9)Net impairment charges (312) (324) (4)Post-provision operating profit 107 135 (21)Depreciation and amortisation (32) (32) +0Non-recurring income(expense) (39) (01) nmNet FX gain(loss) (34) 16 nmProfit before tax 02 119 nmIncome tax expense (27) (62) (57)Net profit(loss) after tax (25) 57 nm
Adjusted EBITDA 233 294 (21)
Income Statement
30
Balance sheetIn millions of euro
31 March 2020 (unaudited)
31 December 2019
Cash and cash equivalents of which 1560 1257- Online 834 767- TBI Bank 725 490
Placements with other banks 127 64Gross receivables due from customers 7042 7337Allowance for impairment (1616) (1548)Net receivables due from customers of which 5426 5789
- Principal 5147 5480- Accrued interest 277 309
Net investments in finance leases 45 47Net loans to related parties 594 607Property and equipment 182 178Financial investments 502 564Prepaid expenses 40 45Tax assets 174 213Deferred tax assets 353 330Intangible IT assets 168 178Goodwill 165 165Other assets 392 295Total assets 9727 9731Calculation for Presentation other assets (not loans Loans and borrowings 3849 3846Deposits from customers 3333 3222Deposits from banks 95 130Corporate income tax payable 124 95Other liabilities 718 780Total liabilities 8119 8074Share capital 358 358Retained earnings 1628 1657Reserves (378) (357)Total attributable equity 1608 1658Non-controlling interests 00 (00)Total equity 1608 1658Total shareholders equity and liabilities 9727 9731
Balance Sheet
31
Statement of Cash FlowsIn millions of euro
2020 2019Cash flows from operating activitiesProfit before taxes 02 119
Adjustments forDepreciation and amortisation 32 32
Impairment of goodwill and intangible assets - -
Net (gain) loss on foreign exchange from borrowings and other monetary items 131 63
Impairment losses on loans 364 359
Reversal of provision on debt portfolio sales (20) 01
Write-off and disposal of intangible and property and equipment assets 01 01
Interest income from non-customers loans (19) (19)
Interest expense on loans and borrowings and deposits from customers 127 150Non-recurring finance cost 32 -
Other non-cash items 14 0
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663 707
Adjustments forChange in financial instruments measured at fair value through profit or loss (137) (82)(Increase) decrease in other assets (including TBI statutory reserve placements amp leases) (09) (15)
Increase (decrease) in accounts payable to suppliers contractors and other creditors (39) (81)
Operating cash flow before movements in portfolio and deposits 479 530
Increase in loans due from customers (132) (468)
Proceeds from sale of portfolio 71 161
Increase in deposits (customer and bank deposits) 77 74
Deposit interest payments (15) (10)
Gross cash flows from operating activities 481 288
Corporate income tax paid (06) (63)
Net cash flows from operating activities 475 225
3 months to 31 March In millions of euro
2020 2019
Cash flows used in investing activitiesPurchase of property and equipment and intangible assets (15) (13)
Net cash from Purchase Sale of financial instruments 39 (118)
Loans issued to related parties - -
Loans repaid from related parties 0 40
Interest received from related parties 31 01
Disposal of subsidiaries net of cash disposed (13) -
(Acquisition)Disposal of equity investments (14) -
Acquisition of non-controlling interests (04) (04)
Net cash flows from investing activities 25 (94)
Cash flows from financing activitiesLoans received and notes issued - 0
Repayment and repurchase of loans and notes (164) (133)
Interest payments (06) (35)
FX hedging margin 14 82
Payment of lease liabilities (11) (1)
Dividend payments - -
Net cash flows used in financing activities (167) (95)
Net increase (decrease) in cash and cash equivalents 333 35
Cash and cash equivalents at the beginning of the period 985 1488
Effect of exchange rate fluctuations on cash (01) 0
Cash and cash equivalents at the end of the period 1318 1524
TBI Bank minimum statutory reserve 242 354
Total cash on hand and cash at central banks 1560 1878
3 months to 31 March
Cash Flow
Cash Flow (2)
Cash Flow
Cash Flow (2)
32
Key financial ratiosQ1 2020 Q1 2019
CapitalisationEquity assets 165 161Equity net receivables 296 299Adjusted interest coverage 18x 20xTBI Bank consolidated capital adequacy 188 210
ProfitabilityNet interest margin
- Online 764 802- TBI Bank 246 252- Overall group 500 557
Cost income ratio 527 520Normalised Profit before tax margin 111 127Normalised Return on average equity 118 104Normalised Return on average assets 20 17
Asset qualityCost of risk
- Online 295 289- TBI Bank 47 45- Overall group 174 184
Net impairment interest income 323 304Gross NPL ratio
- Online 283 227- TBI Bank 160 173- Overall group 222 204
Overall group NPL coverage ratio 1035 1064
See appendix for definitions of key metrics and ratios
key ratios
33
GlossaryDefinitionsbull Adjusted EBITDA ndash a non-IFRS measure that represents EBITDA (profit for the period plus tax plus interest expense plus depreciation and amortization) as adjusted by incomeloss from discontinued operations non-cash gains and losses
attributable to movement in the mark-to-market valuation of hedging obligations under IFRS goodwill write-offs and certain other one-off or non-cash items Adjusted EBITDA as presented here may not be comparable to similarly-titled measures that are reported by other companies due to differences in the way these measures are calculated Further details of covenant adjustments can be found in the relevant bond prospectuses available on our website
bull Adjusted interest coverage ndash Adjusted EBITDA interest expense for the relevant period (nb not equal to the full covenant coverage ratio calculation)
bull Cost of risk ndash Annualised net impairment loss average gross receivables (total gross receivables as of the start and end of each period divided by two)
bull Cost income ratio ndash Operating costs operating income (revenue)
bull Equity assets ratio ndash Total equity total assets
bull Equity net receivables ndash Total equity net customer receivables (including accrued interest)
bull Gross NPL ratio ndash Non-performing receivables (including accrued interest) with a delay of over 90 days gross receivables (including accrued interest)
bull Gross receivables ndash Total amount receivable from customers including principal and accrued interest after deduction of deferred income
bull Intangible assets ndash consists of deferred tax assets intangible IT assets and goodwill
bull Interest income ndash Interest and similar income generated from our customer loan portfolio
bull Loss given default ndash Loss on non-performing receivables (ie 1 - recovery rate) based on recoveries during the appropriate time window for the specific product reduced by costs of collection discounted at the weighted average effective interest rate
bull Net effective annualised yield ndash annualised interest income (excluding penalties) average net loan principal
bull Net impairment to interest income ratio ndash Net impairment losses on loans and receivables interest income
bull Net interest margin ndash Annualised net interest income average gross loan principal (total gross loan principal as of the start and end of each period divided by two)
bull Net receivables ndash Gross receivables (including accrued interest) less impairment provisions
bull Non-performing loans (NPLs) ndash Loan principal or receivables (as applicable) that are over 90 days past due (and for TBI Bank shown on a customer level basis)
bull Normalised ndash Adjusted to remove the effect of non-recurring items net FX and one-off adjustments to intangible assets and for 2018 ratios only adjusted to reflect the opening balance of 2018 balance sheet after IFRS 9 effects
bull Profit before tax margin ndash Profit before tax interest income
bull Return on Average Assets ndash Annualised profit from continuing operations average assets (total assets as of the start and end of each period divided by two)
bull Return on Average Equity ndash Annualised profit from continuing operations average equity (total equity as of the start and end of each period divided by two)
bull Return on Average Tangible Equity ndash Annualised profit from continuing operations average tangible equity (tangible equity as of the start and end of each period divided by two)
bull Tangible Equity ndash Total equity minus intangible assets
bull TBI Bank Capital adequacy ratio ndash (Tier One Capital + Tier Two Capital) Risk weighted assets (calculated according to the prevailing regulations of the Bulgarian National Bank)
34
Contacts
Investor Relationsinvestorrelations4financecom
James EtheringtonHead of Investor RelationsPhone +44 7766 697 950E-mail jamesetherington4financecom
Paul GoldfinchChief Financial OfficerPhone +371 2572 6422E-mail paulgoldfinch4financecom
Headquarters17a-8 Lielirbes street Riga LV-1046 Latvia
4finance Holding SA
Disclaimer
Agenda
Q1 2020 business and financial highlights
Slide Number 5
Current trading and outlook
Review of three month 2020 results
Summary of three month 2020 results
Interest income remains well diversified
Slide Number 10
Strong financial profile ndash stability and profitability
Funding strategy
Diversified loan portfolio
Analysis of net impairments and cost of risk
Asset quality and provisioning
Recent collections performance
Slide Number 17
Thank you and Questions
Appendix ndash responsible lending and regulatory overview
Sustainability through good governance and responsible lending
Regulatory overview
Regulatory overview (continued)
Appendix ndash strategic evolution of portfolio
Evolving and broadening our business model
Evolution of product mix
Slide Number 26
Asset quality and provisioning ndash loan principal
Appendix ndash financials and key ratios
Slide Number 29
Balance sheet
Statement of Cash Flows
Slide Number 32
GlossaryDefinitions
Contacts
Q12018
Q1 2020
9M 2018
Q1 2019
FY 2017
Net receivables (eurom) of which
5426
5408
5477
- Principal
272
5147
5144
5165
208
- Accrued interest
98
279
265
312
39
Total assets (eurom)
9724
10238
10147
Total equity (eurom)
221
1605
1607
1637
335
Capitalisation
Equity assets
147
165
157
161
127
Equity net receivables
195
296
297
299
267
Adjusted interest coverage
233
18x
25x
20x
223
TBI Bank consolidated capital adequacy
231
188
241
210
239
240
Profitability
Q12018
Net interest margin
- Online
764
882
802
- TBI Bank
246
280
252
- Overall group
500
648
557
Cost income ratio
527
520
520
Post-provision operating profit margin
145
166
177
Normalised Profit before tax margin
111
154
127
Normalised Return on average equity
118
375
104
Normalised Return on average assets
20
56
17
Asset quality
Cost of risk
- Online
295
237
289
- TBI Bank
47
86
45
- Overall group
174
181
184
Net impairment interest income
323
259
304
Gross NPL ratio
- Online
283
222
227
- TBI Bank
160
154
173
- Overall group
222
196
204
Overall group NPL coverage ratio
1035
1156
1064
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
505
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(06)
57
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
50
199
199
(248)
(301)
0800
Impairment losses on loans
1485
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(120)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(73)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
568
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
09
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2599
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
108
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(11)
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2637
2840
2840
1756
2279
00
Increase in loans due from customers
(2248)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1453
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1120
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(15)
(13)
(84)
(128)
(131)
(21)
Net cash from Purchase Sale of financial instruments
39
(118)
(136)
mdash
Repayment of financial instrument
-
-
Loans issued to related parties
-
-
(26)
(06)
(43)
(23)
Loans repaid from related parties
0
40
74
23
109
54
Interest received from related parties
31
01
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
00
(01)
0-
mdash
Disposal of subsidiaries net of cash disposed
(13)
-
(59)
(45)
(44)
mdash
(Acquisition)Disposal of equity investments
(14)
-
Acquisition of non-controlling interests
(04)
(04)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
-
-
mdash
0-
(00)
Prepayment for potential acquisition
-
00
208
0-
(208)
mdash
Acquisition of shares
-
00
00
Net cash flows from investing activities
25
(94)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
0
05
2999
1637
05
Repayment and repurchase of loans and notes
(164)
(133)
(272)
(1737)
(580)
(01)
Interest payments
(06)
(35)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
-
00
(00)
(192)
(58)
mdash
FX hedging margin
14
82
42
(140)
(88)
Payment of lease liabilities
(11)
(1)
mdash
Dividend payments
-
-
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(167)
(95)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
333
35
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
985
1488
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
(01)
0
01
10
10
03
Cash and cash equivalents at the end of the period
1318
1524
1488
2040
1319
681
TBI Bank minimum statutory reserve
242
354
234
230
230
242
Total cash on hand and cash at central banks
1560
1878
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
02
119
526
495
107
17000
Adjustments for
Depreciation and amortisation
32
32
121
64
83
1700
Impairment of goodwill and intangible assets
-
-
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
131
63
199
(248)
(301)
0800
Impairment losses on loans
364
359
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(20)
01
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
01
01
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(19)
(19)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
127
150
621
455
619
13300
Non-recurring finance cost
32
-
mdash
mdash
63
Other non-cash items
14
0
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663
707
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(137)
(82)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
(09)
(15)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(39)
(81)
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
479
530
2840
1756
2279
00
Increase in loans due from customers
(132)
(468)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
71
161
819
333
542
160
Increase in deposits (customer and bank deposits)
77
74
165
265
338
110
Deposit interest payments
(15)
(10)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
481
288
1233
524
442
(535)
Corporate income tax paid
(06)
(63)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
475
225
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(83)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(196)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
Q12018 (unaudited)
31 March 2020 (unaudited)
1 January 2018 (post IFRS 9 unaudited)
31 December 2019
Cash and cash equivalents of which
1538
1560
1549
1257
- Online
535
834
658
767
- TBI Bank
1003
725
892
490
Placements with other banks
57
127
70
64
Gross receivables due from customers
7156
7042
6588
7337
Allowance for impairment
(1665)
(1616)
(1575)
(1548)
Net receivables due from customers of which
5491
5426
5013
5789
- Principal
5147
5026
5480
- Accrued interest
277
264
309
Net investments in finance leases
93
45
105
47
Net loans to related parties
631
594
598
607
Property and equipment
96
182
101
178
Financial investments
183
502
184
564
Prepaid expenses
87
40
108
45
Tax assets
212
174
221
213
Deferred tax assets
371
353
368
330
Intangible IT assets
281
168
286
178
Goodwill
214
165
214
165
Other assets
678
392
573
295
Total assets
9932
9727
9390
9731
Calculation for Presentation - other assets (not loans or cash)
Loans and borrowings
4672
3849
3794
3846
Deposits from customers
2728
3333
2710
3222
Deposits from banks
94
95
mdash
130
Corporate income tax payable
178
124
198
95
Other liabilities
799
718
765
780
Total liabilities
8471
8119
7466
8074
Share capital
358
358
358
358
Retained earnings
1475
1628
1350
1657
Reserves
(343)
(378)
(323)
(357)
Total attributable equity
1490
1608
1385
1658
Non-controlling interests
(28)
00
(24)
(00)
Total equity
1461
1608
1362
1658
Total shareholders equity and liabilities
9932
9727
8828
9731
In millions of euro
Q1 2020 (unaudited)
Q1 2019 (unaudited)
change YoY
Interest Income
966
1065
(9)
Interest Expense
(127)
(150)
-(16)
1000000
Net Interest Income
839
915
(8)
Net FampC Income
24
21
12
Other operating income
23
22
7
Non-Interest Income
47
43
10
Operating Income (Revenue)
886
957
(7)
Personnel costs
(221)
(221)
(0
Discretionary bonus
(18)
(19)
(6)
Marketing
(91)
(96)
(5)
IT costs
(39)
(45)
(12)
DampA costs
(35)
(32)
+8
Other costs
(98)
(118)
(17)
Total operating costs
(467)
(498)
(6)
Pre-provision operating profit
419
459
(9)
Net impairment charges
(312)
(324)
-(4)
manual
Post-provision operating profit
107
135
(21)
Depreciation and amortisation
(32)
(32)
-+0
manual
Non-recurring income(expense)
(39)
(01)
nm
Non-recurring finance cost
mdash
mdash
+0
Net FX gain(loss)
(34)
16
nm
One-off adjustments to intangible assets
-
-
(0)
manual
Profit before tax
02
119
nm
Income tax expense
(27)
(62)
-(57)
manual
Net profit(loss) after tax
(25)
57
nm
manual
Adjusted EBITDA
233
294
-(21)
Costincome ratio
527
520
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online principal
Performing (1)
2347
(357)
1990
737
2634
(397)
2237
774
3177
(493)
2684
791
(22139)
3177
(302)
2875
681
(191)
150128837891005
Non-performing (2)
836
(656)
181
263
770
(590)
180
226
840
(664)
175
209
(74878)
36947
1488
(983)
505
319
-648
319
-64836054
-250544747891005
Online total
3184
(1013)
2171
1000
3404
(987)
2417
1000
4017
(1158)
2859
1000
4665
(1286)
3379
1000
(74878)
14808
TBI Bank principal
Performing (1)
2853
(121)
2732
840
2896
(118)
2778
838
2090
(68)
2022
873
(2586)
2090
(43)
2047
873
(25)
-251961477
Non-performing (2)
541
(298)
244
160
558
(274)
284
162
303
(158)
145
127
0437
303
(162)
141
127
04
42578177
TBI Bank total
3394
(418)
2976
1000
3454
(392)
3062
1000
2393
(226)
2167
1000
-
(2149)
2393
(205)
2188
1000
Overall group principal
Performing (1)
5200
(478)
4722
791
5529
(515)
5015
806
5267
(562)
4706
822
-
(24725)
5267
(345)
4922
746
Non-performing (2)
1378
(953)
424
209
1328
(864)
465
194
1142
(822)
320
178
(74878)
37384
1791
(1145)
646
254
Overall total
6578
(1431)
5147
1000
6858
(1378)
5480
1000
6410
(1384)
5026
1000
(74878)
12659
7058
(1490)
5567
1000
31122018 data updated post audit
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
IFRS 9 ADJ part
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online receivables
Performing (1)
2553
(412)
2141
717
2855
(456)
2399
751
3432
(567)
2864
778
(22139)
3432
(346)
3086
665
00
221
-150
Non-performing (2)
1006
(775)
232
283
946
(691)
255
249
977
(775)
201
222
(74878)
36947
1725
(1145)
580
335
749
(369)
250
Online total
3559
(1187)
2373
1000
3801
(1147)
2654
1000
4408
(1343)
3065
1000
5157
(1491)
3666
1000
(148)
NPL (90+)
(74878)
14808
TBI Bank receivables
Performing (1)
2927
(124)
2803
840
2964
(120)
2844
838
2145
(70)
2075
873
(2586)
2145
(44)
2101
873
00
26
120
Non-performing (2)
556
(305)
250
160
571
(280)
291
162
311
(162)
149
127
0437
311
(166)
145
127
00
(04)
-20
TBI Bank total
3482
(429)
3053
1000
3535
(401)
3135
1000
2456
(232)
2224
1000
-
(2149)
2456
(210)
2246
1000
21
Overall group receivables
Performing (1)
5480
(536)
4944
778
5819
(577)
5242
793
5577
(637)
4939
812
-
(24725)
5577
(390)
5187
733
Non-performing (2)
1562
(1080)
482
222
1517
(971)
546
207
1287
(937)
350
188
(74878)
37384
2036
(1311)
725
267
Overall total
7042
(1616)
5426
1000
7337
(1548)
5789
1000
6864
(1575)
5290
1000
(74878)
12659
7613
(1701)
5912
1000
31122018 changed to audited figures
14
486 464426 413
359 373 376 379 364
(55) (52) (42) (45) (36) (34) (34) (32) (31)
(67)(143)
(78) (77)
01
(57)(23) (41) (20)
364
269305 291
324281
319 307 312
-600
-500
-400
-300
-200
-100
00
100
200
300
400
-200
-150
-100
-50
00
50
100
150
200
250
300
350
400
450
500
550
600
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Analysis of net impairments and cost of risk
bull Q1 2020 net impairment charges remain fairly elevatedbull Most products in line with expectations Some additional
provisions in Armenia IL portfolio (in run-off)bull Overall impact of Covid-19 increased net impairments by
approximately euro3 million in Q1 (higher macro provisions delayed debt sales some impact on delay indicators)
bull Overall cost of risk relatively stablebull Overall cost of risk 174 (Q1 2020 including TBI Bank) vs 184
(Q1 2019)bull Online cost of risk 295 vs 289 (Q1 2019)bull Net impairment interest income 323 vs 304 (Q1 2019)
bull Proactive and ongoing adjustments to risk parameters across markets since mid-March
bull 63 changes to underwriting scorecardspoliciesbull 82 changes to debt collection scorecardspoliciesbull Ongoing regular reviews by market (eg Spain Poland)
Net impairment charges by quarter (1)
eurom
See appendix for definitions of key metrics and ratios
208 151
Gross impairments
Net impairment losses
Over provisioning on debt sales (net gainloss)
Recoveries from written off loans
174
2018166
Note (1) Q4 2018 and 2019 figures have been adjusted to reflect audited figures
2019184 160 Overall quarterly
cost of risk183 171 174
2020
15
Asset quality and provisioning bull Gross NPL ratios increased in lsquoonlinersquo due to delayed debt sales but asset quality relatively stable Coverage ratios remain over 100
bull Online gross NPL ratio 283 as of March 2020 compared with 249 as of December 2019bull Overall gross NPL ratio 222 as of March 2020 from 207 as of December 2019bull Some delayed debt sales already restarting in May including Poland
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Recent collections performancebull April and May repayment dynamics
in line with prior monthsbull April performance comparable
with Januarybull Improvement in May
bull Requests for payment deferrals either proactively offered by 4finance or offered in accordance with local regulation have been relatively limited
bull Main take-up in Czech Republic Armenia and TBI Bank
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
January Feb-Mar average April May
Repayment dynamics (single payment)
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
January Feb-Mar average April May
Repayment dynamics (instalment)
Repayment dynamics graphs represent cumulative sum of payments and extensions performed at under 30 DPD as a of amounts due in the prior month For example May line shows progress by day in May of repaymentextension of amounts that were due at any time in April and performed within 30 days of the due date
Payment deferral take-up in selected markets( of eligible portfolio by value)
Poland 2
Spain 3
Denmark 1
Baltics 1
Czech Republic 12
Armenia 17
TBI consumer 12
TBI SME 43
Day number in relevant month Day number in relevant month
17
Pro-active response to Covid-19 across the business with good resultsbull Rapidly adapted operations to home working ensuring employee safety and continuous services for customersbull Focus on risk management but remained ldquoopen for businessrdquo in AprilMay particularly for our returning customersbull Customer repayment behaviour within normal ranges in AprilMay with proactive support offered for customers who have
been impacted
Well positioned to lsquoweather the stormrsquo and take advantage of subsequent opportunitiesbull Key decisions taken to streamline footprint focus on larger markets and right-size cost basebull Continued development of near-prime business both on product side (Latvia Lithuania Sweden launches) and TBI Bank
funding side (Lithuania passport application)bull Encouraging demand and issuance trends in May (22 increase in online loans issued vs April) with improvement
expected to continue in June
Strong balance sheet and funding position with further action being takenbull Strong liquidity position in both lsquoonlinersquo and TBI Bankbull Strong cashflow generation deployed in significant bond buybacks to reduce leveragebull Consultations underway on potential extension to EUR 2021 bonds to allow financial results and markets to normalise
prior to long term refinancing
Summary
4finance a multi-segment multi-product consumer credit specialist
18
Thank you and Questions
19
Appendix ndash responsible lending and regulatory overview
20
Sustainability through good governance and responsible lendingOperating as a mainstream consumer finance business
bull ldquoBank-likerdquo policies and procedures with strong compliance function
bull Continued investment in AML GDPR and other strategic compliance priorities
bull Robust corporate governance with strong Supervisory Board
bull Increasingly regulated by main financial supervisory authorities
bull Diversification of portfolio and consequent reduction of reliance on single payment loans
bull Clear corporate values and code of conduct
bull Listed bond issues with quarterly financial reporting
Developing meaningful and constructive regulatory relationships
bull Ensuring we understand the regulatory arc
bull Helping regulators and legislators gain a solid understanding of our business
bull Ensuring we have a seat at the table
bull Contributing to EU Consumer Credit Directive consultation process
bull Continuous improvements in credit underwriting
bull Ensuring products are used appropriately
bull Working to ensure customers have safe landings when they signal difficulties
21
Regulatory overviewCountry
of interest income(Q1 2020)
Products (1) Regulator CB (2) Licenserequired (3)
Interest rate cap (1) Status
Argentina 1 SPL Consumer Protection Directorate - - -
Armenia 2 LOC Central Bank of the Republic of Armenia Yes Yes Nominal
Bulgaria ndash Online 2 SPL Bulgarian National BankYes Yes APR
(inc fees) Stable frameworkBulgaria ndash Bank 13 IL LOC POS SME
Czech Republic 5 SPL IL Czech National Bank Yes Yes - Stable framework
Denmark 11 LOC IL FSA and Consumer Ombudsman Yes YesAPR amp TCOC
being introduced
Danish FSA licensing process ongoing New regulations regarding interest rate caps (35 APR cap 100 cost of credit cap) and marketing restrictions in final stages of review Expected to start in July
Finland 1 IL(4) Finnish Competition and Consumer Authority - - Nominal
amp fees
New interest rate caps in force from September 2019 Further discussions on temporary reduction to 10 are ongoing
Latvia 5 MTP IL Consumer Rights Protection Centre - Yes Nominal fees amp TCOC
Stable framework since new interest rate caps in July 2019
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards MTP ndash Minimum to pay POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit(2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement(4) lsquoMini-ILrsquo (4 monthly instalments) from September 2019
22
Regulatory overview (continued)Country
of interest income
(Q1 2020)Products (1) Regulator CB (2) License
required (3)Interest rate
cap (1) Status
Lithuania 2 SPL IL Central Bank of Lithuania Yes Yes Nominal fees amp TCOC Stable framework
Mexico 1 IL National Financial Services Consumer Protection Commission - Yes - Stable framework
Poland 23 SPL IL Office of Competition and Consumer Protection - - Nominal fees
amp TCOC
Non-interest cost caps adjusted in April for one year to 15 fixed and 6 annual with a 45 total limit
Romania 10 IL LOC POS SME National Bank of Romania Yes Yes - Bill to introduce interest rate cap under discussion
Slovakia lt1 SPL National Bank of Slovakia Yes Yes APR (inc fees) Stable framework
Spain 22 SPL IL NA - - -
Sweden 1 LOC IL Swedish Financial Supervisory Authority Yes Yes Nominal amp
TCOCStable framework since new interest rate caps in September 2018
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit (2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement
23
Appendix ndash strategic evolution of portfolio
24
Evolving and broadening our business model
Prime
Sub-Prime
Near-Prime
Segments
Higher Duration Lower APR Products
SPL ILLOC POS
A multi-segment multi-product consumer credit specialist
1
1 Optimise
2 2 Diversify amp Grow
Illustrative
25
Evolution of product mix
Note (1) Reflects reclassification of Vivus brand products in Sweden (from January 2016) Denmark (from January 2017) Armenia (from launch in July 2017) and short-term products (SMS Credit amp Ondo) in Latvia (from January 2019) to Lines of Credit
68
17
3
9
29
45
18
11
0
25
50
75
100
30 Jun 2016 31 Mar 2020
SME (Bank)
Point of Sale
Instalment loans
Line of Credit Cards
Single Payment Loans
euro543meuro323m
Net receivables by product (1)
Online sub-prime only
Bank and onlinenear-prime
and sub-prime
76
48
4
14
20
29
7
0
25
50
75
100
Q1 2016 Q1 2020
Interest income by product (1)
euro97meuro90m
Date chosen to reflect the composition of loan portfolio immediately prior to purchase of TBI Bank
26
Funding near-prime growth via TBI Bank
Online acquisition Retail deposit funding
Initial portfolio development
Early stage customer acquisition and credit metrics monitored and
enhanced
Funding Platform
In-house IT funding platform ensuring ongoing automated
portfolio transfers
Bringing portfolios to scale
Market specific portfolios grow with ongoing sales to reach scale
True saleof portfolio(s)loan servicing
Indicative APRs
20-40
CostIncome ratio
c40
Cost of Risk
6-8
Cost of Funds
3-5
Return on Assets
3-5(2)
Illustrative near-prime
ldquounit economicsrdquo(1)
Notes(1) Illustrative metrics for near-prime portfolios and not indicative of a specific product or market(2) Illustrative potential returns in medium-term at scale
Payment of fair market value
bull Regular sales of Polish instalment loans since September 2019bull Passporting application submitted for Lithuania (largest near-prime portfolio)
Accessing TBI Bank deposit funding for lsquoonlinersquo portfolios via ongoing loan sales
27
Asset quality and provisioning ndash loan principal
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Interest Income 966 1065 (9)Interest Expense (127) (150) (16)Net Interest Income 839 915 (8)Net FampC Income 24 21 12Other operating income 23 22 7Non-Interest Income 47 43 10Operating Income (Revenue) 886 957 (7)Total operating costs (467) (498) (6)Pre-provision operating profit 419 459 (9)Net impairment charges (312) (324) (4)Post-provision operating profit 107 135 (21)Depreciation and amortisation (32) (32) +0Non-recurring income(expense) (39) (01) nmNet FX gain(loss) (34) 16 nmProfit before tax 02 119 nmIncome tax expense (27) (62) (57)Net profit(loss) after tax (25) 57 nm
Adjusted EBITDA 233 294 (21)
Income Statement
30
Balance sheetIn millions of euro
31 March 2020 (unaudited)
31 December 2019
Cash and cash equivalents of which 1560 1257- Online 834 767- TBI Bank 725 490
Placements with other banks 127 64Gross receivables due from customers 7042 7337Allowance for impairment (1616) (1548)Net receivables due from customers of which 5426 5789
- Principal 5147 5480- Accrued interest 277 309
Net investments in finance leases 45 47Net loans to related parties 594 607Property and equipment 182 178Financial investments 502 564Prepaid expenses 40 45Tax assets 174 213Deferred tax assets 353 330Intangible IT assets 168 178Goodwill 165 165Other assets 392 295Total assets 9727 9731Calculation for Presentation other assets (not loans Loans and borrowings 3849 3846Deposits from customers 3333 3222Deposits from banks 95 130Corporate income tax payable 124 95Other liabilities 718 780Total liabilities 8119 8074Share capital 358 358Retained earnings 1628 1657Reserves (378) (357)Total attributable equity 1608 1658Non-controlling interests 00 (00)Total equity 1608 1658Total shareholders equity and liabilities 9727 9731
Balance Sheet
31
Statement of Cash FlowsIn millions of euro
2020 2019Cash flows from operating activitiesProfit before taxes 02 119
Adjustments forDepreciation and amortisation 32 32
Impairment of goodwill and intangible assets - -
Net (gain) loss on foreign exchange from borrowings and other monetary items 131 63
Impairment losses on loans 364 359
Reversal of provision on debt portfolio sales (20) 01
Write-off and disposal of intangible and property and equipment assets 01 01
Interest income from non-customers loans (19) (19)
Interest expense on loans and borrowings and deposits from customers 127 150Non-recurring finance cost 32 -
Other non-cash items 14 0
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663 707
Adjustments forChange in financial instruments measured at fair value through profit or loss (137) (82)(Increase) decrease in other assets (including TBI statutory reserve placements amp leases) (09) (15)
Increase (decrease) in accounts payable to suppliers contractors and other creditors (39) (81)
Operating cash flow before movements in portfolio and deposits 479 530
Increase in loans due from customers (132) (468)
Proceeds from sale of portfolio 71 161
Increase in deposits (customer and bank deposits) 77 74
Deposit interest payments (15) (10)
Gross cash flows from operating activities 481 288
Corporate income tax paid (06) (63)
Net cash flows from operating activities 475 225
3 months to 31 March In millions of euro
2020 2019
Cash flows used in investing activitiesPurchase of property and equipment and intangible assets (15) (13)
Net cash from Purchase Sale of financial instruments 39 (118)
Loans issued to related parties - -
Loans repaid from related parties 0 40
Interest received from related parties 31 01
Disposal of subsidiaries net of cash disposed (13) -
(Acquisition)Disposal of equity investments (14) -
Acquisition of non-controlling interests (04) (04)
Net cash flows from investing activities 25 (94)
Cash flows from financing activitiesLoans received and notes issued - 0
Repayment and repurchase of loans and notes (164) (133)
Interest payments (06) (35)
FX hedging margin 14 82
Payment of lease liabilities (11) (1)
Dividend payments - -
Net cash flows used in financing activities (167) (95)
Net increase (decrease) in cash and cash equivalents 333 35
Cash and cash equivalents at the beginning of the period 985 1488
Effect of exchange rate fluctuations on cash (01) 0
Cash and cash equivalents at the end of the period 1318 1524
TBI Bank minimum statutory reserve 242 354
Total cash on hand and cash at central banks 1560 1878
3 months to 31 March
Cash Flow
Cash Flow (2)
Cash Flow
Cash Flow (2)
32
Key financial ratiosQ1 2020 Q1 2019
CapitalisationEquity assets 165 161Equity net receivables 296 299Adjusted interest coverage 18x 20xTBI Bank consolidated capital adequacy 188 210
ProfitabilityNet interest margin
- Online 764 802- TBI Bank 246 252- Overall group 500 557
Cost income ratio 527 520Normalised Profit before tax margin 111 127Normalised Return on average equity 118 104Normalised Return on average assets 20 17
Asset qualityCost of risk
- Online 295 289- TBI Bank 47 45- Overall group 174 184
Net impairment interest income 323 304Gross NPL ratio
- Online 283 227- TBI Bank 160 173- Overall group 222 204
Overall group NPL coverage ratio 1035 1064
See appendix for definitions of key metrics and ratios
key ratios
33
GlossaryDefinitionsbull Adjusted EBITDA ndash a non-IFRS measure that represents EBITDA (profit for the period plus tax plus interest expense plus depreciation and amortization) as adjusted by incomeloss from discontinued operations non-cash gains and losses
attributable to movement in the mark-to-market valuation of hedging obligations under IFRS goodwill write-offs and certain other one-off or non-cash items Adjusted EBITDA as presented here may not be comparable to similarly-titled measures that are reported by other companies due to differences in the way these measures are calculated Further details of covenant adjustments can be found in the relevant bond prospectuses available on our website
bull Adjusted interest coverage ndash Adjusted EBITDA interest expense for the relevant period (nb not equal to the full covenant coverage ratio calculation)
bull Cost of risk ndash Annualised net impairment loss average gross receivables (total gross receivables as of the start and end of each period divided by two)
bull Cost income ratio ndash Operating costs operating income (revenue)
bull Equity assets ratio ndash Total equity total assets
bull Equity net receivables ndash Total equity net customer receivables (including accrued interest)
bull Gross NPL ratio ndash Non-performing receivables (including accrued interest) with a delay of over 90 days gross receivables (including accrued interest)
bull Gross receivables ndash Total amount receivable from customers including principal and accrued interest after deduction of deferred income
bull Intangible assets ndash consists of deferred tax assets intangible IT assets and goodwill
bull Interest income ndash Interest and similar income generated from our customer loan portfolio
bull Loss given default ndash Loss on non-performing receivables (ie 1 - recovery rate) based on recoveries during the appropriate time window for the specific product reduced by costs of collection discounted at the weighted average effective interest rate
bull Net effective annualised yield ndash annualised interest income (excluding penalties) average net loan principal
bull Net impairment to interest income ratio ndash Net impairment losses on loans and receivables interest income
bull Net interest margin ndash Annualised net interest income average gross loan principal (total gross loan principal as of the start and end of each period divided by two)
bull Net receivables ndash Gross receivables (including accrued interest) less impairment provisions
bull Non-performing loans (NPLs) ndash Loan principal or receivables (as applicable) that are over 90 days past due (and for TBI Bank shown on a customer level basis)
bull Normalised ndash Adjusted to remove the effect of non-recurring items net FX and one-off adjustments to intangible assets and for 2018 ratios only adjusted to reflect the opening balance of 2018 balance sheet after IFRS 9 effects
bull Profit before tax margin ndash Profit before tax interest income
bull Return on Average Assets ndash Annualised profit from continuing operations average assets (total assets as of the start and end of each period divided by two)
bull Return on Average Equity ndash Annualised profit from continuing operations average equity (total equity as of the start and end of each period divided by two)
bull Return on Average Tangible Equity ndash Annualised profit from continuing operations average tangible equity (tangible equity as of the start and end of each period divided by two)
bull Tangible Equity ndash Total equity minus intangible assets
bull TBI Bank Capital adequacy ratio ndash (Tier One Capital + Tier Two Capital) Risk weighted assets (calculated according to the prevailing regulations of the Bulgarian National Bank)
34
Contacts
Investor Relationsinvestorrelations4financecom
James EtheringtonHead of Investor RelationsPhone +44 7766 697 950E-mail jamesetherington4financecom
Paul GoldfinchChief Financial OfficerPhone +371 2572 6422E-mail paulgoldfinch4financecom
Headquarters17a-8 Lielirbes street Riga LV-1046 Latvia
4finance Holding SA
Disclaimer
Agenda
Q1 2020 business and financial highlights
Slide Number 5
Current trading and outlook
Review of three month 2020 results
Summary of three month 2020 results
Interest income remains well diversified
Slide Number 10
Strong financial profile ndash stability and profitability
Funding strategy
Diversified loan portfolio
Analysis of net impairments and cost of risk
Asset quality and provisioning
Recent collections performance
Slide Number 17
Thank you and Questions
Appendix ndash responsible lending and regulatory overview
Sustainability through good governance and responsible lending
Regulatory overview
Regulatory overview (continued)
Appendix ndash strategic evolution of portfolio
Evolving and broadening our business model
Evolution of product mix
Slide Number 26
Asset quality and provisioning ndash loan principal
Appendix ndash financials and key ratios
Slide Number 29
Balance sheet
Statement of Cash Flows
Slide Number 32
GlossaryDefinitions
Contacts
Q12018
Q1 2020
9M 2018
Q1 2019
FY 2017
Net receivables (eurom) of which
5426
5408
5477
- Principal
272
5147
5144
5165
208
- Accrued interest
98
279
265
312
39
Total assets (eurom)
9724
10238
10147
Total equity (eurom)
221
1605
1607
1637
335
Capitalisation
Equity assets
147
165
157
161
127
Equity net receivables
195
296
297
299
267
Adjusted interest coverage
233
18x
25x
20x
223
TBI Bank consolidated capital adequacy
231
188
241
210
239
240
Profitability
Q12018
Net interest margin
- Online
764
882
802
- TBI Bank
246
280
252
- Overall group
500
648
557
Cost income ratio
527
520
520
Post-provision operating profit margin
145
166
177
Normalised Profit before tax margin
111
154
127
Normalised Return on average equity
118
375
104
Normalised Return on average assets
20
56
17
Asset quality
Cost of risk
- Online
295
237
289
- TBI Bank
47
86
45
- Overall group
174
181
184
Net impairment interest income
323
259
304
Gross NPL ratio
- Online
283
222
227
- TBI Bank
160
154
173
- Overall group
222
196
204
Overall group NPL coverage ratio
1035
1156
1064
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
505
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(06)
57
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
50
199
199
(248)
(301)
0800
Impairment losses on loans
1485
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(120)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(73)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
568
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
09
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2599
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
108
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(11)
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2637
2840
2840
1756
2279
00
Increase in loans due from customers
(2248)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1453
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1120
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(15)
(13)
(84)
(128)
(131)
(21)
Net cash from Purchase Sale of financial instruments
39
(118)
(136)
mdash
Repayment of financial instrument
-
-
Loans issued to related parties
-
-
(26)
(06)
(43)
(23)
Loans repaid from related parties
0
40
74
23
109
54
Interest received from related parties
31
01
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
00
(01)
0-
mdash
Disposal of subsidiaries net of cash disposed
(13)
-
(59)
(45)
(44)
mdash
(Acquisition)Disposal of equity investments
(14)
-
Acquisition of non-controlling interests
(04)
(04)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
-
-
mdash
0-
(00)
Prepayment for potential acquisition
-
00
208
0-
(208)
mdash
Acquisition of shares
-
00
00
Net cash flows from investing activities
25
(94)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
0
05
2999
1637
05
Repayment and repurchase of loans and notes
(164)
(133)
(272)
(1737)
(580)
(01)
Interest payments
(06)
(35)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
-
00
(00)
(192)
(58)
mdash
FX hedging margin
14
82
42
(140)
(88)
Payment of lease liabilities
(11)
(1)
mdash
Dividend payments
-
-
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(167)
(95)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
333
35
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
985
1488
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
(01)
0
01
10
10
03
Cash and cash equivalents at the end of the period
1318
1524
1488
2040
1319
681
TBI Bank minimum statutory reserve
242
354
234
230
230
242
Total cash on hand and cash at central banks
1560
1878
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
02
119
526
495
107
17000
Adjustments for
Depreciation and amortisation
32
32
121
64
83
1700
Impairment of goodwill and intangible assets
-
-
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
131
63
199
(248)
(301)
0800
Impairment losses on loans
364
359
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(20)
01
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
01
01
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(19)
(19)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
127
150
621
455
619
13300
Non-recurring finance cost
32
-
mdash
mdash
63
Other non-cash items
14
0
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663
707
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(137)
(82)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
(09)
(15)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(39)
(81)
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
479
530
2840
1756
2279
00
Increase in loans due from customers
(132)
(468)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
71
161
819
333
542
160
Increase in deposits (customer and bank deposits)
77
74
165
265
338
110
Deposit interest payments
(15)
(10)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
481
288
1233
524
442
(535)
Corporate income tax paid
(06)
(63)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
475
225
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(83)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(196)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
Q12018 (unaudited)
31 March 2020 (unaudited)
1 January 2018 (post IFRS 9 unaudited)
31 December 2019
Cash and cash equivalents of which
1538
1560
1549
1257
- Online
535
834
658
767
- TBI Bank
1003
725
892
490
Placements with other banks
57
127
70
64
Gross receivables due from customers
7156
7042
6588
7337
Allowance for impairment
(1665)
(1616)
(1575)
(1548)
Net receivables due from customers of which
5491
5426
5013
5789
- Principal
5147
5026
5480
- Accrued interest
277
264
309
Net investments in finance leases
93
45
105
47
Net loans to related parties
631
594
598
607
Property and equipment
96
182
101
178
Financial investments
183
502
184
564
Prepaid expenses
87
40
108
45
Tax assets
212
174
221
213
Deferred tax assets
371
353
368
330
Intangible IT assets
281
168
286
178
Goodwill
214
165
214
165
Other assets
678
392
573
295
Total assets
9932
9727
9390
9731
Calculation for Presentation - other assets (not loans or cash)
Loans and borrowings
4672
3849
3794
3846
Deposits from customers
2728
3333
2710
3222
Deposits from banks
94
95
mdash
130
Corporate income tax payable
178
124
198
95
Other liabilities
799
718
765
780
Total liabilities
8471
8119
7466
8074
Share capital
358
358
358
358
Retained earnings
1475
1628
1350
1657
Reserves
(343)
(378)
(323)
(357)
Total attributable equity
1490
1608
1385
1658
Non-controlling interests
(28)
00
(24)
(00)
Total equity
1461
1608
1362
1658
Total shareholders equity and liabilities
9932
9727
8828
9731
In millions of euro
Q1 2020 (unaudited)
Q1 2019 (unaudited)
change YoY
Interest Income
966
1065
(9)
Interest Expense
(127)
(150)
-(16)
1000000
Net Interest Income
839
915
(8)
Net FampC Income
24
21
12
Other operating income
23
22
7
Non-Interest Income
47
43
10
Operating Income (Revenue)
886
957
(7)
Personnel costs
(221)
(221)
(0
Discretionary bonus
(18)
(19)
(6)
Marketing
(91)
(96)
(5)
IT costs
(39)
(45)
(12)
DampA costs
(35)
(32)
+8
Other costs
(98)
(118)
(17)
Total operating costs
(467)
(498)
(6)
Pre-provision operating profit
419
459
(9)
Net impairment charges
(312)
(324)
-(4)
manual
Post-provision operating profit
107
135
(21)
Depreciation and amortisation
(32)
(32)
-+0
manual
Non-recurring income(expense)
(39)
(01)
nm
Non-recurring finance cost
mdash
mdash
+0
Net FX gain(loss)
(34)
16
nm
One-off adjustments to intangible assets
-
-
(0)
manual
Profit before tax
02
119
nm
Income tax expense
(27)
(62)
-(57)
manual
Net profit(loss) after tax
(25)
57
nm
manual
Adjusted EBITDA
233
294
-(21)
Costincome ratio
527
520
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online principal
Performing (1)
2347
(357)
1990
737
2634
(397)
2237
774
3177
(493)
2684
791
(22139)
3177
(302)
2875
681
(191)
150128837891005
Non-performing (2)
836
(656)
181
263
770
(590)
180
226
840
(664)
175
209
(74878)
36947
1488
(983)
505
319
-648
319
-64836054
-250544747891005
Online total
3184
(1013)
2171
1000
3404
(987)
2417
1000
4017
(1158)
2859
1000
4665
(1286)
3379
1000
(74878)
14808
TBI Bank principal
Performing (1)
2853
(121)
2732
840
2896
(118)
2778
838
2090
(68)
2022
873
(2586)
2090
(43)
2047
873
(25)
-251961477
Non-performing (2)
541
(298)
244
160
558
(274)
284
162
303
(158)
145
127
0437
303
(162)
141
127
04
42578177
TBI Bank total
3394
(418)
2976
1000
3454
(392)
3062
1000
2393
(226)
2167
1000
-
(2149)
2393
(205)
2188
1000
Overall group principal
Performing (1)
5200
(478)
4722
791
5529
(515)
5015
806
5267
(562)
4706
822
-
(24725)
5267
(345)
4922
746
Non-performing (2)
1378
(953)
424
209
1328
(864)
465
194
1142
(822)
320
178
(74878)
37384
1791
(1145)
646
254
Overall total
6578
(1431)
5147
1000
6858
(1378)
5480
1000
6410
(1384)
5026
1000
(74878)
12659
7058
(1490)
5567
1000
31122018 data updated post audit
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
IFRS 9 ADJ part
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online receivables
Performing (1)
2553
(412)
2141
717
2855
(456)
2399
751
3432
(567)
2864
778
(22139)
3432
(346)
3086
665
00
221
-150
Non-performing (2)
1006
(775)
232
283
946
(691)
255
249
977
(775)
201
222
(74878)
36947
1725
(1145)
580
335
749
(369)
250
Online total
3559
(1187)
2373
1000
3801
(1147)
2654
1000
4408
(1343)
3065
1000
5157
(1491)
3666
1000
(148)
NPL (90+)
(74878)
14808
TBI Bank receivables
Performing (1)
2927
(124)
2803
840
2964
(120)
2844
838
2145
(70)
2075
873
(2586)
2145
(44)
2101
873
00
26
120
Non-performing (2)
556
(305)
250
160
571
(280)
291
162
311
(162)
149
127
0437
311
(166)
145
127
00
(04)
-20
TBI Bank total
3482
(429)
3053
1000
3535
(401)
3135
1000
2456
(232)
2224
1000
-
(2149)
2456
(210)
2246
1000
21
Overall group receivables
Performing (1)
5480
(536)
4944
778
5819
(577)
5242
793
5577
(637)
4939
812
-
(24725)
5577
(390)
5187
733
Non-performing (2)
1562
(1080)
482
222
1517
(971)
546
207
1287
(937)
350
188
(74878)
37384
2036
(1311)
725
267
Overall total
7042
(1616)
5426
1000
7337
(1548)
5789
1000
6864
(1575)
5290
1000
(74878)
12659
7613
(1701)
5912
1000
31122018 changed to audited figures
15
Asset quality and provisioning bull Gross NPL ratios increased in lsquoonlinersquo due to delayed debt sales but asset quality relatively stable Coverage ratios remain over 100
bull Online gross NPL ratio 283 as of March 2020 compared with 249 as of December 2019bull Overall gross NPL ratio 222 as of March 2020 from 207 as of December 2019bull Some delayed debt sales already restarting in May including Poland
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Recent collections performancebull April and May repayment dynamics
in line with prior monthsbull April performance comparable
with Januarybull Improvement in May
bull Requests for payment deferrals either proactively offered by 4finance or offered in accordance with local regulation have been relatively limited
bull Main take-up in Czech Republic Armenia and TBI Bank
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
January Feb-Mar average April May
Repayment dynamics (single payment)
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
January Feb-Mar average April May
Repayment dynamics (instalment)
Repayment dynamics graphs represent cumulative sum of payments and extensions performed at under 30 DPD as a of amounts due in the prior month For example May line shows progress by day in May of repaymentextension of amounts that were due at any time in April and performed within 30 days of the due date
Payment deferral take-up in selected markets( of eligible portfolio by value)
Poland 2
Spain 3
Denmark 1
Baltics 1
Czech Republic 12
Armenia 17
TBI consumer 12
TBI SME 43
Day number in relevant month Day number in relevant month
17
Pro-active response to Covid-19 across the business with good resultsbull Rapidly adapted operations to home working ensuring employee safety and continuous services for customersbull Focus on risk management but remained ldquoopen for businessrdquo in AprilMay particularly for our returning customersbull Customer repayment behaviour within normal ranges in AprilMay with proactive support offered for customers who have
been impacted
Well positioned to lsquoweather the stormrsquo and take advantage of subsequent opportunitiesbull Key decisions taken to streamline footprint focus on larger markets and right-size cost basebull Continued development of near-prime business both on product side (Latvia Lithuania Sweden launches) and TBI Bank
funding side (Lithuania passport application)bull Encouraging demand and issuance trends in May (22 increase in online loans issued vs April) with improvement
expected to continue in June
Strong balance sheet and funding position with further action being takenbull Strong liquidity position in both lsquoonlinersquo and TBI Bankbull Strong cashflow generation deployed in significant bond buybacks to reduce leveragebull Consultations underway on potential extension to EUR 2021 bonds to allow financial results and markets to normalise
prior to long term refinancing
Summary
4finance a multi-segment multi-product consumer credit specialist
18
Thank you and Questions
19
Appendix ndash responsible lending and regulatory overview
20
Sustainability through good governance and responsible lendingOperating as a mainstream consumer finance business
bull ldquoBank-likerdquo policies and procedures with strong compliance function
bull Continued investment in AML GDPR and other strategic compliance priorities
bull Robust corporate governance with strong Supervisory Board
bull Increasingly regulated by main financial supervisory authorities
bull Diversification of portfolio and consequent reduction of reliance on single payment loans
bull Clear corporate values and code of conduct
bull Listed bond issues with quarterly financial reporting
Developing meaningful and constructive regulatory relationships
bull Ensuring we understand the regulatory arc
bull Helping regulators and legislators gain a solid understanding of our business
bull Ensuring we have a seat at the table
bull Contributing to EU Consumer Credit Directive consultation process
bull Continuous improvements in credit underwriting
bull Ensuring products are used appropriately
bull Working to ensure customers have safe landings when they signal difficulties
21
Regulatory overviewCountry
of interest income(Q1 2020)
Products (1) Regulator CB (2) Licenserequired (3)
Interest rate cap (1) Status
Argentina 1 SPL Consumer Protection Directorate - - -
Armenia 2 LOC Central Bank of the Republic of Armenia Yes Yes Nominal
Bulgaria ndash Online 2 SPL Bulgarian National BankYes Yes APR
(inc fees) Stable frameworkBulgaria ndash Bank 13 IL LOC POS SME
Czech Republic 5 SPL IL Czech National Bank Yes Yes - Stable framework
Denmark 11 LOC IL FSA and Consumer Ombudsman Yes YesAPR amp TCOC
being introduced
Danish FSA licensing process ongoing New regulations regarding interest rate caps (35 APR cap 100 cost of credit cap) and marketing restrictions in final stages of review Expected to start in July
Finland 1 IL(4) Finnish Competition and Consumer Authority - - Nominal
amp fees
New interest rate caps in force from September 2019 Further discussions on temporary reduction to 10 are ongoing
Latvia 5 MTP IL Consumer Rights Protection Centre - Yes Nominal fees amp TCOC
Stable framework since new interest rate caps in July 2019
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards MTP ndash Minimum to pay POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit(2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement(4) lsquoMini-ILrsquo (4 monthly instalments) from September 2019
22
Regulatory overview (continued)Country
of interest income
(Q1 2020)Products (1) Regulator CB (2) License
required (3)Interest rate
cap (1) Status
Lithuania 2 SPL IL Central Bank of Lithuania Yes Yes Nominal fees amp TCOC Stable framework
Mexico 1 IL National Financial Services Consumer Protection Commission - Yes - Stable framework
Poland 23 SPL IL Office of Competition and Consumer Protection - - Nominal fees
amp TCOC
Non-interest cost caps adjusted in April for one year to 15 fixed and 6 annual with a 45 total limit
Romania 10 IL LOC POS SME National Bank of Romania Yes Yes - Bill to introduce interest rate cap under discussion
Slovakia lt1 SPL National Bank of Slovakia Yes Yes APR (inc fees) Stable framework
Spain 22 SPL IL NA - - -
Sweden 1 LOC IL Swedish Financial Supervisory Authority Yes Yes Nominal amp
TCOCStable framework since new interest rate caps in September 2018
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit (2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement
23
Appendix ndash strategic evolution of portfolio
24
Evolving and broadening our business model
Prime
Sub-Prime
Near-Prime
Segments
Higher Duration Lower APR Products
SPL ILLOC POS
A multi-segment multi-product consumer credit specialist
1
1 Optimise
2 2 Diversify amp Grow
Illustrative
25
Evolution of product mix
Note (1) Reflects reclassification of Vivus brand products in Sweden (from January 2016) Denmark (from January 2017) Armenia (from launch in July 2017) and short-term products (SMS Credit amp Ondo) in Latvia (from January 2019) to Lines of Credit
68
17
3
9
29
45
18
11
0
25
50
75
100
30 Jun 2016 31 Mar 2020
SME (Bank)
Point of Sale
Instalment loans
Line of Credit Cards
Single Payment Loans
euro543meuro323m
Net receivables by product (1)
Online sub-prime only
Bank and onlinenear-prime
and sub-prime
76
48
4
14
20
29
7
0
25
50
75
100
Q1 2016 Q1 2020
Interest income by product (1)
euro97meuro90m
Date chosen to reflect the composition of loan portfolio immediately prior to purchase of TBI Bank
26
Funding near-prime growth via TBI Bank
Online acquisition Retail deposit funding
Initial portfolio development
Early stage customer acquisition and credit metrics monitored and
enhanced
Funding Platform
In-house IT funding platform ensuring ongoing automated
portfolio transfers
Bringing portfolios to scale
Market specific portfolios grow with ongoing sales to reach scale
True saleof portfolio(s)loan servicing
Indicative APRs
20-40
CostIncome ratio
c40
Cost of Risk
6-8
Cost of Funds
3-5
Return on Assets
3-5(2)
Illustrative near-prime
ldquounit economicsrdquo(1)
Notes(1) Illustrative metrics for near-prime portfolios and not indicative of a specific product or market(2) Illustrative potential returns in medium-term at scale
Payment of fair market value
bull Regular sales of Polish instalment loans since September 2019bull Passporting application submitted for Lithuania (largest near-prime portfolio)
Accessing TBI Bank deposit funding for lsquoonlinersquo portfolios via ongoing loan sales
27
Asset quality and provisioning ndash loan principal
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Interest Income 966 1065 (9)Interest Expense (127) (150) (16)Net Interest Income 839 915 (8)Net FampC Income 24 21 12Other operating income 23 22 7Non-Interest Income 47 43 10Operating Income (Revenue) 886 957 (7)Total operating costs (467) (498) (6)Pre-provision operating profit 419 459 (9)Net impairment charges (312) (324) (4)Post-provision operating profit 107 135 (21)Depreciation and amortisation (32) (32) +0Non-recurring income(expense) (39) (01) nmNet FX gain(loss) (34) 16 nmProfit before tax 02 119 nmIncome tax expense (27) (62) (57)Net profit(loss) after tax (25) 57 nm
Adjusted EBITDA 233 294 (21)
Income Statement
30
Balance sheetIn millions of euro
31 March 2020 (unaudited)
31 December 2019
Cash and cash equivalents of which 1560 1257- Online 834 767- TBI Bank 725 490
Placements with other banks 127 64Gross receivables due from customers 7042 7337Allowance for impairment (1616) (1548)Net receivables due from customers of which 5426 5789
- Principal 5147 5480- Accrued interest 277 309
Net investments in finance leases 45 47Net loans to related parties 594 607Property and equipment 182 178Financial investments 502 564Prepaid expenses 40 45Tax assets 174 213Deferred tax assets 353 330Intangible IT assets 168 178Goodwill 165 165Other assets 392 295Total assets 9727 9731Calculation for Presentation other assets (not loans Loans and borrowings 3849 3846Deposits from customers 3333 3222Deposits from banks 95 130Corporate income tax payable 124 95Other liabilities 718 780Total liabilities 8119 8074Share capital 358 358Retained earnings 1628 1657Reserves (378) (357)Total attributable equity 1608 1658Non-controlling interests 00 (00)Total equity 1608 1658Total shareholders equity and liabilities 9727 9731
Balance Sheet
31
Statement of Cash FlowsIn millions of euro
2020 2019Cash flows from operating activitiesProfit before taxes 02 119
Adjustments forDepreciation and amortisation 32 32
Impairment of goodwill and intangible assets - -
Net (gain) loss on foreign exchange from borrowings and other monetary items 131 63
Impairment losses on loans 364 359
Reversal of provision on debt portfolio sales (20) 01
Write-off and disposal of intangible and property and equipment assets 01 01
Interest income from non-customers loans (19) (19)
Interest expense on loans and borrowings and deposits from customers 127 150Non-recurring finance cost 32 -
Other non-cash items 14 0
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663 707
Adjustments forChange in financial instruments measured at fair value through profit or loss (137) (82)(Increase) decrease in other assets (including TBI statutory reserve placements amp leases) (09) (15)
Increase (decrease) in accounts payable to suppliers contractors and other creditors (39) (81)
Operating cash flow before movements in portfolio and deposits 479 530
Increase in loans due from customers (132) (468)
Proceeds from sale of portfolio 71 161
Increase in deposits (customer and bank deposits) 77 74
Deposit interest payments (15) (10)
Gross cash flows from operating activities 481 288
Corporate income tax paid (06) (63)
Net cash flows from operating activities 475 225
3 months to 31 March In millions of euro
2020 2019
Cash flows used in investing activitiesPurchase of property and equipment and intangible assets (15) (13)
Net cash from Purchase Sale of financial instruments 39 (118)
Loans issued to related parties - -
Loans repaid from related parties 0 40
Interest received from related parties 31 01
Disposal of subsidiaries net of cash disposed (13) -
(Acquisition)Disposal of equity investments (14) -
Acquisition of non-controlling interests (04) (04)
Net cash flows from investing activities 25 (94)
Cash flows from financing activitiesLoans received and notes issued - 0
Repayment and repurchase of loans and notes (164) (133)
Interest payments (06) (35)
FX hedging margin 14 82
Payment of lease liabilities (11) (1)
Dividend payments - -
Net cash flows used in financing activities (167) (95)
Net increase (decrease) in cash and cash equivalents 333 35
Cash and cash equivalents at the beginning of the period 985 1488
Effect of exchange rate fluctuations on cash (01) 0
Cash and cash equivalents at the end of the period 1318 1524
TBI Bank minimum statutory reserve 242 354
Total cash on hand and cash at central banks 1560 1878
3 months to 31 March
Cash Flow
Cash Flow (2)
Cash Flow
Cash Flow (2)
32
Key financial ratiosQ1 2020 Q1 2019
CapitalisationEquity assets 165 161Equity net receivables 296 299Adjusted interest coverage 18x 20xTBI Bank consolidated capital adequacy 188 210
ProfitabilityNet interest margin
- Online 764 802- TBI Bank 246 252- Overall group 500 557
Cost income ratio 527 520Normalised Profit before tax margin 111 127Normalised Return on average equity 118 104Normalised Return on average assets 20 17
Asset qualityCost of risk
- Online 295 289- TBI Bank 47 45- Overall group 174 184
Net impairment interest income 323 304Gross NPL ratio
- Online 283 227- TBI Bank 160 173- Overall group 222 204
Overall group NPL coverage ratio 1035 1064
See appendix for definitions of key metrics and ratios
key ratios
33
GlossaryDefinitionsbull Adjusted EBITDA ndash a non-IFRS measure that represents EBITDA (profit for the period plus tax plus interest expense plus depreciation and amortization) as adjusted by incomeloss from discontinued operations non-cash gains and losses
attributable to movement in the mark-to-market valuation of hedging obligations under IFRS goodwill write-offs and certain other one-off or non-cash items Adjusted EBITDA as presented here may not be comparable to similarly-titled measures that are reported by other companies due to differences in the way these measures are calculated Further details of covenant adjustments can be found in the relevant bond prospectuses available on our website
bull Adjusted interest coverage ndash Adjusted EBITDA interest expense for the relevant period (nb not equal to the full covenant coverage ratio calculation)
bull Cost of risk ndash Annualised net impairment loss average gross receivables (total gross receivables as of the start and end of each period divided by two)
bull Cost income ratio ndash Operating costs operating income (revenue)
bull Equity assets ratio ndash Total equity total assets
bull Equity net receivables ndash Total equity net customer receivables (including accrued interest)
bull Gross NPL ratio ndash Non-performing receivables (including accrued interest) with a delay of over 90 days gross receivables (including accrued interest)
bull Gross receivables ndash Total amount receivable from customers including principal and accrued interest after deduction of deferred income
bull Intangible assets ndash consists of deferred tax assets intangible IT assets and goodwill
bull Interest income ndash Interest and similar income generated from our customer loan portfolio
bull Loss given default ndash Loss on non-performing receivables (ie 1 - recovery rate) based on recoveries during the appropriate time window for the specific product reduced by costs of collection discounted at the weighted average effective interest rate
bull Net effective annualised yield ndash annualised interest income (excluding penalties) average net loan principal
bull Net impairment to interest income ratio ndash Net impairment losses on loans and receivables interest income
bull Net interest margin ndash Annualised net interest income average gross loan principal (total gross loan principal as of the start and end of each period divided by two)
bull Net receivables ndash Gross receivables (including accrued interest) less impairment provisions
bull Non-performing loans (NPLs) ndash Loan principal or receivables (as applicable) that are over 90 days past due (and for TBI Bank shown on a customer level basis)
bull Normalised ndash Adjusted to remove the effect of non-recurring items net FX and one-off adjustments to intangible assets and for 2018 ratios only adjusted to reflect the opening balance of 2018 balance sheet after IFRS 9 effects
bull Profit before tax margin ndash Profit before tax interest income
bull Return on Average Assets ndash Annualised profit from continuing operations average assets (total assets as of the start and end of each period divided by two)
bull Return on Average Equity ndash Annualised profit from continuing operations average equity (total equity as of the start and end of each period divided by two)
bull Return on Average Tangible Equity ndash Annualised profit from continuing operations average tangible equity (tangible equity as of the start and end of each period divided by two)
bull Tangible Equity ndash Total equity minus intangible assets
bull TBI Bank Capital adequacy ratio ndash (Tier One Capital + Tier Two Capital) Risk weighted assets (calculated according to the prevailing regulations of the Bulgarian National Bank)
34
Contacts
Investor Relationsinvestorrelations4financecom
James EtheringtonHead of Investor RelationsPhone +44 7766 697 950E-mail jamesetherington4financecom
Paul GoldfinchChief Financial OfficerPhone +371 2572 6422E-mail paulgoldfinch4financecom
Headquarters17a-8 Lielirbes street Riga LV-1046 Latvia
4finance Holding SA
Disclaimer
Agenda
Q1 2020 business and financial highlights
Slide Number 5
Current trading and outlook
Review of three month 2020 results
Summary of three month 2020 results
Interest income remains well diversified
Slide Number 10
Strong financial profile ndash stability and profitability
Funding strategy
Diversified loan portfolio
Analysis of net impairments and cost of risk
Asset quality and provisioning
Recent collections performance
Slide Number 17
Thank you and Questions
Appendix ndash responsible lending and regulatory overview
Sustainability through good governance and responsible lending
Regulatory overview
Regulatory overview (continued)
Appendix ndash strategic evolution of portfolio
Evolving and broadening our business model
Evolution of product mix
Slide Number 26
Asset quality and provisioning ndash loan principal
Appendix ndash financials and key ratios
Slide Number 29
Balance sheet
Statement of Cash Flows
Slide Number 32
GlossaryDefinitions
Contacts
Q12018
Q1 2020
9M 2018
Q1 2019
FY 2017
Net receivables (eurom) of which
5426
5408
5477
- Principal
272
5147
5144
5165
208
- Accrued interest
98
279
265
312
39
Total assets (eurom)
9724
10238
10147
Total equity (eurom)
221
1605
1607
1637
335
Capitalisation
Equity assets
147
165
157
161
127
Equity net receivables
195
296
297
299
267
Adjusted interest coverage
233
18x
25x
20x
223
TBI Bank consolidated capital adequacy
231
188
241
210
239
240
Profitability
Q12018
Net interest margin
- Online
764
882
802
- TBI Bank
246
280
252
- Overall group
500
648
557
Cost income ratio
527
520
520
Post-provision operating profit margin
145
166
177
Normalised Profit before tax margin
111
154
127
Normalised Return on average equity
118
375
104
Normalised Return on average assets
20
56
17
Asset quality
Cost of risk
- Online
295
237
289
- TBI Bank
47
86
45
- Overall group
174
181
184
Net impairment interest income
323
259
304
Gross NPL ratio
- Online
283
222
227
- TBI Bank
160
154
173
- Overall group
222
196
204
Overall group NPL coverage ratio
1035
1156
1064
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
505
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(06)
57
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
50
199
199
(248)
(301)
0800
Impairment losses on loans
1485
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(120)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(73)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
568
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
09
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2599
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
108
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(11)
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2637
2840
2840
1756
2279
00
Increase in loans due from customers
(2248)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1453
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1120
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(15)
(13)
(84)
(128)
(131)
(21)
Net cash from Purchase Sale of financial instruments
39
(118)
(136)
mdash
Repayment of financial instrument
-
-
Loans issued to related parties
-
-
(26)
(06)
(43)
(23)
Loans repaid from related parties
0
40
74
23
109
54
Interest received from related parties
31
01
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
00
(01)
0-
mdash
Disposal of subsidiaries net of cash disposed
(13)
-
(59)
(45)
(44)
mdash
(Acquisition)Disposal of equity investments
(14)
-
Acquisition of non-controlling interests
(04)
(04)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
-
-
mdash
0-
(00)
Prepayment for potential acquisition
-
00
208
0-
(208)
mdash
Acquisition of shares
-
00
00
Net cash flows from investing activities
25
(94)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
0
05
2999
1637
05
Repayment and repurchase of loans and notes
(164)
(133)
(272)
(1737)
(580)
(01)
Interest payments
(06)
(35)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
-
00
(00)
(192)
(58)
mdash
FX hedging margin
14
82
42
(140)
(88)
Payment of lease liabilities
(11)
(1)
mdash
Dividend payments
-
-
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(167)
(95)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
333
35
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
985
1488
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
(01)
0
01
10
10
03
Cash and cash equivalents at the end of the period
1318
1524
1488
2040
1319
681
TBI Bank minimum statutory reserve
242
354
234
230
230
242
Total cash on hand and cash at central banks
1560
1878
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
02
119
526
495
107
17000
Adjustments for
Depreciation and amortisation
32
32
121
64
83
1700
Impairment of goodwill and intangible assets
-
-
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
131
63
199
(248)
(301)
0800
Impairment losses on loans
364
359
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(20)
01
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
01
01
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(19)
(19)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
127
150
621
455
619
13300
Non-recurring finance cost
32
-
mdash
mdash
63
Other non-cash items
14
0
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663
707
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(137)
(82)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
(09)
(15)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(39)
(81)
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
479
530
2840
1756
2279
00
Increase in loans due from customers
(132)
(468)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
71
161
819
333
542
160
Increase in deposits (customer and bank deposits)
77
74
165
265
338
110
Deposit interest payments
(15)
(10)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
481
288
1233
524
442
(535)
Corporate income tax paid
(06)
(63)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
475
225
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(83)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(196)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
Q12018 (unaudited)
31 March 2020 (unaudited)
1 January 2018 (post IFRS 9 unaudited)
31 December 2019
Cash and cash equivalents of which
1538
1560
1549
1257
- Online
535
834
658
767
- TBI Bank
1003
725
892
490
Placements with other banks
57
127
70
64
Gross receivables due from customers
7156
7042
6588
7337
Allowance for impairment
(1665)
(1616)
(1575)
(1548)
Net receivables due from customers of which
5491
5426
5013
5789
- Principal
5147
5026
5480
- Accrued interest
277
264
309
Net investments in finance leases
93
45
105
47
Net loans to related parties
631
594
598
607
Property and equipment
96
182
101
178
Financial investments
183
502
184
564
Prepaid expenses
87
40
108
45
Tax assets
212
174
221
213
Deferred tax assets
371
353
368
330
Intangible IT assets
281
168
286
178
Goodwill
214
165
214
165
Other assets
678
392
573
295
Total assets
9932
9727
9390
9731
Calculation for Presentation - other assets (not loans or cash)
Loans and borrowings
4672
3849
3794
3846
Deposits from customers
2728
3333
2710
3222
Deposits from banks
94
95
mdash
130
Corporate income tax payable
178
124
198
95
Other liabilities
799
718
765
780
Total liabilities
8471
8119
7466
8074
Share capital
358
358
358
358
Retained earnings
1475
1628
1350
1657
Reserves
(343)
(378)
(323)
(357)
Total attributable equity
1490
1608
1385
1658
Non-controlling interests
(28)
00
(24)
(00)
Total equity
1461
1608
1362
1658
Total shareholders equity and liabilities
9932
9727
8828
9731
In millions of euro
Q1 2020 (unaudited)
Q1 2019 (unaudited)
change YoY
Interest Income
966
1065
(9)
Interest Expense
(127)
(150)
-(16)
1000000
Net Interest Income
839
915
(8)
Net FampC Income
24
21
12
Other operating income
23
22
7
Non-Interest Income
47
43
10
Operating Income (Revenue)
886
957
(7)
Personnel costs
(221)
(221)
(0
Discretionary bonus
(18)
(19)
(6)
Marketing
(91)
(96)
(5)
IT costs
(39)
(45)
(12)
DampA costs
(35)
(32)
+8
Other costs
(98)
(118)
(17)
Total operating costs
(467)
(498)
(6)
Pre-provision operating profit
419
459
(9)
Net impairment charges
(312)
(324)
-(4)
manual
Post-provision operating profit
107
135
(21)
Depreciation and amortisation
(32)
(32)
-+0
manual
Non-recurring income(expense)
(39)
(01)
nm
Non-recurring finance cost
mdash
mdash
+0
Net FX gain(loss)
(34)
16
nm
One-off adjustments to intangible assets
-
-
(0)
manual
Profit before tax
02
119
nm
Income tax expense
(27)
(62)
-(57)
manual
Net profit(loss) after tax
(25)
57
nm
manual
Adjusted EBITDA
233
294
-(21)
Costincome ratio
527
520
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online principal
Performing (1)
2347
(357)
1990
737
2634
(397)
2237
774
3177
(493)
2684
791
(22139)
3177
(302)
2875
681
(191)
150128837891005
Non-performing (2)
836
(656)
181
263
770
(590)
180
226
840
(664)
175
209
(74878)
36947
1488
(983)
505
319
-648
319
-64836054
-250544747891005
Online total
3184
(1013)
2171
1000
3404
(987)
2417
1000
4017
(1158)
2859
1000
4665
(1286)
3379
1000
(74878)
14808
TBI Bank principal
Performing (1)
2853
(121)
2732
840
2896
(118)
2778
838
2090
(68)
2022
873
(2586)
2090
(43)
2047
873
(25)
-251961477
Non-performing (2)
541
(298)
244
160
558
(274)
284
162
303
(158)
145
127
0437
303
(162)
141
127
04
42578177
TBI Bank total
3394
(418)
2976
1000
3454
(392)
3062
1000
2393
(226)
2167
1000
-
(2149)
2393
(205)
2188
1000
Overall group principal
Performing (1)
5200
(478)
4722
791
5529
(515)
5015
806
5267
(562)
4706
822
-
(24725)
5267
(345)
4922
746
Non-performing (2)
1378
(953)
424
209
1328
(864)
465
194
1142
(822)
320
178
(74878)
37384
1791
(1145)
646
254
Overall total
6578
(1431)
5147
1000
6858
(1378)
5480
1000
6410
(1384)
5026
1000
(74878)
12659
7058
(1490)
5567
1000
31122018 data updated post audit
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
IFRS 9 ADJ part
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online receivables
Performing (1)
2553
(412)
2141
717
2855
(456)
2399
751
3432
(567)
2864
778
(22139)
3432
(346)
3086
665
00
221
-150
Non-performing (2)
1006
(775)
232
283
946
(691)
255
249
977
(775)
201
222
(74878)
36947
1725
(1145)
580
335
749
(369)
250
Online total
3559
(1187)
2373
1000
3801
(1147)
2654
1000
4408
(1343)
3065
1000
5157
(1491)
3666
1000
(148)
NPL (90+)
(74878)
14808
TBI Bank receivables
Performing (1)
2927
(124)
2803
840
2964
(120)
2844
838
2145
(70)
2075
873
(2586)
2145
(44)
2101
873
00
26
120
Non-performing (2)
556
(305)
250
160
571
(280)
291
162
311
(162)
149
127
0437
311
(166)
145
127
00
(04)
-20
TBI Bank total
3482
(429)
3053
1000
3535
(401)
3135
1000
2456
(232)
2224
1000
-
(2149)
2456
(210)
2246
1000
21
Overall group receivables
Performing (1)
5480
(536)
4944
778
5819
(577)
5242
793
5577
(637)
4939
812
-
(24725)
5577
(390)
5187
733
Non-performing (2)
1562
(1080)
482
222
1517
(971)
546
207
1287
(937)
350
188
(74878)
37384
2036
(1311)
725
267
Overall total
7042
(1616)
5426
1000
7337
(1548)
5789
1000
6864
(1575)
5290
1000
(74878)
12659
7613
(1701)
5912
1000
31122018 changed to audited figures
16
Recent collections performancebull April and May repayment dynamics
in line with prior monthsbull April performance comparable
with Januarybull Improvement in May
bull Requests for payment deferrals either proactively offered by 4finance or offered in accordance with local regulation have been relatively limited
bull Main take-up in Czech Republic Armenia and TBI Bank
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
January Feb-Mar average April May
Repayment dynamics (single payment)
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
January Feb-Mar average April May
Repayment dynamics (instalment)
Repayment dynamics graphs represent cumulative sum of payments and extensions performed at under 30 DPD as a of amounts due in the prior month For example May line shows progress by day in May of repaymentextension of amounts that were due at any time in April and performed within 30 days of the due date
Payment deferral take-up in selected markets( of eligible portfolio by value)
Poland 2
Spain 3
Denmark 1
Baltics 1
Czech Republic 12
Armenia 17
TBI consumer 12
TBI SME 43
Day number in relevant month Day number in relevant month
17
Pro-active response to Covid-19 across the business with good resultsbull Rapidly adapted operations to home working ensuring employee safety and continuous services for customersbull Focus on risk management but remained ldquoopen for businessrdquo in AprilMay particularly for our returning customersbull Customer repayment behaviour within normal ranges in AprilMay with proactive support offered for customers who have
been impacted
Well positioned to lsquoweather the stormrsquo and take advantage of subsequent opportunitiesbull Key decisions taken to streamline footprint focus on larger markets and right-size cost basebull Continued development of near-prime business both on product side (Latvia Lithuania Sweden launches) and TBI Bank
funding side (Lithuania passport application)bull Encouraging demand and issuance trends in May (22 increase in online loans issued vs April) with improvement
expected to continue in June
Strong balance sheet and funding position with further action being takenbull Strong liquidity position in both lsquoonlinersquo and TBI Bankbull Strong cashflow generation deployed in significant bond buybacks to reduce leveragebull Consultations underway on potential extension to EUR 2021 bonds to allow financial results and markets to normalise
prior to long term refinancing
Summary
4finance a multi-segment multi-product consumer credit specialist
18
Thank you and Questions
19
Appendix ndash responsible lending and regulatory overview
20
Sustainability through good governance and responsible lendingOperating as a mainstream consumer finance business
bull ldquoBank-likerdquo policies and procedures with strong compliance function
bull Continued investment in AML GDPR and other strategic compliance priorities
bull Robust corporate governance with strong Supervisory Board
bull Increasingly regulated by main financial supervisory authorities
bull Diversification of portfolio and consequent reduction of reliance on single payment loans
bull Clear corporate values and code of conduct
bull Listed bond issues with quarterly financial reporting
Developing meaningful and constructive regulatory relationships
bull Ensuring we understand the regulatory arc
bull Helping regulators and legislators gain a solid understanding of our business
bull Ensuring we have a seat at the table
bull Contributing to EU Consumer Credit Directive consultation process
bull Continuous improvements in credit underwriting
bull Ensuring products are used appropriately
bull Working to ensure customers have safe landings when they signal difficulties
21
Regulatory overviewCountry
of interest income(Q1 2020)
Products (1) Regulator CB (2) Licenserequired (3)
Interest rate cap (1) Status
Argentina 1 SPL Consumer Protection Directorate - - -
Armenia 2 LOC Central Bank of the Republic of Armenia Yes Yes Nominal
Bulgaria ndash Online 2 SPL Bulgarian National BankYes Yes APR
(inc fees) Stable frameworkBulgaria ndash Bank 13 IL LOC POS SME
Czech Republic 5 SPL IL Czech National Bank Yes Yes - Stable framework
Denmark 11 LOC IL FSA and Consumer Ombudsman Yes YesAPR amp TCOC
being introduced
Danish FSA licensing process ongoing New regulations regarding interest rate caps (35 APR cap 100 cost of credit cap) and marketing restrictions in final stages of review Expected to start in July
Finland 1 IL(4) Finnish Competition and Consumer Authority - - Nominal
amp fees
New interest rate caps in force from September 2019 Further discussions on temporary reduction to 10 are ongoing
Latvia 5 MTP IL Consumer Rights Protection Centre - Yes Nominal fees amp TCOC
Stable framework since new interest rate caps in July 2019
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards MTP ndash Minimum to pay POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit(2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement(4) lsquoMini-ILrsquo (4 monthly instalments) from September 2019
22
Regulatory overview (continued)Country
of interest income
(Q1 2020)Products (1) Regulator CB (2) License
required (3)Interest rate
cap (1) Status
Lithuania 2 SPL IL Central Bank of Lithuania Yes Yes Nominal fees amp TCOC Stable framework
Mexico 1 IL National Financial Services Consumer Protection Commission - Yes - Stable framework
Poland 23 SPL IL Office of Competition and Consumer Protection - - Nominal fees
amp TCOC
Non-interest cost caps adjusted in April for one year to 15 fixed and 6 annual with a 45 total limit
Romania 10 IL LOC POS SME National Bank of Romania Yes Yes - Bill to introduce interest rate cap under discussion
Slovakia lt1 SPL National Bank of Slovakia Yes Yes APR (inc fees) Stable framework
Spain 22 SPL IL NA - - -
Sweden 1 LOC IL Swedish Financial Supervisory Authority Yes Yes Nominal amp
TCOCStable framework since new interest rate caps in September 2018
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit (2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement
23
Appendix ndash strategic evolution of portfolio
24
Evolving and broadening our business model
Prime
Sub-Prime
Near-Prime
Segments
Higher Duration Lower APR Products
SPL ILLOC POS
A multi-segment multi-product consumer credit specialist
1
1 Optimise
2 2 Diversify amp Grow
Illustrative
25
Evolution of product mix
Note (1) Reflects reclassification of Vivus brand products in Sweden (from January 2016) Denmark (from January 2017) Armenia (from launch in July 2017) and short-term products (SMS Credit amp Ondo) in Latvia (from January 2019) to Lines of Credit
68
17
3
9
29
45
18
11
0
25
50
75
100
30 Jun 2016 31 Mar 2020
SME (Bank)
Point of Sale
Instalment loans
Line of Credit Cards
Single Payment Loans
euro543meuro323m
Net receivables by product (1)
Online sub-prime only
Bank and onlinenear-prime
and sub-prime
76
48
4
14
20
29
7
0
25
50
75
100
Q1 2016 Q1 2020
Interest income by product (1)
euro97meuro90m
Date chosen to reflect the composition of loan portfolio immediately prior to purchase of TBI Bank
26
Funding near-prime growth via TBI Bank
Online acquisition Retail deposit funding
Initial portfolio development
Early stage customer acquisition and credit metrics monitored and
enhanced
Funding Platform
In-house IT funding platform ensuring ongoing automated
portfolio transfers
Bringing portfolios to scale
Market specific portfolios grow with ongoing sales to reach scale
True saleof portfolio(s)loan servicing
Indicative APRs
20-40
CostIncome ratio
c40
Cost of Risk
6-8
Cost of Funds
3-5
Return on Assets
3-5(2)
Illustrative near-prime
ldquounit economicsrdquo(1)
Notes(1) Illustrative metrics for near-prime portfolios and not indicative of a specific product or market(2) Illustrative potential returns in medium-term at scale
Payment of fair market value
bull Regular sales of Polish instalment loans since September 2019bull Passporting application submitted for Lithuania (largest near-prime portfolio)
Accessing TBI Bank deposit funding for lsquoonlinersquo portfolios via ongoing loan sales
27
Asset quality and provisioning ndash loan principal
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Interest Income 966 1065 (9)Interest Expense (127) (150) (16)Net Interest Income 839 915 (8)Net FampC Income 24 21 12Other operating income 23 22 7Non-Interest Income 47 43 10Operating Income (Revenue) 886 957 (7)Total operating costs (467) (498) (6)Pre-provision operating profit 419 459 (9)Net impairment charges (312) (324) (4)Post-provision operating profit 107 135 (21)Depreciation and amortisation (32) (32) +0Non-recurring income(expense) (39) (01) nmNet FX gain(loss) (34) 16 nmProfit before tax 02 119 nmIncome tax expense (27) (62) (57)Net profit(loss) after tax (25) 57 nm
Adjusted EBITDA 233 294 (21)
Income Statement
30
Balance sheetIn millions of euro
31 March 2020 (unaudited)
31 December 2019
Cash and cash equivalents of which 1560 1257- Online 834 767- TBI Bank 725 490
Placements with other banks 127 64Gross receivables due from customers 7042 7337Allowance for impairment (1616) (1548)Net receivables due from customers of which 5426 5789
- Principal 5147 5480- Accrued interest 277 309
Net investments in finance leases 45 47Net loans to related parties 594 607Property and equipment 182 178Financial investments 502 564Prepaid expenses 40 45Tax assets 174 213Deferred tax assets 353 330Intangible IT assets 168 178Goodwill 165 165Other assets 392 295Total assets 9727 9731Calculation for Presentation other assets (not loans Loans and borrowings 3849 3846Deposits from customers 3333 3222Deposits from banks 95 130Corporate income tax payable 124 95Other liabilities 718 780Total liabilities 8119 8074Share capital 358 358Retained earnings 1628 1657Reserves (378) (357)Total attributable equity 1608 1658Non-controlling interests 00 (00)Total equity 1608 1658Total shareholders equity and liabilities 9727 9731
Balance Sheet
31
Statement of Cash FlowsIn millions of euro
2020 2019Cash flows from operating activitiesProfit before taxes 02 119
Adjustments forDepreciation and amortisation 32 32
Impairment of goodwill and intangible assets - -
Net (gain) loss on foreign exchange from borrowings and other monetary items 131 63
Impairment losses on loans 364 359
Reversal of provision on debt portfolio sales (20) 01
Write-off and disposal of intangible and property and equipment assets 01 01
Interest income from non-customers loans (19) (19)
Interest expense on loans and borrowings and deposits from customers 127 150Non-recurring finance cost 32 -
Other non-cash items 14 0
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663 707
Adjustments forChange in financial instruments measured at fair value through profit or loss (137) (82)(Increase) decrease in other assets (including TBI statutory reserve placements amp leases) (09) (15)
Increase (decrease) in accounts payable to suppliers contractors and other creditors (39) (81)
Operating cash flow before movements in portfolio and deposits 479 530
Increase in loans due from customers (132) (468)
Proceeds from sale of portfolio 71 161
Increase in deposits (customer and bank deposits) 77 74
Deposit interest payments (15) (10)
Gross cash flows from operating activities 481 288
Corporate income tax paid (06) (63)
Net cash flows from operating activities 475 225
3 months to 31 March In millions of euro
2020 2019
Cash flows used in investing activitiesPurchase of property and equipment and intangible assets (15) (13)
Net cash from Purchase Sale of financial instruments 39 (118)
Loans issued to related parties - -
Loans repaid from related parties 0 40
Interest received from related parties 31 01
Disposal of subsidiaries net of cash disposed (13) -
(Acquisition)Disposal of equity investments (14) -
Acquisition of non-controlling interests (04) (04)
Net cash flows from investing activities 25 (94)
Cash flows from financing activitiesLoans received and notes issued - 0
Repayment and repurchase of loans and notes (164) (133)
Interest payments (06) (35)
FX hedging margin 14 82
Payment of lease liabilities (11) (1)
Dividend payments - -
Net cash flows used in financing activities (167) (95)
Net increase (decrease) in cash and cash equivalents 333 35
Cash and cash equivalents at the beginning of the period 985 1488
Effect of exchange rate fluctuations on cash (01) 0
Cash and cash equivalents at the end of the period 1318 1524
TBI Bank minimum statutory reserve 242 354
Total cash on hand and cash at central banks 1560 1878
3 months to 31 March
Cash Flow
Cash Flow (2)
Cash Flow
Cash Flow (2)
32
Key financial ratiosQ1 2020 Q1 2019
CapitalisationEquity assets 165 161Equity net receivables 296 299Adjusted interest coverage 18x 20xTBI Bank consolidated capital adequacy 188 210
ProfitabilityNet interest margin
- Online 764 802- TBI Bank 246 252- Overall group 500 557
Cost income ratio 527 520Normalised Profit before tax margin 111 127Normalised Return on average equity 118 104Normalised Return on average assets 20 17
Asset qualityCost of risk
- Online 295 289- TBI Bank 47 45- Overall group 174 184
Net impairment interest income 323 304Gross NPL ratio
- Online 283 227- TBI Bank 160 173- Overall group 222 204
Overall group NPL coverage ratio 1035 1064
See appendix for definitions of key metrics and ratios
key ratios
33
GlossaryDefinitionsbull Adjusted EBITDA ndash a non-IFRS measure that represents EBITDA (profit for the period plus tax plus interest expense plus depreciation and amortization) as adjusted by incomeloss from discontinued operations non-cash gains and losses
attributable to movement in the mark-to-market valuation of hedging obligations under IFRS goodwill write-offs and certain other one-off or non-cash items Adjusted EBITDA as presented here may not be comparable to similarly-titled measures that are reported by other companies due to differences in the way these measures are calculated Further details of covenant adjustments can be found in the relevant bond prospectuses available on our website
bull Adjusted interest coverage ndash Adjusted EBITDA interest expense for the relevant period (nb not equal to the full covenant coverage ratio calculation)
bull Cost of risk ndash Annualised net impairment loss average gross receivables (total gross receivables as of the start and end of each period divided by two)
bull Cost income ratio ndash Operating costs operating income (revenue)
bull Equity assets ratio ndash Total equity total assets
bull Equity net receivables ndash Total equity net customer receivables (including accrued interest)
bull Gross NPL ratio ndash Non-performing receivables (including accrued interest) with a delay of over 90 days gross receivables (including accrued interest)
bull Gross receivables ndash Total amount receivable from customers including principal and accrued interest after deduction of deferred income
bull Intangible assets ndash consists of deferred tax assets intangible IT assets and goodwill
bull Interest income ndash Interest and similar income generated from our customer loan portfolio
bull Loss given default ndash Loss on non-performing receivables (ie 1 - recovery rate) based on recoveries during the appropriate time window for the specific product reduced by costs of collection discounted at the weighted average effective interest rate
bull Net effective annualised yield ndash annualised interest income (excluding penalties) average net loan principal
bull Net impairment to interest income ratio ndash Net impairment losses on loans and receivables interest income
bull Net interest margin ndash Annualised net interest income average gross loan principal (total gross loan principal as of the start and end of each period divided by two)
bull Net receivables ndash Gross receivables (including accrued interest) less impairment provisions
bull Non-performing loans (NPLs) ndash Loan principal or receivables (as applicable) that are over 90 days past due (and for TBI Bank shown on a customer level basis)
bull Normalised ndash Adjusted to remove the effect of non-recurring items net FX and one-off adjustments to intangible assets and for 2018 ratios only adjusted to reflect the opening balance of 2018 balance sheet after IFRS 9 effects
bull Profit before tax margin ndash Profit before tax interest income
bull Return on Average Assets ndash Annualised profit from continuing operations average assets (total assets as of the start and end of each period divided by two)
bull Return on Average Equity ndash Annualised profit from continuing operations average equity (total equity as of the start and end of each period divided by two)
bull Return on Average Tangible Equity ndash Annualised profit from continuing operations average tangible equity (tangible equity as of the start and end of each period divided by two)
bull Tangible Equity ndash Total equity minus intangible assets
bull TBI Bank Capital adequacy ratio ndash (Tier One Capital + Tier Two Capital) Risk weighted assets (calculated according to the prevailing regulations of the Bulgarian National Bank)
34
Contacts
Investor Relationsinvestorrelations4financecom
James EtheringtonHead of Investor RelationsPhone +44 7766 697 950E-mail jamesetherington4financecom
Paul GoldfinchChief Financial OfficerPhone +371 2572 6422E-mail paulgoldfinch4financecom
Headquarters17a-8 Lielirbes street Riga LV-1046 Latvia
4finance Holding SA
Disclaimer
Agenda
Q1 2020 business and financial highlights
Slide Number 5
Current trading and outlook
Review of three month 2020 results
Summary of three month 2020 results
Interest income remains well diversified
Slide Number 10
Strong financial profile ndash stability and profitability
Funding strategy
Diversified loan portfolio
Analysis of net impairments and cost of risk
Asset quality and provisioning
Recent collections performance
Slide Number 17
Thank you and Questions
Appendix ndash responsible lending and regulatory overview
Sustainability through good governance and responsible lending
Regulatory overview
Regulatory overview (continued)
Appendix ndash strategic evolution of portfolio
Evolving and broadening our business model
Evolution of product mix
Slide Number 26
Asset quality and provisioning ndash loan principal
Appendix ndash financials and key ratios
Slide Number 29
Balance sheet
Statement of Cash Flows
Slide Number 32
GlossaryDefinitions
Contacts
Q12018
Q1 2020
9M 2018
Q1 2019
FY 2017
Net receivables (eurom) of which
5426
5408
5477
- Principal
272
5147
5144
5165
208
- Accrued interest
98
279
265
312
39
Total assets (eurom)
9724
10238
10147
Total equity (eurom)
221
1605
1607
1637
335
Capitalisation
Equity assets
147
165
157
161
127
Equity net receivables
195
296
297
299
267
Adjusted interest coverage
233
18x
25x
20x
223
TBI Bank consolidated capital adequacy
231
188
241
210
239
240
Profitability
Q12018
Net interest margin
- Online
764
882
802
- TBI Bank
246
280
252
- Overall group
500
648
557
Cost income ratio
527
520
520
Post-provision operating profit margin
145
166
177
Normalised Profit before tax margin
111
154
127
Normalised Return on average equity
118
375
104
Normalised Return on average assets
20
56
17
Asset quality
Cost of risk
- Online
295
237
289
- TBI Bank
47
86
45
- Overall group
174
181
184
Net impairment interest income
323
259
304
Gross NPL ratio
- Online
283
222
227
- TBI Bank
160
154
173
- Overall group
222
196
204
Overall group NPL coverage ratio
1035
1156
1064
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
505
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(06)
57
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
50
199
199
(248)
(301)
0800
Impairment losses on loans
1485
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(120)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(73)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
568
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
09
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2599
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
108
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(11)
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2637
2840
2840
1756
2279
00
Increase in loans due from customers
(2248)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1453
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1120
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(15)
(13)
(84)
(128)
(131)
(21)
Net cash from Purchase Sale of financial instruments
39
(118)
(136)
mdash
Repayment of financial instrument
-
-
Loans issued to related parties
-
-
(26)
(06)
(43)
(23)
Loans repaid from related parties
0
40
74
23
109
54
Interest received from related parties
31
01
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
00
(01)
0-
mdash
Disposal of subsidiaries net of cash disposed
(13)
-
(59)
(45)
(44)
mdash
(Acquisition)Disposal of equity investments
(14)
-
Acquisition of non-controlling interests
(04)
(04)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
-
-
mdash
0-
(00)
Prepayment for potential acquisition
-
00
208
0-
(208)
mdash
Acquisition of shares
-
00
00
Net cash flows from investing activities
25
(94)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
0
05
2999
1637
05
Repayment and repurchase of loans and notes
(164)
(133)
(272)
(1737)
(580)
(01)
Interest payments
(06)
(35)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
-
00
(00)
(192)
(58)
mdash
FX hedging margin
14
82
42
(140)
(88)
Payment of lease liabilities
(11)
(1)
mdash
Dividend payments
-
-
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(167)
(95)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
333
35
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
985
1488
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
(01)
0
01
10
10
03
Cash and cash equivalents at the end of the period
1318
1524
1488
2040
1319
681
TBI Bank minimum statutory reserve
242
354
234
230
230
242
Total cash on hand and cash at central banks
1560
1878
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
02
119
526
495
107
17000
Adjustments for
Depreciation and amortisation
32
32
121
64
83
1700
Impairment of goodwill and intangible assets
-
-
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
131
63
199
(248)
(301)
0800
Impairment losses on loans
364
359
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(20)
01
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
01
01
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(19)
(19)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
127
150
621
455
619
13300
Non-recurring finance cost
32
-
mdash
mdash
63
Other non-cash items
14
0
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663
707
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(137)
(82)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
(09)
(15)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(39)
(81)
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
479
530
2840
1756
2279
00
Increase in loans due from customers
(132)
(468)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
71
161
819
333
542
160
Increase in deposits (customer and bank deposits)
77
74
165
265
338
110
Deposit interest payments
(15)
(10)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
481
288
1233
524
442
(535)
Corporate income tax paid
(06)
(63)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
475
225
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(83)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(196)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
Q12018 (unaudited)
31 March 2020 (unaudited)
1 January 2018 (post IFRS 9 unaudited)
31 December 2019
Cash and cash equivalents of which
1538
1560
1549
1257
- Online
535
834
658
767
- TBI Bank
1003
725
892
490
Placements with other banks
57
127
70
64
Gross receivables due from customers
7156
7042
6588
7337
Allowance for impairment
(1665)
(1616)
(1575)
(1548)
Net receivables due from customers of which
5491
5426
5013
5789
- Principal
5147
5026
5480
- Accrued interest
277
264
309
Net investments in finance leases
93
45
105
47
Net loans to related parties
631
594
598
607
Property and equipment
96
182
101
178
Financial investments
183
502
184
564
Prepaid expenses
87
40
108
45
Tax assets
212
174
221
213
Deferred tax assets
371
353
368
330
Intangible IT assets
281
168
286
178
Goodwill
214
165
214
165
Other assets
678
392
573
295
Total assets
9932
9727
9390
9731
Calculation for Presentation - other assets (not loans or cash)
Loans and borrowings
4672
3849
3794
3846
Deposits from customers
2728
3333
2710
3222
Deposits from banks
94
95
mdash
130
Corporate income tax payable
178
124
198
95
Other liabilities
799
718
765
780
Total liabilities
8471
8119
7466
8074
Share capital
358
358
358
358
Retained earnings
1475
1628
1350
1657
Reserves
(343)
(378)
(323)
(357)
Total attributable equity
1490
1608
1385
1658
Non-controlling interests
(28)
00
(24)
(00)
Total equity
1461
1608
1362
1658
Total shareholders equity and liabilities
9932
9727
8828
9731
In millions of euro
Q1 2020 (unaudited)
Q1 2019 (unaudited)
change YoY
Interest Income
966
1065
(9)
Interest Expense
(127)
(150)
-(16)
1000000
Net Interest Income
839
915
(8)
Net FampC Income
24
21
12
Other operating income
23
22
7
Non-Interest Income
47
43
10
Operating Income (Revenue)
886
957
(7)
Personnel costs
(221)
(221)
(0
Discretionary bonus
(18)
(19)
(6)
Marketing
(91)
(96)
(5)
IT costs
(39)
(45)
(12)
DampA costs
(35)
(32)
+8
Other costs
(98)
(118)
(17)
Total operating costs
(467)
(498)
(6)
Pre-provision operating profit
419
459
(9)
Net impairment charges
(312)
(324)
-(4)
manual
Post-provision operating profit
107
135
(21)
Depreciation and amortisation
(32)
(32)
-+0
manual
Non-recurring income(expense)
(39)
(01)
nm
Non-recurring finance cost
mdash
mdash
+0
Net FX gain(loss)
(34)
16
nm
One-off adjustments to intangible assets
-
-
(0)
manual
Profit before tax
02
119
nm
Income tax expense
(27)
(62)
-(57)
manual
Net profit(loss) after tax
(25)
57
nm
manual
Adjusted EBITDA
233
294
-(21)
Costincome ratio
527
520
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online principal
Performing (1)
2347
(357)
1990
737
2634
(397)
2237
774
3177
(493)
2684
791
(22139)
3177
(302)
2875
681
(191)
150128837891005
Non-performing (2)
836
(656)
181
263
770
(590)
180
226
840
(664)
175
209
(74878)
36947
1488
(983)
505
319
-648
319
-64836054
-250544747891005
Online total
3184
(1013)
2171
1000
3404
(987)
2417
1000
4017
(1158)
2859
1000
4665
(1286)
3379
1000
(74878)
14808
TBI Bank principal
Performing (1)
2853
(121)
2732
840
2896
(118)
2778
838
2090
(68)
2022
873
(2586)
2090
(43)
2047
873
(25)
-251961477
Non-performing (2)
541
(298)
244
160
558
(274)
284
162
303
(158)
145
127
0437
303
(162)
141
127
04
42578177
TBI Bank total
3394
(418)
2976
1000
3454
(392)
3062
1000
2393
(226)
2167
1000
-
(2149)
2393
(205)
2188
1000
Overall group principal
Performing (1)
5200
(478)
4722
791
5529
(515)
5015
806
5267
(562)
4706
822
-
(24725)
5267
(345)
4922
746
Non-performing (2)
1378
(953)
424
209
1328
(864)
465
194
1142
(822)
320
178
(74878)
37384
1791
(1145)
646
254
Overall total
6578
(1431)
5147
1000
6858
(1378)
5480
1000
6410
(1384)
5026
1000
(74878)
12659
7058
(1490)
5567
1000
31122018 data updated post audit
17
Pro-active response to Covid-19 across the business with good resultsbull Rapidly adapted operations to home working ensuring employee safety and continuous services for customersbull Focus on risk management but remained ldquoopen for businessrdquo in AprilMay particularly for our returning customersbull Customer repayment behaviour within normal ranges in AprilMay with proactive support offered for customers who have
been impacted
Well positioned to lsquoweather the stormrsquo and take advantage of subsequent opportunitiesbull Key decisions taken to streamline footprint focus on larger markets and right-size cost basebull Continued development of near-prime business both on product side (Latvia Lithuania Sweden launches) and TBI Bank
funding side (Lithuania passport application)bull Encouraging demand and issuance trends in May (22 increase in online loans issued vs April) with improvement
expected to continue in June
Strong balance sheet and funding position with further action being takenbull Strong liquidity position in both lsquoonlinersquo and TBI Bankbull Strong cashflow generation deployed in significant bond buybacks to reduce leveragebull Consultations underway on potential extension to EUR 2021 bonds to allow financial results and markets to normalise
prior to long term refinancing
Summary
4finance a multi-segment multi-product consumer credit specialist
18
Thank you and Questions
19
Appendix ndash responsible lending and regulatory overview
20
Sustainability through good governance and responsible lendingOperating as a mainstream consumer finance business
bull ldquoBank-likerdquo policies and procedures with strong compliance function
bull Continued investment in AML GDPR and other strategic compliance priorities
bull Robust corporate governance with strong Supervisory Board
bull Increasingly regulated by main financial supervisory authorities
bull Diversification of portfolio and consequent reduction of reliance on single payment loans
bull Clear corporate values and code of conduct
bull Listed bond issues with quarterly financial reporting
Developing meaningful and constructive regulatory relationships
bull Ensuring we understand the regulatory arc
bull Helping regulators and legislators gain a solid understanding of our business
bull Ensuring we have a seat at the table
bull Contributing to EU Consumer Credit Directive consultation process
bull Continuous improvements in credit underwriting
bull Ensuring products are used appropriately
bull Working to ensure customers have safe landings when they signal difficulties
21
Regulatory overviewCountry
of interest income(Q1 2020)
Products (1) Regulator CB (2) Licenserequired (3)
Interest rate cap (1) Status
Argentina 1 SPL Consumer Protection Directorate - - -
Armenia 2 LOC Central Bank of the Republic of Armenia Yes Yes Nominal
Bulgaria ndash Online 2 SPL Bulgarian National BankYes Yes APR
(inc fees) Stable frameworkBulgaria ndash Bank 13 IL LOC POS SME
Czech Republic 5 SPL IL Czech National Bank Yes Yes - Stable framework
Denmark 11 LOC IL FSA and Consumer Ombudsman Yes YesAPR amp TCOC
being introduced
Danish FSA licensing process ongoing New regulations regarding interest rate caps (35 APR cap 100 cost of credit cap) and marketing restrictions in final stages of review Expected to start in July
Finland 1 IL(4) Finnish Competition and Consumer Authority - - Nominal
amp fees
New interest rate caps in force from September 2019 Further discussions on temporary reduction to 10 are ongoing
Latvia 5 MTP IL Consumer Rights Protection Centre - Yes Nominal fees amp TCOC
Stable framework since new interest rate caps in July 2019
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards MTP ndash Minimum to pay POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit(2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement(4) lsquoMini-ILrsquo (4 monthly instalments) from September 2019
22
Regulatory overview (continued)Country
of interest income
(Q1 2020)Products (1) Regulator CB (2) License
required (3)Interest rate
cap (1) Status
Lithuania 2 SPL IL Central Bank of Lithuania Yes Yes Nominal fees amp TCOC Stable framework
Mexico 1 IL National Financial Services Consumer Protection Commission - Yes - Stable framework
Poland 23 SPL IL Office of Competition and Consumer Protection - - Nominal fees
amp TCOC
Non-interest cost caps adjusted in April for one year to 15 fixed and 6 annual with a 45 total limit
Romania 10 IL LOC POS SME National Bank of Romania Yes Yes - Bill to introduce interest rate cap under discussion
Slovakia lt1 SPL National Bank of Slovakia Yes Yes APR (inc fees) Stable framework
Spain 22 SPL IL NA - - -
Sweden 1 LOC IL Swedish Financial Supervisory Authority Yes Yes Nominal amp
TCOCStable framework since new interest rate caps in September 2018
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit (2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement
23
Appendix ndash strategic evolution of portfolio
24
Evolving and broadening our business model
Prime
Sub-Prime
Near-Prime
Segments
Higher Duration Lower APR Products
SPL ILLOC POS
A multi-segment multi-product consumer credit specialist
1
1 Optimise
2 2 Diversify amp Grow
Illustrative
25
Evolution of product mix
Note (1) Reflects reclassification of Vivus brand products in Sweden (from January 2016) Denmark (from January 2017) Armenia (from launch in July 2017) and short-term products (SMS Credit amp Ondo) in Latvia (from January 2019) to Lines of Credit
68
17
3
9
29
45
18
11
0
25
50
75
100
30 Jun 2016 31 Mar 2020
SME (Bank)
Point of Sale
Instalment loans
Line of Credit Cards
Single Payment Loans
euro543meuro323m
Net receivables by product (1)
Online sub-prime only
Bank and onlinenear-prime
and sub-prime
76
48
4
14
20
29
7
0
25
50
75
100
Q1 2016 Q1 2020
Interest income by product (1)
euro97meuro90m
Date chosen to reflect the composition of loan portfolio immediately prior to purchase of TBI Bank
26
Funding near-prime growth via TBI Bank
Online acquisition Retail deposit funding
Initial portfolio development
Early stage customer acquisition and credit metrics monitored and
enhanced
Funding Platform
In-house IT funding platform ensuring ongoing automated
portfolio transfers
Bringing portfolios to scale
Market specific portfolios grow with ongoing sales to reach scale
True saleof portfolio(s)loan servicing
Indicative APRs
20-40
CostIncome ratio
c40
Cost of Risk
6-8
Cost of Funds
3-5
Return on Assets
3-5(2)
Illustrative near-prime
ldquounit economicsrdquo(1)
Notes(1) Illustrative metrics for near-prime portfolios and not indicative of a specific product or market(2) Illustrative potential returns in medium-term at scale
Payment of fair market value
bull Regular sales of Polish instalment loans since September 2019bull Passporting application submitted for Lithuania (largest near-prime portfolio)
Accessing TBI Bank deposit funding for lsquoonlinersquo portfolios via ongoing loan sales
27
Asset quality and provisioning ndash loan principal
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Interest Income 966 1065 (9)Interest Expense (127) (150) (16)Net Interest Income 839 915 (8)Net FampC Income 24 21 12Other operating income 23 22 7Non-Interest Income 47 43 10Operating Income (Revenue) 886 957 (7)Total operating costs (467) (498) (6)Pre-provision operating profit 419 459 (9)Net impairment charges (312) (324) (4)Post-provision operating profit 107 135 (21)Depreciation and amortisation (32) (32) +0Non-recurring income(expense) (39) (01) nmNet FX gain(loss) (34) 16 nmProfit before tax 02 119 nmIncome tax expense (27) (62) (57)Net profit(loss) after tax (25) 57 nm
Adjusted EBITDA 233 294 (21)
Income Statement
30
Balance sheetIn millions of euro
31 March 2020 (unaudited)
31 December 2019
Cash and cash equivalents of which 1560 1257- Online 834 767- TBI Bank 725 490
Placements with other banks 127 64Gross receivables due from customers 7042 7337Allowance for impairment (1616) (1548)Net receivables due from customers of which 5426 5789
- Principal 5147 5480- Accrued interest 277 309
Net investments in finance leases 45 47Net loans to related parties 594 607Property and equipment 182 178Financial investments 502 564Prepaid expenses 40 45Tax assets 174 213Deferred tax assets 353 330Intangible IT assets 168 178Goodwill 165 165Other assets 392 295Total assets 9727 9731Calculation for Presentation other assets (not loans Loans and borrowings 3849 3846Deposits from customers 3333 3222Deposits from banks 95 130Corporate income tax payable 124 95Other liabilities 718 780Total liabilities 8119 8074Share capital 358 358Retained earnings 1628 1657Reserves (378) (357)Total attributable equity 1608 1658Non-controlling interests 00 (00)Total equity 1608 1658Total shareholders equity and liabilities 9727 9731
Balance Sheet
31
Statement of Cash FlowsIn millions of euro
2020 2019Cash flows from operating activitiesProfit before taxes 02 119
Adjustments forDepreciation and amortisation 32 32
Impairment of goodwill and intangible assets - -
Net (gain) loss on foreign exchange from borrowings and other monetary items 131 63
Impairment losses on loans 364 359
Reversal of provision on debt portfolio sales (20) 01
Write-off and disposal of intangible and property and equipment assets 01 01
Interest income from non-customers loans (19) (19)
Interest expense on loans and borrowings and deposits from customers 127 150Non-recurring finance cost 32 -
Other non-cash items 14 0
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663 707
Adjustments forChange in financial instruments measured at fair value through profit or loss (137) (82)(Increase) decrease in other assets (including TBI statutory reserve placements amp leases) (09) (15)
Increase (decrease) in accounts payable to suppliers contractors and other creditors (39) (81)
Operating cash flow before movements in portfolio and deposits 479 530
Increase in loans due from customers (132) (468)
Proceeds from sale of portfolio 71 161
Increase in deposits (customer and bank deposits) 77 74
Deposit interest payments (15) (10)
Gross cash flows from operating activities 481 288
Corporate income tax paid (06) (63)
Net cash flows from operating activities 475 225
3 months to 31 March In millions of euro
2020 2019
Cash flows used in investing activitiesPurchase of property and equipment and intangible assets (15) (13)
Net cash from Purchase Sale of financial instruments 39 (118)
Loans issued to related parties - -
Loans repaid from related parties 0 40
Interest received from related parties 31 01
Disposal of subsidiaries net of cash disposed (13) -
(Acquisition)Disposal of equity investments (14) -
Acquisition of non-controlling interests (04) (04)
Net cash flows from investing activities 25 (94)
Cash flows from financing activitiesLoans received and notes issued - 0
Repayment and repurchase of loans and notes (164) (133)
Interest payments (06) (35)
FX hedging margin 14 82
Payment of lease liabilities (11) (1)
Dividend payments - -
Net cash flows used in financing activities (167) (95)
Net increase (decrease) in cash and cash equivalents 333 35
Cash and cash equivalents at the beginning of the period 985 1488
Effect of exchange rate fluctuations on cash (01) 0
Cash and cash equivalents at the end of the period 1318 1524
TBI Bank minimum statutory reserve 242 354
Total cash on hand and cash at central banks 1560 1878
3 months to 31 March
Cash Flow
Cash Flow (2)
Cash Flow
Cash Flow (2)
32
Key financial ratiosQ1 2020 Q1 2019
CapitalisationEquity assets 165 161Equity net receivables 296 299Adjusted interest coverage 18x 20xTBI Bank consolidated capital adequacy 188 210
ProfitabilityNet interest margin
- Online 764 802- TBI Bank 246 252- Overall group 500 557
Cost income ratio 527 520Normalised Profit before tax margin 111 127Normalised Return on average equity 118 104Normalised Return on average assets 20 17
Asset qualityCost of risk
- Online 295 289- TBI Bank 47 45- Overall group 174 184
Net impairment interest income 323 304Gross NPL ratio
- Online 283 227- TBI Bank 160 173- Overall group 222 204
Overall group NPL coverage ratio 1035 1064
See appendix for definitions of key metrics and ratios
key ratios
33
GlossaryDefinitionsbull Adjusted EBITDA ndash a non-IFRS measure that represents EBITDA (profit for the period plus tax plus interest expense plus depreciation and amortization) as adjusted by incomeloss from discontinued operations non-cash gains and losses
attributable to movement in the mark-to-market valuation of hedging obligations under IFRS goodwill write-offs and certain other one-off or non-cash items Adjusted EBITDA as presented here may not be comparable to similarly-titled measures that are reported by other companies due to differences in the way these measures are calculated Further details of covenant adjustments can be found in the relevant bond prospectuses available on our website
bull Adjusted interest coverage ndash Adjusted EBITDA interest expense for the relevant period (nb not equal to the full covenant coverage ratio calculation)
bull Cost of risk ndash Annualised net impairment loss average gross receivables (total gross receivables as of the start and end of each period divided by two)
bull Cost income ratio ndash Operating costs operating income (revenue)
bull Equity assets ratio ndash Total equity total assets
bull Equity net receivables ndash Total equity net customer receivables (including accrued interest)
bull Gross NPL ratio ndash Non-performing receivables (including accrued interest) with a delay of over 90 days gross receivables (including accrued interest)
bull Gross receivables ndash Total amount receivable from customers including principal and accrued interest after deduction of deferred income
bull Intangible assets ndash consists of deferred tax assets intangible IT assets and goodwill
bull Interest income ndash Interest and similar income generated from our customer loan portfolio
bull Loss given default ndash Loss on non-performing receivables (ie 1 - recovery rate) based on recoveries during the appropriate time window for the specific product reduced by costs of collection discounted at the weighted average effective interest rate
bull Net effective annualised yield ndash annualised interest income (excluding penalties) average net loan principal
bull Net impairment to interest income ratio ndash Net impairment losses on loans and receivables interest income
bull Net interest margin ndash Annualised net interest income average gross loan principal (total gross loan principal as of the start and end of each period divided by two)
bull Net receivables ndash Gross receivables (including accrued interest) less impairment provisions
bull Non-performing loans (NPLs) ndash Loan principal or receivables (as applicable) that are over 90 days past due (and for TBI Bank shown on a customer level basis)
bull Normalised ndash Adjusted to remove the effect of non-recurring items net FX and one-off adjustments to intangible assets and for 2018 ratios only adjusted to reflect the opening balance of 2018 balance sheet after IFRS 9 effects
bull Profit before tax margin ndash Profit before tax interest income
bull Return on Average Assets ndash Annualised profit from continuing operations average assets (total assets as of the start and end of each period divided by two)
bull Return on Average Equity ndash Annualised profit from continuing operations average equity (total equity as of the start and end of each period divided by two)
bull Return on Average Tangible Equity ndash Annualised profit from continuing operations average tangible equity (tangible equity as of the start and end of each period divided by two)
bull Tangible Equity ndash Total equity minus intangible assets
bull TBI Bank Capital adequacy ratio ndash (Tier One Capital + Tier Two Capital) Risk weighted assets (calculated according to the prevailing regulations of the Bulgarian National Bank)
34
Contacts
Investor Relationsinvestorrelations4financecom
James EtheringtonHead of Investor RelationsPhone +44 7766 697 950E-mail jamesetherington4financecom
Paul GoldfinchChief Financial OfficerPhone +371 2572 6422E-mail paulgoldfinch4financecom
Headquarters17a-8 Lielirbes street Riga LV-1046 Latvia
4finance Holding SA
Disclaimer
Agenda
Q1 2020 business and financial highlights
Slide Number 5
Current trading and outlook
Review of three month 2020 results
Summary of three month 2020 results
Interest income remains well diversified
Slide Number 10
Strong financial profile ndash stability and profitability
Funding strategy
Diversified loan portfolio
Analysis of net impairments and cost of risk
Asset quality and provisioning
Recent collections performance
Slide Number 17
Thank you and Questions
Appendix ndash responsible lending and regulatory overview
Sustainability through good governance and responsible lending
Regulatory overview
Regulatory overview (continued)
Appendix ndash strategic evolution of portfolio
Evolving and broadening our business model
Evolution of product mix
Slide Number 26
Asset quality and provisioning ndash loan principal
Appendix ndash financials and key ratios
Slide Number 29
Balance sheet
Statement of Cash Flows
Slide Number 32
GlossaryDefinitions
Contacts
Q12018
Q1 2020
9M 2018
Q1 2019
FY 2017
Net receivables (eurom) of which
5426
5408
5477
- Principal
272
5147
5144
5165
208
- Accrued interest
98
279
265
312
39
Total assets (eurom)
9724
10238
10147
Total equity (eurom)
221
1605
1607
1637
335
Capitalisation
Equity assets
147
165
157
161
127
Equity net receivables
195
296
297
299
267
Adjusted interest coverage
233
18x
25x
20x
223
TBI Bank consolidated capital adequacy
231
188
241
210
239
240
Profitability
Q12018
Net interest margin
- Online
764
882
802
- TBI Bank
246
280
252
- Overall group
500
648
557
Cost income ratio
527
520
520
Post-provision operating profit margin
145
166
177
Normalised Profit before tax margin
111
154
127
Normalised Return on average equity
118
375
104
Normalised Return on average assets
20
56
17
Asset quality
Cost of risk
- Online
295
237
289
- TBI Bank
47
86
45
- Overall group
174
181
184
Net impairment interest income
323
259
304
Gross NPL ratio
- Online
283
222
227
- TBI Bank
160
154
173
- Overall group
222
196
204
Overall group NPL coverage ratio
1035
1156
1064
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
505
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(06)
57
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
50
199
199
(248)
(301)
0800
Impairment losses on loans
1485
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(120)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(73)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
568
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
09
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2599
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
108
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(11)
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2637
2840
2840
1756
2279
00
Increase in loans due from customers
(2248)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1453
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1120
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(15)
(13)
(84)
(128)
(131)
(21)
Net cash from Purchase Sale of financial instruments
39
(118)
(136)
mdash
Repayment of financial instrument
-
-
Loans issued to related parties
-
-
(26)
(06)
(43)
(23)
Loans repaid from related parties
0
40
74
23
109
54
Interest received from related parties
31
01
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
00
(01)
0-
mdash
Disposal of subsidiaries net of cash disposed
(13)
-
(59)
(45)
(44)
mdash
(Acquisition)Disposal of equity investments
(14)
-
Acquisition of non-controlling interests
(04)
(04)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
-
-
mdash
0-
(00)
Prepayment for potential acquisition
-
00
208
0-
(208)
mdash
Acquisition of shares
-
00
00
Net cash flows from investing activities
25
(94)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
0
05
2999
1637
05
Repayment and repurchase of loans and notes
(164)
(133)
(272)
(1737)
(580)
(01)
Interest payments
(06)
(35)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
-
00
(00)
(192)
(58)
mdash
FX hedging margin
14
82
42
(140)
(88)
Payment of lease liabilities
(11)
(1)
mdash
Dividend payments
-
-
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(167)
(95)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
333
35
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
985
1488
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
(01)
0
01
10
10
03
Cash and cash equivalents at the end of the period
1318
1524
1488
2040
1319
681
TBI Bank minimum statutory reserve
242
354
234
230
230
242
Total cash on hand and cash at central banks
1560
1878
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
02
119
526
495
107
17000
Adjustments for
Depreciation and amortisation
32
32
121
64
83
1700
Impairment of goodwill and intangible assets
-
-
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
131
63
199
(248)
(301)
0800
Impairment losses on loans
364
359
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(20)
01
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
01
01
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(19)
(19)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
127
150
621
455
619
13300
Non-recurring finance cost
32
-
mdash
mdash
63
Other non-cash items
14
0
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663
707
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(137)
(82)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
(09)
(15)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(39)
(81)
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
479
530
2840
1756
2279
00
Increase in loans due from customers
(132)
(468)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
71
161
819
333
542
160
Increase in deposits (customer and bank deposits)
77
74
165
265
338
110
Deposit interest payments
(15)
(10)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
481
288
1233
524
442
(535)
Corporate income tax paid
(06)
(63)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
475
225
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(83)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(196)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
Q12018 (unaudited)
31 March 2020 (unaudited)
1 January 2018 (post IFRS 9 unaudited)
31 December 2019
Cash and cash equivalents of which
1538
1560
1549
1257
- Online
535
834
658
767
- TBI Bank
1003
725
892
490
Placements with other banks
57
127
70
64
Gross receivables due from customers
7156
7042
6588
7337
Allowance for impairment
(1665)
(1616)
(1575)
(1548)
Net receivables due from customers of which
5491
5426
5013
5789
- Principal
5147
5026
5480
- Accrued interest
277
264
309
Net investments in finance leases
93
45
105
47
Net loans to related parties
631
594
598
607
Property and equipment
96
182
101
178
Financial investments
183
502
184
564
Prepaid expenses
87
40
108
45
Tax assets
212
174
221
213
Deferred tax assets
371
353
368
330
Intangible IT assets
281
168
286
178
Goodwill
214
165
214
165
Other assets
678
392
573
295
Total assets
9932
9727
9390
9731
Calculation for Presentation - other assets (not loans or cash)
Loans and borrowings
4672
3849
3794
3846
Deposits from customers
2728
3333
2710
3222
Deposits from banks
94
95
mdash
130
Corporate income tax payable
178
124
198
95
Other liabilities
799
718
765
780
Total liabilities
8471
8119
7466
8074
Share capital
358
358
358
358
Retained earnings
1475
1628
1350
1657
Reserves
(343)
(378)
(323)
(357)
Total attributable equity
1490
1608
1385
1658
Non-controlling interests
(28)
00
(24)
(00)
Total equity
1461
1608
1362
1658
Total shareholders equity and liabilities
9932
9727
8828
9731
In millions of euro
Q1 2020 (unaudited)
Q1 2019 (unaudited)
change YoY
Interest Income
966
1065
(9)
Interest Expense
(127)
(150)
-(16)
1000000
Net Interest Income
839
915
(8)
Net FampC Income
24
21
12
Other operating income
23
22
7
Non-Interest Income
47
43
10
Operating Income (Revenue)
886
957
(7)
Personnel costs
(221)
(221)
(0
Discretionary bonus
(18)
(19)
(6)
Marketing
(91)
(96)
(5)
IT costs
(39)
(45)
(12)
DampA costs
(35)
(32)
+8
Other costs
(98)
(118)
(17)
Total operating costs
(467)
(498)
(6)
Pre-provision operating profit
419
459
(9)
Net impairment charges
(312)
(324)
-(4)
manual
Post-provision operating profit
107
135
(21)
Depreciation and amortisation
(32)
(32)
-+0
manual
Non-recurring income(expense)
(39)
(01)
nm
Non-recurring finance cost
mdash
mdash
+0
Net FX gain(loss)
(34)
16
nm
One-off adjustments to intangible assets
-
-
(0)
manual
Profit before tax
02
119
nm
Income tax expense
(27)
(62)
-(57)
manual
Net profit(loss) after tax
(25)
57
nm
manual
Adjusted EBITDA
233
294
-(21)
Costincome ratio
527
520
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online principal
Performing (1)
2347
(357)
1990
737
2634
(397)
2237
774
3177
(493)
2684
791
(22139)
3177
(302)
2875
681
(191)
150128837891005
Non-performing (2)
836
(656)
181
263
770
(590)
180
226
840
(664)
175
209
(74878)
36947
1488
(983)
505
319
-648
319
-64836054
-250544747891005
Online total
3184
(1013)
2171
1000
3404
(987)
2417
1000
4017
(1158)
2859
1000
4665
(1286)
3379
1000
(74878)
14808
TBI Bank principal
Performing (1)
2853
(121)
2732
840
2896
(118)
2778
838
2090
(68)
2022
873
(2586)
2090
(43)
2047
873
(25)
-251961477
Non-performing (2)
541
(298)
244
160
558
(274)
284
162
303
(158)
145
127
0437
303
(162)
141
127
04
42578177
TBI Bank total
3394
(418)
2976
1000
3454
(392)
3062
1000
2393
(226)
2167
1000
-
(2149)
2393
(205)
2188
1000
Overall group principal
Performing (1)
5200
(478)
4722
791
5529
(515)
5015
806
5267
(562)
4706
822
-
(24725)
5267
(345)
4922
746
Non-performing (2)
1378
(953)
424
209
1328
(864)
465
194
1142
(822)
320
178
(74878)
37384
1791
(1145)
646
254
Overall total
6578
(1431)
5147
1000
6858
(1378)
5480
1000
6410
(1384)
5026
1000
(74878)
12659
7058
(1490)
5567
1000
31122018 data updated post audit
18
Thank you and Questions
19
Appendix ndash responsible lending and regulatory overview
20
Sustainability through good governance and responsible lendingOperating as a mainstream consumer finance business
bull ldquoBank-likerdquo policies and procedures with strong compliance function
bull Continued investment in AML GDPR and other strategic compliance priorities
bull Robust corporate governance with strong Supervisory Board
bull Increasingly regulated by main financial supervisory authorities
bull Diversification of portfolio and consequent reduction of reliance on single payment loans
bull Clear corporate values and code of conduct
bull Listed bond issues with quarterly financial reporting
Developing meaningful and constructive regulatory relationships
bull Ensuring we understand the regulatory arc
bull Helping regulators and legislators gain a solid understanding of our business
bull Ensuring we have a seat at the table
bull Contributing to EU Consumer Credit Directive consultation process
bull Continuous improvements in credit underwriting
bull Ensuring products are used appropriately
bull Working to ensure customers have safe landings when they signal difficulties
21
Regulatory overviewCountry
of interest income(Q1 2020)
Products (1) Regulator CB (2) Licenserequired (3)
Interest rate cap (1) Status
Argentina 1 SPL Consumer Protection Directorate - - -
Armenia 2 LOC Central Bank of the Republic of Armenia Yes Yes Nominal
Bulgaria ndash Online 2 SPL Bulgarian National BankYes Yes APR
(inc fees) Stable frameworkBulgaria ndash Bank 13 IL LOC POS SME
Czech Republic 5 SPL IL Czech National Bank Yes Yes - Stable framework
Denmark 11 LOC IL FSA and Consumer Ombudsman Yes YesAPR amp TCOC
being introduced
Danish FSA licensing process ongoing New regulations regarding interest rate caps (35 APR cap 100 cost of credit cap) and marketing restrictions in final stages of review Expected to start in July
Finland 1 IL(4) Finnish Competition and Consumer Authority - - Nominal
amp fees
New interest rate caps in force from September 2019 Further discussions on temporary reduction to 10 are ongoing
Latvia 5 MTP IL Consumer Rights Protection Centre - Yes Nominal fees amp TCOC
Stable framework since new interest rate caps in July 2019
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards MTP ndash Minimum to pay POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit(2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement(4) lsquoMini-ILrsquo (4 monthly instalments) from September 2019
22
Regulatory overview (continued)Country
of interest income
(Q1 2020)Products (1) Regulator CB (2) License
required (3)Interest rate
cap (1) Status
Lithuania 2 SPL IL Central Bank of Lithuania Yes Yes Nominal fees amp TCOC Stable framework
Mexico 1 IL National Financial Services Consumer Protection Commission - Yes - Stable framework
Poland 23 SPL IL Office of Competition and Consumer Protection - - Nominal fees
amp TCOC
Non-interest cost caps adjusted in April for one year to 15 fixed and 6 annual with a 45 total limit
Romania 10 IL LOC POS SME National Bank of Romania Yes Yes - Bill to introduce interest rate cap under discussion
Slovakia lt1 SPL National Bank of Slovakia Yes Yes APR (inc fees) Stable framework
Spain 22 SPL IL NA - - -
Sweden 1 LOC IL Swedish Financial Supervisory Authority Yes Yes Nominal amp
TCOCStable framework since new interest rate caps in September 2018
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit (2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement
23
Appendix ndash strategic evolution of portfolio
24
Evolving and broadening our business model
Prime
Sub-Prime
Near-Prime
Segments
Higher Duration Lower APR Products
SPL ILLOC POS
A multi-segment multi-product consumer credit specialist
1
1 Optimise
2 2 Diversify amp Grow
Illustrative
25
Evolution of product mix
Note (1) Reflects reclassification of Vivus brand products in Sweden (from January 2016) Denmark (from January 2017) Armenia (from launch in July 2017) and short-term products (SMS Credit amp Ondo) in Latvia (from January 2019) to Lines of Credit
68
17
3
9
29
45
18
11
0
25
50
75
100
30 Jun 2016 31 Mar 2020
SME (Bank)
Point of Sale
Instalment loans
Line of Credit Cards
Single Payment Loans
euro543meuro323m
Net receivables by product (1)
Online sub-prime only
Bank and onlinenear-prime
and sub-prime
76
48
4
14
20
29
7
0
25
50
75
100
Q1 2016 Q1 2020
Interest income by product (1)
euro97meuro90m
Date chosen to reflect the composition of loan portfolio immediately prior to purchase of TBI Bank
26
Funding near-prime growth via TBI Bank
Online acquisition Retail deposit funding
Initial portfolio development
Early stage customer acquisition and credit metrics monitored and
enhanced
Funding Platform
In-house IT funding platform ensuring ongoing automated
portfolio transfers
Bringing portfolios to scale
Market specific portfolios grow with ongoing sales to reach scale
True saleof portfolio(s)loan servicing
Indicative APRs
20-40
CostIncome ratio
c40
Cost of Risk
6-8
Cost of Funds
3-5
Return on Assets
3-5(2)
Illustrative near-prime
ldquounit economicsrdquo(1)
Notes(1) Illustrative metrics for near-prime portfolios and not indicative of a specific product or market(2) Illustrative potential returns in medium-term at scale
Payment of fair market value
bull Regular sales of Polish instalment loans since September 2019bull Passporting application submitted for Lithuania (largest near-prime portfolio)
Accessing TBI Bank deposit funding for lsquoonlinersquo portfolios via ongoing loan sales
27
Asset quality and provisioning ndash loan principal
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Interest Income 966 1065 (9)Interest Expense (127) (150) (16)Net Interest Income 839 915 (8)Net FampC Income 24 21 12Other operating income 23 22 7Non-Interest Income 47 43 10Operating Income (Revenue) 886 957 (7)Total operating costs (467) (498) (6)Pre-provision operating profit 419 459 (9)Net impairment charges (312) (324) (4)Post-provision operating profit 107 135 (21)Depreciation and amortisation (32) (32) +0Non-recurring income(expense) (39) (01) nmNet FX gain(loss) (34) 16 nmProfit before tax 02 119 nmIncome tax expense (27) (62) (57)Net profit(loss) after tax (25) 57 nm
Adjusted EBITDA 233 294 (21)
Income Statement
30
Balance sheetIn millions of euro
31 March 2020 (unaudited)
31 December 2019
Cash and cash equivalents of which 1560 1257- Online 834 767- TBI Bank 725 490
Placements with other banks 127 64Gross receivables due from customers 7042 7337Allowance for impairment (1616) (1548)Net receivables due from customers of which 5426 5789
- Principal 5147 5480- Accrued interest 277 309
Net investments in finance leases 45 47Net loans to related parties 594 607Property and equipment 182 178Financial investments 502 564Prepaid expenses 40 45Tax assets 174 213Deferred tax assets 353 330Intangible IT assets 168 178Goodwill 165 165Other assets 392 295Total assets 9727 9731Calculation for Presentation other assets (not loans Loans and borrowings 3849 3846Deposits from customers 3333 3222Deposits from banks 95 130Corporate income tax payable 124 95Other liabilities 718 780Total liabilities 8119 8074Share capital 358 358Retained earnings 1628 1657Reserves (378) (357)Total attributable equity 1608 1658Non-controlling interests 00 (00)Total equity 1608 1658Total shareholders equity and liabilities 9727 9731
Balance Sheet
31
Statement of Cash FlowsIn millions of euro
2020 2019Cash flows from operating activitiesProfit before taxes 02 119
Adjustments forDepreciation and amortisation 32 32
Impairment of goodwill and intangible assets - -
Net (gain) loss on foreign exchange from borrowings and other monetary items 131 63
Impairment losses on loans 364 359
Reversal of provision on debt portfolio sales (20) 01
Write-off and disposal of intangible and property and equipment assets 01 01
Interest income from non-customers loans (19) (19)
Interest expense on loans and borrowings and deposits from customers 127 150Non-recurring finance cost 32 -
Other non-cash items 14 0
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663 707
Adjustments forChange in financial instruments measured at fair value through profit or loss (137) (82)(Increase) decrease in other assets (including TBI statutory reserve placements amp leases) (09) (15)
Increase (decrease) in accounts payable to suppliers contractors and other creditors (39) (81)
Operating cash flow before movements in portfolio and deposits 479 530
Increase in loans due from customers (132) (468)
Proceeds from sale of portfolio 71 161
Increase in deposits (customer and bank deposits) 77 74
Deposit interest payments (15) (10)
Gross cash flows from operating activities 481 288
Corporate income tax paid (06) (63)
Net cash flows from operating activities 475 225
3 months to 31 March In millions of euro
2020 2019
Cash flows used in investing activitiesPurchase of property and equipment and intangible assets (15) (13)
Net cash from Purchase Sale of financial instruments 39 (118)
Loans issued to related parties - -
Loans repaid from related parties 0 40
Interest received from related parties 31 01
Disposal of subsidiaries net of cash disposed (13) -
(Acquisition)Disposal of equity investments (14) -
Acquisition of non-controlling interests (04) (04)
Net cash flows from investing activities 25 (94)
Cash flows from financing activitiesLoans received and notes issued - 0
Repayment and repurchase of loans and notes (164) (133)
Interest payments (06) (35)
FX hedging margin 14 82
Payment of lease liabilities (11) (1)
Dividend payments - -
Net cash flows used in financing activities (167) (95)
Net increase (decrease) in cash and cash equivalents 333 35
Cash and cash equivalents at the beginning of the period 985 1488
Effect of exchange rate fluctuations on cash (01) 0
Cash and cash equivalents at the end of the period 1318 1524
TBI Bank minimum statutory reserve 242 354
Total cash on hand and cash at central banks 1560 1878
3 months to 31 March
Cash Flow
Cash Flow (2)
Cash Flow
Cash Flow (2)
32
Key financial ratiosQ1 2020 Q1 2019
CapitalisationEquity assets 165 161Equity net receivables 296 299Adjusted interest coverage 18x 20xTBI Bank consolidated capital adequacy 188 210
ProfitabilityNet interest margin
- Online 764 802- TBI Bank 246 252- Overall group 500 557
Cost income ratio 527 520Normalised Profit before tax margin 111 127Normalised Return on average equity 118 104Normalised Return on average assets 20 17
Asset qualityCost of risk
- Online 295 289- TBI Bank 47 45- Overall group 174 184
Net impairment interest income 323 304Gross NPL ratio
- Online 283 227- TBI Bank 160 173- Overall group 222 204
Overall group NPL coverage ratio 1035 1064
See appendix for definitions of key metrics and ratios
key ratios
33
GlossaryDefinitionsbull Adjusted EBITDA ndash a non-IFRS measure that represents EBITDA (profit for the period plus tax plus interest expense plus depreciation and amortization) as adjusted by incomeloss from discontinued operations non-cash gains and losses
attributable to movement in the mark-to-market valuation of hedging obligations under IFRS goodwill write-offs and certain other one-off or non-cash items Adjusted EBITDA as presented here may not be comparable to similarly-titled measures that are reported by other companies due to differences in the way these measures are calculated Further details of covenant adjustments can be found in the relevant bond prospectuses available on our website
bull Adjusted interest coverage ndash Adjusted EBITDA interest expense for the relevant period (nb not equal to the full covenant coverage ratio calculation)
bull Cost of risk ndash Annualised net impairment loss average gross receivables (total gross receivables as of the start and end of each period divided by two)
bull Cost income ratio ndash Operating costs operating income (revenue)
bull Equity assets ratio ndash Total equity total assets
bull Equity net receivables ndash Total equity net customer receivables (including accrued interest)
bull Gross NPL ratio ndash Non-performing receivables (including accrued interest) with a delay of over 90 days gross receivables (including accrued interest)
bull Gross receivables ndash Total amount receivable from customers including principal and accrued interest after deduction of deferred income
bull Intangible assets ndash consists of deferred tax assets intangible IT assets and goodwill
bull Interest income ndash Interest and similar income generated from our customer loan portfolio
bull Loss given default ndash Loss on non-performing receivables (ie 1 - recovery rate) based on recoveries during the appropriate time window for the specific product reduced by costs of collection discounted at the weighted average effective interest rate
bull Net effective annualised yield ndash annualised interest income (excluding penalties) average net loan principal
bull Net impairment to interest income ratio ndash Net impairment losses on loans and receivables interest income
bull Net interest margin ndash Annualised net interest income average gross loan principal (total gross loan principal as of the start and end of each period divided by two)
bull Net receivables ndash Gross receivables (including accrued interest) less impairment provisions
bull Non-performing loans (NPLs) ndash Loan principal or receivables (as applicable) that are over 90 days past due (and for TBI Bank shown on a customer level basis)
bull Normalised ndash Adjusted to remove the effect of non-recurring items net FX and one-off adjustments to intangible assets and for 2018 ratios only adjusted to reflect the opening balance of 2018 balance sheet after IFRS 9 effects
bull Profit before tax margin ndash Profit before tax interest income
bull Return on Average Assets ndash Annualised profit from continuing operations average assets (total assets as of the start and end of each period divided by two)
bull Return on Average Equity ndash Annualised profit from continuing operations average equity (total equity as of the start and end of each period divided by two)
bull Return on Average Tangible Equity ndash Annualised profit from continuing operations average tangible equity (tangible equity as of the start and end of each period divided by two)
bull Tangible Equity ndash Total equity minus intangible assets
bull TBI Bank Capital adequacy ratio ndash (Tier One Capital + Tier Two Capital) Risk weighted assets (calculated according to the prevailing regulations of the Bulgarian National Bank)
34
Contacts
Investor Relationsinvestorrelations4financecom
James EtheringtonHead of Investor RelationsPhone +44 7766 697 950E-mail jamesetherington4financecom
Paul GoldfinchChief Financial OfficerPhone +371 2572 6422E-mail paulgoldfinch4financecom
Headquarters17a-8 Lielirbes street Riga LV-1046 Latvia
4finance Holding SA
Disclaimer
Agenda
Q1 2020 business and financial highlights
Slide Number 5
Current trading and outlook
Review of three month 2020 results
Summary of three month 2020 results
Interest income remains well diversified
Slide Number 10
Strong financial profile ndash stability and profitability
Funding strategy
Diversified loan portfolio
Analysis of net impairments and cost of risk
Asset quality and provisioning
Recent collections performance
Slide Number 17
Thank you and Questions
Appendix ndash responsible lending and regulatory overview
Sustainability through good governance and responsible lending
Regulatory overview
Regulatory overview (continued)
Appendix ndash strategic evolution of portfolio
Evolving and broadening our business model
Evolution of product mix
Slide Number 26
Asset quality and provisioning ndash loan principal
Appendix ndash financials and key ratios
Slide Number 29
Balance sheet
Statement of Cash Flows
Slide Number 32
GlossaryDefinitions
Contacts
Q12018
Q1 2020
9M 2018
Q1 2019
FY 2017
Net receivables (eurom) of which
5426
5408
5477
- Principal
272
5147
5144
5165
208
- Accrued interest
98
279
265
312
39
Total assets (eurom)
9724
10238
10147
Total equity (eurom)
221
1605
1607
1637
335
Capitalisation
Equity assets
147
165
157
161
127
Equity net receivables
195
296
297
299
267
Adjusted interest coverage
233
18x
25x
20x
223
TBI Bank consolidated capital adequacy
231
188
241
210
239
240
Profitability
Q12018
Net interest margin
- Online
764
882
802
- TBI Bank
246
280
252
- Overall group
500
648
557
Cost income ratio
527
520
520
Post-provision operating profit margin
145
166
177
Normalised Profit before tax margin
111
154
127
Normalised Return on average equity
118
375
104
Normalised Return on average assets
20
56
17
Asset quality
Cost of risk
- Online
295
237
289
- TBI Bank
47
86
45
- Overall group
174
181
184
Net impairment interest income
323
259
304
Gross NPL ratio
- Online
283
222
227
- TBI Bank
160
154
173
- Overall group
222
196
204
Overall group NPL coverage ratio
1035
1156
1064
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
505
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(06)
57
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
50
199
199
(248)
(301)
0800
Impairment losses on loans
1485
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(120)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(73)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
568
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
09
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2599
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
108
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(11)
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2637
2840
2840
1756
2279
00
Increase in loans due from customers
(2248)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1453
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1120
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(15)
(13)
(84)
(128)
(131)
(21)
Net cash from Purchase Sale of financial instruments
39
(118)
(136)
mdash
Repayment of financial instrument
-
-
Loans issued to related parties
-
-
(26)
(06)
(43)
(23)
Loans repaid from related parties
0
40
74
23
109
54
Interest received from related parties
31
01
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
00
(01)
0-
mdash
Disposal of subsidiaries net of cash disposed
(13)
-
(59)
(45)
(44)
mdash
(Acquisition)Disposal of equity investments
(14)
-
Acquisition of non-controlling interests
(04)
(04)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
-
-
mdash
0-
(00)
Prepayment for potential acquisition
-
00
208
0-
(208)
mdash
Acquisition of shares
-
00
00
Net cash flows from investing activities
25
(94)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
0
05
2999
1637
05
Repayment and repurchase of loans and notes
(164)
(133)
(272)
(1737)
(580)
(01)
Interest payments
(06)
(35)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
-
00
(00)
(192)
(58)
mdash
FX hedging margin
14
82
42
(140)
(88)
Payment of lease liabilities
(11)
(1)
mdash
Dividend payments
-
-
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(167)
(95)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
333
35
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
985
1488
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
(01)
0
01
10
10
03
Cash and cash equivalents at the end of the period
1318
1524
1488
2040
1319
681
TBI Bank minimum statutory reserve
242
354
234
230
230
242
Total cash on hand and cash at central banks
1560
1878
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
02
119
526
495
107
17000
Adjustments for
Depreciation and amortisation
32
32
121
64
83
1700
Impairment of goodwill and intangible assets
-
-
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
131
63
199
(248)
(301)
0800
Impairment losses on loans
364
359
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(20)
01
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
01
01
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(19)
(19)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
127
150
621
455
619
13300
Non-recurring finance cost
32
-
mdash
mdash
63
Other non-cash items
14
0
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663
707
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(137)
(82)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
(09)
(15)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(39)
(81)
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
479
530
2840
1756
2279
00
Increase in loans due from customers
(132)
(468)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
71
161
819
333
542
160
Increase in deposits (customer and bank deposits)
77
74
165
265
338
110
Deposit interest payments
(15)
(10)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
481
288
1233
524
442
(535)
Corporate income tax paid
(06)
(63)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
475
225
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(83)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(196)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
Q12018 (unaudited)
31 March 2020 (unaudited)
1 January 2018 (post IFRS 9 unaudited)
31 December 2019
Cash and cash equivalents of which
1538
1560
1549
1257
- Online
535
834
658
767
- TBI Bank
1003
725
892
490
Placements with other banks
57
127
70
64
Gross receivables due from customers
7156
7042
6588
7337
Allowance for impairment
(1665)
(1616)
(1575)
(1548)
Net receivables due from customers of which
5491
5426
5013
5789
- Principal
5147
5026
5480
- Accrued interest
277
264
309
Net investments in finance leases
93
45
105
47
Net loans to related parties
631
594
598
607
Property and equipment
96
182
101
178
Financial investments
183
502
184
564
Prepaid expenses
87
40
108
45
Tax assets
212
174
221
213
Deferred tax assets
371
353
368
330
Intangible IT assets
281
168
286
178
Goodwill
214
165
214
165
Other assets
678
392
573
295
Total assets
9932
9727
9390
9731
Calculation for Presentation - other assets (not loans or cash)
Loans and borrowings
4672
3849
3794
3846
Deposits from customers
2728
3333
2710
3222
Deposits from banks
94
95
mdash
130
Corporate income tax payable
178
124
198
95
Other liabilities
799
718
765
780
Total liabilities
8471
8119
7466
8074
Share capital
358
358
358
358
Retained earnings
1475
1628
1350
1657
Reserves
(343)
(378)
(323)
(357)
Total attributable equity
1490
1608
1385
1658
Non-controlling interests
(28)
00
(24)
(00)
Total equity
1461
1608
1362
1658
Total shareholders equity and liabilities
9932
9727
8828
9731
In millions of euro
Q1 2020 (unaudited)
Q1 2019 (unaudited)
change YoY
Interest Income
966
1065
(9)
Interest Expense
(127)
(150)
-(16)
1000000
Net Interest Income
839
915
(8)
Net FampC Income
24
21
12
Other operating income
23
22
7
Non-Interest Income
47
43
10
Operating Income (Revenue)
886
957
(7)
Personnel costs
(221)
(221)
(0
Discretionary bonus
(18)
(19)
(6)
Marketing
(91)
(96)
(5)
IT costs
(39)
(45)
(12)
DampA costs
(35)
(32)
+8
Other costs
(98)
(118)
(17)
Total operating costs
(467)
(498)
(6)
Pre-provision operating profit
419
459
(9)
Net impairment charges
(312)
(324)
-(4)
manual
Post-provision operating profit
107
135
(21)
Depreciation and amortisation
(32)
(32)
-+0
manual
Non-recurring income(expense)
(39)
(01)
nm
Non-recurring finance cost
mdash
mdash
+0
Net FX gain(loss)
(34)
16
nm
One-off adjustments to intangible assets
-
-
(0)
manual
Profit before tax
02
119
nm
Income tax expense
(27)
(62)
-(57)
manual
Net profit(loss) after tax
(25)
57
nm
manual
Adjusted EBITDA
233
294
-(21)
Costincome ratio
527
520
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online principal
Performing (1)
2347
(357)
1990
737
2634
(397)
2237
774
3177
(493)
2684
791
(22139)
3177
(302)
2875
681
(191)
150128837891005
Non-performing (2)
836
(656)
181
263
770
(590)
180
226
840
(664)
175
209
(74878)
36947
1488
(983)
505
319
-648
319
-64836054
-250544747891005
Online total
3184
(1013)
2171
1000
3404
(987)
2417
1000
4017
(1158)
2859
1000
4665
(1286)
3379
1000
(74878)
14808
TBI Bank principal
Performing (1)
2853
(121)
2732
840
2896
(118)
2778
838
2090
(68)
2022
873
(2586)
2090
(43)
2047
873
(25)
-251961477
Non-performing (2)
541
(298)
244
160
558
(274)
284
162
303
(158)
145
127
0437
303
(162)
141
127
04
42578177
TBI Bank total
3394
(418)
2976
1000
3454
(392)
3062
1000
2393
(226)
2167
1000
-
(2149)
2393
(205)
2188
1000
Overall group principal
Performing (1)
5200
(478)
4722
791
5529
(515)
5015
806
5267
(562)
4706
822
-
(24725)
5267
(345)
4922
746
Non-performing (2)
1378
(953)
424
209
1328
(864)
465
194
1142
(822)
320
178
(74878)
37384
1791
(1145)
646
254
Overall total
6578
(1431)
5147
1000
6858
(1378)
5480
1000
6410
(1384)
5026
1000
(74878)
12659
7058
(1490)
5567
1000
31122018 data updated post audit
19
Appendix ndash responsible lending and regulatory overview
20
Sustainability through good governance and responsible lendingOperating as a mainstream consumer finance business
bull ldquoBank-likerdquo policies and procedures with strong compliance function
bull Continued investment in AML GDPR and other strategic compliance priorities
bull Robust corporate governance with strong Supervisory Board
bull Increasingly regulated by main financial supervisory authorities
bull Diversification of portfolio and consequent reduction of reliance on single payment loans
bull Clear corporate values and code of conduct
bull Listed bond issues with quarterly financial reporting
Developing meaningful and constructive regulatory relationships
bull Ensuring we understand the regulatory arc
bull Helping regulators and legislators gain a solid understanding of our business
bull Ensuring we have a seat at the table
bull Contributing to EU Consumer Credit Directive consultation process
bull Continuous improvements in credit underwriting
bull Ensuring products are used appropriately
bull Working to ensure customers have safe landings when they signal difficulties
21
Regulatory overviewCountry
of interest income(Q1 2020)
Products (1) Regulator CB (2) Licenserequired (3)
Interest rate cap (1) Status
Argentina 1 SPL Consumer Protection Directorate - - -
Armenia 2 LOC Central Bank of the Republic of Armenia Yes Yes Nominal
Bulgaria ndash Online 2 SPL Bulgarian National BankYes Yes APR
(inc fees) Stable frameworkBulgaria ndash Bank 13 IL LOC POS SME
Czech Republic 5 SPL IL Czech National Bank Yes Yes - Stable framework
Denmark 11 LOC IL FSA and Consumer Ombudsman Yes YesAPR amp TCOC
being introduced
Danish FSA licensing process ongoing New regulations regarding interest rate caps (35 APR cap 100 cost of credit cap) and marketing restrictions in final stages of review Expected to start in July
Finland 1 IL(4) Finnish Competition and Consumer Authority - - Nominal
amp fees
New interest rate caps in force from September 2019 Further discussions on temporary reduction to 10 are ongoing
Latvia 5 MTP IL Consumer Rights Protection Centre - Yes Nominal fees amp TCOC
Stable framework since new interest rate caps in July 2019
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards MTP ndash Minimum to pay POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit(2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement(4) lsquoMini-ILrsquo (4 monthly instalments) from September 2019
22
Regulatory overview (continued)Country
of interest income
(Q1 2020)Products (1) Regulator CB (2) License
required (3)Interest rate
cap (1) Status
Lithuania 2 SPL IL Central Bank of Lithuania Yes Yes Nominal fees amp TCOC Stable framework
Mexico 1 IL National Financial Services Consumer Protection Commission - Yes - Stable framework
Poland 23 SPL IL Office of Competition and Consumer Protection - - Nominal fees
amp TCOC
Non-interest cost caps adjusted in April for one year to 15 fixed and 6 annual with a 45 total limit
Romania 10 IL LOC POS SME National Bank of Romania Yes Yes - Bill to introduce interest rate cap under discussion
Slovakia lt1 SPL National Bank of Slovakia Yes Yes APR (inc fees) Stable framework
Spain 22 SPL IL NA - - -
Sweden 1 LOC IL Swedish Financial Supervisory Authority Yes Yes Nominal amp
TCOCStable framework since new interest rate caps in September 2018
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit (2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement
23
Appendix ndash strategic evolution of portfolio
24
Evolving and broadening our business model
Prime
Sub-Prime
Near-Prime
Segments
Higher Duration Lower APR Products
SPL ILLOC POS
A multi-segment multi-product consumer credit specialist
1
1 Optimise
2 2 Diversify amp Grow
Illustrative
25
Evolution of product mix
Note (1) Reflects reclassification of Vivus brand products in Sweden (from January 2016) Denmark (from January 2017) Armenia (from launch in July 2017) and short-term products (SMS Credit amp Ondo) in Latvia (from January 2019) to Lines of Credit
68
17
3
9
29
45
18
11
0
25
50
75
100
30 Jun 2016 31 Mar 2020
SME (Bank)
Point of Sale
Instalment loans
Line of Credit Cards
Single Payment Loans
euro543meuro323m
Net receivables by product (1)
Online sub-prime only
Bank and onlinenear-prime
and sub-prime
76
48
4
14
20
29
7
0
25
50
75
100
Q1 2016 Q1 2020
Interest income by product (1)
euro97meuro90m
Date chosen to reflect the composition of loan portfolio immediately prior to purchase of TBI Bank
26
Funding near-prime growth via TBI Bank
Online acquisition Retail deposit funding
Initial portfolio development
Early stage customer acquisition and credit metrics monitored and
enhanced
Funding Platform
In-house IT funding platform ensuring ongoing automated
portfolio transfers
Bringing portfolios to scale
Market specific portfolios grow with ongoing sales to reach scale
True saleof portfolio(s)loan servicing
Indicative APRs
20-40
CostIncome ratio
c40
Cost of Risk
6-8
Cost of Funds
3-5
Return on Assets
3-5(2)
Illustrative near-prime
ldquounit economicsrdquo(1)
Notes(1) Illustrative metrics for near-prime portfolios and not indicative of a specific product or market(2) Illustrative potential returns in medium-term at scale
Payment of fair market value
bull Regular sales of Polish instalment loans since September 2019bull Passporting application submitted for Lithuania (largest near-prime portfolio)
Accessing TBI Bank deposit funding for lsquoonlinersquo portfolios via ongoing loan sales
27
Asset quality and provisioning ndash loan principal
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Interest Income 966 1065 (9)Interest Expense (127) (150) (16)Net Interest Income 839 915 (8)Net FampC Income 24 21 12Other operating income 23 22 7Non-Interest Income 47 43 10Operating Income (Revenue) 886 957 (7)Total operating costs (467) (498) (6)Pre-provision operating profit 419 459 (9)Net impairment charges (312) (324) (4)Post-provision operating profit 107 135 (21)Depreciation and amortisation (32) (32) +0Non-recurring income(expense) (39) (01) nmNet FX gain(loss) (34) 16 nmProfit before tax 02 119 nmIncome tax expense (27) (62) (57)Net profit(loss) after tax (25) 57 nm
Adjusted EBITDA 233 294 (21)
Income Statement
30
Balance sheetIn millions of euro
31 March 2020 (unaudited)
31 December 2019
Cash and cash equivalents of which 1560 1257- Online 834 767- TBI Bank 725 490
Placements with other banks 127 64Gross receivables due from customers 7042 7337Allowance for impairment (1616) (1548)Net receivables due from customers of which 5426 5789
- Principal 5147 5480- Accrued interest 277 309
Net investments in finance leases 45 47Net loans to related parties 594 607Property and equipment 182 178Financial investments 502 564Prepaid expenses 40 45Tax assets 174 213Deferred tax assets 353 330Intangible IT assets 168 178Goodwill 165 165Other assets 392 295Total assets 9727 9731Calculation for Presentation other assets (not loans Loans and borrowings 3849 3846Deposits from customers 3333 3222Deposits from banks 95 130Corporate income tax payable 124 95Other liabilities 718 780Total liabilities 8119 8074Share capital 358 358Retained earnings 1628 1657Reserves (378) (357)Total attributable equity 1608 1658Non-controlling interests 00 (00)Total equity 1608 1658Total shareholders equity and liabilities 9727 9731
Balance Sheet
31
Statement of Cash FlowsIn millions of euro
2020 2019Cash flows from operating activitiesProfit before taxes 02 119
Adjustments forDepreciation and amortisation 32 32
Impairment of goodwill and intangible assets - -
Net (gain) loss on foreign exchange from borrowings and other monetary items 131 63
Impairment losses on loans 364 359
Reversal of provision on debt portfolio sales (20) 01
Write-off and disposal of intangible and property and equipment assets 01 01
Interest income from non-customers loans (19) (19)
Interest expense on loans and borrowings and deposits from customers 127 150Non-recurring finance cost 32 -
Other non-cash items 14 0
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663 707
Adjustments forChange in financial instruments measured at fair value through profit or loss (137) (82)(Increase) decrease in other assets (including TBI statutory reserve placements amp leases) (09) (15)
Increase (decrease) in accounts payable to suppliers contractors and other creditors (39) (81)
Operating cash flow before movements in portfolio and deposits 479 530
Increase in loans due from customers (132) (468)
Proceeds from sale of portfolio 71 161
Increase in deposits (customer and bank deposits) 77 74
Deposit interest payments (15) (10)
Gross cash flows from operating activities 481 288
Corporate income tax paid (06) (63)
Net cash flows from operating activities 475 225
3 months to 31 March In millions of euro
2020 2019
Cash flows used in investing activitiesPurchase of property and equipment and intangible assets (15) (13)
Net cash from Purchase Sale of financial instruments 39 (118)
Loans issued to related parties - -
Loans repaid from related parties 0 40
Interest received from related parties 31 01
Disposal of subsidiaries net of cash disposed (13) -
(Acquisition)Disposal of equity investments (14) -
Acquisition of non-controlling interests (04) (04)
Net cash flows from investing activities 25 (94)
Cash flows from financing activitiesLoans received and notes issued - 0
Repayment and repurchase of loans and notes (164) (133)
Interest payments (06) (35)
FX hedging margin 14 82
Payment of lease liabilities (11) (1)
Dividend payments - -
Net cash flows used in financing activities (167) (95)
Net increase (decrease) in cash and cash equivalents 333 35
Cash and cash equivalents at the beginning of the period 985 1488
Effect of exchange rate fluctuations on cash (01) 0
Cash and cash equivalents at the end of the period 1318 1524
TBI Bank minimum statutory reserve 242 354
Total cash on hand and cash at central banks 1560 1878
3 months to 31 March
Cash Flow
Cash Flow (2)
Cash Flow
Cash Flow (2)
32
Key financial ratiosQ1 2020 Q1 2019
CapitalisationEquity assets 165 161Equity net receivables 296 299Adjusted interest coverage 18x 20xTBI Bank consolidated capital adequacy 188 210
ProfitabilityNet interest margin
- Online 764 802- TBI Bank 246 252- Overall group 500 557
Cost income ratio 527 520Normalised Profit before tax margin 111 127Normalised Return on average equity 118 104Normalised Return on average assets 20 17
Asset qualityCost of risk
- Online 295 289- TBI Bank 47 45- Overall group 174 184
Net impairment interest income 323 304Gross NPL ratio
- Online 283 227- TBI Bank 160 173- Overall group 222 204
Overall group NPL coverage ratio 1035 1064
See appendix for definitions of key metrics and ratios
key ratios
33
GlossaryDefinitionsbull Adjusted EBITDA ndash a non-IFRS measure that represents EBITDA (profit for the period plus tax plus interest expense plus depreciation and amortization) as adjusted by incomeloss from discontinued operations non-cash gains and losses
attributable to movement in the mark-to-market valuation of hedging obligations under IFRS goodwill write-offs and certain other one-off or non-cash items Adjusted EBITDA as presented here may not be comparable to similarly-titled measures that are reported by other companies due to differences in the way these measures are calculated Further details of covenant adjustments can be found in the relevant bond prospectuses available on our website
bull Adjusted interest coverage ndash Adjusted EBITDA interest expense for the relevant period (nb not equal to the full covenant coverage ratio calculation)
bull Cost of risk ndash Annualised net impairment loss average gross receivables (total gross receivables as of the start and end of each period divided by two)
bull Cost income ratio ndash Operating costs operating income (revenue)
bull Equity assets ratio ndash Total equity total assets
bull Equity net receivables ndash Total equity net customer receivables (including accrued interest)
bull Gross NPL ratio ndash Non-performing receivables (including accrued interest) with a delay of over 90 days gross receivables (including accrued interest)
bull Gross receivables ndash Total amount receivable from customers including principal and accrued interest after deduction of deferred income
bull Intangible assets ndash consists of deferred tax assets intangible IT assets and goodwill
bull Interest income ndash Interest and similar income generated from our customer loan portfolio
bull Loss given default ndash Loss on non-performing receivables (ie 1 - recovery rate) based on recoveries during the appropriate time window for the specific product reduced by costs of collection discounted at the weighted average effective interest rate
bull Net effective annualised yield ndash annualised interest income (excluding penalties) average net loan principal
bull Net impairment to interest income ratio ndash Net impairment losses on loans and receivables interest income
bull Net interest margin ndash Annualised net interest income average gross loan principal (total gross loan principal as of the start and end of each period divided by two)
bull Net receivables ndash Gross receivables (including accrued interest) less impairment provisions
bull Non-performing loans (NPLs) ndash Loan principal or receivables (as applicable) that are over 90 days past due (and for TBI Bank shown on a customer level basis)
bull Normalised ndash Adjusted to remove the effect of non-recurring items net FX and one-off adjustments to intangible assets and for 2018 ratios only adjusted to reflect the opening balance of 2018 balance sheet after IFRS 9 effects
bull Profit before tax margin ndash Profit before tax interest income
bull Return on Average Assets ndash Annualised profit from continuing operations average assets (total assets as of the start and end of each period divided by two)
bull Return on Average Equity ndash Annualised profit from continuing operations average equity (total equity as of the start and end of each period divided by two)
bull Return on Average Tangible Equity ndash Annualised profit from continuing operations average tangible equity (tangible equity as of the start and end of each period divided by two)
bull Tangible Equity ndash Total equity minus intangible assets
bull TBI Bank Capital adequacy ratio ndash (Tier One Capital + Tier Two Capital) Risk weighted assets (calculated according to the prevailing regulations of the Bulgarian National Bank)
34
Contacts
Investor Relationsinvestorrelations4financecom
James EtheringtonHead of Investor RelationsPhone +44 7766 697 950E-mail jamesetherington4financecom
Paul GoldfinchChief Financial OfficerPhone +371 2572 6422E-mail paulgoldfinch4financecom
Headquarters17a-8 Lielirbes street Riga LV-1046 Latvia
4finance Holding SA
Disclaimer
Agenda
Q1 2020 business and financial highlights
Slide Number 5
Current trading and outlook
Review of three month 2020 results
Summary of three month 2020 results
Interest income remains well diversified
Slide Number 10
Strong financial profile ndash stability and profitability
Funding strategy
Diversified loan portfolio
Analysis of net impairments and cost of risk
Asset quality and provisioning
Recent collections performance
Slide Number 17
Thank you and Questions
Appendix ndash responsible lending and regulatory overview
Sustainability through good governance and responsible lending
Regulatory overview
Regulatory overview (continued)
Appendix ndash strategic evolution of portfolio
Evolving and broadening our business model
Evolution of product mix
Slide Number 26
Asset quality and provisioning ndash loan principal
Appendix ndash financials and key ratios
Slide Number 29
Balance sheet
Statement of Cash Flows
Slide Number 32
GlossaryDefinitions
Contacts
Q12018
Q1 2020
9M 2018
Q1 2019
FY 2017
Net receivables (eurom) of which
5426
5408
5477
- Principal
272
5147
5144
5165
208
- Accrued interest
98
279
265
312
39
Total assets (eurom)
9724
10238
10147
Total equity (eurom)
221
1605
1607
1637
335
Capitalisation
Equity assets
147
165
157
161
127
Equity net receivables
195
296
297
299
267
Adjusted interest coverage
233
18x
25x
20x
223
TBI Bank consolidated capital adequacy
231
188
241
210
239
240
Profitability
Q12018
Net interest margin
- Online
764
882
802
- TBI Bank
246
280
252
- Overall group
500
648
557
Cost income ratio
527
520
520
Post-provision operating profit margin
145
166
177
Normalised Profit before tax margin
111
154
127
Normalised Return on average equity
118
375
104
Normalised Return on average assets
20
56
17
Asset quality
Cost of risk
- Online
295
237
289
- TBI Bank
47
86
45
- Overall group
174
181
184
Net impairment interest income
323
259
304
Gross NPL ratio
- Online
283
222
227
- TBI Bank
160
154
173
- Overall group
222
196
204
Overall group NPL coverage ratio
1035
1156
1064
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
505
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(06)
57
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
50
199
199
(248)
(301)
0800
Impairment losses on loans
1485
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(120)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(73)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
568
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
09
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2599
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
108
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(11)
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2637
2840
2840
1756
2279
00
Increase in loans due from customers
(2248)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1453
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1120
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(15)
(13)
(84)
(128)
(131)
(21)
Net cash from Purchase Sale of financial instruments
39
(118)
(136)
mdash
Repayment of financial instrument
-
-
Loans issued to related parties
-
-
(26)
(06)
(43)
(23)
Loans repaid from related parties
0
40
74
23
109
54
Interest received from related parties
31
01
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
00
(01)
0-
mdash
Disposal of subsidiaries net of cash disposed
(13)
-
(59)
(45)
(44)
mdash
(Acquisition)Disposal of equity investments
(14)
-
Acquisition of non-controlling interests
(04)
(04)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
-
-
mdash
0-
(00)
Prepayment for potential acquisition
-
00
208
0-
(208)
mdash
Acquisition of shares
-
00
00
Net cash flows from investing activities
25
(94)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
0
05
2999
1637
05
Repayment and repurchase of loans and notes
(164)
(133)
(272)
(1737)
(580)
(01)
Interest payments
(06)
(35)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
-
00
(00)
(192)
(58)
mdash
FX hedging margin
14
82
42
(140)
(88)
Payment of lease liabilities
(11)
(1)
mdash
Dividend payments
-
-
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(167)
(95)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
333
35
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
985
1488
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
(01)
0
01
10
10
03
Cash and cash equivalents at the end of the period
1318
1524
1488
2040
1319
681
TBI Bank minimum statutory reserve
242
354
234
230
230
242
Total cash on hand and cash at central banks
1560
1878
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
02
119
526
495
107
17000
Adjustments for
Depreciation and amortisation
32
32
121
64
83
1700
Impairment of goodwill and intangible assets
-
-
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
131
63
199
(248)
(301)
0800
Impairment losses on loans
364
359
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(20)
01
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
01
01
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(19)
(19)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
127
150
621
455
619
13300
Non-recurring finance cost
32
-
mdash
mdash
63
Other non-cash items
14
0
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663
707
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(137)
(82)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
(09)
(15)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(39)
(81)
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
479
530
2840
1756
2279
00
Increase in loans due from customers
(132)
(468)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
71
161
819
333
542
160
Increase in deposits (customer and bank deposits)
77
74
165
265
338
110
Deposit interest payments
(15)
(10)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
481
288
1233
524
442
(535)
Corporate income tax paid
(06)
(63)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
475
225
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(83)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(196)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
Q12018 (unaudited)
31 March 2020 (unaudited)
1 January 2018 (post IFRS 9 unaudited)
31 December 2019
Cash and cash equivalents of which
1538
1560
1549
1257
- Online
535
834
658
767
- TBI Bank
1003
725
892
490
Placements with other banks
57
127
70
64
Gross receivables due from customers
7156
7042
6588
7337
Allowance for impairment
(1665)
(1616)
(1575)
(1548)
Net receivables due from customers of which
5491
5426
5013
5789
- Principal
5147
5026
5480
- Accrued interest
277
264
309
Net investments in finance leases
93
45
105
47
Net loans to related parties
631
594
598
607
Property and equipment
96
182
101
178
Financial investments
183
502
184
564
Prepaid expenses
87
40
108
45
Tax assets
212
174
221
213
Deferred tax assets
371
353
368
330
Intangible IT assets
281
168
286
178
Goodwill
214
165
214
165
Other assets
678
392
573
295
Total assets
9932
9727
9390
9731
Calculation for Presentation - other assets (not loans or cash)
Loans and borrowings
4672
3849
3794
3846
Deposits from customers
2728
3333
2710
3222
Deposits from banks
94
95
mdash
130
Corporate income tax payable
178
124
198
95
Other liabilities
799
718
765
780
Total liabilities
8471
8119
7466
8074
Share capital
358
358
358
358
Retained earnings
1475
1628
1350
1657
Reserves
(343)
(378)
(323)
(357)
Total attributable equity
1490
1608
1385
1658
Non-controlling interests
(28)
00
(24)
(00)
Total equity
1461
1608
1362
1658
Total shareholders equity and liabilities
9932
9727
8828
9731
In millions of euro
Q1 2020 (unaudited)
Q1 2019 (unaudited)
change YoY
Interest Income
966
1065
(9)
Interest Expense
(127)
(150)
-(16)
1000000
Net Interest Income
839
915
(8)
Net FampC Income
24
21
12
Other operating income
23
22
7
Non-Interest Income
47
43
10
Operating Income (Revenue)
886
957
(7)
Personnel costs
(221)
(221)
(0
Discretionary bonus
(18)
(19)
(6)
Marketing
(91)
(96)
(5)
IT costs
(39)
(45)
(12)
DampA costs
(35)
(32)
+8
Other costs
(98)
(118)
(17)
Total operating costs
(467)
(498)
(6)
Pre-provision operating profit
419
459
(9)
Net impairment charges
(312)
(324)
-(4)
manual
Post-provision operating profit
107
135
(21)
Depreciation and amortisation
(32)
(32)
-+0
manual
Non-recurring income(expense)
(39)
(01)
nm
Non-recurring finance cost
mdash
mdash
+0
Net FX gain(loss)
(34)
16
nm
One-off adjustments to intangible assets
-
-
(0)
manual
Profit before tax
02
119
nm
Income tax expense
(27)
(62)
-(57)
manual
Net profit(loss) after tax
(25)
57
nm
manual
Adjusted EBITDA
233
294
-(21)
Costincome ratio
527
520
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online principal
Performing (1)
2347
(357)
1990
737
2634
(397)
2237
774
3177
(493)
2684
791
(22139)
3177
(302)
2875
681
(191)
150128837891005
Non-performing (2)
836
(656)
181
263
770
(590)
180
226
840
(664)
175
209
(74878)
36947
1488
(983)
505
319
-648
319
-64836054
-250544747891005
Online total
3184
(1013)
2171
1000
3404
(987)
2417
1000
4017
(1158)
2859
1000
4665
(1286)
3379
1000
(74878)
14808
TBI Bank principal
Performing (1)
2853
(121)
2732
840
2896
(118)
2778
838
2090
(68)
2022
873
(2586)
2090
(43)
2047
873
(25)
-251961477
Non-performing (2)
541
(298)
244
160
558
(274)
284
162
303
(158)
145
127
0437
303
(162)
141
127
04
42578177
TBI Bank total
3394
(418)
2976
1000
3454
(392)
3062
1000
2393
(226)
2167
1000
-
(2149)
2393
(205)
2188
1000
Overall group principal
Performing (1)
5200
(478)
4722
791
5529
(515)
5015
806
5267
(562)
4706
822
-
(24725)
5267
(345)
4922
746
Non-performing (2)
1378
(953)
424
209
1328
(864)
465
194
1142
(822)
320
178
(74878)
37384
1791
(1145)
646
254
Overall total
6578
(1431)
5147
1000
6858
(1378)
5480
1000
6410
(1384)
5026
1000
(74878)
12659
7058
(1490)
5567
1000
31122018 data updated post audit
20
Sustainability through good governance and responsible lendingOperating as a mainstream consumer finance business
bull ldquoBank-likerdquo policies and procedures with strong compliance function
bull Continued investment in AML GDPR and other strategic compliance priorities
bull Robust corporate governance with strong Supervisory Board
bull Increasingly regulated by main financial supervisory authorities
bull Diversification of portfolio and consequent reduction of reliance on single payment loans
bull Clear corporate values and code of conduct
bull Listed bond issues with quarterly financial reporting
Developing meaningful and constructive regulatory relationships
bull Ensuring we understand the regulatory arc
bull Helping regulators and legislators gain a solid understanding of our business
bull Ensuring we have a seat at the table
bull Contributing to EU Consumer Credit Directive consultation process
bull Continuous improvements in credit underwriting
bull Ensuring products are used appropriately
bull Working to ensure customers have safe landings when they signal difficulties
21
Regulatory overviewCountry
of interest income(Q1 2020)
Products (1) Regulator CB (2) Licenserequired (3)
Interest rate cap (1) Status
Argentina 1 SPL Consumer Protection Directorate - - -
Armenia 2 LOC Central Bank of the Republic of Armenia Yes Yes Nominal
Bulgaria ndash Online 2 SPL Bulgarian National BankYes Yes APR
(inc fees) Stable frameworkBulgaria ndash Bank 13 IL LOC POS SME
Czech Republic 5 SPL IL Czech National Bank Yes Yes - Stable framework
Denmark 11 LOC IL FSA and Consumer Ombudsman Yes YesAPR amp TCOC
being introduced
Danish FSA licensing process ongoing New regulations regarding interest rate caps (35 APR cap 100 cost of credit cap) and marketing restrictions in final stages of review Expected to start in July
Finland 1 IL(4) Finnish Competition and Consumer Authority - - Nominal
amp fees
New interest rate caps in force from September 2019 Further discussions on temporary reduction to 10 are ongoing
Latvia 5 MTP IL Consumer Rights Protection Centre - Yes Nominal fees amp TCOC
Stable framework since new interest rate caps in July 2019
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards MTP ndash Minimum to pay POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit(2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement(4) lsquoMini-ILrsquo (4 monthly instalments) from September 2019
22
Regulatory overview (continued)Country
of interest income
(Q1 2020)Products (1) Regulator CB (2) License
required (3)Interest rate
cap (1) Status
Lithuania 2 SPL IL Central Bank of Lithuania Yes Yes Nominal fees amp TCOC Stable framework
Mexico 1 IL National Financial Services Consumer Protection Commission - Yes - Stable framework
Poland 23 SPL IL Office of Competition and Consumer Protection - - Nominal fees
amp TCOC
Non-interest cost caps adjusted in April for one year to 15 fixed and 6 annual with a 45 total limit
Romania 10 IL LOC POS SME National Bank of Romania Yes Yes - Bill to introduce interest rate cap under discussion
Slovakia lt1 SPL National Bank of Slovakia Yes Yes APR (inc fees) Stable framework
Spain 22 SPL IL NA - - -
Sweden 1 LOC IL Swedish Financial Supervisory Authority Yes Yes Nominal amp
TCOCStable framework since new interest rate caps in September 2018
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit (2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement
23
Appendix ndash strategic evolution of portfolio
24
Evolving and broadening our business model
Prime
Sub-Prime
Near-Prime
Segments
Higher Duration Lower APR Products
SPL ILLOC POS
A multi-segment multi-product consumer credit specialist
1
1 Optimise
2 2 Diversify amp Grow
Illustrative
25
Evolution of product mix
Note (1) Reflects reclassification of Vivus brand products in Sweden (from January 2016) Denmark (from January 2017) Armenia (from launch in July 2017) and short-term products (SMS Credit amp Ondo) in Latvia (from January 2019) to Lines of Credit
68
17
3
9
29
45
18
11
0
25
50
75
100
30 Jun 2016 31 Mar 2020
SME (Bank)
Point of Sale
Instalment loans
Line of Credit Cards
Single Payment Loans
euro543meuro323m
Net receivables by product (1)
Online sub-prime only
Bank and onlinenear-prime
and sub-prime
76
48
4
14
20
29
7
0
25
50
75
100
Q1 2016 Q1 2020
Interest income by product (1)
euro97meuro90m
Date chosen to reflect the composition of loan portfolio immediately prior to purchase of TBI Bank
26
Funding near-prime growth via TBI Bank
Online acquisition Retail deposit funding
Initial portfolio development
Early stage customer acquisition and credit metrics monitored and
enhanced
Funding Platform
In-house IT funding platform ensuring ongoing automated
portfolio transfers
Bringing portfolios to scale
Market specific portfolios grow with ongoing sales to reach scale
True saleof portfolio(s)loan servicing
Indicative APRs
20-40
CostIncome ratio
c40
Cost of Risk
6-8
Cost of Funds
3-5
Return on Assets
3-5(2)
Illustrative near-prime
ldquounit economicsrdquo(1)
Notes(1) Illustrative metrics for near-prime portfolios and not indicative of a specific product or market(2) Illustrative potential returns in medium-term at scale
Payment of fair market value
bull Regular sales of Polish instalment loans since September 2019bull Passporting application submitted for Lithuania (largest near-prime portfolio)
Accessing TBI Bank deposit funding for lsquoonlinersquo portfolios via ongoing loan sales
27
Asset quality and provisioning ndash loan principal
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Interest Income 966 1065 (9)Interest Expense (127) (150) (16)Net Interest Income 839 915 (8)Net FampC Income 24 21 12Other operating income 23 22 7Non-Interest Income 47 43 10Operating Income (Revenue) 886 957 (7)Total operating costs (467) (498) (6)Pre-provision operating profit 419 459 (9)Net impairment charges (312) (324) (4)Post-provision operating profit 107 135 (21)Depreciation and amortisation (32) (32) +0Non-recurring income(expense) (39) (01) nmNet FX gain(loss) (34) 16 nmProfit before tax 02 119 nmIncome tax expense (27) (62) (57)Net profit(loss) after tax (25) 57 nm
Adjusted EBITDA 233 294 (21)
Income Statement
30
Balance sheetIn millions of euro
31 March 2020 (unaudited)
31 December 2019
Cash and cash equivalents of which 1560 1257- Online 834 767- TBI Bank 725 490
Placements with other banks 127 64Gross receivables due from customers 7042 7337Allowance for impairment (1616) (1548)Net receivables due from customers of which 5426 5789
- Principal 5147 5480- Accrued interest 277 309
Net investments in finance leases 45 47Net loans to related parties 594 607Property and equipment 182 178Financial investments 502 564Prepaid expenses 40 45Tax assets 174 213Deferred tax assets 353 330Intangible IT assets 168 178Goodwill 165 165Other assets 392 295Total assets 9727 9731Calculation for Presentation other assets (not loans Loans and borrowings 3849 3846Deposits from customers 3333 3222Deposits from banks 95 130Corporate income tax payable 124 95Other liabilities 718 780Total liabilities 8119 8074Share capital 358 358Retained earnings 1628 1657Reserves (378) (357)Total attributable equity 1608 1658Non-controlling interests 00 (00)Total equity 1608 1658Total shareholders equity and liabilities 9727 9731
Balance Sheet
31
Statement of Cash FlowsIn millions of euro
2020 2019Cash flows from operating activitiesProfit before taxes 02 119
Adjustments forDepreciation and amortisation 32 32
Impairment of goodwill and intangible assets - -
Net (gain) loss on foreign exchange from borrowings and other monetary items 131 63
Impairment losses on loans 364 359
Reversal of provision on debt portfolio sales (20) 01
Write-off and disposal of intangible and property and equipment assets 01 01
Interest income from non-customers loans (19) (19)
Interest expense on loans and borrowings and deposits from customers 127 150Non-recurring finance cost 32 -
Other non-cash items 14 0
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663 707
Adjustments forChange in financial instruments measured at fair value through profit or loss (137) (82)(Increase) decrease in other assets (including TBI statutory reserve placements amp leases) (09) (15)
Increase (decrease) in accounts payable to suppliers contractors and other creditors (39) (81)
Operating cash flow before movements in portfolio and deposits 479 530
Increase in loans due from customers (132) (468)
Proceeds from sale of portfolio 71 161
Increase in deposits (customer and bank deposits) 77 74
Deposit interest payments (15) (10)
Gross cash flows from operating activities 481 288
Corporate income tax paid (06) (63)
Net cash flows from operating activities 475 225
3 months to 31 March In millions of euro
2020 2019
Cash flows used in investing activitiesPurchase of property and equipment and intangible assets (15) (13)
Net cash from Purchase Sale of financial instruments 39 (118)
Loans issued to related parties - -
Loans repaid from related parties 0 40
Interest received from related parties 31 01
Disposal of subsidiaries net of cash disposed (13) -
(Acquisition)Disposal of equity investments (14) -
Acquisition of non-controlling interests (04) (04)
Net cash flows from investing activities 25 (94)
Cash flows from financing activitiesLoans received and notes issued - 0
Repayment and repurchase of loans and notes (164) (133)
Interest payments (06) (35)
FX hedging margin 14 82
Payment of lease liabilities (11) (1)
Dividend payments - -
Net cash flows used in financing activities (167) (95)
Net increase (decrease) in cash and cash equivalents 333 35
Cash and cash equivalents at the beginning of the period 985 1488
Effect of exchange rate fluctuations on cash (01) 0
Cash and cash equivalents at the end of the period 1318 1524
TBI Bank minimum statutory reserve 242 354
Total cash on hand and cash at central banks 1560 1878
3 months to 31 March
Cash Flow
Cash Flow (2)
Cash Flow
Cash Flow (2)
32
Key financial ratiosQ1 2020 Q1 2019
CapitalisationEquity assets 165 161Equity net receivables 296 299Adjusted interest coverage 18x 20xTBI Bank consolidated capital adequacy 188 210
ProfitabilityNet interest margin
- Online 764 802- TBI Bank 246 252- Overall group 500 557
Cost income ratio 527 520Normalised Profit before tax margin 111 127Normalised Return on average equity 118 104Normalised Return on average assets 20 17
Asset qualityCost of risk
- Online 295 289- TBI Bank 47 45- Overall group 174 184
Net impairment interest income 323 304Gross NPL ratio
- Online 283 227- TBI Bank 160 173- Overall group 222 204
Overall group NPL coverage ratio 1035 1064
See appendix for definitions of key metrics and ratios
key ratios
33
GlossaryDefinitionsbull Adjusted EBITDA ndash a non-IFRS measure that represents EBITDA (profit for the period plus tax plus interest expense plus depreciation and amortization) as adjusted by incomeloss from discontinued operations non-cash gains and losses
attributable to movement in the mark-to-market valuation of hedging obligations under IFRS goodwill write-offs and certain other one-off or non-cash items Adjusted EBITDA as presented here may not be comparable to similarly-titled measures that are reported by other companies due to differences in the way these measures are calculated Further details of covenant adjustments can be found in the relevant bond prospectuses available on our website
bull Adjusted interest coverage ndash Adjusted EBITDA interest expense for the relevant period (nb not equal to the full covenant coverage ratio calculation)
bull Cost of risk ndash Annualised net impairment loss average gross receivables (total gross receivables as of the start and end of each period divided by two)
bull Cost income ratio ndash Operating costs operating income (revenue)
bull Equity assets ratio ndash Total equity total assets
bull Equity net receivables ndash Total equity net customer receivables (including accrued interest)
bull Gross NPL ratio ndash Non-performing receivables (including accrued interest) with a delay of over 90 days gross receivables (including accrued interest)
bull Gross receivables ndash Total amount receivable from customers including principal and accrued interest after deduction of deferred income
bull Intangible assets ndash consists of deferred tax assets intangible IT assets and goodwill
bull Interest income ndash Interest and similar income generated from our customer loan portfolio
bull Loss given default ndash Loss on non-performing receivables (ie 1 - recovery rate) based on recoveries during the appropriate time window for the specific product reduced by costs of collection discounted at the weighted average effective interest rate
bull Net effective annualised yield ndash annualised interest income (excluding penalties) average net loan principal
bull Net impairment to interest income ratio ndash Net impairment losses on loans and receivables interest income
bull Net interest margin ndash Annualised net interest income average gross loan principal (total gross loan principal as of the start and end of each period divided by two)
bull Net receivables ndash Gross receivables (including accrued interest) less impairment provisions
bull Non-performing loans (NPLs) ndash Loan principal or receivables (as applicable) that are over 90 days past due (and for TBI Bank shown on a customer level basis)
bull Normalised ndash Adjusted to remove the effect of non-recurring items net FX and one-off adjustments to intangible assets and for 2018 ratios only adjusted to reflect the opening balance of 2018 balance sheet after IFRS 9 effects
bull Profit before tax margin ndash Profit before tax interest income
bull Return on Average Assets ndash Annualised profit from continuing operations average assets (total assets as of the start and end of each period divided by two)
bull Return on Average Equity ndash Annualised profit from continuing operations average equity (total equity as of the start and end of each period divided by two)
bull Return on Average Tangible Equity ndash Annualised profit from continuing operations average tangible equity (tangible equity as of the start and end of each period divided by two)
bull Tangible Equity ndash Total equity minus intangible assets
bull TBI Bank Capital adequacy ratio ndash (Tier One Capital + Tier Two Capital) Risk weighted assets (calculated according to the prevailing regulations of the Bulgarian National Bank)
34
Contacts
Investor Relationsinvestorrelations4financecom
James EtheringtonHead of Investor RelationsPhone +44 7766 697 950E-mail jamesetherington4financecom
Paul GoldfinchChief Financial OfficerPhone +371 2572 6422E-mail paulgoldfinch4financecom
Headquarters17a-8 Lielirbes street Riga LV-1046 Latvia
4finance Holding SA
Disclaimer
Agenda
Q1 2020 business and financial highlights
Slide Number 5
Current trading and outlook
Review of three month 2020 results
Summary of three month 2020 results
Interest income remains well diversified
Slide Number 10
Strong financial profile ndash stability and profitability
Funding strategy
Diversified loan portfolio
Analysis of net impairments and cost of risk
Asset quality and provisioning
Recent collections performance
Slide Number 17
Thank you and Questions
Appendix ndash responsible lending and regulatory overview
Sustainability through good governance and responsible lending
Regulatory overview
Regulatory overview (continued)
Appendix ndash strategic evolution of portfolio
Evolving and broadening our business model
Evolution of product mix
Slide Number 26
Asset quality and provisioning ndash loan principal
Appendix ndash financials and key ratios
Slide Number 29
Balance sheet
Statement of Cash Flows
Slide Number 32
GlossaryDefinitions
Contacts
Q12018
Q1 2020
9M 2018
Q1 2019
FY 2017
Net receivables (eurom) of which
5426
5408
5477
- Principal
272
5147
5144
5165
208
- Accrued interest
98
279
265
312
39
Total assets (eurom)
9724
10238
10147
Total equity (eurom)
221
1605
1607
1637
335
Capitalisation
Equity assets
147
165
157
161
127
Equity net receivables
195
296
297
299
267
Adjusted interest coverage
233
18x
25x
20x
223
TBI Bank consolidated capital adequacy
231
188
241
210
239
240
Profitability
Q12018
Net interest margin
- Online
764
882
802
- TBI Bank
246
280
252
- Overall group
500
648
557
Cost income ratio
527
520
520
Post-provision operating profit margin
145
166
177
Normalised Profit before tax margin
111
154
127
Normalised Return on average equity
118
375
104
Normalised Return on average assets
20
56
17
Asset quality
Cost of risk
- Online
295
237
289
- TBI Bank
47
86
45
- Overall group
174
181
184
Net impairment interest income
323
259
304
Gross NPL ratio
- Online
283
222
227
- TBI Bank
160
154
173
- Overall group
222
196
204
Overall group NPL coverage ratio
1035
1156
1064
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
505
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(06)
57
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
50
199
199
(248)
(301)
0800
Impairment losses on loans
1485
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(120)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(73)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
568
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
09
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2599
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
108
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(11)
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2637
2840
2840
1756
2279
00
Increase in loans due from customers
(2248)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1453
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1120
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(15)
(13)
(84)
(128)
(131)
(21)
Net cash from Purchase Sale of financial instruments
39
(118)
(136)
mdash
Repayment of financial instrument
-
-
Loans issued to related parties
-
-
(26)
(06)
(43)
(23)
Loans repaid from related parties
0
40
74
23
109
54
Interest received from related parties
31
01
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
00
(01)
0-
mdash
Disposal of subsidiaries net of cash disposed
(13)
-
(59)
(45)
(44)
mdash
(Acquisition)Disposal of equity investments
(14)
-
Acquisition of non-controlling interests
(04)
(04)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
-
-
mdash
0-
(00)
Prepayment for potential acquisition
-
00
208
0-
(208)
mdash
Acquisition of shares
-
00
00
Net cash flows from investing activities
25
(94)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
0
05
2999
1637
05
Repayment and repurchase of loans and notes
(164)
(133)
(272)
(1737)
(580)
(01)
Interest payments
(06)
(35)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
-
00
(00)
(192)
(58)
mdash
FX hedging margin
14
82
42
(140)
(88)
Payment of lease liabilities
(11)
(1)
mdash
Dividend payments
-
-
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(167)
(95)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
333
35
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
985
1488
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
(01)
0
01
10
10
03
Cash and cash equivalents at the end of the period
1318
1524
1488
2040
1319
681
TBI Bank minimum statutory reserve
242
354
234
230
230
242
Total cash on hand and cash at central banks
1560
1878
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
02
119
526
495
107
17000
Adjustments for
Depreciation and amortisation
32
32
121
64
83
1700
Impairment of goodwill and intangible assets
-
-
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
131
63
199
(248)
(301)
0800
Impairment losses on loans
364
359
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(20)
01
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
01
01
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(19)
(19)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
127
150
621
455
619
13300
Non-recurring finance cost
32
-
mdash
mdash
63
Other non-cash items
14
0
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663
707
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(137)
(82)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
(09)
(15)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(39)
(81)
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
479
530
2840
1756
2279
00
Increase in loans due from customers
(132)
(468)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
71
161
819
333
542
160
Increase in deposits (customer and bank deposits)
77
74
165
265
338
110
Deposit interest payments
(15)
(10)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
481
288
1233
524
442
(535)
Corporate income tax paid
(06)
(63)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
475
225
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(83)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(196)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
Q12018 (unaudited)
31 March 2020 (unaudited)
1 January 2018 (post IFRS 9 unaudited)
31 December 2019
Cash and cash equivalents of which
1538
1560
1549
1257
- Online
535
834
658
767
- TBI Bank
1003
725
892
490
Placements with other banks
57
127
70
64
Gross receivables due from customers
7156
7042
6588
7337
Allowance for impairment
(1665)
(1616)
(1575)
(1548)
Net receivables due from customers of which
5491
5426
5013
5789
- Principal
5147
5026
5480
- Accrued interest
277
264
309
Net investments in finance leases
93
45
105
47
Net loans to related parties
631
594
598
607
Property and equipment
96
182
101
178
Financial investments
183
502
184
564
Prepaid expenses
87
40
108
45
Tax assets
212
174
221
213
Deferred tax assets
371
353
368
330
Intangible IT assets
281
168
286
178
Goodwill
214
165
214
165
Other assets
678
392
573
295
Total assets
9932
9727
9390
9731
Calculation for Presentation - other assets (not loans or cash)
Loans and borrowings
4672
3849
3794
3846
Deposits from customers
2728
3333
2710
3222
Deposits from banks
94
95
mdash
130
Corporate income tax payable
178
124
198
95
Other liabilities
799
718
765
780
Total liabilities
8471
8119
7466
8074
Share capital
358
358
358
358
Retained earnings
1475
1628
1350
1657
Reserves
(343)
(378)
(323)
(357)
Total attributable equity
1490
1608
1385
1658
Non-controlling interests
(28)
00
(24)
(00)
Total equity
1461
1608
1362
1658
Total shareholders equity and liabilities
9932
9727
8828
9731
In millions of euro
Q1 2020 (unaudited)
Q1 2019 (unaudited)
change YoY
Interest Income
966
1065
(9)
Interest Expense
(127)
(150)
-(16)
1000000
Net Interest Income
839
915
(8)
Net FampC Income
24
21
12
Other operating income
23
22
7
Non-Interest Income
47
43
10
Operating Income (Revenue)
886
957
(7)
Personnel costs
(221)
(221)
(0
Discretionary bonus
(18)
(19)
(6)
Marketing
(91)
(96)
(5)
IT costs
(39)
(45)
(12)
DampA costs
(35)
(32)
+8
Other costs
(98)
(118)
(17)
Total operating costs
(467)
(498)
(6)
Pre-provision operating profit
419
459
(9)
Net impairment charges
(312)
(324)
-(4)
manual
Post-provision operating profit
107
135
(21)
Depreciation and amortisation
(32)
(32)
-+0
manual
Non-recurring income(expense)
(39)
(01)
nm
Non-recurring finance cost
mdash
mdash
+0
Net FX gain(loss)
(34)
16
nm
One-off adjustments to intangible assets
-
-
(0)
manual
Profit before tax
02
119
nm
Income tax expense
(27)
(62)
-(57)
manual
Net profit(loss) after tax
(25)
57
nm
manual
Adjusted EBITDA
233
294
-(21)
Costincome ratio
527
520
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online principal
Performing (1)
2347
(357)
1990
737
2634
(397)
2237
774
3177
(493)
2684
791
(22139)
3177
(302)
2875
681
(191)
150128837891005
Non-performing (2)
836
(656)
181
263
770
(590)
180
226
840
(664)
175
209
(74878)
36947
1488
(983)
505
319
-648
319
-64836054
-250544747891005
Online total
3184
(1013)
2171
1000
3404
(987)
2417
1000
4017
(1158)
2859
1000
4665
(1286)
3379
1000
(74878)
14808
TBI Bank principal
Performing (1)
2853
(121)
2732
840
2896
(118)
2778
838
2090
(68)
2022
873
(2586)
2090
(43)
2047
873
(25)
-251961477
Non-performing (2)
541
(298)
244
160
558
(274)
284
162
303
(158)
145
127
0437
303
(162)
141
127
04
42578177
TBI Bank total
3394
(418)
2976
1000
3454
(392)
3062
1000
2393
(226)
2167
1000
-
(2149)
2393
(205)
2188
1000
Overall group principal
Performing (1)
5200
(478)
4722
791
5529
(515)
5015
806
5267
(562)
4706
822
-
(24725)
5267
(345)
4922
746
Non-performing (2)
1378
(953)
424
209
1328
(864)
465
194
1142
(822)
320
178
(74878)
37384
1791
(1145)
646
254
Overall total
6578
(1431)
5147
1000
6858
(1378)
5480
1000
6410
(1384)
5026
1000
(74878)
12659
7058
(1490)
5567
1000
31122018 data updated post audit
21
Regulatory overviewCountry
of interest income(Q1 2020)
Products (1) Regulator CB (2) Licenserequired (3)
Interest rate cap (1) Status
Argentina 1 SPL Consumer Protection Directorate - - -
Armenia 2 LOC Central Bank of the Republic of Armenia Yes Yes Nominal
Bulgaria ndash Online 2 SPL Bulgarian National BankYes Yes APR
(inc fees) Stable frameworkBulgaria ndash Bank 13 IL LOC POS SME
Czech Republic 5 SPL IL Czech National Bank Yes Yes - Stable framework
Denmark 11 LOC IL FSA and Consumer Ombudsman Yes YesAPR amp TCOC
being introduced
Danish FSA licensing process ongoing New regulations regarding interest rate caps (35 APR cap 100 cost of credit cap) and marketing restrictions in final stages of review Expected to start in July
Finland 1 IL(4) Finnish Competition and Consumer Authority - - Nominal
amp fees
New interest rate caps in force from September 2019 Further discussions on temporary reduction to 10 are ongoing
Latvia 5 MTP IL Consumer Rights Protection Centre - Yes Nominal fees amp TCOC
Stable framework since new interest rate caps in July 2019
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards MTP ndash Minimum to pay POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit(2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement(4) lsquoMini-ILrsquo (4 monthly instalments) from September 2019
22
Regulatory overview (continued)Country
of interest income
(Q1 2020)Products (1) Regulator CB (2) License
required (3)Interest rate
cap (1) Status
Lithuania 2 SPL IL Central Bank of Lithuania Yes Yes Nominal fees amp TCOC Stable framework
Mexico 1 IL National Financial Services Consumer Protection Commission - Yes - Stable framework
Poland 23 SPL IL Office of Competition and Consumer Protection - - Nominal fees
amp TCOC
Non-interest cost caps adjusted in April for one year to 15 fixed and 6 annual with a 45 total limit
Romania 10 IL LOC POS SME National Bank of Romania Yes Yes - Bill to introduce interest rate cap under discussion
Slovakia lt1 SPL National Bank of Slovakia Yes Yes APR (inc fees) Stable framework
Spain 22 SPL IL NA - - -
Sweden 1 LOC IL Swedish Financial Supervisory Authority Yes Yes Nominal amp
TCOCStable framework since new interest rate caps in September 2018
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit (2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement
23
Appendix ndash strategic evolution of portfolio
24
Evolving and broadening our business model
Prime
Sub-Prime
Near-Prime
Segments
Higher Duration Lower APR Products
SPL ILLOC POS
A multi-segment multi-product consumer credit specialist
1
1 Optimise
2 2 Diversify amp Grow
Illustrative
25
Evolution of product mix
Note (1) Reflects reclassification of Vivus brand products in Sweden (from January 2016) Denmark (from January 2017) Armenia (from launch in July 2017) and short-term products (SMS Credit amp Ondo) in Latvia (from January 2019) to Lines of Credit
68
17
3
9
29
45
18
11
0
25
50
75
100
30 Jun 2016 31 Mar 2020
SME (Bank)
Point of Sale
Instalment loans
Line of Credit Cards
Single Payment Loans
euro543meuro323m
Net receivables by product (1)
Online sub-prime only
Bank and onlinenear-prime
and sub-prime
76
48
4
14
20
29
7
0
25
50
75
100
Q1 2016 Q1 2020
Interest income by product (1)
euro97meuro90m
Date chosen to reflect the composition of loan portfolio immediately prior to purchase of TBI Bank
26
Funding near-prime growth via TBI Bank
Online acquisition Retail deposit funding
Initial portfolio development
Early stage customer acquisition and credit metrics monitored and
enhanced
Funding Platform
In-house IT funding platform ensuring ongoing automated
portfolio transfers
Bringing portfolios to scale
Market specific portfolios grow with ongoing sales to reach scale
True saleof portfolio(s)loan servicing
Indicative APRs
20-40
CostIncome ratio
c40
Cost of Risk
6-8
Cost of Funds
3-5
Return on Assets
3-5(2)
Illustrative near-prime
ldquounit economicsrdquo(1)
Notes(1) Illustrative metrics for near-prime portfolios and not indicative of a specific product or market(2) Illustrative potential returns in medium-term at scale
Payment of fair market value
bull Regular sales of Polish instalment loans since September 2019bull Passporting application submitted for Lithuania (largest near-prime portfolio)
Accessing TBI Bank deposit funding for lsquoonlinersquo portfolios via ongoing loan sales
27
Asset quality and provisioning ndash loan principal
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Interest Income 966 1065 (9)Interest Expense (127) (150) (16)Net Interest Income 839 915 (8)Net FampC Income 24 21 12Other operating income 23 22 7Non-Interest Income 47 43 10Operating Income (Revenue) 886 957 (7)Total operating costs (467) (498) (6)Pre-provision operating profit 419 459 (9)Net impairment charges (312) (324) (4)Post-provision operating profit 107 135 (21)Depreciation and amortisation (32) (32) +0Non-recurring income(expense) (39) (01) nmNet FX gain(loss) (34) 16 nmProfit before tax 02 119 nmIncome tax expense (27) (62) (57)Net profit(loss) after tax (25) 57 nm
Adjusted EBITDA 233 294 (21)
Income Statement
30
Balance sheetIn millions of euro
31 March 2020 (unaudited)
31 December 2019
Cash and cash equivalents of which 1560 1257- Online 834 767- TBI Bank 725 490
Placements with other banks 127 64Gross receivables due from customers 7042 7337Allowance for impairment (1616) (1548)Net receivables due from customers of which 5426 5789
- Principal 5147 5480- Accrued interest 277 309
Net investments in finance leases 45 47Net loans to related parties 594 607Property and equipment 182 178Financial investments 502 564Prepaid expenses 40 45Tax assets 174 213Deferred tax assets 353 330Intangible IT assets 168 178Goodwill 165 165Other assets 392 295Total assets 9727 9731Calculation for Presentation other assets (not loans Loans and borrowings 3849 3846Deposits from customers 3333 3222Deposits from banks 95 130Corporate income tax payable 124 95Other liabilities 718 780Total liabilities 8119 8074Share capital 358 358Retained earnings 1628 1657Reserves (378) (357)Total attributable equity 1608 1658Non-controlling interests 00 (00)Total equity 1608 1658Total shareholders equity and liabilities 9727 9731
Balance Sheet
31
Statement of Cash FlowsIn millions of euro
2020 2019Cash flows from operating activitiesProfit before taxes 02 119
Adjustments forDepreciation and amortisation 32 32
Impairment of goodwill and intangible assets - -
Net (gain) loss on foreign exchange from borrowings and other monetary items 131 63
Impairment losses on loans 364 359
Reversal of provision on debt portfolio sales (20) 01
Write-off and disposal of intangible and property and equipment assets 01 01
Interest income from non-customers loans (19) (19)
Interest expense on loans and borrowings and deposits from customers 127 150Non-recurring finance cost 32 -
Other non-cash items 14 0
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663 707
Adjustments forChange in financial instruments measured at fair value through profit or loss (137) (82)(Increase) decrease in other assets (including TBI statutory reserve placements amp leases) (09) (15)
Increase (decrease) in accounts payable to suppliers contractors and other creditors (39) (81)
Operating cash flow before movements in portfolio and deposits 479 530
Increase in loans due from customers (132) (468)
Proceeds from sale of portfolio 71 161
Increase in deposits (customer and bank deposits) 77 74
Deposit interest payments (15) (10)
Gross cash flows from operating activities 481 288
Corporate income tax paid (06) (63)
Net cash flows from operating activities 475 225
3 months to 31 March In millions of euro
2020 2019
Cash flows used in investing activitiesPurchase of property and equipment and intangible assets (15) (13)
Net cash from Purchase Sale of financial instruments 39 (118)
Loans issued to related parties - -
Loans repaid from related parties 0 40
Interest received from related parties 31 01
Disposal of subsidiaries net of cash disposed (13) -
(Acquisition)Disposal of equity investments (14) -
Acquisition of non-controlling interests (04) (04)
Net cash flows from investing activities 25 (94)
Cash flows from financing activitiesLoans received and notes issued - 0
Repayment and repurchase of loans and notes (164) (133)
Interest payments (06) (35)
FX hedging margin 14 82
Payment of lease liabilities (11) (1)
Dividend payments - -
Net cash flows used in financing activities (167) (95)
Net increase (decrease) in cash and cash equivalents 333 35
Cash and cash equivalents at the beginning of the period 985 1488
Effect of exchange rate fluctuations on cash (01) 0
Cash and cash equivalents at the end of the period 1318 1524
TBI Bank minimum statutory reserve 242 354
Total cash on hand and cash at central banks 1560 1878
3 months to 31 March
Cash Flow
Cash Flow (2)
Cash Flow
Cash Flow (2)
32
Key financial ratiosQ1 2020 Q1 2019
CapitalisationEquity assets 165 161Equity net receivables 296 299Adjusted interest coverage 18x 20xTBI Bank consolidated capital adequacy 188 210
ProfitabilityNet interest margin
- Online 764 802- TBI Bank 246 252- Overall group 500 557
Cost income ratio 527 520Normalised Profit before tax margin 111 127Normalised Return on average equity 118 104Normalised Return on average assets 20 17
Asset qualityCost of risk
- Online 295 289- TBI Bank 47 45- Overall group 174 184
Net impairment interest income 323 304Gross NPL ratio
- Online 283 227- TBI Bank 160 173- Overall group 222 204
Overall group NPL coverage ratio 1035 1064
See appendix for definitions of key metrics and ratios
key ratios
33
GlossaryDefinitionsbull Adjusted EBITDA ndash a non-IFRS measure that represents EBITDA (profit for the period plus tax plus interest expense plus depreciation and amortization) as adjusted by incomeloss from discontinued operations non-cash gains and losses
attributable to movement in the mark-to-market valuation of hedging obligations under IFRS goodwill write-offs and certain other one-off or non-cash items Adjusted EBITDA as presented here may not be comparable to similarly-titled measures that are reported by other companies due to differences in the way these measures are calculated Further details of covenant adjustments can be found in the relevant bond prospectuses available on our website
bull Adjusted interest coverage ndash Adjusted EBITDA interest expense for the relevant period (nb not equal to the full covenant coverage ratio calculation)
bull Cost of risk ndash Annualised net impairment loss average gross receivables (total gross receivables as of the start and end of each period divided by two)
bull Cost income ratio ndash Operating costs operating income (revenue)
bull Equity assets ratio ndash Total equity total assets
bull Equity net receivables ndash Total equity net customer receivables (including accrued interest)
bull Gross NPL ratio ndash Non-performing receivables (including accrued interest) with a delay of over 90 days gross receivables (including accrued interest)
bull Gross receivables ndash Total amount receivable from customers including principal and accrued interest after deduction of deferred income
bull Intangible assets ndash consists of deferred tax assets intangible IT assets and goodwill
bull Interest income ndash Interest and similar income generated from our customer loan portfolio
bull Loss given default ndash Loss on non-performing receivables (ie 1 - recovery rate) based on recoveries during the appropriate time window for the specific product reduced by costs of collection discounted at the weighted average effective interest rate
bull Net effective annualised yield ndash annualised interest income (excluding penalties) average net loan principal
bull Net impairment to interest income ratio ndash Net impairment losses on loans and receivables interest income
bull Net interest margin ndash Annualised net interest income average gross loan principal (total gross loan principal as of the start and end of each period divided by two)
bull Net receivables ndash Gross receivables (including accrued interest) less impairment provisions
bull Non-performing loans (NPLs) ndash Loan principal or receivables (as applicable) that are over 90 days past due (and for TBI Bank shown on a customer level basis)
bull Normalised ndash Adjusted to remove the effect of non-recurring items net FX and one-off adjustments to intangible assets and for 2018 ratios only adjusted to reflect the opening balance of 2018 balance sheet after IFRS 9 effects
bull Profit before tax margin ndash Profit before tax interest income
bull Return on Average Assets ndash Annualised profit from continuing operations average assets (total assets as of the start and end of each period divided by two)
bull Return on Average Equity ndash Annualised profit from continuing operations average equity (total equity as of the start and end of each period divided by two)
bull Return on Average Tangible Equity ndash Annualised profit from continuing operations average tangible equity (tangible equity as of the start and end of each period divided by two)
bull Tangible Equity ndash Total equity minus intangible assets
bull TBI Bank Capital adequacy ratio ndash (Tier One Capital + Tier Two Capital) Risk weighted assets (calculated according to the prevailing regulations of the Bulgarian National Bank)
34
Contacts
Investor Relationsinvestorrelations4financecom
James EtheringtonHead of Investor RelationsPhone +44 7766 697 950E-mail jamesetherington4financecom
Paul GoldfinchChief Financial OfficerPhone +371 2572 6422E-mail paulgoldfinch4financecom
Headquarters17a-8 Lielirbes street Riga LV-1046 Latvia
4finance Holding SA
Disclaimer
Agenda
Q1 2020 business and financial highlights
Slide Number 5
Current trading and outlook
Review of three month 2020 results
Summary of three month 2020 results
Interest income remains well diversified
Slide Number 10
Strong financial profile ndash stability and profitability
Funding strategy
Diversified loan portfolio
Analysis of net impairments and cost of risk
Asset quality and provisioning
Recent collections performance
Slide Number 17
Thank you and Questions
Appendix ndash responsible lending and regulatory overview
Sustainability through good governance and responsible lending
Regulatory overview
Regulatory overview (continued)
Appendix ndash strategic evolution of portfolio
Evolving and broadening our business model
Evolution of product mix
Slide Number 26
Asset quality and provisioning ndash loan principal
Appendix ndash financials and key ratios
Slide Number 29
Balance sheet
Statement of Cash Flows
Slide Number 32
GlossaryDefinitions
Contacts
Q12018
Q1 2020
9M 2018
Q1 2019
FY 2017
Net receivables (eurom) of which
5426
5408
5477
- Principal
272
5147
5144
5165
208
- Accrued interest
98
279
265
312
39
Total assets (eurom)
9724
10238
10147
Total equity (eurom)
221
1605
1607
1637
335
Capitalisation
Equity assets
147
165
157
161
127
Equity net receivables
195
296
297
299
267
Adjusted interest coverage
233
18x
25x
20x
223
TBI Bank consolidated capital adequacy
231
188
241
210
239
240
Profitability
Q12018
Net interest margin
- Online
764
882
802
- TBI Bank
246
280
252
- Overall group
500
648
557
Cost income ratio
527
520
520
Post-provision operating profit margin
145
166
177
Normalised Profit before tax margin
111
154
127
Normalised Return on average equity
118
375
104
Normalised Return on average assets
20
56
17
Asset quality
Cost of risk
- Online
295
237
289
- TBI Bank
47
86
45
- Overall group
174
181
184
Net impairment interest income
323
259
304
Gross NPL ratio
- Online
283
222
227
- TBI Bank
160
154
173
- Overall group
222
196
204
Overall group NPL coverage ratio
1035
1156
1064
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
505
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(06)
57
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
50
199
199
(248)
(301)
0800
Impairment losses on loans
1485
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(120)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(73)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
568
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
09
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2599
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
108
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(11)
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2637
2840
2840
1756
2279
00
Increase in loans due from customers
(2248)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1453
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1120
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(15)
(13)
(84)
(128)
(131)
(21)
Net cash from Purchase Sale of financial instruments
39
(118)
(136)
mdash
Repayment of financial instrument
-
-
Loans issued to related parties
-
-
(26)
(06)
(43)
(23)
Loans repaid from related parties
0
40
74
23
109
54
Interest received from related parties
31
01
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
00
(01)
0-
mdash
Disposal of subsidiaries net of cash disposed
(13)
-
(59)
(45)
(44)
mdash
(Acquisition)Disposal of equity investments
(14)
-
Acquisition of non-controlling interests
(04)
(04)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
-
-
mdash
0-
(00)
Prepayment for potential acquisition
-
00
208
0-
(208)
mdash
Acquisition of shares
-
00
00
Net cash flows from investing activities
25
(94)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
0
05
2999
1637
05
Repayment and repurchase of loans and notes
(164)
(133)
(272)
(1737)
(580)
(01)
Interest payments
(06)
(35)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
-
00
(00)
(192)
(58)
mdash
FX hedging margin
14
82
42
(140)
(88)
Payment of lease liabilities
(11)
(1)
mdash
Dividend payments
-
-
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(167)
(95)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
333
35
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
985
1488
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
(01)
0
01
10
10
03
Cash and cash equivalents at the end of the period
1318
1524
1488
2040
1319
681
TBI Bank minimum statutory reserve
242
354
234
230
230
242
Total cash on hand and cash at central banks
1560
1878
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
02
119
526
495
107
17000
Adjustments for
Depreciation and amortisation
32
32
121
64
83
1700
Impairment of goodwill and intangible assets
-
-
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
131
63
199
(248)
(301)
0800
Impairment losses on loans
364
359
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(20)
01
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
01
01
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(19)
(19)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
127
150
621
455
619
13300
Non-recurring finance cost
32
-
mdash
mdash
63
Other non-cash items
14
0
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663
707
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(137)
(82)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
(09)
(15)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(39)
(81)
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
479
530
2840
1756
2279
00
Increase in loans due from customers
(132)
(468)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
71
161
819
333
542
160
Increase in deposits (customer and bank deposits)
77
74
165
265
338
110
Deposit interest payments
(15)
(10)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
481
288
1233
524
442
(535)
Corporate income tax paid
(06)
(63)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
475
225
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(83)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(196)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
Q12018 (unaudited)
31 March 2020 (unaudited)
1 January 2018 (post IFRS 9 unaudited)
31 December 2019
Cash and cash equivalents of which
1538
1560
1549
1257
- Online
535
834
658
767
- TBI Bank
1003
725
892
490
Placements with other banks
57
127
70
64
Gross receivables due from customers
7156
7042
6588
7337
Allowance for impairment
(1665)
(1616)
(1575)
(1548)
Net receivables due from customers of which
5491
5426
5013
5789
- Principal
5147
5026
5480
- Accrued interest
277
264
309
Net investments in finance leases
93
45
105
47
Net loans to related parties
631
594
598
607
Property and equipment
96
182
101
178
Financial investments
183
502
184
564
Prepaid expenses
87
40
108
45
Tax assets
212
174
221
213
Deferred tax assets
371
353
368
330
Intangible IT assets
281
168
286
178
Goodwill
214
165
214
165
Other assets
678
392
573
295
Total assets
9932
9727
9390
9731
Calculation for Presentation - other assets (not loans or cash)
Loans and borrowings
4672
3849
3794
3846
Deposits from customers
2728
3333
2710
3222
Deposits from banks
94
95
mdash
130
Corporate income tax payable
178
124
198
95
Other liabilities
799
718
765
780
Total liabilities
8471
8119
7466
8074
Share capital
358
358
358
358
Retained earnings
1475
1628
1350
1657
Reserves
(343)
(378)
(323)
(357)
Total attributable equity
1490
1608
1385
1658
Non-controlling interests
(28)
00
(24)
(00)
Total equity
1461
1608
1362
1658
Total shareholders equity and liabilities
9932
9727
8828
9731
In millions of euro
Q1 2020 (unaudited)
Q1 2019 (unaudited)
change YoY
Interest Income
966
1065
(9)
Interest Expense
(127)
(150)
-(16)
1000000
Net Interest Income
839
915
(8)
Net FampC Income
24
21
12
Other operating income
23
22
7
Non-Interest Income
47
43
10
Operating Income (Revenue)
886
957
(7)
Personnel costs
(221)
(221)
(0
Discretionary bonus
(18)
(19)
(6)
Marketing
(91)
(96)
(5)
IT costs
(39)
(45)
(12)
DampA costs
(35)
(32)
+8
Other costs
(98)
(118)
(17)
Total operating costs
(467)
(498)
(6)
Pre-provision operating profit
419
459
(9)
Net impairment charges
(312)
(324)
-(4)
manual
Post-provision operating profit
107
135
(21)
Depreciation and amortisation
(32)
(32)
-+0
manual
Non-recurring income(expense)
(39)
(01)
nm
Non-recurring finance cost
mdash
mdash
+0
Net FX gain(loss)
(34)
16
nm
One-off adjustments to intangible assets
-
-
(0)
manual
Profit before tax
02
119
nm
Income tax expense
(27)
(62)
-(57)
manual
Net profit(loss) after tax
(25)
57
nm
manual
Adjusted EBITDA
233
294
-(21)
Costincome ratio
527
520
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online principal
Performing (1)
2347
(357)
1990
737
2634
(397)
2237
774
3177
(493)
2684
791
(22139)
3177
(302)
2875
681
(191)
150128837891005
Non-performing (2)
836
(656)
181
263
770
(590)
180
226
840
(664)
175
209
(74878)
36947
1488
(983)
505
319
-648
319
-64836054
-250544747891005
Online total
3184
(1013)
2171
1000
3404
(987)
2417
1000
4017
(1158)
2859
1000
4665
(1286)
3379
1000
(74878)
14808
TBI Bank principal
Performing (1)
2853
(121)
2732
840
2896
(118)
2778
838
2090
(68)
2022
873
(2586)
2090
(43)
2047
873
(25)
-251961477
Non-performing (2)
541
(298)
244
160
558
(274)
284
162
303
(158)
145
127
0437
303
(162)
141
127
04
42578177
TBI Bank total
3394
(418)
2976
1000
3454
(392)
3062
1000
2393
(226)
2167
1000
-
(2149)
2393
(205)
2188
1000
Overall group principal
Performing (1)
5200
(478)
4722
791
5529
(515)
5015
806
5267
(562)
4706
822
-
(24725)
5267
(345)
4922
746
Non-performing (2)
1378
(953)
424
209
1328
(864)
465
194
1142
(822)
320
178
(74878)
37384
1791
(1145)
646
254
Overall total
6578
(1431)
5147
1000
6858
(1378)
5480
1000
6410
(1384)
5026
1000
(74878)
12659
7058
(1490)
5567
1000
31122018 data updated post audit
22
Regulatory overview (continued)Country
of interest income
(Q1 2020)Products (1) Regulator CB (2) License
required (3)Interest rate
cap (1) Status
Lithuania 2 SPL IL Central Bank of Lithuania Yes Yes Nominal fees amp TCOC Stable framework
Mexico 1 IL National Financial Services Consumer Protection Commission - Yes - Stable framework
Poland 23 SPL IL Office of Competition and Consumer Protection - - Nominal fees
amp TCOC
Non-interest cost caps adjusted in April for one year to 15 fixed and 6 annual with a 45 total limit
Romania 10 IL LOC POS SME National Bank of Romania Yes Yes - Bill to introduce interest rate cap under discussion
Slovakia lt1 SPL National Bank of Slovakia Yes Yes APR (inc fees) Stable framework
Spain 22 SPL IL NA - - -
Sweden 1 LOC IL Swedish Financial Supervisory Authority Yes Yes Nominal amp
TCOCStable framework since new interest rate caps in September 2018
Notes(1) Abbreviations APR ndash Annual Percentage Rate IL ndash Instalment loans LOC ndash Line of Credit Credit Cards POS ndash Point of Sale SPL ndash Single Payment Loans SME ndash Business Banking (Small-Medium Sized Enterprise) TCOC ndash Total Cost of Credit (2) Indicates whether the regulator is also the main banking supervisory authority in the relevant market(3) Indicates license or specific registration requirement
23
Appendix ndash strategic evolution of portfolio
24
Evolving and broadening our business model
Prime
Sub-Prime
Near-Prime
Segments
Higher Duration Lower APR Products
SPL ILLOC POS
A multi-segment multi-product consumer credit specialist
1
1 Optimise
2 2 Diversify amp Grow
Illustrative
25
Evolution of product mix
Note (1) Reflects reclassification of Vivus brand products in Sweden (from January 2016) Denmark (from January 2017) Armenia (from launch in July 2017) and short-term products (SMS Credit amp Ondo) in Latvia (from January 2019) to Lines of Credit
68
17
3
9
29
45
18
11
0
25
50
75
100
30 Jun 2016 31 Mar 2020
SME (Bank)
Point of Sale
Instalment loans
Line of Credit Cards
Single Payment Loans
euro543meuro323m
Net receivables by product (1)
Online sub-prime only
Bank and onlinenear-prime
and sub-prime
76
48
4
14
20
29
7
0
25
50
75
100
Q1 2016 Q1 2020
Interest income by product (1)
euro97meuro90m
Date chosen to reflect the composition of loan portfolio immediately prior to purchase of TBI Bank
26
Funding near-prime growth via TBI Bank
Online acquisition Retail deposit funding
Initial portfolio development
Early stage customer acquisition and credit metrics monitored and
enhanced
Funding Platform
In-house IT funding platform ensuring ongoing automated
portfolio transfers
Bringing portfolios to scale
Market specific portfolios grow with ongoing sales to reach scale
True saleof portfolio(s)loan servicing
Indicative APRs
20-40
CostIncome ratio
c40
Cost of Risk
6-8
Cost of Funds
3-5
Return on Assets
3-5(2)
Illustrative near-prime
ldquounit economicsrdquo(1)
Notes(1) Illustrative metrics for near-prime portfolios and not indicative of a specific product or market(2) Illustrative potential returns in medium-term at scale
Payment of fair market value
bull Regular sales of Polish instalment loans since September 2019bull Passporting application submitted for Lithuania (largest near-prime portfolio)
Accessing TBI Bank deposit funding for lsquoonlinersquo portfolios via ongoing loan sales
27
Asset quality and provisioning ndash loan principal
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Interest Income 966 1065 (9)Interest Expense (127) (150) (16)Net Interest Income 839 915 (8)Net FampC Income 24 21 12Other operating income 23 22 7Non-Interest Income 47 43 10Operating Income (Revenue) 886 957 (7)Total operating costs (467) (498) (6)Pre-provision operating profit 419 459 (9)Net impairment charges (312) (324) (4)Post-provision operating profit 107 135 (21)Depreciation and amortisation (32) (32) +0Non-recurring income(expense) (39) (01) nmNet FX gain(loss) (34) 16 nmProfit before tax 02 119 nmIncome tax expense (27) (62) (57)Net profit(loss) after tax (25) 57 nm
Adjusted EBITDA 233 294 (21)
Income Statement
30
Balance sheetIn millions of euro
31 March 2020 (unaudited)
31 December 2019
Cash and cash equivalents of which 1560 1257- Online 834 767- TBI Bank 725 490
Placements with other banks 127 64Gross receivables due from customers 7042 7337Allowance for impairment (1616) (1548)Net receivables due from customers of which 5426 5789
- Principal 5147 5480- Accrued interest 277 309
Net investments in finance leases 45 47Net loans to related parties 594 607Property and equipment 182 178Financial investments 502 564Prepaid expenses 40 45Tax assets 174 213Deferred tax assets 353 330Intangible IT assets 168 178Goodwill 165 165Other assets 392 295Total assets 9727 9731Calculation for Presentation other assets (not loans Loans and borrowings 3849 3846Deposits from customers 3333 3222Deposits from banks 95 130Corporate income tax payable 124 95Other liabilities 718 780Total liabilities 8119 8074Share capital 358 358Retained earnings 1628 1657Reserves (378) (357)Total attributable equity 1608 1658Non-controlling interests 00 (00)Total equity 1608 1658Total shareholders equity and liabilities 9727 9731
Balance Sheet
31
Statement of Cash FlowsIn millions of euro
2020 2019Cash flows from operating activitiesProfit before taxes 02 119
Adjustments forDepreciation and amortisation 32 32
Impairment of goodwill and intangible assets - -
Net (gain) loss on foreign exchange from borrowings and other monetary items 131 63
Impairment losses on loans 364 359
Reversal of provision on debt portfolio sales (20) 01
Write-off and disposal of intangible and property and equipment assets 01 01
Interest income from non-customers loans (19) (19)
Interest expense on loans and borrowings and deposits from customers 127 150Non-recurring finance cost 32 -
Other non-cash items 14 0
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663 707
Adjustments forChange in financial instruments measured at fair value through profit or loss (137) (82)(Increase) decrease in other assets (including TBI statutory reserve placements amp leases) (09) (15)
Increase (decrease) in accounts payable to suppliers contractors and other creditors (39) (81)
Operating cash flow before movements in portfolio and deposits 479 530
Increase in loans due from customers (132) (468)
Proceeds from sale of portfolio 71 161
Increase in deposits (customer and bank deposits) 77 74
Deposit interest payments (15) (10)
Gross cash flows from operating activities 481 288
Corporate income tax paid (06) (63)
Net cash flows from operating activities 475 225
3 months to 31 March In millions of euro
2020 2019
Cash flows used in investing activitiesPurchase of property and equipment and intangible assets (15) (13)
Net cash from Purchase Sale of financial instruments 39 (118)
Loans issued to related parties - -
Loans repaid from related parties 0 40
Interest received from related parties 31 01
Disposal of subsidiaries net of cash disposed (13) -
(Acquisition)Disposal of equity investments (14) -
Acquisition of non-controlling interests (04) (04)
Net cash flows from investing activities 25 (94)
Cash flows from financing activitiesLoans received and notes issued - 0
Repayment and repurchase of loans and notes (164) (133)
Interest payments (06) (35)
FX hedging margin 14 82
Payment of lease liabilities (11) (1)
Dividend payments - -
Net cash flows used in financing activities (167) (95)
Net increase (decrease) in cash and cash equivalents 333 35
Cash and cash equivalents at the beginning of the period 985 1488
Effect of exchange rate fluctuations on cash (01) 0
Cash and cash equivalents at the end of the period 1318 1524
TBI Bank minimum statutory reserve 242 354
Total cash on hand and cash at central banks 1560 1878
3 months to 31 March
Cash Flow
Cash Flow (2)
Cash Flow
Cash Flow (2)
32
Key financial ratiosQ1 2020 Q1 2019
CapitalisationEquity assets 165 161Equity net receivables 296 299Adjusted interest coverage 18x 20xTBI Bank consolidated capital adequacy 188 210
ProfitabilityNet interest margin
- Online 764 802- TBI Bank 246 252- Overall group 500 557
Cost income ratio 527 520Normalised Profit before tax margin 111 127Normalised Return on average equity 118 104Normalised Return on average assets 20 17
Asset qualityCost of risk
- Online 295 289- TBI Bank 47 45- Overall group 174 184
Net impairment interest income 323 304Gross NPL ratio
- Online 283 227- TBI Bank 160 173- Overall group 222 204
Overall group NPL coverage ratio 1035 1064
See appendix for definitions of key metrics and ratios
key ratios
33
GlossaryDefinitionsbull Adjusted EBITDA ndash a non-IFRS measure that represents EBITDA (profit for the period plus tax plus interest expense plus depreciation and amortization) as adjusted by incomeloss from discontinued operations non-cash gains and losses
attributable to movement in the mark-to-market valuation of hedging obligations under IFRS goodwill write-offs and certain other one-off or non-cash items Adjusted EBITDA as presented here may not be comparable to similarly-titled measures that are reported by other companies due to differences in the way these measures are calculated Further details of covenant adjustments can be found in the relevant bond prospectuses available on our website
bull Adjusted interest coverage ndash Adjusted EBITDA interest expense for the relevant period (nb not equal to the full covenant coverage ratio calculation)
bull Cost of risk ndash Annualised net impairment loss average gross receivables (total gross receivables as of the start and end of each period divided by two)
bull Cost income ratio ndash Operating costs operating income (revenue)
bull Equity assets ratio ndash Total equity total assets
bull Equity net receivables ndash Total equity net customer receivables (including accrued interest)
bull Gross NPL ratio ndash Non-performing receivables (including accrued interest) with a delay of over 90 days gross receivables (including accrued interest)
bull Gross receivables ndash Total amount receivable from customers including principal and accrued interest after deduction of deferred income
bull Intangible assets ndash consists of deferred tax assets intangible IT assets and goodwill
bull Interest income ndash Interest and similar income generated from our customer loan portfolio
bull Loss given default ndash Loss on non-performing receivables (ie 1 - recovery rate) based on recoveries during the appropriate time window for the specific product reduced by costs of collection discounted at the weighted average effective interest rate
bull Net effective annualised yield ndash annualised interest income (excluding penalties) average net loan principal
bull Net impairment to interest income ratio ndash Net impairment losses on loans and receivables interest income
bull Net interest margin ndash Annualised net interest income average gross loan principal (total gross loan principal as of the start and end of each period divided by two)
bull Net receivables ndash Gross receivables (including accrued interest) less impairment provisions
bull Non-performing loans (NPLs) ndash Loan principal or receivables (as applicable) that are over 90 days past due (and for TBI Bank shown on a customer level basis)
bull Normalised ndash Adjusted to remove the effect of non-recurring items net FX and one-off adjustments to intangible assets and for 2018 ratios only adjusted to reflect the opening balance of 2018 balance sheet after IFRS 9 effects
bull Profit before tax margin ndash Profit before tax interest income
bull Return on Average Assets ndash Annualised profit from continuing operations average assets (total assets as of the start and end of each period divided by two)
bull Return on Average Equity ndash Annualised profit from continuing operations average equity (total equity as of the start and end of each period divided by two)
bull Return on Average Tangible Equity ndash Annualised profit from continuing operations average tangible equity (tangible equity as of the start and end of each period divided by two)
bull Tangible Equity ndash Total equity minus intangible assets
bull TBI Bank Capital adequacy ratio ndash (Tier One Capital + Tier Two Capital) Risk weighted assets (calculated according to the prevailing regulations of the Bulgarian National Bank)
34
Contacts
Investor Relationsinvestorrelations4financecom
James EtheringtonHead of Investor RelationsPhone +44 7766 697 950E-mail jamesetherington4financecom
Paul GoldfinchChief Financial OfficerPhone +371 2572 6422E-mail paulgoldfinch4financecom
Headquarters17a-8 Lielirbes street Riga LV-1046 Latvia
4finance Holding SA
Disclaimer
Agenda
Q1 2020 business and financial highlights
Slide Number 5
Current trading and outlook
Review of three month 2020 results
Summary of three month 2020 results
Interest income remains well diversified
Slide Number 10
Strong financial profile ndash stability and profitability
Funding strategy
Diversified loan portfolio
Analysis of net impairments and cost of risk
Asset quality and provisioning
Recent collections performance
Slide Number 17
Thank you and Questions
Appendix ndash responsible lending and regulatory overview
Sustainability through good governance and responsible lending
Regulatory overview
Regulatory overview (continued)
Appendix ndash strategic evolution of portfolio
Evolving and broadening our business model
Evolution of product mix
Slide Number 26
Asset quality and provisioning ndash loan principal
Appendix ndash financials and key ratios
Slide Number 29
Balance sheet
Statement of Cash Flows
Slide Number 32
GlossaryDefinitions
Contacts
Q12018
Q1 2020
9M 2018
Q1 2019
FY 2017
Net receivables (eurom) of which
5426
5408
5477
- Principal
272
5147
5144
5165
208
- Accrued interest
98
279
265
312
39
Total assets (eurom)
9724
10238
10147
Total equity (eurom)
221
1605
1607
1637
335
Capitalisation
Equity assets
147
165
157
161
127
Equity net receivables
195
296
297
299
267
Adjusted interest coverage
233
18x
25x
20x
223
TBI Bank consolidated capital adequacy
231
188
241
210
239
240
Profitability
Q12018
Net interest margin
- Online
764
882
802
- TBI Bank
246
280
252
- Overall group
500
648
557
Cost income ratio
527
520
520
Post-provision operating profit margin
145
166
177
Normalised Profit before tax margin
111
154
127
Normalised Return on average equity
118
375
104
Normalised Return on average assets
20
56
17
Asset quality
Cost of risk
- Online
295
237
289
- TBI Bank
47
86
45
- Overall group
174
181
184
Net impairment interest income
323
259
304
Gross NPL ratio
- Online
283
222
227
- TBI Bank
160
154
173
- Overall group
222
196
204
Overall group NPL coverage ratio
1035
1156
1064
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
505
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(06)
57
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
50
199
199
(248)
(301)
0800
Impairment losses on loans
1485
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(120)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(73)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
568
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
09
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2599
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
108
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(11)
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2637
2840
2840
1756
2279
00
Increase in loans due from customers
(2248)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1453
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1120
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(15)
(13)
(84)
(128)
(131)
(21)
Net cash from Purchase Sale of financial instruments
39
(118)
(136)
mdash
Repayment of financial instrument
-
-
Loans issued to related parties
-
-
(26)
(06)
(43)
(23)
Loans repaid from related parties
0
40
74
23
109
54
Interest received from related parties
31
01
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
00
(01)
0-
mdash
Disposal of subsidiaries net of cash disposed
(13)
-
(59)
(45)
(44)
mdash
(Acquisition)Disposal of equity investments
(14)
-
Acquisition of non-controlling interests
(04)
(04)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
-
-
mdash
0-
(00)
Prepayment for potential acquisition
-
00
208
0-
(208)
mdash
Acquisition of shares
-
00
00
Net cash flows from investing activities
25
(94)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
0
05
2999
1637
05
Repayment and repurchase of loans and notes
(164)
(133)
(272)
(1737)
(580)
(01)
Interest payments
(06)
(35)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
-
00
(00)
(192)
(58)
mdash
FX hedging margin
14
82
42
(140)
(88)
Payment of lease liabilities
(11)
(1)
mdash
Dividend payments
-
-
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(167)
(95)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
333
35
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
985
1488
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
(01)
0
01
10
10
03
Cash and cash equivalents at the end of the period
1318
1524
1488
2040
1319
681
TBI Bank minimum statutory reserve
242
354
234
230
230
242
Total cash on hand and cash at central banks
1560
1878
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
02
119
526
495
107
17000
Adjustments for
Depreciation and amortisation
32
32
121
64
83
1700
Impairment of goodwill and intangible assets
-
-
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
131
63
199
(248)
(301)
0800
Impairment losses on loans
364
359
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(20)
01
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
01
01
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(19)
(19)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
127
150
621
455
619
13300
Non-recurring finance cost
32
-
mdash
mdash
63
Other non-cash items
14
0
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663
707
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(137)
(82)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
(09)
(15)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(39)
(81)
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
479
530
2840
1756
2279
00
Increase in loans due from customers
(132)
(468)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
71
161
819
333
542
160
Increase in deposits (customer and bank deposits)
77
74
165
265
338
110
Deposit interest payments
(15)
(10)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
481
288
1233
524
442
(535)
Corporate income tax paid
(06)
(63)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
475
225
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(83)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(196)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
Q12018 (unaudited)
31 March 2020 (unaudited)
1 January 2018 (post IFRS 9 unaudited)
31 December 2019
Cash and cash equivalents of which
1538
1560
1549
1257
- Online
535
834
658
767
- TBI Bank
1003
725
892
490
Placements with other banks
57
127
70
64
Gross receivables due from customers
7156
7042
6588
7337
Allowance for impairment
(1665)
(1616)
(1575)
(1548)
Net receivables due from customers of which
5491
5426
5013
5789
- Principal
5147
5026
5480
- Accrued interest
277
264
309
Net investments in finance leases
93
45
105
47
Net loans to related parties
631
594
598
607
Property and equipment
96
182
101
178
Financial investments
183
502
184
564
Prepaid expenses
87
40
108
45
Tax assets
212
174
221
213
Deferred tax assets
371
353
368
330
Intangible IT assets
281
168
286
178
Goodwill
214
165
214
165
Other assets
678
392
573
295
Total assets
9932
9727
9390
9731
Calculation for Presentation - other assets (not loans or cash)
Loans and borrowings
4672
3849
3794
3846
Deposits from customers
2728
3333
2710
3222
Deposits from banks
94
95
mdash
130
Corporate income tax payable
178
124
198
95
Other liabilities
799
718
765
780
Total liabilities
8471
8119
7466
8074
Share capital
358
358
358
358
Retained earnings
1475
1628
1350
1657
Reserves
(343)
(378)
(323)
(357)
Total attributable equity
1490
1608
1385
1658
Non-controlling interests
(28)
00
(24)
(00)
Total equity
1461
1608
1362
1658
Total shareholders equity and liabilities
9932
9727
8828
9731
In millions of euro
Q1 2020 (unaudited)
Q1 2019 (unaudited)
change YoY
Interest Income
966
1065
(9)
Interest Expense
(127)
(150)
-(16)
1000000
Net Interest Income
839
915
(8)
Net FampC Income
24
21
12
Other operating income
23
22
7
Non-Interest Income
47
43
10
Operating Income (Revenue)
886
957
(7)
Personnel costs
(221)
(221)
(0
Discretionary bonus
(18)
(19)
(6)
Marketing
(91)
(96)
(5)
IT costs
(39)
(45)
(12)
DampA costs
(35)
(32)
+8
Other costs
(98)
(118)
(17)
Total operating costs
(467)
(498)
(6)
Pre-provision operating profit
419
459
(9)
Net impairment charges
(312)
(324)
-(4)
manual
Post-provision operating profit
107
135
(21)
Depreciation and amortisation
(32)
(32)
-+0
manual
Non-recurring income(expense)
(39)
(01)
nm
Non-recurring finance cost
mdash
mdash
+0
Net FX gain(loss)
(34)
16
nm
One-off adjustments to intangible assets
-
-
(0)
manual
Profit before tax
02
119
nm
Income tax expense
(27)
(62)
-(57)
manual
Net profit(loss) after tax
(25)
57
nm
manual
Adjusted EBITDA
233
294
-(21)
Costincome ratio
527
520
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online principal
Performing (1)
2347
(357)
1990
737
2634
(397)
2237
774
3177
(493)
2684
791
(22139)
3177
(302)
2875
681
(191)
150128837891005
Non-performing (2)
836
(656)
181
263
770
(590)
180
226
840
(664)
175
209
(74878)
36947
1488
(983)
505
319
-648
319
-64836054
-250544747891005
Online total
3184
(1013)
2171
1000
3404
(987)
2417
1000
4017
(1158)
2859
1000
4665
(1286)
3379
1000
(74878)
14808
TBI Bank principal
Performing (1)
2853
(121)
2732
840
2896
(118)
2778
838
2090
(68)
2022
873
(2586)
2090
(43)
2047
873
(25)
-251961477
Non-performing (2)
541
(298)
244
160
558
(274)
284
162
303
(158)
145
127
0437
303
(162)
141
127
04
42578177
TBI Bank total
3394
(418)
2976
1000
3454
(392)
3062
1000
2393
(226)
2167
1000
-
(2149)
2393
(205)
2188
1000
Overall group principal
Performing (1)
5200
(478)
4722
791
5529
(515)
5015
806
5267
(562)
4706
822
-
(24725)
5267
(345)
4922
746
Non-performing (2)
1378
(953)
424
209
1328
(864)
465
194
1142
(822)
320
178
(74878)
37384
1791
(1145)
646
254
Overall total
6578
(1431)
5147
1000
6858
(1378)
5480
1000
6410
(1384)
5026
1000
(74878)
12659
7058
(1490)
5567
1000
31122018 data updated post audit
23
Appendix ndash strategic evolution of portfolio
24
Evolving and broadening our business model
Prime
Sub-Prime
Near-Prime
Segments
Higher Duration Lower APR Products
SPL ILLOC POS
A multi-segment multi-product consumer credit specialist
1
1 Optimise
2 2 Diversify amp Grow
Illustrative
25
Evolution of product mix
Note (1) Reflects reclassification of Vivus brand products in Sweden (from January 2016) Denmark (from January 2017) Armenia (from launch in July 2017) and short-term products (SMS Credit amp Ondo) in Latvia (from January 2019) to Lines of Credit
68
17
3
9
29
45
18
11
0
25
50
75
100
30 Jun 2016 31 Mar 2020
SME (Bank)
Point of Sale
Instalment loans
Line of Credit Cards
Single Payment Loans
euro543meuro323m
Net receivables by product (1)
Online sub-prime only
Bank and onlinenear-prime
and sub-prime
76
48
4
14
20
29
7
0
25
50
75
100
Q1 2016 Q1 2020
Interest income by product (1)
euro97meuro90m
Date chosen to reflect the composition of loan portfolio immediately prior to purchase of TBI Bank
26
Funding near-prime growth via TBI Bank
Online acquisition Retail deposit funding
Initial portfolio development
Early stage customer acquisition and credit metrics monitored and
enhanced
Funding Platform
In-house IT funding platform ensuring ongoing automated
portfolio transfers
Bringing portfolios to scale
Market specific portfolios grow with ongoing sales to reach scale
True saleof portfolio(s)loan servicing
Indicative APRs
20-40
CostIncome ratio
c40
Cost of Risk
6-8
Cost of Funds
3-5
Return on Assets
3-5(2)
Illustrative near-prime
ldquounit economicsrdquo(1)
Notes(1) Illustrative metrics for near-prime portfolios and not indicative of a specific product or market(2) Illustrative potential returns in medium-term at scale
Payment of fair market value
bull Regular sales of Polish instalment loans since September 2019bull Passporting application submitted for Lithuania (largest near-prime portfolio)
Accessing TBI Bank deposit funding for lsquoonlinersquo portfolios via ongoing loan sales
27
Asset quality and provisioning ndash loan principal
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Interest Income 966 1065 (9)Interest Expense (127) (150) (16)Net Interest Income 839 915 (8)Net FampC Income 24 21 12Other operating income 23 22 7Non-Interest Income 47 43 10Operating Income (Revenue) 886 957 (7)Total operating costs (467) (498) (6)Pre-provision operating profit 419 459 (9)Net impairment charges (312) (324) (4)Post-provision operating profit 107 135 (21)Depreciation and amortisation (32) (32) +0Non-recurring income(expense) (39) (01) nmNet FX gain(loss) (34) 16 nmProfit before tax 02 119 nmIncome tax expense (27) (62) (57)Net profit(loss) after tax (25) 57 nm
Adjusted EBITDA 233 294 (21)
Income Statement
30
Balance sheetIn millions of euro
31 March 2020 (unaudited)
31 December 2019
Cash and cash equivalents of which 1560 1257- Online 834 767- TBI Bank 725 490
Placements with other banks 127 64Gross receivables due from customers 7042 7337Allowance for impairment (1616) (1548)Net receivables due from customers of which 5426 5789
- Principal 5147 5480- Accrued interest 277 309
Net investments in finance leases 45 47Net loans to related parties 594 607Property and equipment 182 178Financial investments 502 564Prepaid expenses 40 45Tax assets 174 213Deferred tax assets 353 330Intangible IT assets 168 178Goodwill 165 165Other assets 392 295Total assets 9727 9731Calculation for Presentation other assets (not loans Loans and borrowings 3849 3846Deposits from customers 3333 3222Deposits from banks 95 130Corporate income tax payable 124 95Other liabilities 718 780Total liabilities 8119 8074Share capital 358 358Retained earnings 1628 1657Reserves (378) (357)Total attributable equity 1608 1658Non-controlling interests 00 (00)Total equity 1608 1658Total shareholders equity and liabilities 9727 9731
Balance Sheet
31
Statement of Cash FlowsIn millions of euro
2020 2019Cash flows from operating activitiesProfit before taxes 02 119
Adjustments forDepreciation and amortisation 32 32
Impairment of goodwill and intangible assets - -
Net (gain) loss on foreign exchange from borrowings and other monetary items 131 63
Impairment losses on loans 364 359
Reversal of provision on debt portfolio sales (20) 01
Write-off and disposal of intangible and property and equipment assets 01 01
Interest income from non-customers loans (19) (19)
Interest expense on loans and borrowings and deposits from customers 127 150Non-recurring finance cost 32 -
Other non-cash items 14 0
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663 707
Adjustments forChange in financial instruments measured at fair value through profit or loss (137) (82)(Increase) decrease in other assets (including TBI statutory reserve placements amp leases) (09) (15)
Increase (decrease) in accounts payable to suppliers contractors and other creditors (39) (81)
Operating cash flow before movements in portfolio and deposits 479 530
Increase in loans due from customers (132) (468)
Proceeds from sale of portfolio 71 161
Increase in deposits (customer and bank deposits) 77 74
Deposit interest payments (15) (10)
Gross cash flows from operating activities 481 288
Corporate income tax paid (06) (63)
Net cash flows from operating activities 475 225
3 months to 31 March In millions of euro
2020 2019
Cash flows used in investing activitiesPurchase of property and equipment and intangible assets (15) (13)
Net cash from Purchase Sale of financial instruments 39 (118)
Loans issued to related parties - -
Loans repaid from related parties 0 40
Interest received from related parties 31 01
Disposal of subsidiaries net of cash disposed (13) -
(Acquisition)Disposal of equity investments (14) -
Acquisition of non-controlling interests (04) (04)
Net cash flows from investing activities 25 (94)
Cash flows from financing activitiesLoans received and notes issued - 0
Repayment and repurchase of loans and notes (164) (133)
Interest payments (06) (35)
FX hedging margin 14 82
Payment of lease liabilities (11) (1)
Dividend payments - -
Net cash flows used in financing activities (167) (95)
Net increase (decrease) in cash and cash equivalents 333 35
Cash and cash equivalents at the beginning of the period 985 1488
Effect of exchange rate fluctuations on cash (01) 0
Cash and cash equivalents at the end of the period 1318 1524
TBI Bank minimum statutory reserve 242 354
Total cash on hand and cash at central banks 1560 1878
3 months to 31 March
Cash Flow
Cash Flow (2)
Cash Flow
Cash Flow (2)
32
Key financial ratiosQ1 2020 Q1 2019
CapitalisationEquity assets 165 161Equity net receivables 296 299Adjusted interest coverage 18x 20xTBI Bank consolidated capital adequacy 188 210
ProfitabilityNet interest margin
- Online 764 802- TBI Bank 246 252- Overall group 500 557
Cost income ratio 527 520Normalised Profit before tax margin 111 127Normalised Return on average equity 118 104Normalised Return on average assets 20 17
Asset qualityCost of risk
- Online 295 289- TBI Bank 47 45- Overall group 174 184
Net impairment interest income 323 304Gross NPL ratio
- Online 283 227- TBI Bank 160 173- Overall group 222 204
Overall group NPL coverage ratio 1035 1064
See appendix for definitions of key metrics and ratios
key ratios
33
GlossaryDefinitionsbull Adjusted EBITDA ndash a non-IFRS measure that represents EBITDA (profit for the period plus tax plus interest expense plus depreciation and amortization) as adjusted by incomeloss from discontinued operations non-cash gains and losses
attributable to movement in the mark-to-market valuation of hedging obligations under IFRS goodwill write-offs and certain other one-off or non-cash items Adjusted EBITDA as presented here may not be comparable to similarly-titled measures that are reported by other companies due to differences in the way these measures are calculated Further details of covenant adjustments can be found in the relevant bond prospectuses available on our website
bull Adjusted interest coverage ndash Adjusted EBITDA interest expense for the relevant period (nb not equal to the full covenant coverage ratio calculation)
bull Cost of risk ndash Annualised net impairment loss average gross receivables (total gross receivables as of the start and end of each period divided by two)
bull Cost income ratio ndash Operating costs operating income (revenue)
bull Equity assets ratio ndash Total equity total assets
bull Equity net receivables ndash Total equity net customer receivables (including accrued interest)
bull Gross NPL ratio ndash Non-performing receivables (including accrued interest) with a delay of over 90 days gross receivables (including accrued interest)
bull Gross receivables ndash Total amount receivable from customers including principal and accrued interest after deduction of deferred income
bull Intangible assets ndash consists of deferred tax assets intangible IT assets and goodwill
bull Interest income ndash Interest and similar income generated from our customer loan portfolio
bull Loss given default ndash Loss on non-performing receivables (ie 1 - recovery rate) based on recoveries during the appropriate time window for the specific product reduced by costs of collection discounted at the weighted average effective interest rate
bull Net effective annualised yield ndash annualised interest income (excluding penalties) average net loan principal
bull Net impairment to interest income ratio ndash Net impairment losses on loans and receivables interest income
bull Net interest margin ndash Annualised net interest income average gross loan principal (total gross loan principal as of the start and end of each period divided by two)
bull Net receivables ndash Gross receivables (including accrued interest) less impairment provisions
bull Non-performing loans (NPLs) ndash Loan principal or receivables (as applicable) that are over 90 days past due (and for TBI Bank shown on a customer level basis)
bull Normalised ndash Adjusted to remove the effect of non-recurring items net FX and one-off adjustments to intangible assets and for 2018 ratios only adjusted to reflect the opening balance of 2018 balance sheet after IFRS 9 effects
bull Profit before tax margin ndash Profit before tax interest income
bull Return on Average Assets ndash Annualised profit from continuing operations average assets (total assets as of the start and end of each period divided by two)
bull Return on Average Equity ndash Annualised profit from continuing operations average equity (total equity as of the start and end of each period divided by two)
bull Return on Average Tangible Equity ndash Annualised profit from continuing operations average tangible equity (tangible equity as of the start and end of each period divided by two)
bull Tangible Equity ndash Total equity minus intangible assets
bull TBI Bank Capital adequacy ratio ndash (Tier One Capital + Tier Two Capital) Risk weighted assets (calculated according to the prevailing regulations of the Bulgarian National Bank)
34
Contacts
Investor Relationsinvestorrelations4financecom
James EtheringtonHead of Investor RelationsPhone +44 7766 697 950E-mail jamesetherington4financecom
Paul GoldfinchChief Financial OfficerPhone +371 2572 6422E-mail paulgoldfinch4financecom
Headquarters17a-8 Lielirbes street Riga LV-1046 Latvia
4finance Holding SA
Disclaimer
Agenda
Q1 2020 business and financial highlights
Slide Number 5
Current trading and outlook
Review of three month 2020 results
Summary of three month 2020 results
Interest income remains well diversified
Slide Number 10
Strong financial profile ndash stability and profitability
Funding strategy
Diversified loan portfolio
Analysis of net impairments and cost of risk
Asset quality and provisioning
Recent collections performance
Slide Number 17
Thank you and Questions
Appendix ndash responsible lending and regulatory overview
Sustainability through good governance and responsible lending
Regulatory overview
Regulatory overview (continued)
Appendix ndash strategic evolution of portfolio
Evolving and broadening our business model
Evolution of product mix
Slide Number 26
Asset quality and provisioning ndash loan principal
Appendix ndash financials and key ratios
Slide Number 29
Balance sheet
Statement of Cash Flows
Slide Number 32
GlossaryDefinitions
Contacts
Q12018
Q1 2020
9M 2018
Q1 2019
FY 2017
Net receivables (eurom) of which
5426
5408
5477
- Principal
272
5147
5144
5165
208
- Accrued interest
98
279
265
312
39
Total assets (eurom)
9724
10238
10147
Total equity (eurom)
221
1605
1607
1637
335
Capitalisation
Equity assets
147
165
157
161
127
Equity net receivables
195
296
297
299
267
Adjusted interest coverage
233
18x
25x
20x
223
TBI Bank consolidated capital adequacy
231
188
241
210
239
240
Profitability
Q12018
Net interest margin
- Online
764
882
802
- TBI Bank
246
280
252
- Overall group
500
648
557
Cost income ratio
527
520
520
Post-provision operating profit margin
145
166
177
Normalised Profit before tax margin
111
154
127
Normalised Return on average equity
118
375
104
Normalised Return on average assets
20
56
17
Asset quality
Cost of risk
- Online
295
237
289
- TBI Bank
47
86
45
- Overall group
174
181
184
Net impairment interest income
323
259
304
Gross NPL ratio
- Online
283
222
227
- TBI Bank
160
154
173
- Overall group
222
196
204
Overall group NPL coverage ratio
1035
1156
1064
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
505
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(06)
57
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
50
199
199
(248)
(301)
0800
Impairment losses on loans
1485
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(120)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(73)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
568
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
09
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2599
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
108
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(11)
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2637
2840
2840
1756
2279
00
Increase in loans due from customers
(2248)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1453
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1120
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(15)
(13)
(84)
(128)
(131)
(21)
Net cash from Purchase Sale of financial instruments
39
(118)
(136)
mdash
Repayment of financial instrument
-
-
Loans issued to related parties
-
-
(26)
(06)
(43)
(23)
Loans repaid from related parties
0
40
74
23
109
54
Interest received from related parties
31
01
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
00
(01)
0-
mdash
Disposal of subsidiaries net of cash disposed
(13)
-
(59)
(45)
(44)
mdash
(Acquisition)Disposal of equity investments
(14)
-
Acquisition of non-controlling interests
(04)
(04)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
-
-
mdash
0-
(00)
Prepayment for potential acquisition
-
00
208
0-
(208)
mdash
Acquisition of shares
-
00
00
Net cash flows from investing activities
25
(94)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
0
05
2999
1637
05
Repayment and repurchase of loans and notes
(164)
(133)
(272)
(1737)
(580)
(01)
Interest payments
(06)
(35)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
-
00
(00)
(192)
(58)
mdash
FX hedging margin
14
82
42
(140)
(88)
Payment of lease liabilities
(11)
(1)
mdash
Dividend payments
-
-
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(167)
(95)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
333
35
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
985
1488
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
(01)
0
01
10
10
03
Cash and cash equivalents at the end of the period
1318
1524
1488
2040
1319
681
TBI Bank minimum statutory reserve
242
354
234
230
230
242
Total cash on hand and cash at central banks
1560
1878
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
02
119
526
495
107
17000
Adjustments for
Depreciation and amortisation
32
32
121
64
83
1700
Impairment of goodwill and intangible assets
-
-
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
131
63
199
(248)
(301)
0800
Impairment losses on loans
364
359
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(20)
01
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
01
01
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(19)
(19)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
127
150
621
455
619
13300
Non-recurring finance cost
32
-
mdash
mdash
63
Other non-cash items
14
0
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663
707
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(137)
(82)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
(09)
(15)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(39)
(81)
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
479
530
2840
1756
2279
00
Increase in loans due from customers
(132)
(468)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
71
161
819
333
542
160
Increase in deposits (customer and bank deposits)
77
74
165
265
338
110
Deposit interest payments
(15)
(10)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
481
288
1233
524
442
(535)
Corporate income tax paid
(06)
(63)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
475
225
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(83)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(196)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
Q12018 (unaudited)
31 March 2020 (unaudited)
1 January 2018 (post IFRS 9 unaudited)
31 December 2019
Cash and cash equivalents of which
1538
1560
1549
1257
- Online
535
834
658
767
- TBI Bank
1003
725
892
490
Placements with other banks
57
127
70
64
Gross receivables due from customers
7156
7042
6588
7337
Allowance for impairment
(1665)
(1616)
(1575)
(1548)
Net receivables due from customers of which
5491
5426
5013
5789
- Principal
5147
5026
5480
- Accrued interest
277
264
309
Net investments in finance leases
93
45
105
47
Net loans to related parties
631
594
598
607
Property and equipment
96
182
101
178
Financial investments
183
502
184
564
Prepaid expenses
87
40
108
45
Tax assets
212
174
221
213
Deferred tax assets
371
353
368
330
Intangible IT assets
281
168
286
178
Goodwill
214
165
214
165
Other assets
678
392
573
295
Total assets
9932
9727
9390
9731
Calculation for Presentation - other assets (not loans or cash)
Loans and borrowings
4672
3849
3794
3846
Deposits from customers
2728
3333
2710
3222
Deposits from banks
94
95
mdash
130
Corporate income tax payable
178
124
198
95
Other liabilities
799
718
765
780
Total liabilities
8471
8119
7466
8074
Share capital
358
358
358
358
Retained earnings
1475
1628
1350
1657
Reserves
(343)
(378)
(323)
(357)
Total attributable equity
1490
1608
1385
1658
Non-controlling interests
(28)
00
(24)
(00)
Total equity
1461
1608
1362
1658
Total shareholders equity and liabilities
9932
9727
8828
9731
In millions of euro
Q1 2020 (unaudited)
Q1 2019 (unaudited)
change YoY
Interest Income
966
1065
(9)
Interest Expense
(127)
(150)
-(16)
1000000
Net Interest Income
839
915
(8)
Net FampC Income
24
21
12
Other operating income
23
22
7
Non-Interest Income
47
43
10
Operating Income (Revenue)
886
957
(7)
Personnel costs
(221)
(221)
(0
Discretionary bonus
(18)
(19)
(6)
Marketing
(91)
(96)
(5)
IT costs
(39)
(45)
(12)
DampA costs
(35)
(32)
+8
Other costs
(98)
(118)
(17)
Total operating costs
(467)
(498)
(6)
Pre-provision operating profit
419
459
(9)
Net impairment charges
(312)
(324)
-(4)
manual
Post-provision operating profit
107
135
(21)
Depreciation and amortisation
(32)
(32)
-+0
manual
Non-recurring income(expense)
(39)
(01)
nm
Non-recurring finance cost
mdash
mdash
+0
Net FX gain(loss)
(34)
16
nm
One-off adjustments to intangible assets
-
-
(0)
manual
Profit before tax
02
119
nm
Income tax expense
(27)
(62)
-(57)
manual
Net profit(loss) after tax
(25)
57
nm
manual
Adjusted EBITDA
233
294
-(21)
Costincome ratio
527
520
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online principal
Performing (1)
2347
(357)
1990
737
2634
(397)
2237
774
3177
(493)
2684
791
(22139)
3177
(302)
2875
681
(191)
150128837891005
Non-performing (2)
836
(656)
181
263
770
(590)
180
226
840
(664)
175
209
(74878)
36947
1488
(983)
505
319
-648
319
-64836054
-250544747891005
Online total
3184
(1013)
2171
1000
3404
(987)
2417
1000
4017
(1158)
2859
1000
4665
(1286)
3379
1000
(74878)
14808
TBI Bank principal
Performing (1)
2853
(121)
2732
840
2896
(118)
2778
838
2090
(68)
2022
873
(2586)
2090
(43)
2047
873
(25)
-251961477
Non-performing (2)
541
(298)
244
160
558
(274)
284
162
303
(158)
145
127
0437
303
(162)
141
127
04
42578177
TBI Bank total
3394
(418)
2976
1000
3454
(392)
3062
1000
2393
(226)
2167
1000
-
(2149)
2393
(205)
2188
1000
Overall group principal
Performing (1)
5200
(478)
4722
791
5529
(515)
5015
806
5267
(562)
4706
822
-
(24725)
5267
(345)
4922
746
Non-performing (2)
1378
(953)
424
209
1328
(864)
465
194
1142
(822)
320
178
(74878)
37384
1791
(1145)
646
254
Overall total
6578
(1431)
5147
1000
6858
(1378)
5480
1000
6410
(1384)
5026
1000
(74878)
12659
7058
(1490)
5567
1000
31122018 data updated post audit
24
Evolving and broadening our business model
Prime
Sub-Prime
Near-Prime
Segments
Higher Duration Lower APR Products
SPL ILLOC POS
A multi-segment multi-product consumer credit specialist
1
1 Optimise
2 2 Diversify amp Grow
Illustrative
25
Evolution of product mix
Note (1) Reflects reclassification of Vivus brand products in Sweden (from January 2016) Denmark (from January 2017) Armenia (from launch in July 2017) and short-term products (SMS Credit amp Ondo) in Latvia (from January 2019) to Lines of Credit
68
17
3
9
29
45
18
11
0
25
50
75
100
30 Jun 2016 31 Mar 2020
SME (Bank)
Point of Sale
Instalment loans
Line of Credit Cards
Single Payment Loans
euro543meuro323m
Net receivables by product (1)
Online sub-prime only
Bank and onlinenear-prime
and sub-prime
76
48
4
14
20
29
7
0
25
50
75
100
Q1 2016 Q1 2020
Interest income by product (1)
euro97meuro90m
Date chosen to reflect the composition of loan portfolio immediately prior to purchase of TBI Bank
26
Funding near-prime growth via TBI Bank
Online acquisition Retail deposit funding
Initial portfolio development
Early stage customer acquisition and credit metrics monitored and
enhanced
Funding Platform
In-house IT funding platform ensuring ongoing automated
portfolio transfers
Bringing portfolios to scale
Market specific portfolios grow with ongoing sales to reach scale
True saleof portfolio(s)loan servicing
Indicative APRs
20-40
CostIncome ratio
c40
Cost of Risk
6-8
Cost of Funds
3-5
Return on Assets
3-5(2)
Illustrative near-prime
ldquounit economicsrdquo(1)
Notes(1) Illustrative metrics for near-prime portfolios and not indicative of a specific product or market(2) Illustrative potential returns in medium-term at scale
Payment of fair market value
bull Regular sales of Polish instalment loans since September 2019bull Passporting application submitted for Lithuania (largest near-prime portfolio)
Accessing TBI Bank deposit funding for lsquoonlinersquo portfolios via ongoing loan sales
27
Asset quality and provisioning ndash loan principal
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Interest Income 966 1065 (9)Interest Expense (127) (150) (16)Net Interest Income 839 915 (8)Net FampC Income 24 21 12Other operating income 23 22 7Non-Interest Income 47 43 10Operating Income (Revenue) 886 957 (7)Total operating costs (467) (498) (6)Pre-provision operating profit 419 459 (9)Net impairment charges (312) (324) (4)Post-provision operating profit 107 135 (21)Depreciation and amortisation (32) (32) +0Non-recurring income(expense) (39) (01) nmNet FX gain(loss) (34) 16 nmProfit before tax 02 119 nmIncome tax expense (27) (62) (57)Net profit(loss) after tax (25) 57 nm
Adjusted EBITDA 233 294 (21)
Income Statement
30
Balance sheetIn millions of euro
31 March 2020 (unaudited)
31 December 2019
Cash and cash equivalents of which 1560 1257- Online 834 767- TBI Bank 725 490
Placements with other banks 127 64Gross receivables due from customers 7042 7337Allowance for impairment (1616) (1548)Net receivables due from customers of which 5426 5789
- Principal 5147 5480- Accrued interest 277 309
Net investments in finance leases 45 47Net loans to related parties 594 607Property and equipment 182 178Financial investments 502 564Prepaid expenses 40 45Tax assets 174 213Deferred tax assets 353 330Intangible IT assets 168 178Goodwill 165 165Other assets 392 295Total assets 9727 9731Calculation for Presentation other assets (not loans Loans and borrowings 3849 3846Deposits from customers 3333 3222Deposits from banks 95 130Corporate income tax payable 124 95Other liabilities 718 780Total liabilities 8119 8074Share capital 358 358Retained earnings 1628 1657Reserves (378) (357)Total attributable equity 1608 1658Non-controlling interests 00 (00)Total equity 1608 1658Total shareholders equity and liabilities 9727 9731
Balance Sheet
31
Statement of Cash FlowsIn millions of euro
2020 2019Cash flows from operating activitiesProfit before taxes 02 119
Adjustments forDepreciation and amortisation 32 32
Impairment of goodwill and intangible assets - -
Net (gain) loss on foreign exchange from borrowings and other monetary items 131 63
Impairment losses on loans 364 359
Reversal of provision on debt portfolio sales (20) 01
Write-off and disposal of intangible and property and equipment assets 01 01
Interest income from non-customers loans (19) (19)
Interest expense on loans and borrowings and deposits from customers 127 150Non-recurring finance cost 32 -
Other non-cash items 14 0
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663 707
Adjustments forChange in financial instruments measured at fair value through profit or loss (137) (82)(Increase) decrease in other assets (including TBI statutory reserve placements amp leases) (09) (15)
Increase (decrease) in accounts payable to suppliers contractors and other creditors (39) (81)
Operating cash flow before movements in portfolio and deposits 479 530
Increase in loans due from customers (132) (468)
Proceeds from sale of portfolio 71 161
Increase in deposits (customer and bank deposits) 77 74
Deposit interest payments (15) (10)
Gross cash flows from operating activities 481 288
Corporate income tax paid (06) (63)
Net cash flows from operating activities 475 225
3 months to 31 March In millions of euro
2020 2019
Cash flows used in investing activitiesPurchase of property and equipment and intangible assets (15) (13)
Net cash from Purchase Sale of financial instruments 39 (118)
Loans issued to related parties - -
Loans repaid from related parties 0 40
Interest received from related parties 31 01
Disposal of subsidiaries net of cash disposed (13) -
(Acquisition)Disposal of equity investments (14) -
Acquisition of non-controlling interests (04) (04)
Net cash flows from investing activities 25 (94)
Cash flows from financing activitiesLoans received and notes issued - 0
Repayment and repurchase of loans and notes (164) (133)
Interest payments (06) (35)
FX hedging margin 14 82
Payment of lease liabilities (11) (1)
Dividend payments - -
Net cash flows used in financing activities (167) (95)
Net increase (decrease) in cash and cash equivalents 333 35
Cash and cash equivalents at the beginning of the period 985 1488
Effect of exchange rate fluctuations on cash (01) 0
Cash and cash equivalents at the end of the period 1318 1524
TBI Bank minimum statutory reserve 242 354
Total cash on hand and cash at central banks 1560 1878
3 months to 31 March
Cash Flow
Cash Flow (2)
Cash Flow
Cash Flow (2)
32
Key financial ratiosQ1 2020 Q1 2019
CapitalisationEquity assets 165 161Equity net receivables 296 299Adjusted interest coverage 18x 20xTBI Bank consolidated capital adequacy 188 210
ProfitabilityNet interest margin
- Online 764 802- TBI Bank 246 252- Overall group 500 557
Cost income ratio 527 520Normalised Profit before tax margin 111 127Normalised Return on average equity 118 104Normalised Return on average assets 20 17
Asset qualityCost of risk
- Online 295 289- TBI Bank 47 45- Overall group 174 184
Net impairment interest income 323 304Gross NPL ratio
- Online 283 227- TBI Bank 160 173- Overall group 222 204
Overall group NPL coverage ratio 1035 1064
See appendix for definitions of key metrics and ratios
key ratios
33
GlossaryDefinitionsbull Adjusted EBITDA ndash a non-IFRS measure that represents EBITDA (profit for the period plus tax plus interest expense plus depreciation and amortization) as adjusted by incomeloss from discontinued operations non-cash gains and losses
attributable to movement in the mark-to-market valuation of hedging obligations under IFRS goodwill write-offs and certain other one-off or non-cash items Adjusted EBITDA as presented here may not be comparable to similarly-titled measures that are reported by other companies due to differences in the way these measures are calculated Further details of covenant adjustments can be found in the relevant bond prospectuses available on our website
bull Adjusted interest coverage ndash Adjusted EBITDA interest expense for the relevant period (nb not equal to the full covenant coverage ratio calculation)
bull Cost of risk ndash Annualised net impairment loss average gross receivables (total gross receivables as of the start and end of each period divided by two)
bull Cost income ratio ndash Operating costs operating income (revenue)
bull Equity assets ratio ndash Total equity total assets
bull Equity net receivables ndash Total equity net customer receivables (including accrued interest)
bull Gross NPL ratio ndash Non-performing receivables (including accrued interest) with a delay of over 90 days gross receivables (including accrued interest)
bull Gross receivables ndash Total amount receivable from customers including principal and accrued interest after deduction of deferred income
bull Intangible assets ndash consists of deferred tax assets intangible IT assets and goodwill
bull Interest income ndash Interest and similar income generated from our customer loan portfolio
bull Loss given default ndash Loss on non-performing receivables (ie 1 - recovery rate) based on recoveries during the appropriate time window for the specific product reduced by costs of collection discounted at the weighted average effective interest rate
bull Net effective annualised yield ndash annualised interest income (excluding penalties) average net loan principal
bull Net impairment to interest income ratio ndash Net impairment losses on loans and receivables interest income
bull Net interest margin ndash Annualised net interest income average gross loan principal (total gross loan principal as of the start and end of each period divided by two)
bull Net receivables ndash Gross receivables (including accrued interest) less impairment provisions
bull Non-performing loans (NPLs) ndash Loan principal or receivables (as applicable) that are over 90 days past due (and for TBI Bank shown on a customer level basis)
bull Normalised ndash Adjusted to remove the effect of non-recurring items net FX and one-off adjustments to intangible assets and for 2018 ratios only adjusted to reflect the opening balance of 2018 balance sheet after IFRS 9 effects
bull Profit before tax margin ndash Profit before tax interest income
bull Return on Average Assets ndash Annualised profit from continuing operations average assets (total assets as of the start and end of each period divided by two)
bull Return on Average Equity ndash Annualised profit from continuing operations average equity (total equity as of the start and end of each period divided by two)
bull Return on Average Tangible Equity ndash Annualised profit from continuing operations average tangible equity (tangible equity as of the start and end of each period divided by two)
bull Tangible Equity ndash Total equity minus intangible assets
bull TBI Bank Capital adequacy ratio ndash (Tier One Capital + Tier Two Capital) Risk weighted assets (calculated according to the prevailing regulations of the Bulgarian National Bank)
34
Contacts
Investor Relationsinvestorrelations4financecom
James EtheringtonHead of Investor RelationsPhone +44 7766 697 950E-mail jamesetherington4financecom
Paul GoldfinchChief Financial OfficerPhone +371 2572 6422E-mail paulgoldfinch4financecom
Headquarters17a-8 Lielirbes street Riga LV-1046 Latvia
4finance Holding SA
Disclaimer
Agenda
Q1 2020 business and financial highlights
Slide Number 5
Current trading and outlook
Review of three month 2020 results
Summary of three month 2020 results
Interest income remains well diversified
Slide Number 10
Strong financial profile ndash stability and profitability
Funding strategy
Diversified loan portfolio
Analysis of net impairments and cost of risk
Asset quality and provisioning
Recent collections performance
Slide Number 17
Thank you and Questions
Appendix ndash responsible lending and regulatory overview
Sustainability through good governance and responsible lending
Regulatory overview
Regulatory overview (continued)
Appendix ndash strategic evolution of portfolio
Evolving and broadening our business model
Evolution of product mix
Slide Number 26
Asset quality and provisioning ndash loan principal
Appendix ndash financials and key ratios
Slide Number 29
Balance sheet
Statement of Cash Flows
Slide Number 32
GlossaryDefinitions
Contacts
Q12018
Q1 2020
9M 2018
Q1 2019
FY 2017
Net receivables (eurom) of which
5426
5408
5477
- Principal
272
5147
5144
5165
208
- Accrued interest
98
279
265
312
39
Total assets (eurom)
9724
10238
10147
Total equity (eurom)
221
1605
1607
1637
335
Capitalisation
Equity assets
147
165
157
161
127
Equity net receivables
195
296
297
299
267
Adjusted interest coverage
233
18x
25x
20x
223
TBI Bank consolidated capital adequacy
231
188
241
210
239
240
Profitability
Q12018
Net interest margin
- Online
764
882
802
- TBI Bank
246
280
252
- Overall group
500
648
557
Cost income ratio
527
520
520
Post-provision operating profit margin
145
166
177
Normalised Profit before tax margin
111
154
127
Normalised Return on average equity
118
375
104
Normalised Return on average assets
20
56
17
Asset quality
Cost of risk
- Online
295
237
289
- TBI Bank
47
86
45
- Overall group
174
181
184
Net impairment interest income
323
259
304
Gross NPL ratio
- Online
283
222
227
- TBI Bank
160
154
173
- Overall group
222
196
204
Overall group NPL coverage ratio
1035
1156
1064
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
505
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(06)
57
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
50
199
199
(248)
(301)
0800
Impairment losses on loans
1485
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(120)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(73)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
568
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
09
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2599
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
108
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(11)
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2637
2840
2840
1756
2279
00
Increase in loans due from customers
(2248)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1453
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1120
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(15)
(13)
(84)
(128)
(131)
(21)
Net cash from Purchase Sale of financial instruments
39
(118)
(136)
mdash
Repayment of financial instrument
-
-
Loans issued to related parties
-
-
(26)
(06)
(43)
(23)
Loans repaid from related parties
0
40
74
23
109
54
Interest received from related parties
31
01
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
00
(01)
0-
mdash
Disposal of subsidiaries net of cash disposed
(13)
-
(59)
(45)
(44)
mdash
(Acquisition)Disposal of equity investments
(14)
-
Acquisition of non-controlling interests
(04)
(04)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
-
-
mdash
0-
(00)
Prepayment for potential acquisition
-
00
208
0-
(208)
mdash
Acquisition of shares
-
00
00
Net cash flows from investing activities
25
(94)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
0
05
2999
1637
05
Repayment and repurchase of loans and notes
(164)
(133)
(272)
(1737)
(580)
(01)
Interest payments
(06)
(35)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
-
00
(00)
(192)
(58)
mdash
FX hedging margin
14
82
42
(140)
(88)
Payment of lease liabilities
(11)
(1)
mdash
Dividend payments
-
-
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(167)
(95)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
333
35
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
985
1488
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
(01)
0
01
10
10
03
Cash and cash equivalents at the end of the period
1318
1524
1488
2040
1319
681
TBI Bank minimum statutory reserve
242
354
234
230
230
242
Total cash on hand and cash at central banks
1560
1878
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
02
119
526
495
107
17000
Adjustments for
Depreciation and amortisation
32
32
121
64
83
1700
Impairment of goodwill and intangible assets
-
-
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
131
63
199
(248)
(301)
0800
Impairment losses on loans
364
359
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(20)
01
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
01
01
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(19)
(19)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
127
150
621
455
619
13300
Non-recurring finance cost
32
-
mdash
mdash
63
Other non-cash items
14
0
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663
707
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(137)
(82)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
(09)
(15)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(39)
(81)
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
479
530
2840
1756
2279
00
Increase in loans due from customers
(132)
(468)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
71
161
819
333
542
160
Increase in deposits (customer and bank deposits)
77
74
165
265
338
110
Deposit interest payments
(15)
(10)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
481
288
1233
524
442
(535)
Corporate income tax paid
(06)
(63)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
475
225
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(83)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(196)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
Q12018 (unaudited)
31 March 2020 (unaudited)
1 January 2018 (post IFRS 9 unaudited)
31 December 2019
Cash and cash equivalents of which
1538
1560
1549
1257
- Online
535
834
658
767
- TBI Bank
1003
725
892
490
Placements with other banks
57
127
70
64
Gross receivables due from customers
7156
7042
6588
7337
Allowance for impairment
(1665)
(1616)
(1575)
(1548)
Net receivables due from customers of which
5491
5426
5013
5789
- Principal
5147
5026
5480
- Accrued interest
277
264
309
Net investments in finance leases
93
45
105
47
Net loans to related parties
631
594
598
607
Property and equipment
96
182
101
178
Financial investments
183
502
184
564
Prepaid expenses
87
40
108
45
Tax assets
212
174
221
213
Deferred tax assets
371
353
368
330
Intangible IT assets
281
168
286
178
Goodwill
214
165
214
165
Other assets
678
392
573
295
Total assets
9932
9727
9390
9731
Calculation for Presentation - other assets (not loans or cash)
Loans and borrowings
4672
3849
3794
3846
Deposits from customers
2728
3333
2710
3222
Deposits from banks
94
95
mdash
130
Corporate income tax payable
178
124
198
95
Other liabilities
799
718
765
780
Total liabilities
8471
8119
7466
8074
Share capital
358
358
358
358
Retained earnings
1475
1628
1350
1657
Reserves
(343)
(378)
(323)
(357)
Total attributable equity
1490
1608
1385
1658
Non-controlling interests
(28)
00
(24)
(00)
Total equity
1461
1608
1362
1658
Total shareholders equity and liabilities
9932
9727
8828
9731
In millions of euro
Q1 2020 (unaudited)
Q1 2019 (unaudited)
change YoY
Interest Income
966
1065
(9)
Interest Expense
(127)
(150)
-(16)
1000000
Net Interest Income
839
915
(8)
Net FampC Income
24
21
12
Other operating income
23
22
7
Non-Interest Income
47
43
10
Operating Income (Revenue)
886
957
(7)
Personnel costs
(221)
(221)
(0
Discretionary bonus
(18)
(19)
(6)
Marketing
(91)
(96)
(5)
IT costs
(39)
(45)
(12)
DampA costs
(35)
(32)
+8
Other costs
(98)
(118)
(17)
Total operating costs
(467)
(498)
(6)
Pre-provision operating profit
419
459
(9)
Net impairment charges
(312)
(324)
-(4)
manual
Post-provision operating profit
107
135
(21)
Depreciation and amortisation
(32)
(32)
-+0
manual
Non-recurring income(expense)
(39)
(01)
nm
Non-recurring finance cost
mdash
mdash
+0
Net FX gain(loss)
(34)
16
nm
One-off adjustments to intangible assets
-
-
(0)
manual
Profit before tax
02
119
nm
Income tax expense
(27)
(62)
-(57)
manual
Net profit(loss) after tax
(25)
57
nm
manual
Adjusted EBITDA
233
294
-(21)
Costincome ratio
527
520
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online principal
Performing (1)
2347
(357)
1990
737
2634
(397)
2237
774
3177
(493)
2684
791
(22139)
3177
(302)
2875
681
(191)
150128837891005
Non-performing (2)
836
(656)
181
263
770
(590)
180
226
840
(664)
175
209
(74878)
36947
1488
(983)
505
319
-648
319
-64836054
-250544747891005
Online total
3184
(1013)
2171
1000
3404
(987)
2417
1000
4017
(1158)
2859
1000
4665
(1286)
3379
1000
(74878)
14808
TBI Bank principal
Performing (1)
2853
(121)
2732
840
2896
(118)
2778
838
2090
(68)
2022
873
(2586)
2090
(43)
2047
873
(25)
-251961477
Non-performing (2)
541
(298)
244
160
558
(274)
284
162
303
(158)
145
127
0437
303
(162)
141
127
04
42578177
TBI Bank total
3394
(418)
2976
1000
3454
(392)
3062
1000
2393
(226)
2167
1000
-
(2149)
2393
(205)
2188
1000
Overall group principal
Performing (1)
5200
(478)
4722
791
5529
(515)
5015
806
5267
(562)
4706
822
-
(24725)
5267
(345)
4922
746
Non-performing (2)
1378
(953)
424
209
1328
(864)
465
194
1142
(822)
320
178
(74878)
37384
1791
(1145)
646
254
Overall total
6578
(1431)
5147
1000
6858
(1378)
5480
1000
6410
(1384)
5026
1000
(74878)
12659
7058
(1490)
5567
1000
31122018 data updated post audit
25
Evolution of product mix
Note (1) Reflects reclassification of Vivus brand products in Sweden (from January 2016) Denmark (from January 2017) Armenia (from launch in July 2017) and short-term products (SMS Credit amp Ondo) in Latvia (from January 2019) to Lines of Credit
68
17
3
9
29
45
18
11
0
25
50
75
100
30 Jun 2016 31 Mar 2020
SME (Bank)
Point of Sale
Instalment loans
Line of Credit Cards
Single Payment Loans
euro543meuro323m
Net receivables by product (1)
Online sub-prime only
Bank and onlinenear-prime
and sub-prime
76
48
4
14
20
29
7
0
25
50
75
100
Q1 2016 Q1 2020
Interest income by product (1)
euro97meuro90m
Date chosen to reflect the composition of loan portfolio immediately prior to purchase of TBI Bank
26
Funding near-prime growth via TBI Bank
Online acquisition Retail deposit funding
Initial portfolio development
Early stage customer acquisition and credit metrics monitored and
enhanced
Funding Platform
In-house IT funding platform ensuring ongoing automated
portfolio transfers
Bringing portfolios to scale
Market specific portfolios grow with ongoing sales to reach scale
True saleof portfolio(s)loan servicing
Indicative APRs
20-40
CostIncome ratio
c40
Cost of Risk
6-8
Cost of Funds
3-5
Return on Assets
3-5(2)
Illustrative near-prime
ldquounit economicsrdquo(1)
Notes(1) Illustrative metrics for near-prime portfolios and not indicative of a specific product or market(2) Illustrative potential returns in medium-term at scale
Payment of fair market value
bull Regular sales of Polish instalment loans since September 2019bull Passporting application submitted for Lithuania (largest near-prime portfolio)
Accessing TBI Bank deposit funding for lsquoonlinersquo portfolios via ongoing loan sales
27
Asset quality and provisioning ndash loan principal
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Interest Income 966 1065 (9)Interest Expense (127) (150) (16)Net Interest Income 839 915 (8)Net FampC Income 24 21 12Other operating income 23 22 7Non-Interest Income 47 43 10Operating Income (Revenue) 886 957 (7)Total operating costs (467) (498) (6)Pre-provision operating profit 419 459 (9)Net impairment charges (312) (324) (4)Post-provision operating profit 107 135 (21)Depreciation and amortisation (32) (32) +0Non-recurring income(expense) (39) (01) nmNet FX gain(loss) (34) 16 nmProfit before tax 02 119 nmIncome tax expense (27) (62) (57)Net profit(loss) after tax (25) 57 nm
Adjusted EBITDA 233 294 (21)
Income Statement
30
Balance sheetIn millions of euro
31 March 2020 (unaudited)
31 December 2019
Cash and cash equivalents of which 1560 1257- Online 834 767- TBI Bank 725 490
Placements with other banks 127 64Gross receivables due from customers 7042 7337Allowance for impairment (1616) (1548)Net receivables due from customers of which 5426 5789
- Principal 5147 5480- Accrued interest 277 309
Net investments in finance leases 45 47Net loans to related parties 594 607Property and equipment 182 178Financial investments 502 564Prepaid expenses 40 45Tax assets 174 213Deferred tax assets 353 330Intangible IT assets 168 178Goodwill 165 165Other assets 392 295Total assets 9727 9731Calculation for Presentation other assets (not loans Loans and borrowings 3849 3846Deposits from customers 3333 3222Deposits from banks 95 130Corporate income tax payable 124 95Other liabilities 718 780Total liabilities 8119 8074Share capital 358 358Retained earnings 1628 1657Reserves (378) (357)Total attributable equity 1608 1658Non-controlling interests 00 (00)Total equity 1608 1658Total shareholders equity and liabilities 9727 9731
Balance Sheet
31
Statement of Cash FlowsIn millions of euro
2020 2019Cash flows from operating activitiesProfit before taxes 02 119
Adjustments forDepreciation and amortisation 32 32
Impairment of goodwill and intangible assets - -
Net (gain) loss on foreign exchange from borrowings and other monetary items 131 63
Impairment losses on loans 364 359
Reversal of provision on debt portfolio sales (20) 01
Write-off and disposal of intangible and property and equipment assets 01 01
Interest income from non-customers loans (19) (19)
Interest expense on loans and borrowings and deposits from customers 127 150Non-recurring finance cost 32 -
Other non-cash items 14 0
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663 707
Adjustments forChange in financial instruments measured at fair value through profit or loss (137) (82)(Increase) decrease in other assets (including TBI statutory reserve placements amp leases) (09) (15)
Increase (decrease) in accounts payable to suppliers contractors and other creditors (39) (81)
Operating cash flow before movements in portfolio and deposits 479 530
Increase in loans due from customers (132) (468)
Proceeds from sale of portfolio 71 161
Increase in deposits (customer and bank deposits) 77 74
Deposit interest payments (15) (10)
Gross cash flows from operating activities 481 288
Corporate income tax paid (06) (63)
Net cash flows from operating activities 475 225
3 months to 31 March In millions of euro
2020 2019
Cash flows used in investing activitiesPurchase of property and equipment and intangible assets (15) (13)
Net cash from Purchase Sale of financial instruments 39 (118)
Loans issued to related parties - -
Loans repaid from related parties 0 40
Interest received from related parties 31 01
Disposal of subsidiaries net of cash disposed (13) -
(Acquisition)Disposal of equity investments (14) -
Acquisition of non-controlling interests (04) (04)
Net cash flows from investing activities 25 (94)
Cash flows from financing activitiesLoans received and notes issued - 0
Repayment and repurchase of loans and notes (164) (133)
Interest payments (06) (35)
FX hedging margin 14 82
Payment of lease liabilities (11) (1)
Dividend payments - -
Net cash flows used in financing activities (167) (95)
Net increase (decrease) in cash and cash equivalents 333 35
Cash and cash equivalents at the beginning of the period 985 1488
Effect of exchange rate fluctuations on cash (01) 0
Cash and cash equivalents at the end of the period 1318 1524
TBI Bank minimum statutory reserve 242 354
Total cash on hand and cash at central banks 1560 1878
3 months to 31 March
Cash Flow
Cash Flow (2)
Cash Flow
Cash Flow (2)
32
Key financial ratiosQ1 2020 Q1 2019
CapitalisationEquity assets 165 161Equity net receivables 296 299Adjusted interest coverage 18x 20xTBI Bank consolidated capital adequacy 188 210
ProfitabilityNet interest margin
- Online 764 802- TBI Bank 246 252- Overall group 500 557
Cost income ratio 527 520Normalised Profit before tax margin 111 127Normalised Return on average equity 118 104Normalised Return on average assets 20 17
Asset qualityCost of risk
- Online 295 289- TBI Bank 47 45- Overall group 174 184
Net impairment interest income 323 304Gross NPL ratio
- Online 283 227- TBI Bank 160 173- Overall group 222 204
Overall group NPL coverage ratio 1035 1064
See appendix for definitions of key metrics and ratios
key ratios
33
GlossaryDefinitionsbull Adjusted EBITDA ndash a non-IFRS measure that represents EBITDA (profit for the period plus tax plus interest expense plus depreciation and amortization) as adjusted by incomeloss from discontinued operations non-cash gains and losses
attributable to movement in the mark-to-market valuation of hedging obligations under IFRS goodwill write-offs and certain other one-off or non-cash items Adjusted EBITDA as presented here may not be comparable to similarly-titled measures that are reported by other companies due to differences in the way these measures are calculated Further details of covenant adjustments can be found in the relevant bond prospectuses available on our website
bull Adjusted interest coverage ndash Adjusted EBITDA interest expense for the relevant period (nb not equal to the full covenant coverage ratio calculation)
bull Cost of risk ndash Annualised net impairment loss average gross receivables (total gross receivables as of the start and end of each period divided by two)
bull Cost income ratio ndash Operating costs operating income (revenue)
bull Equity assets ratio ndash Total equity total assets
bull Equity net receivables ndash Total equity net customer receivables (including accrued interest)
bull Gross NPL ratio ndash Non-performing receivables (including accrued interest) with a delay of over 90 days gross receivables (including accrued interest)
bull Gross receivables ndash Total amount receivable from customers including principal and accrued interest after deduction of deferred income
bull Intangible assets ndash consists of deferred tax assets intangible IT assets and goodwill
bull Interest income ndash Interest and similar income generated from our customer loan portfolio
bull Loss given default ndash Loss on non-performing receivables (ie 1 - recovery rate) based on recoveries during the appropriate time window for the specific product reduced by costs of collection discounted at the weighted average effective interest rate
bull Net effective annualised yield ndash annualised interest income (excluding penalties) average net loan principal
bull Net impairment to interest income ratio ndash Net impairment losses on loans and receivables interest income
bull Net interest margin ndash Annualised net interest income average gross loan principal (total gross loan principal as of the start and end of each period divided by two)
bull Net receivables ndash Gross receivables (including accrued interest) less impairment provisions
bull Non-performing loans (NPLs) ndash Loan principal or receivables (as applicable) that are over 90 days past due (and for TBI Bank shown on a customer level basis)
bull Normalised ndash Adjusted to remove the effect of non-recurring items net FX and one-off adjustments to intangible assets and for 2018 ratios only adjusted to reflect the opening balance of 2018 balance sheet after IFRS 9 effects
bull Profit before tax margin ndash Profit before tax interest income
bull Return on Average Assets ndash Annualised profit from continuing operations average assets (total assets as of the start and end of each period divided by two)
bull Return on Average Equity ndash Annualised profit from continuing operations average equity (total equity as of the start and end of each period divided by two)
bull Return on Average Tangible Equity ndash Annualised profit from continuing operations average tangible equity (tangible equity as of the start and end of each period divided by two)
bull Tangible Equity ndash Total equity minus intangible assets
bull TBI Bank Capital adequacy ratio ndash (Tier One Capital + Tier Two Capital) Risk weighted assets (calculated according to the prevailing regulations of the Bulgarian National Bank)
34
Contacts
Investor Relationsinvestorrelations4financecom
James EtheringtonHead of Investor RelationsPhone +44 7766 697 950E-mail jamesetherington4financecom
Paul GoldfinchChief Financial OfficerPhone +371 2572 6422E-mail paulgoldfinch4financecom
Headquarters17a-8 Lielirbes street Riga LV-1046 Latvia
4finance Holding SA
Disclaimer
Agenda
Q1 2020 business and financial highlights
Slide Number 5
Current trading and outlook
Review of three month 2020 results
Summary of three month 2020 results
Interest income remains well diversified
Slide Number 10
Strong financial profile ndash stability and profitability
Funding strategy
Diversified loan portfolio
Analysis of net impairments and cost of risk
Asset quality and provisioning
Recent collections performance
Slide Number 17
Thank you and Questions
Appendix ndash responsible lending and regulatory overview
Sustainability through good governance and responsible lending
Regulatory overview
Regulatory overview (continued)
Appendix ndash strategic evolution of portfolio
Evolving and broadening our business model
Evolution of product mix
Slide Number 26
Asset quality and provisioning ndash loan principal
Appendix ndash financials and key ratios
Slide Number 29
Balance sheet
Statement of Cash Flows
Slide Number 32
GlossaryDefinitions
Contacts
Q12018
Q1 2020
9M 2018
Q1 2019
FY 2017
Net receivables (eurom) of which
5426
5408
5477
- Principal
272
5147
5144
5165
208
- Accrued interest
98
279
265
312
39
Total assets (eurom)
9724
10238
10147
Total equity (eurom)
221
1605
1607
1637
335
Capitalisation
Equity assets
147
165
157
161
127
Equity net receivables
195
296
297
299
267
Adjusted interest coverage
233
18x
25x
20x
223
TBI Bank consolidated capital adequacy
231
188
241
210
239
240
Profitability
Q12018
Net interest margin
- Online
764
882
802
- TBI Bank
246
280
252
- Overall group
500
648
557
Cost income ratio
527
520
520
Post-provision operating profit margin
145
166
177
Normalised Profit before tax margin
111
154
127
Normalised Return on average equity
118
375
104
Normalised Return on average assets
20
56
17
Asset quality
Cost of risk
- Online
295
237
289
- TBI Bank
47
86
45
- Overall group
174
181
184
Net impairment interest income
323
259
304
Gross NPL ratio
- Online
283
222
227
- TBI Bank
160
154
173
- Overall group
222
196
204
Overall group NPL coverage ratio
1035
1156
1064
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
505
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(06)
57
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
50
199
199
(248)
(301)
0800
Impairment losses on loans
1485
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(120)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(73)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
568
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
09
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2599
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
108
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(11)
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2637
2840
2840
1756
2279
00
Increase in loans due from customers
(2248)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1453
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1120
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(15)
(13)
(84)
(128)
(131)
(21)
Net cash from Purchase Sale of financial instruments
39
(118)
(136)
mdash
Repayment of financial instrument
-
-
Loans issued to related parties
-
-
(26)
(06)
(43)
(23)
Loans repaid from related parties
0
40
74
23
109
54
Interest received from related parties
31
01
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
00
(01)
0-
mdash
Disposal of subsidiaries net of cash disposed
(13)
-
(59)
(45)
(44)
mdash
(Acquisition)Disposal of equity investments
(14)
-
Acquisition of non-controlling interests
(04)
(04)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
-
-
mdash
0-
(00)
Prepayment for potential acquisition
-
00
208
0-
(208)
mdash
Acquisition of shares
-
00
00
Net cash flows from investing activities
25
(94)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
0
05
2999
1637
05
Repayment and repurchase of loans and notes
(164)
(133)
(272)
(1737)
(580)
(01)
Interest payments
(06)
(35)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
-
00
(00)
(192)
(58)
mdash
FX hedging margin
14
82
42
(140)
(88)
Payment of lease liabilities
(11)
(1)
mdash
Dividend payments
-
-
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(167)
(95)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
333
35
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
985
1488
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
(01)
0
01
10
10
03
Cash and cash equivalents at the end of the period
1318
1524
1488
2040
1319
681
TBI Bank minimum statutory reserve
242
354
234
230
230
242
Total cash on hand and cash at central banks
1560
1878
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
02
119
526
495
107
17000
Adjustments for
Depreciation and amortisation
32
32
121
64
83
1700
Impairment of goodwill and intangible assets
-
-
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
131
63
199
(248)
(301)
0800
Impairment losses on loans
364
359
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(20)
01
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
01
01
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(19)
(19)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
127
150
621
455
619
13300
Non-recurring finance cost
32
-
mdash
mdash
63
Other non-cash items
14
0
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663
707
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(137)
(82)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
(09)
(15)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(39)
(81)
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
479
530
2840
1756
2279
00
Increase in loans due from customers
(132)
(468)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
71
161
819
333
542
160
Increase in deposits (customer and bank deposits)
77
74
165
265
338
110
Deposit interest payments
(15)
(10)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
481
288
1233
524
442
(535)
Corporate income tax paid
(06)
(63)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
475
225
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(83)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(196)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
Q12018 (unaudited)
31 March 2020 (unaudited)
1 January 2018 (post IFRS 9 unaudited)
31 December 2019
Cash and cash equivalents of which
1538
1560
1549
1257
- Online
535
834
658
767
- TBI Bank
1003
725
892
490
Placements with other banks
57
127
70
64
Gross receivables due from customers
7156
7042
6588
7337
Allowance for impairment
(1665)
(1616)
(1575)
(1548)
Net receivables due from customers of which
5491
5426
5013
5789
- Principal
5147
5026
5480
- Accrued interest
277
264
309
Net investments in finance leases
93
45
105
47
Net loans to related parties
631
594
598
607
Property and equipment
96
182
101
178
Financial investments
183
502
184
564
Prepaid expenses
87
40
108
45
Tax assets
212
174
221
213
Deferred tax assets
371
353
368
330
Intangible IT assets
281
168
286
178
Goodwill
214
165
214
165
Other assets
678
392
573
295
Total assets
9932
9727
9390
9731
Calculation for Presentation - other assets (not loans or cash)
Loans and borrowings
4672
3849
3794
3846
Deposits from customers
2728
3333
2710
3222
Deposits from banks
94
95
mdash
130
Corporate income tax payable
178
124
198
95
Other liabilities
799
718
765
780
Total liabilities
8471
8119
7466
8074
Share capital
358
358
358
358
Retained earnings
1475
1628
1350
1657
Reserves
(343)
(378)
(323)
(357)
Total attributable equity
1490
1608
1385
1658
Non-controlling interests
(28)
00
(24)
(00)
Total equity
1461
1608
1362
1658
Total shareholders equity and liabilities
9932
9727
8828
9731
In millions of euro
Q1 2020 (unaudited)
Q1 2019 (unaudited)
change YoY
Interest Income
966
1065
(9)
Interest Expense
(127)
(150)
-(16)
1000000
Net Interest Income
839
915
(8)
Net FampC Income
24
21
12
Other operating income
23
22
7
Non-Interest Income
47
43
10
Operating Income (Revenue)
886
957
(7)
Personnel costs
(221)
(221)
(0
Discretionary bonus
(18)
(19)
(6)
Marketing
(91)
(96)
(5)
IT costs
(39)
(45)
(12)
DampA costs
(35)
(32)
+8
Other costs
(98)
(118)
(17)
Total operating costs
(467)
(498)
(6)
Pre-provision operating profit
419
459
(9)
Net impairment charges
(312)
(324)
-(4)
manual
Post-provision operating profit
107
135
(21)
Depreciation and amortisation
(32)
(32)
-+0
manual
Non-recurring income(expense)
(39)
(01)
nm
Non-recurring finance cost
mdash
mdash
+0
Net FX gain(loss)
(34)
16
nm
One-off adjustments to intangible assets
-
-
(0)
manual
Profit before tax
02
119
nm
Income tax expense
(27)
(62)
-(57)
manual
Net profit(loss) after tax
(25)
57
nm
manual
Adjusted EBITDA
233
294
-(21)
Costincome ratio
527
520
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online principal
Performing (1)
2347
(357)
1990
737
2634
(397)
2237
774
3177
(493)
2684
791
(22139)
3177
(302)
2875
681
(191)
150128837891005
Non-performing (2)
836
(656)
181
263
770
(590)
180
226
840
(664)
175
209
(74878)
36947
1488
(983)
505
319
-648
319
-64836054
-250544747891005
Online total
3184
(1013)
2171
1000
3404
(987)
2417
1000
4017
(1158)
2859
1000
4665
(1286)
3379
1000
(74878)
14808
TBI Bank principal
Performing (1)
2853
(121)
2732
840
2896
(118)
2778
838
2090
(68)
2022
873
(2586)
2090
(43)
2047
873
(25)
-251961477
Non-performing (2)
541
(298)
244
160
558
(274)
284
162
303
(158)
145
127
0437
303
(162)
141
127
04
42578177
TBI Bank total
3394
(418)
2976
1000
3454
(392)
3062
1000
2393
(226)
2167
1000
-
(2149)
2393
(205)
2188
1000
Overall group principal
Performing (1)
5200
(478)
4722
791
5529
(515)
5015
806
5267
(562)
4706
822
-
(24725)
5267
(345)
4922
746
Non-performing (2)
1378
(953)
424
209
1328
(864)
465
194
1142
(822)
320
178
(74878)
37384
1791
(1145)
646
254
Overall total
6578
(1431)
5147
1000
6858
(1378)
5480
1000
6410
(1384)
5026
1000
(74878)
12659
7058
(1490)
5567
1000
31122018 data updated post audit
26
Funding near-prime growth via TBI Bank
Online acquisition Retail deposit funding
Initial portfolio development
Early stage customer acquisition and credit metrics monitored and
enhanced
Funding Platform
In-house IT funding platform ensuring ongoing automated
portfolio transfers
Bringing portfolios to scale
Market specific portfolios grow with ongoing sales to reach scale
True saleof portfolio(s)loan servicing
Indicative APRs
20-40
CostIncome ratio
c40
Cost of Risk
6-8
Cost of Funds
3-5
Return on Assets
3-5(2)
Illustrative near-prime
ldquounit economicsrdquo(1)
Notes(1) Illustrative metrics for near-prime portfolios and not indicative of a specific product or market(2) Illustrative potential returns in medium-term at scale
Payment of fair market value
bull Regular sales of Polish instalment loans since September 2019bull Passporting application submitted for Lithuania (largest near-prime portfolio)
Accessing TBI Bank deposit funding for lsquoonlinersquo portfolios via ongoing loan sales
27
Asset quality and provisioning ndash loan principal
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Interest Income 966 1065 (9)Interest Expense (127) (150) (16)Net Interest Income 839 915 (8)Net FampC Income 24 21 12Other operating income 23 22 7Non-Interest Income 47 43 10Operating Income (Revenue) 886 957 (7)Total operating costs (467) (498) (6)Pre-provision operating profit 419 459 (9)Net impairment charges (312) (324) (4)Post-provision operating profit 107 135 (21)Depreciation and amortisation (32) (32) +0Non-recurring income(expense) (39) (01) nmNet FX gain(loss) (34) 16 nmProfit before tax 02 119 nmIncome tax expense (27) (62) (57)Net profit(loss) after tax (25) 57 nm
Adjusted EBITDA 233 294 (21)
Income Statement
30
Balance sheetIn millions of euro
31 March 2020 (unaudited)
31 December 2019
Cash and cash equivalents of which 1560 1257- Online 834 767- TBI Bank 725 490
Placements with other banks 127 64Gross receivables due from customers 7042 7337Allowance for impairment (1616) (1548)Net receivables due from customers of which 5426 5789
- Principal 5147 5480- Accrued interest 277 309
Net investments in finance leases 45 47Net loans to related parties 594 607Property and equipment 182 178Financial investments 502 564Prepaid expenses 40 45Tax assets 174 213Deferred tax assets 353 330Intangible IT assets 168 178Goodwill 165 165Other assets 392 295Total assets 9727 9731Calculation for Presentation other assets (not loans Loans and borrowings 3849 3846Deposits from customers 3333 3222Deposits from banks 95 130Corporate income tax payable 124 95Other liabilities 718 780Total liabilities 8119 8074Share capital 358 358Retained earnings 1628 1657Reserves (378) (357)Total attributable equity 1608 1658Non-controlling interests 00 (00)Total equity 1608 1658Total shareholders equity and liabilities 9727 9731
Balance Sheet
31
Statement of Cash FlowsIn millions of euro
2020 2019Cash flows from operating activitiesProfit before taxes 02 119
Adjustments forDepreciation and amortisation 32 32
Impairment of goodwill and intangible assets - -
Net (gain) loss on foreign exchange from borrowings and other monetary items 131 63
Impairment losses on loans 364 359
Reversal of provision on debt portfolio sales (20) 01
Write-off and disposal of intangible and property and equipment assets 01 01
Interest income from non-customers loans (19) (19)
Interest expense on loans and borrowings and deposits from customers 127 150Non-recurring finance cost 32 -
Other non-cash items 14 0
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663 707
Adjustments forChange in financial instruments measured at fair value through profit or loss (137) (82)(Increase) decrease in other assets (including TBI statutory reserve placements amp leases) (09) (15)
Increase (decrease) in accounts payable to suppliers contractors and other creditors (39) (81)
Operating cash flow before movements in portfolio and deposits 479 530
Increase in loans due from customers (132) (468)
Proceeds from sale of portfolio 71 161
Increase in deposits (customer and bank deposits) 77 74
Deposit interest payments (15) (10)
Gross cash flows from operating activities 481 288
Corporate income tax paid (06) (63)
Net cash flows from operating activities 475 225
3 months to 31 March In millions of euro
2020 2019
Cash flows used in investing activitiesPurchase of property and equipment and intangible assets (15) (13)
Net cash from Purchase Sale of financial instruments 39 (118)
Loans issued to related parties - -
Loans repaid from related parties 0 40
Interest received from related parties 31 01
Disposal of subsidiaries net of cash disposed (13) -
(Acquisition)Disposal of equity investments (14) -
Acquisition of non-controlling interests (04) (04)
Net cash flows from investing activities 25 (94)
Cash flows from financing activitiesLoans received and notes issued - 0
Repayment and repurchase of loans and notes (164) (133)
Interest payments (06) (35)
FX hedging margin 14 82
Payment of lease liabilities (11) (1)
Dividend payments - -
Net cash flows used in financing activities (167) (95)
Net increase (decrease) in cash and cash equivalents 333 35
Cash and cash equivalents at the beginning of the period 985 1488
Effect of exchange rate fluctuations on cash (01) 0
Cash and cash equivalents at the end of the period 1318 1524
TBI Bank minimum statutory reserve 242 354
Total cash on hand and cash at central banks 1560 1878
3 months to 31 March
Cash Flow
Cash Flow (2)
Cash Flow
Cash Flow (2)
32
Key financial ratiosQ1 2020 Q1 2019
CapitalisationEquity assets 165 161Equity net receivables 296 299Adjusted interest coverage 18x 20xTBI Bank consolidated capital adequacy 188 210
ProfitabilityNet interest margin
- Online 764 802- TBI Bank 246 252- Overall group 500 557
Cost income ratio 527 520Normalised Profit before tax margin 111 127Normalised Return on average equity 118 104Normalised Return on average assets 20 17
Asset qualityCost of risk
- Online 295 289- TBI Bank 47 45- Overall group 174 184
Net impairment interest income 323 304Gross NPL ratio
- Online 283 227- TBI Bank 160 173- Overall group 222 204
Overall group NPL coverage ratio 1035 1064
See appendix for definitions of key metrics and ratios
key ratios
33
GlossaryDefinitionsbull Adjusted EBITDA ndash a non-IFRS measure that represents EBITDA (profit for the period plus tax plus interest expense plus depreciation and amortization) as adjusted by incomeloss from discontinued operations non-cash gains and losses
attributable to movement in the mark-to-market valuation of hedging obligations under IFRS goodwill write-offs and certain other one-off or non-cash items Adjusted EBITDA as presented here may not be comparable to similarly-titled measures that are reported by other companies due to differences in the way these measures are calculated Further details of covenant adjustments can be found in the relevant bond prospectuses available on our website
bull Adjusted interest coverage ndash Adjusted EBITDA interest expense for the relevant period (nb not equal to the full covenant coverage ratio calculation)
bull Cost of risk ndash Annualised net impairment loss average gross receivables (total gross receivables as of the start and end of each period divided by two)
bull Cost income ratio ndash Operating costs operating income (revenue)
bull Equity assets ratio ndash Total equity total assets
bull Equity net receivables ndash Total equity net customer receivables (including accrued interest)
bull Gross NPL ratio ndash Non-performing receivables (including accrued interest) with a delay of over 90 days gross receivables (including accrued interest)
bull Gross receivables ndash Total amount receivable from customers including principal and accrued interest after deduction of deferred income
bull Intangible assets ndash consists of deferred tax assets intangible IT assets and goodwill
bull Interest income ndash Interest and similar income generated from our customer loan portfolio
bull Loss given default ndash Loss on non-performing receivables (ie 1 - recovery rate) based on recoveries during the appropriate time window for the specific product reduced by costs of collection discounted at the weighted average effective interest rate
bull Net effective annualised yield ndash annualised interest income (excluding penalties) average net loan principal
bull Net impairment to interest income ratio ndash Net impairment losses on loans and receivables interest income
bull Net interest margin ndash Annualised net interest income average gross loan principal (total gross loan principal as of the start and end of each period divided by two)
bull Net receivables ndash Gross receivables (including accrued interest) less impairment provisions
bull Non-performing loans (NPLs) ndash Loan principal or receivables (as applicable) that are over 90 days past due (and for TBI Bank shown on a customer level basis)
bull Normalised ndash Adjusted to remove the effect of non-recurring items net FX and one-off adjustments to intangible assets and for 2018 ratios only adjusted to reflect the opening balance of 2018 balance sheet after IFRS 9 effects
bull Profit before tax margin ndash Profit before tax interest income
bull Return on Average Assets ndash Annualised profit from continuing operations average assets (total assets as of the start and end of each period divided by two)
bull Return on Average Equity ndash Annualised profit from continuing operations average equity (total equity as of the start and end of each period divided by two)
bull Return on Average Tangible Equity ndash Annualised profit from continuing operations average tangible equity (tangible equity as of the start and end of each period divided by two)
bull Tangible Equity ndash Total equity minus intangible assets
bull TBI Bank Capital adequacy ratio ndash (Tier One Capital + Tier Two Capital) Risk weighted assets (calculated according to the prevailing regulations of the Bulgarian National Bank)
34
Contacts
Investor Relationsinvestorrelations4financecom
James EtheringtonHead of Investor RelationsPhone +44 7766 697 950E-mail jamesetherington4financecom
Paul GoldfinchChief Financial OfficerPhone +371 2572 6422E-mail paulgoldfinch4financecom
Headquarters17a-8 Lielirbes street Riga LV-1046 Latvia
4finance Holding SA
Disclaimer
Agenda
Q1 2020 business and financial highlights
Slide Number 5
Current trading and outlook
Review of three month 2020 results
Summary of three month 2020 results
Interest income remains well diversified
Slide Number 10
Strong financial profile ndash stability and profitability
Funding strategy
Diversified loan portfolio
Analysis of net impairments and cost of risk
Asset quality and provisioning
Recent collections performance
Slide Number 17
Thank you and Questions
Appendix ndash responsible lending and regulatory overview
Sustainability through good governance and responsible lending
Regulatory overview
Regulatory overview (continued)
Appendix ndash strategic evolution of portfolio
Evolving and broadening our business model
Evolution of product mix
Slide Number 26
Asset quality and provisioning ndash loan principal
Appendix ndash financials and key ratios
Slide Number 29
Balance sheet
Statement of Cash Flows
Slide Number 32
GlossaryDefinitions
Contacts
Q12018
Q1 2020
9M 2018
Q1 2019
FY 2017
Net receivables (eurom) of which
5426
5408
5477
- Principal
272
5147
5144
5165
208
- Accrued interest
98
279
265
312
39
Total assets (eurom)
9724
10238
10147
Total equity (eurom)
221
1605
1607
1637
335
Capitalisation
Equity assets
147
165
157
161
127
Equity net receivables
195
296
297
299
267
Adjusted interest coverage
233
18x
25x
20x
223
TBI Bank consolidated capital adequacy
231
188
241
210
239
240
Profitability
Q12018
Net interest margin
- Online
764
882
802
- TBI Bank
246
280
252
- Overall group
500
648
557
Cost income ratio
527
520
520
Post-provision operating profit margin
145
166
177
Normalised Profit before tax margin
111
154
127
Normalised Return on average equity
118
375
104
Normalised Return on average assets
20
56
17
Asset quality
Cost of risk
- Online
295
237
289
- TBI Bank
47
86
45
- Overall group
174
181
184
Net impairment interest income
323
259
304
Gross NPL ratio
- Online
283
222
227
- TBI Bank
160
154
173
- Overall group
222
196
204
Overall group NPL coverage ratio
1035
1156
1064
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
505
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(06)
57
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
50
199
199
(248)
(301)
0800
Impairment losses on loans
1485
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(120)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(73)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
568
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
09
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2599
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
108
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(11)
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2637
2840
2840
1756
2279
00
Increase in loans due from customers
(2248)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1453
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1120
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(15)
(13)
(84)
(128)
(131)
(21)
Net cash from Purchase Sale of financial instruments
39
(118)
(136)
mdash
Repayment of financial instrument
-
-
Loans issued to related parties
-
-
(26)
(06)
(43)
(23)
Loans repaid from related parties
0
40
74
23
109
54
Interest received from related parties
31
01
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
00
(01)
0-
mdash
Disposal of subsidiaries net of cash disposed
(13)
-
(59)
(45)
(44)
mdash
(Acquisition)Disposal of equity investments
(14)
-
Acquisition of non-controlling interests
(04)
(04)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
-
-
mdash
0-
(00)
Prepayment for potential acquisition
-
00
208
0-
(208)
mdash
Acquisition of shares
-
00
00
Net cash flows from investing activities
25
(94)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
0
05
2999
1637
05
Repayment and repurchase of loans and notes
(164)
(133)
(272)
(1737)
(580)
(01)
Interest payments
(06)
(35)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
-
00
(00)
(192)
(58)
mdash
FX hedging margin
14
82
42
(140)
(88)
Payment of lease liabilities
(11)
(1)
mdash
Dividend payments
-
-
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(167)
(95)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
333
35
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
985
1488
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
(01)
0
01
10
10
03
Cash and cash equivalents at the end of the period
1318
1524
1488
2040
1319
681
TBI Bank minimum statutory reserve
242
354
234
230
230
242
Total cash on hand and cash at central banks
1560
1878
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
02
119
526
495
107
17000
Adjustments for
Depreciation and amortisation
32
32
121
64
83
1700
Impairment of goodwill and intangible assets
-
-
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
131
63
199
(248)
(301)
0800
Impairment losses on loans
364
359
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(20)
01
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
01
01
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(19)
(19)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
127
150
621
455
619
13300
Non-recurring finance cost
32
-
mdash
mdash
63
Other non-cash items
14
0
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663
707
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(137)
(82)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
(09)
(15)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(39)
(81)
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
479
530
2840
1756
2279
00
Increase in loans due from customers
(132)
(468)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
71
161
819
333
542
160
Increase in deposits (customer and bank deposits)
77
74
165
265
338
110
Deposit interest payments
(15)
(10)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
481
288
1233
524
442
(535)
Corporate income tax paid
(06)
(63)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
475
225
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(83)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(196)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
Q12018 (unaudited)
31 March 2020 (unaudited)
1 January 2018 (post IFRS 9 unaudited)
31 December 2019
Cash and cash equivalents of which
1538
1560
1549
1257
- Online
535
834
658
767
- TBI Bank
1003
725
892
490
Placements with other banks
57
127
70
64
Gross receivables due from customers
7156
7042
6588
7337
Allowance for impairment
(1665)
(1616)
(1575)
(1548)
Net receivables due from customers of which
5491
5426
5013
5789
- Principal
5147
5026
5480
- Accrued interest
277
264
309
Net investments in finance leases
93
45
105
47
Net loans to related parties
631
594
598
607
Property and equipment
96
182
101
178
Financial investments
183
502
184
564
Prepaid expenses
87
40
108
45
Tax assets
212
174
221
213
Deferred tax assets
371
353
368
330
Intangible IT assets
281
168
286
178
Goodwill
214
165
214
165
Other assets
678
392
573
295
Total assets
9932
9727
9390
9731
Calculation for Presentation - other assets (not loans or cash)
Loans and borrowings
4672
3849
3794
3846
Deposits from customers
2728
3333
2710
3222
Deposits from banks
94
95
mdash
130
Corporate income tax payable
178
124
198
95
Other liabilities
799
718
765
780
Total liabilities
8471
8119
7466
8074
Share capital
358
358
358
358
Retained earnings
1475
1628
1350
1657
Reserves
(343)
(378)
(323)
(357)
Total attributable equity
1490
1608
1385
1658
Non-controlling interests
(28)
00
(24)
(00)
Total equity
1461
1608
1362
1658
Total shareholders equity and liabilities
9932
9727
8828
9731
In millions of euro
Q1 2020 (unaudited)
Q1 2019 (unaudited)
change YoY
Interest Income
966
1065
(9)
Interest Expense
(127)
(150)
-(16)
1000000
Net Interest Income
839
915
(8)
Net FampC Income
24
21
12
Other operating income
23
22
7
Non-Interest Income
47
43
10
Operating Income (Revenue)
886
957
(7)
Personnel costs
(221)
(221)
(0
Discretionary bonus
(18)
(19)
(6)
Marketing
(91)
(96)
(5)
IT costs
(39)
(45)
(12)
DampA costs
(35)
(32)
+8
Other costs
(98)
(118)
(17)
Total operating costs
(467)
(498)
(6)
Pre-provision operating profit
419
459
(9)
Net impairment charges
(312)
(324)
-(4)
manual
Post-provision operating profit
107
135
(21)
Depreciation and amortisation
(32)
(32)
-+0
manual
Non-recurring income(expense)
(39)
(01)
nm
Non-recurring finance cost
mdash
mdash
+0
Net FX gain(loss)
(34)
16
nm
One-off adjustments to intangible assets
-
-
(0)
manual
Profit before tax
02
119
nm
Income tax expense
(27)
(62)
-(57)
manual
Net profit(loss) after tax
(25)
57
nm
manual
Adjusted EBITDA
233
294
-(21)
Costincome ratio
527
520
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online principal
Performing (1)
2347
(357)
1990
737
2634
(397)
2237
774
3177
(493)
2684
791
(22139)
3177
(302)
2875
681
(191)
150128837891005
Non-performing (2)
836
(656)
181
263
770
(590)
180
226
840
(664)
175
209
(74878)
36947
1488
(983)
505
319
-648
319
-64836054
-250544747891005
Online total
3184
(1013)
2171
1000
3404
(987)
2417
1000
4017
(1158)
2859
1000
4665
(1286)
3379
1000
(74878)
14808
TBI Bank principal
Performing (1)
2853
(121)
2732
840
2896
(118)
2778
838
2090
(68)
2022
873
(2586)
2090
(43)
2047
873
(25)
-251961477
Non-performing (2)
541
(298)
244
160
558
(274)
284
162
303
(158)
145
127
0437
303
(162)
141
127
04
42578177
TBI Bank total
3394
(418)
2976
1000
3454
(392)
3062
1000
2393
(226)
2167
1000
-
(2149)
2393
(205)
2188
1000
Overall group principal
Performing (1)
5200
(478)
4722
791
5529
(515)
5015
806
5267
(562)
4706
822
-
(24725)
5267
(345)
4922
746
Non-performing (2)
1378
(953)
424
209
1328
(864)
465
194
1142
(822)
320
178
(74878)
37384
1791
(1145)
646
254
Overall total
6578
(1431)
5147
1000
6858
(1378)
5480
1000
6410
(1384)
5026
1000
(74878)
12659
7058
(1490)
5567
1000
31122018 data updated post audit
27
Asset quality and provisioning ndash loan principal
Notes (1) Performing receivables 0-90 DPD(2) Non-performing receivables 91+ DPD (and for TBI Bank shown on a customer level basis)
Interest Income 966 1065 (9)Interest Expense (127) (150) (16)Net Interest Income 839 915 (8)Net FampC Income 24 21 12Other operating income 23 22 7Non-Interest Income 47 43 10Operating Income (Revenue) 886 957 (7)Total operating costs (467) (498) (6)Pre-provision operating profit 419 459 (9)Net impairment charges (312) (324) (4)Post-provision operating profit 107 135 (21)Depreciation and amortisation (32) (32) +0Non-recurring income(expense) (39) (01) nmNet FX gain(loss) (34) 16 nmProfit before tax 02 119 nmIncome tax expense (27) (62) (57)Net profit(loss) after tax (25) 57 nm
Adjusted EBITDA 233 294 (21)
Income Statement
30
Balance sheetIn millions of euro
31 March 2020 (unaudited)
31 December 2019
Cash and cash equivalents of which 1560 1257- Online 834 767- TBI Bank 725 490
Placements with other banks 127 64Gross receivables due from customers 7042 7337Allowance for impairment (1616) (1548)Net receivables due from customers of which 5426 5789
- Principal 5147 5480- Accrued interest 277 309
Net investments in finance leases 45 47Net loans to related parties 594 607Property and equipment 182 178Financial investments 502 564Prepaid expenses 40 45Tax assets 174 213Deferred tax assets 353 330Intangible IT assets 168 178Goodwill 165 165Other assets 392 295Total assets 9727 9731Calculation for Presentation other assets (not loans Loans and borrowings 3849 3846Deposits from customers 3333 3222Deposits from banks 95 130Corporate income tax payable 124 95Other liabilities 718 780Total liabilities 8119 8074Share capital 358 358Retained earnings 1628 1657Reserves (378) (357)Total attributable equity 1608 1658Non-controlling interests 00 (00)Total equity 1608 1658Total shareholders equity and liabilities 9727 9731
Balance Sheet
31
Statement of Cash FlowsIn millions of euro
2020 2019Cash flows from operating activitiesProfit before taxes 02 119
Adjustments forDepreciation and amortisation 32 32
Impairment of goodwill and intangible assets - -
Net (gain) loss on foreign exchange from borrowings and other monetary items 131 63
Impairment losses on loans 364 359
Reversal of provision on debt portfolio sales (20) 01
Write-off and disposal of intangible and property and equipment assets 01 01
Interest income from non-customers loans (19) (19)
Interest expense on loans and borrowings and deposits from customers 127 150Non-recurring finance cost 32 -
Other non-cash items 14 0
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663 707
Adjustments forChange in financial instruments measured at fair value through profit or loss (137) (82)(Increase) decrease in other assets (including TBI statutory reserve placements amp leases) (09) (15)
Increase (decrease) in accounts payable to suppliers contractors and other creditors (39) (81)
Operating cash flow before movements in portfolio and deposits 479 530
Increase in loans due from customers (132) (468)
Proceeds from sale of portfolio 71 161
Increase in deposits (customer and bank deposits) 77 74
Deposit interest payments (15) (10)
Gross cash flows from operating activities 481 288
Corporate income tax paid (06) (63)
Net cash flows from operating activities 475 225
3 months to 31 March In millions of euro
2020 2019
Cash flows used in investing activitiesPurchase of property and equipment and intangible assets (15) (13)
Net cash from Purchase Sale of financial instruments 39 (118)
Loans issued to related parties - -
Loans repaid from related parties 0 40
Interest received from related parties 31 01
Disposal of subsidiaries net of cash disposed (13) -
(Acquisition)Disposal of equity investments (14) -
Acquisition of non-controlling interests (04) (04)
Net cash flows from investing activities 25 (94)
Cash flows from financing activitiesLoans received and notes issued - 0
Repayment and repurchase of loans and notes (164) (133)
Interest payments (06) (35)
FX hedging margin 14 82
Payment of lease liabilities (11) (1)
Dividend payments - -
Net cash flows used in financing activities (167) (95)
Net increase (decrease) in cash and cash equivalents 333 35
Cash and cash equivalents at the beginning of the period 985 1488
Effect of exchange rate fluctuations on cash (01) 0
Cash and cash equivalents at the end of the period 1318 1524
TBI Bank minimum statutory reserve 242 354
Total cash on hand and cash at central banks 1560 1878
3 months to 31 March
Cash Flow
Cash Flow (2)
Cash Flow
Cash Flow (2)
32
Key financial ratiosQ1 2020 Q1 2019
CapitalisationEquity assets 165 161Equity net receivables 296 299Adjusted interest coverage 18x 20xTBI Bank consolidated capital adequacy 188 210
ProfitabilityNet interest margin
- Online 764 802- TBI Bank 246 252- Overall group 500 557
Cost income ratio 527 520Normalised Profit before tax margin 111 127Normalised Return on average equity 118 104Normalised Return on average assets 20 17
Asset qualityCost of risk
- Online 295 289- TBI Bank 47 45- Overall group 174 184
Net impairment interest income 323 304Gross NPL ratio
- Online 283 227- TBI Bank 160 173- Overall group 222 204
Overall group NPL coverage ratio 1035 1064
See appendix for definitions of key metrics and ratios
key ratios
33
GlossaryDefinitionsbull Adjusted EBITDA ndash a non-IFRS measure that represents EBITDA (profit for the period plus tax plus interest expense plus depreciation and amortization) as adjusted by incomeloss from discontinued operations non-cash gains and losses
attributable to movement in the mark-to-market valuation of hedging obligations under IFRS goodwill write-offs and certain other one-off or non-cash items Adjusted EBITDA as presented here may not be comparable to similarly-titled measures that are reported by other companies due to differences in the way these measures are calculated Further details of covenant adjustments can be found in the relevant bond prospectuses available on our website
bull Adjusted interest coverage ndash Adjusted EBITDA interest expense for the relevant period (nb not equal to the full covenant coverage ratio calculation)
bull Cost of risk ndash Annualised net impairment loss average gross receivables (total gross receivables as of the start and end of each period divided by two)
bull Cost income ratio ndash Operating costs operating income (revenue)
bull Equity assets ratio ndash Total equity total assets
bull Equity net receivables ndash Total equity net customer receivables (including accrued interest)
bull Gross NPL ratio ndash Non-performing receivables (including accrued interest) with a delay of over 90 days gross receivables (including accrued interest)
bull Gross receivables ndash Total amount receivable from customers including principal and accrued interest after deduction of deferred income
bull Intangible assets ndash consists of deferred tax assets intangible IT assets and goodwill
bull Interest income ndash Interest and similar income generated from our customer loan portfolio
bull Loss given default ndash Loss on non-performing receivables (ie 1 - recovery rate) based on recoveries during the appropriate time window for the specific product reduced by costs of collection discounted at the weighted average effective interest rate
bull Net effective annualised yield ndash annualised interest income (excluding penalties) average net loan principal
bull Net impairment to interest income ratio ndash Net impairment losses on loans and receivables interest income
bull Net interest margin ndash Annualised net interest income average gross loan principal (total gross loan principal as of the start and end of each period divided by two)
bull Net receivables ndash Gross receivables (including accrued interest) less impairment provisions
bull Non-performing loans (NPLs) ndash Loan principal or receivables (as applicable) that are over 90 days past due (and for TBI Bank shown on a customer level basis)
bull Normalised ndash Adjusted to remove the effect of non-recurring items net FX and one-off adjustments to intangible assets and for 2018 ratios only adjusted to reflect the opening balance of 2018 balance sheet after IFRS 9 effects
bull Profit before tax margin ndash Profit before tax interest income
bull Return on Average Assets ndash Annualised profit from continuing operations average assets (total assets as of the start and end of each period divided by two)
bull Return on Average Equity ndash Annualised profit from continuing operations average equity (total equity as of the start and end of each period divided by two)
bull Return on Average Tangible Equity ndash Annualised profit from continuing operations average tangible equity (tangible equity as of the start and end of each period divided by two)
bull Tangible Equity ndash Total equity minus intangible assets
bull TBI Bank Capital adequacy ratio ndash (Tier One Capital + Tier Two Capital) Risk weighted assets (calculated according to the prevailing regulations of the Bulgarian National Bank)
34
Contacts
Investor Relationsinvestorrelations4financecom
James EtheringtonHead of Investor RelationsPhone +44 7766 697 950E-mail jamesetherington4financecom
Paul GoldfinchChief Financial OfficerPhone +371 2572 6422E-mail paulgoldfinch4financecom
Headquarters17a-8 Lielirbes street Riga LV-1046 Latvia
4finance Holding SA
Disclaimer
Agenda
Q1 2020 business and financial highlights
Slide Number 5
Current trading and outlook
Review of three month 2020 results
Summary of three month 2020 results
Interest income remains well diversified
Slide Number 10
Strong financial profile ndash stability and profitability
Funding strategy
Diversified loan portfolio
Analysis of net impairments and cost of risk
Asset quality and provisioning
Recent collections performance
Slide Number 17
Thank you and Questions
Appendix ndash responsible lending and regulatory overview
Sustainability through good governance and responsible lending
Regulatory overview
Regulatory overview (continued)
Appendix ndash strategic evolution of portfolio
Evolving and broadening our business model
Evolution of product mix
Slide Number 26
Asset quality and provisioning ndash loan principal
Appendix ndash financials and key ratios
Slide Number 29
Balance sheet
Statement of Cash Flows
Slide Number 32
GlossaryDefinitions
Contacts
Q12018
Q1 2020
9M 2018
Q1 2019
FY 2017
Net receivables (eurom) of which
5426
5408
5477
- Principal
272
5147
5144
5165
208
- Accrued interest
98
279
265
312
39
Total assets (eurom)
9724
10238
10147
Total equity (eurom)
221
1605
1607
1637
335
Capitalisation
Equity assets
147
165
157
161
127
Equity net receivables
195
296
297
299
267
Adjusted interest coverage
233
18x
25x
20x
223
TBI Bank consolidated capital adequacy
231
188
241
210
239
240
Profitability
Q12018
Net interest margin
- Online
764
882
802
- TBI Bank
246
280
252
- Overall group
500
648
557
Cost income ratio
527
520
520
Post-provision operating profit margin
145
166
177
Normalised Profit before tax margin
111
154
127
Normalised Return on average equity
118
375
104
Normalised Return on average assets
20
56
17
Asset quality
Cost of risk
- Online
295
237
289
- TBI Bank
47
86
45
- Overall group
174
181
184
Net impairment interest income
323
259
304
Gross NPL ratio
- Online
283
222
227
- TBI Bank
160
154
173
- Overall group
222
196
204
Overall group NPL coverage ratio
1035
1156
1064
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
505
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(06)
57
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
50
199
199
(248)
(301)
0800
Impairment losses on loans
1485
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(120)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(73)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
568
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
09
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2599
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
108
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(11)
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2637
2840
2840
1756
2279
00
Increase in loans due from customers
(2248)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1453
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1120
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(15)
(13)
(84)
(128)
(131)
(21)
Net cash from Purchase Sale of financial instruments
39
(118)
(136)
mdash
Repayment of financial instrument
-
-
Loans issued to related parties
-
-
(26)
(06)
(43)
(23)
Loans repaid from related parties
0
40
74
23
109
54
Interest received from related parties
31
01
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
00
(01)
0-
mdash
Disposal of subsidiaries net of cash disposed
(13)
-
(59)
(45)
(44)
mdash
(Acquisition)Disposal of equity investments
(14)
-
Acquisition of non-controlling interests
(04)
(04)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
-
-
mdash
0-
(00)
Prepayment for potential acquisition
-
00
208
0-
(208)
mdash
Acquisition of shares
-
00
00
Net cash flows from investing activities
25
(94)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
0
05
2999
1637
05
Repayment and repurchase of loans and notes
(164)
(133)
(272)
(1737)
(580)
(01)
Interest payments
(06)
(35)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
-
00
(00)
(192)
(58)
mdash
FX hedging margin
14
82
42
(140)
(88)
Payment of lease liabilities
(11)
(1)
mdash
Dividend payments
-
-
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(167)
(95)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
333
35
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
985
1488
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
(01)
0
01
10
10
03
Cash and cash equivalents at the end of the period
1318
1524
1488
2040
1319
681
TBI Bank minimum statutory reserve
242
354
234
230
230
242
Total cash on hand and cash at central banks
1560
1878
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
02
119
526
495
107
17000
Adjustments for
Depreciation and amortisation
32
32
121
64
83
1700
Impairment of goodwill and intangible assets
-
-
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
131
63
199
(248)
(301)
0800
Impairment losses on loans
364
359
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(20)
01
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
01
01
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(19)
(19)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
127
150
621
455
619
13300
Non-recurring finance cost
32
-
mdash
mdash
63
Other non-cash items
14
0
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663
707
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(137)
(82)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
(09)
(15)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(39)
(81)
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
479
530
2840
1756
2279
00
Increase in loans due from customers
(132)
(468)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
71
161
819
333
542
160
Increase in deposits (customer and bank deposits)
77
74
165
265
338
110
Deposit interest payments
(15)
(10)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
481
288
1233
524
442
(535)
Corporate income tax paid
(06)
(63)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
475
225
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(83)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(196)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
Q12018 (unaudited)
31 March 2020 (unaudited)
1 January 2018 (post IFRS 9 unaudited)
31 December 2019
Cash and cash equivalents of which
1538
1560
1549
1257
- Online
535
834
658
767
- TBI Bank
1003
725
892
490
Placements with other banks
57
127
70
64
Gross receivables due from customers
7156
7042
6588
7337
Allowance for impairment
(1665)
(1616)
(1575)
(1548)
Net receivables due from customers of which
5491
5426
5013
5789
- Principal
5147
5026
5480
- Accrued interest
277
264
309
Net investments in finance leases
93
45
105
47
Net loans to related parties
631
594
598
607
Property and equipment
96
182
101
178
Financial investments
183
502
184
564
Prepaid expenses
87
40
108
45
Tax assets
212
174
221
213
Deferred tax assets
371
353
368
330
Intangible IT assets
281
168
286
178
Goodwill
214
165
214
165
Other assets
678
392
573
295
Total assets
9932
9727
9390
9731
Calculation for Presentation - other assets (not loans or cash)
Loans and borrowings
4672
3849
3794
3846
Deposits from customers
2728
3333
2710
3222
Deposits from banks
94
95
mdash
130
Corporate income tax payable
178
124
198
95
Other liabilities
799
718
765
780
Total liabilities
8471
8119
7466
8074
Share capital
358
358
358
358
Retained earnings
1475
1628
1350
1657
Reserves
(343)
(378)
(323)
(357)
Total attributable equity
1490
1608
1385
1658
Non-controlling interests
(28)
00
(24)
(00)
Total equity
1461
1608
1362
1658
Total shareholders equity and liabilities
9932
9727
8828
9731
In millions of euro
Q1 2020 (unaudited)
Q1 2019 (unaudited)
change YoY
Interest Income
966
1065
(9)
Interest Expense
(127)
(150)
-(16)
1000000
Net Interest Income
839
915
(8)
Net FampC Income
24
21
12
Other operating income
23
22
7
Non-Interest Income
47
43
10
Operating Income (Revenue)
886
957
(7)
Personnel costs
(221)
(221)
(0
Discretionary bonus
(18)
(19)
(6)
Marketing
(91)
(96)
(5)
IT costs
(39)
(45)
(12)
DampA costs
(35)
(32)
+8
Other costs
(98)
(118)
(17)
Total operating costs
(467)
(498)
(6)
Pre-provision operating profit
419
459
(9)
Net impairment charges
(312)
(324)
-(4)
manual
Post-provision operating profit
107
135
(21)
Depreciation and amortisation
(32)
(32)
-+0
manual
Non-recurring income(expense)
(39)
(01)
nm
Non-recurring finance cost
mdash
mdash
+0
Net FX gain(loss)
(34)
16
nm
One-off adjustments to intangible assets
-
-
(0)
manual
Profit before tax
02
119
nm
Income tax expense
(27)
(62)
-(57)
manual
Net profit(loss) after tax
(25)
57
nm
manual
Adjusted EBITDA
233
294
-(21)
Costincome ratio
527
520
31 March 2020
31 December 2019
1 January 2018 (post IFRS 9)
IFRS 9 Adjust
31 December 2017
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross amount
Impairment allowance
Netamount
of Gross Amount
Gross Amount
Impairment
Gross amount
Impairment allowance
Netamount
of Gross Amount
eurom except percentages
Online principal
Performing (1)
2347
(357)
1990
737
2634
(397)
2237
774
3177
(493)
2684
791
(22139)
3177
(302)
2875
681
(191)
150128837891005
Non-performing (2)
836
(656)
181
263
770
(590)
180
226
840
(664)
175
209
(74878)
36947
1488
(983)
505
319
-648
319
-64836054
-250544747891005
Online total
3184
(1013)
2171
1000
3404
(987)
2417
1000
4017
(1158)
2859
1000
4665
(1286)
3379
1000
(74878)
14808
TBI Bank principal
Performing (1)
2853
(121)
2732
840
2896
(118)
2778
838
2090
(68)
2022
873
(2586)
2090
(43)
2047
873
(25)
-251961477
Non-performing (2)
541
(298)
244
160
558
(274)
284
162
303
(158)
145
127
0437
303
(162)
141
127
04
42578177
TBI Bank total
3394
(418)
2976
1000
3454
(392)
3062
1000
2393
(226)
2167
1000
-
(2149)
2393
(205)
2188
1000
Overall group principal
Performing (1)
5200
(478)
4722
791
5529
(515)
5015
806
5267
(562)
4706
822
-
(24725)
5267
(345)
4922
746
Non-performing (2)
1378
(953)
424
209
1328
(864)
465
194
1142
(822)
320
178
(74878)
37384
1791
(1145)
646
254
Overall total
6578
(1431)
5147
1000
6858
(1378)
5480
1000
6410
(1384)
5026
1000
(74878)
12659
7058
(1490)
5567
1000
31122018 data updated post audit
28
Appendix ndash financials and key ratios
29
Income statementIn millions of euro Q1 2020
(unaudited) Q1 2019
(unaudited) change
YoY
Interest Income 966 1065 (9)Interest Expense (127) (150) (16)Net Interest Income 839 915 (8)Net FampC Income 24 21 12Other operating income 23 22 7Non-Interest Income 47 43 10Operating Income (Revenue) 886 957 (7)Total operating costs (467) (498) (6)Pre-provision operating profit 419 459 (9)Net impairment charges (312) (324) (4)Post-provision operating profit 107 135 (21)Depreciation and amortisation (32) (32) +0Non-recurring income(expense) (39) (01) nmNet FX gain(loss) (34) 16 nmProfit before tax 02 119 nmIncome tax expense (27) (62) (57)Net profit(loss) after tax (25) 57 nm
Adjusted EBITDA 233 294 (21)
Income Statement
30
Balance sheetIn millions of euro
31 March 2020 (unaudited)
31 December 2019
Cash and cash equivalents of which 1560 1257- Online 834 767- TBI Bank 725 490
Placements with other banks 127 64Gross receivables due from customers 7042 7337Allowance for impairment (1616) (1548)Net receivables due from customers of which 5426 5789
- Principal 5147 5480- Accrued interest 277 309
Net investments in finance leases 45 47Net loans to related parties 594 607Property and equipment 182 178Financial investments 502 564Prepaid expenses 40 45Tax assets 174 213Deferred tax assets 353 330Intangible IT assets 168 178Goodwill 165 165Other assets 392 295Total assets 9727 9731Calculation for Presentation other assets (not loans Loans and borrowings 3849 3846Deposits from customers 3333 3222Deposits from banks 95 130Corporate income tax payable 124 95Other liabilities 718 780Total liabilities 8119 8074Share capital 358 358Retained earnings 1628 1657Reserves (378) (357)Total attributable equity 1608 1658Non-controlling interests 00 (00)Total equity 1608 1658Total shareholders equity and liabilities 9727 9731
Balance Sheet
31
Statement of Cash FlowsIn millions of euro
2020 2019Cash flows from operating activitiesProfit before taxes 02 119
Adjustments forDepreciation and amortisation 32 32
Impairment of goodwill and intangible assets - -
Net (gain) loss on foreign exchange from borrowings and other monetary items 131 63
Impairment losses on loans 364 359
Reversal of provision on debt portfolio sales (20) 01
Write-off and disposal of intangible and property and equipment assets 01 01
Interest income from non-customers loans (19) (19)
Interest expense on loans and borrowings and deposits from customers 127 150Non-recurring finance cost 32 -
Other non-cash items 14 0
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663 707
Adjustments forChange in financial instruments measured at fair value through profit or loss (137) (82)(Increase) decrease in other assets (including TBI statutory reserve placements amp leases) (09) (15)
Increase (decrease) in accounts payable to suppliers contractors and other creditors (39) (81)
Operating cash flow before movements in portfolio and deposits 479 530
Increase in loans due from customers (132) (468)
Proceeds from sale of portfolio 71 161
Increase in deposits (customer and bank deposits) 77 74
Deposit interest payments (15) (10)
Gross cash flows from operating activities 481 288
Corporate income tax paid (06) (63)
Net cash flows from operating activities 475 225
3 months to 31 March In millions of euro
2020 2019
Cash flows used in investing activitiesPurchase of property and equipment and intangible assets (15) (13)
Net cash from Purchase Sale of financial instruments 39 (118)
Loans issued to related parties - -
Loans repaid from related parties 0 40
Interest received from related parties 31 01
Disposal of subsidiaries net of cash disposed (13) -
(Acquisition)Disposal of equity investments (14) -
Acquisition of non-controlling interests (04) (04)
Net cash flows from investing activities 25 (94)
Cash flows from financing activitiesLoans received and notes issued - 0
Repayment and repurchase of loans and notes (164) (133)
Interest payments (06) (35)
FX hedging margin 14 82
Payment of lease liabilities (11) (1)
Dividend payments - -
Net cash flows used in financing activities (167) (95)
Net increase (decrease) in cash and cash equivalents 333 35
Cash and cash equivalents at the beginning of the period 985 1488
Effect of exchange rate fluctuations on cash (01) 0
Cash and cash equivalents at the end of the period 1318 1524
TBI Bank minimum statutory reserve 242 354
Total cash on hand and cash at central banks 1560 1878
3 months to 31 March
Cash Flow
Cash Flow (2)
Cash Flow
Cash Flow (2)
32
Key financial ratiosQ1 2020 Q1 2019
CapitalisationEquity assets 165 161Equity net receivables 296 299Adjusted interest coverage 18x 20xTBI Bank consolidated capital adequacy 188 210
ProfitabilityNet interest margin
- Online 764 802- TBI Bank 246 252- Overall group 500 557
Cost income ratio 527 520Normalised Profit before tax margin 111 127Normalised Return on average equity 118 104Normalised Return on average assets 20 17
Asset qualityCost of risk
- Online 295 289- TBI Bank 47 45- Overall group 174 184
Net impairment interest income 323 304Gross NPL ratio
- Online 283 227- TBI Bank 160 173- Overall group 222 204
Overall group NPL coverage ratio 1035 1064
See appendix for definitions of key metrics and ratios
key ratios
33
GlossaryDefinitionsbull Adjusted EBITDA ndash a non-IFRS measure that represents EBITDA (profit for the period plus tax plus interest expense plus depreciation and amortization) as adjusted by incomeloss from discontinued operations non-cash gains and losses
attributable to movement in the mark-to-market valuation of hedging obligations under IFRS goodwill write-offs and certain other one-off or non-cash items Adjusted EBITDA as presented here may not be comparable to similarly-titled measures that are reported by other companies due to differences in the way these measures are calculated Further details of covenant adjustments can be found in the relevant bond prospectuses available on our website
bull Adjusted interest coverage ndash Adjusted EBITDA interest expense for the relevant period (nb not equal to the full covenant coverage ratio calculation)
bull Cost of risk ndash Annualised net impairment loss average gross receivables (total gross receivables as of the start and end of each period divided by two)
bull Cost income ratio ndash Operating costs operating income (revenue)
bull Equity assets ratio ndash Total equity total assets
bull Equity net receivables ndash Total equity net customer receivables (including accrued interest)
bull Gross NPL ratio ndash Non-performing receivables (including accrued interest) with a delay of over 90 days gross receivables (including accrued interest)
bull Gross receivables ndash Total amount receivable from customers including principal and accrued interest after deduction of deferred income
bull Intangible assets ndash consists of deferred tax assets intangible IT assets and goodwill
bull Interest income ndash Interest and similar income generated from our customer loan portfolio
bull Loss given default ndash Loss on non-performing receivables (ie 1 - recovery rate) based on recoveries during the appropriate time window for the specific product reduced by costs of collection discounted at the weighted average effective interest rate
bull Net effective annualised yield ndash annualised interest income (excluding penalties) average net loan principal
bull Net impairment to interest income ratio ndash Net impairment losses on loans and receivables interest income
bull Net interest margin ndash Annualised net interest income average gross loan principal (total gross loan principal as of the start and end of each period divided by two)
bull Net receivables ndash Gross receivables (including accrued interest) less impairment provisions
bull Non-performing loans (NPLs) ndash Loan principal or receivables (as applicable) that are over 90 days past due (and for TBI Bank shown on a customer level basis)
bull Normalised ndash Adjusted to remove the effect of non-recurring items net FX and one-off adjustments to intangible assets and for 2018 ratios only adjusted to reflect the opening balance of 2018 balance sheet after IFRS 9 effects
bull Profit before tax margin ndash Profit before tax interest income
bull Return on Average Assets ndash Annualised profit from continuing operations average assets (total assets as of the start and end of each period divided by two)
bull Return on Average Equity ndash Annualised profit from continuing operations average equity (total equity as of the start and end of each period divided by two)
bull Return on Average Tangible Equity ndash Annualised profit from continuing operations average tangible equity (tangible equity as of the start and end of each period divided by two)
bull Tangible Equity ndash Total equity minus intangible assets
bull TBI Bank Capital adequacy ratio ndash (Tier One Capital + Tier Two Capital) Risk weighted assets (calculated according to the prevailing regulations of the Bulgarian National Bank)
34
Contacts
Investor Relationsinvestorrelations4financecom
James EtheringtonHead of Investor RelationsPhone +44 7766 697 950E-mail jamesetherington4financecom
Paul GoldfinchChief Financial OfficerPhone +371 2572 6422E-mail paulgoldfinch4financecom
Headquarters17a-8 Lielirbes street Riga LV-1046 Latvia
4finance Holding SA
Disclaimer
Agenda
Q1 2020 business and financial highlights
Slide Number 5
Current trading and outlook
Review of three month 2020 results
Summary of three month 2020 results
Interest income remains well diversified
Slide Number 10
Strong financial profile ndash stability and profitability
Funding strategy
Diversified loan portfolio
Analysis of net impairments and cost of risk
Asset quality and provisioning
Recent collections performance
Slide Number 17
Thank you and Questions
Appendix ndash responsible lending and regulatory overview
Sustainability through good governance and responsible lending
Regulatory overview
Regulatory overview (continued)
Appendix ndash strategic evolution of portfolio
Evolving and broadening our business model
Evolution of product mix
Slide Number 26
Asset quality and provisioning ndash loan principal
Appendix ndash financials and key ratios
Slide Number 29
Balance sheet
Statement of Cash Flows
Slide Number 32
GlossaryDefinitions
Contacts
Q12018
Q1 2020
9M 2018
Q1 2019
FY 2017
Net receivables (eurom) of which
5426
5408
5477
- Principal
272
5147
5144
5165
208
- Accrued interest
98
279
265
312
39
Total assets (eurom)
9724
10238
10147
Total equity (eurom)
221
1605
1607
1637
335
Capitalisation
Equity assets
147
165
157
161
127
Equity net receivables
195
296
297
299
267
Adjusted interest coverage
233
18x
25x
20x
223
TBI Bank consolidated capital adequacy
231
188
241
210
239
240
Profitability
Q12018
Net interest margin
- Online
764
882
802
- TBI Bank
246
280
252
- Overall group
500
648
557
Cost income ratio
527
520
520
Post-provision operating profit margin
145
166
177
Normalised Profit before tax margin
111
154
127
Normalised Return on average equity
118
375
104
Normalised Return on average assets
20
56
17
Asset quality
Cost of risk
- Online
295
237
289
- TBI Bank
47
86
45
- Overall group
174
181
184
Net impairment interest income
323
259
304
Gross NPL ratio
- Online
283
222
227
- TBI Bank
160
154
173
- Overall group
222
196
204
Overall group NPL coverage ratio
1035
1156
1064
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
505
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(06)
57
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
50
199
199
(248)
(301)
0800
Impairment losses on loans
1485
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(120)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(73)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
568
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
09
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2599
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
108
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(11)
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2637
2840
2840
1756
2279
00
Increase in loans due from customers
(2248)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1453
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1120
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(15)
(13)
(84)
(128)
(131)
(21)
Net cash from Purchase Sale of financial instruments
39
(118)
(136)
mdash
Repayment of financial instrument
-
-
Loans issued to related parties
-
-
(26)
(06)
(43)
(23)
Loans repaid from related parties
0
40
74
23
109
54
Interest received from related parties
31
01
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
00
(01)
0-
mdash
Disposal of subsidiaries net of cash disposed
(13)
-
(59)
(45)
(44)
mdash
(Acquisition)Disposal of equity investments
(14)
-
Acquisition of non-controlling interests
(04)
(04)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
-
-
mdash
0-
(00)
Prepayment for potential acquisition
-
00
208
0-
(208)
mdash
Acquisition of shares
-
00
00
Net cash flows from investing activities
25
(94)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
0
05
2999
1637
05
Repayment and repurchase of loans and notes
(164)
(133)
(272)
(1737)
(580)
(01)
Interest payments
(06)
(35)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
-
00
(00)
(192)
(58)
mdash
FX hedging margin
14
82
42
(140)
(88)
Payment of lease liabilities
(11)
(1)
mdash
Dividend payments
-
-
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(167)
(95)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
333
35
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
985
1488
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
(01)
0
01
10
10
03
Cash and cash equivalents at the end of the period
1318
1524
1488
2040
1319
681
TBI Bank minimum statutory reserve
242
354
234
230
230
242
Total cash on hand and cash at central banks
1560
1878
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
02
119
526
495
107
17000
Adjustments for
Depreciation and amortisation
32
32
121
64
83
1700
Impairment of goodwill and intangible assets
-
-
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
131
63
199
(248)
(301)
0800
Impairment losses on loans
364
359
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(20)
01
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
01
01
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(19)
(19)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
127
150
621
455
619
13300
Non-recurring finance cost
32
-
mdash
mdash
63
Other non-cash items
14
0
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663
707
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(137)
(82)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
(09)
(15)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(39)
(81)
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
479
530
2840
1756
2279
00
Increase in loans due from customers
(132)
(468)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
71
161
819
333
542
160
Increase in deposits (customer and bank deposits)
77
74
165
265
338
110
Deposit interest payments
(15)
(10)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
481
288
1233
524
442
(535)
Corporate income tax paid
(06)
(63)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
475
225
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(83)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(196)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
Q12018 (unaudited)
31 March 2020 (unaudited)
1 January 2018 (post IFRS 9 unaudited)
31 December 2019
Cash and cash equivalents of which
1538
1560
1549
1257
- Online
535
834
658
767
- TBI Bank
1003
725
892
490
Placements with other banks
57
127
70
64
Gross receivables due from customers
7156
7042
6588
7337
Allowance for impairment
(1665)
(1616)
(1575)
(1548)
Net receivables due from customers of which
5491
5426
5013
5789
- Principal
5147
5026
5480
- Accrued interest
277
264
309
Net investments in finance leases
93
45
105
47
Net loans to related parties
631
594
598
607
Property and equipment
96
182
101
178
Financial investments
183
502
184
564
Prepaid expenses
87
40
108
45
Tax assets
212
174
221
213
Deferred tax assets
371
353
368
330
Intangible IT assets
281
168
286
178
Goodwill
214
165
214
165
Other assets
678
392
573
295
Total assets
9932
9727
9390
9731
Calculation for Presentation - other assets (not loans or cash)
Loans and borrowings
4672
3849
3794
3846
Deposits from customers
2728
3333
2710
3222
Deposits from banks
94
95
mdash
130
Corporate income tax payable
178
124
198
95
Other liabilities
799
718
765
780
Total liabilities
8471
8119
7466
8074
Share capital
358
358
358
358
Retained earnings
1475
1628
1350
1657
Reserves
(343)
(378)
(323)
(357)
Total attributable equity
1490
1608
1385
1658
Non-controlling interests
(28)
00
(24)
(00)
Total equity
1461
1608
1362
1658
Total shareholders equity and liabilities
9932
9727
8828
9731
In millions of euro
Q1 2020 (unaudited)
Q1 2019 (unaudited)
change YoY
Interest Income
966
1065
(9)
Interest Expense
(127)
(150)
-(16)
1000000
Net Interest Income
839
915
(8)
Net FampC Income
24
21
12
Other operating income
23
22
7
Non-Interest Income
47
43
10
Operating Income (Revenue)
886
957
(7)
Personnel costs
(221)
(221)
(0
Discretionary bonus
(18)
(19)
(6)
Marketing
(91)
(96)
(5)
IT costs
(39)
(45)
(12)
DampA costs
(35)
(32)
+8
Other costs
(98)
(118)
(17)
Total operating costs
(467)
(498)
(6)
Pre-provision operating profit
419
459
(9)
Net impairment charges
(312)
(324)
-(4)
manual
Post-provision operating profit
107
135
(21)
Depreciation and amortisation
(32)
(32)
-+0
manual
Non-recurring income(expense)
(39)
(01)
nm
Non-recurring finance cost
mdash
mdash
+0
Net FX gain(loss)
(34)
16
nm
One-off adjustments to intangible assets
-
-
(0)
manual
Profit before tax
02
119
nm
Income tax expense
(27)
(62)
-(57)
manual
Net profit(loss) after tax
(25)
57
nm
manual
Adjusted EBITDA
233
294
-(21)
Costincome ratio
527
520
29
Income statementIn millions of euro Q1 2020
(unaudited) Q1 2019
(unaudited) change
YoY
Interest Income 966 1065 (9)Interest Expense (127) (150) (16)Net Interest Income 839 915 (8)Net FampC Income 24 21 12Other operating income 23 22 7Non-Interest Income 47 43 10Operating Income (Revenue) 886 957 (7)Total operating costs (467) (498) (6)Pre-provision operating profit 419 459 (9)Net impairment charges (312) (324) (4)Post-provision operating profit 107 135 (21)Depreciation and amortisation (32) (32) +0Non-recurring income(expense) (39) (01) nmNet FX gain(loss) (34) 16 nmProfit before tax 02 119 nmIncome tax expense (27) (62) (57)Net profit(loss) after tax (25) 57 nm
Adjusted EBITDA 233 294 (21)
Income Statement
30
Balance sheetIn millions of euro
31 March 2020 (unaudited)
31 December 2019
Cash and cash equivalents of which 1560 1257- Online 834 767- TBI Bank 725 490
Placements with other banks 127 64Gross receivables due from customers 7042 7337Allowance for impairment (1616) (1548)Net receivables due from customers of which 5426 5789
- Principal 5147 5480- Accrued interest 277 309
Net investments in finance leases 45 47Net loans to related parties 594 607Property and equipment 182 178Financial investments 502 564Prepaid expenses 40 45Tax assets 174 213Deferred tax assets 353 330Intangible IT assets 168 178Goodwill 165 165Other assets 392 295Total assets 9727 9731Calculation for Presentation other assets (not loans Loans and borrowings 3849 3846Deposits from customers 3333 3222Deposits from banks 95 130Corporate income tax payable 124 95Other liabilities 718 780Total liabilities 8119 8074Share capital 358 358Retained earnings 1628 1657Reserves (378) (357)Total attributable equity 1608 1658Non-controlling interests 00 (00)Total equity 1608 1658Total shareholders equity and liabilities 9727 9731
Balance Sheet
31
Statement of Cash FlowsIn millions of euro
2020 2019Cash flows from operating activitiesProfit before taxes 02 119
Adjustments forDepreciation and amortisation 32 32
Impairment of goodwill and intangible assets - -
Net (gain) loss on foreign exchange from borrowings and other monetary items 131 63
Impairment losses on loans 364 359
Reversal of provision on debt portfolio sales (20) 01
Write-off and disposal of intangible and property and equipment assets 01 01
Interest income from non-customers loans (19) (19)
Interest expense on loans and borrowings and deposits from customers 127 150Non-recurring finance cost 32 -
Other non-cash items 14 0
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663 707
Adjustments forChange in financial instruments measured at fair value through profit or loss (137) (82)(Increase) decrease in other assets (including TBI statutory reserve placements amp leases) (09) (15)
Increase (decrease) in accounts payable to suppliers contractors and other creditors (39) (81)
Operating cash flow before movements in portfolio and deposits 479 530
Increase in loans due from customers (132) (468)
Proceeds from sale of portfolio 71 161
Increase in deposits (customer and bank deposits) 77 74
Deposit interest payments (15) (10)
Gross cash flows from operating activities 481 288
Corporate income tax paid (06) (63)
Net cash flows from operating activities 475 225
3 months to 31 March In millions of euro
2020 2019
Cash flows used in investing activitiesPurchase of property and equipment and intangible assets (15) (13)
Net cash from Purchase Sale of financial instruments 39 (118)
Loans issued to related parties - -
Loans repaid from related parties 0 40
Interest received from related parties 31 01
Disposal of subsidiaries net of cash disposed (13) -
(Acquisition)Disposal of equity investments (14) -
Acquisition of non-controlling interests (04) (04)
Net cash flows from investing activities 25 (94)
Cash flows from financing activitiesLoans received and notes issued - 0
Repayment and repurchase of loans and notes (164) (133)
Interest payments (06) (35)
FX hedging margin 14 82
Payment of lease liabilities (11) (1)
Dividend payments - -
Net cash flows used in financing activities (167) (95)
Net increase (decrease) in cash and cash equivalents 333 35
Cash and cash equivalents at the beginning of the period 985 1488
Effect of exchange rate fluctuations on cash (01) 0
Cash and cash equivalents at the end of the period 1318 1524
TBI Bank minimum statutory reserve 242 354
Total cash on hand and cash at central banks 1560 1878
3 months to 31 March
Cash Flow
Cash Flow (2)
Cash Flow
Cash Flow (2)
32
Key financial ratiosQ1 2020 Q1 2019
CapitalisationEquity assets 165 161Equity net receivables 296 299Adjusted interest coverage 18x 20xTBI Bank consolidated capital adequacy 188 210
ProfitabilityNet interest margin
- Online 764 802- TBI Bank 246 252- Overall group 500 557
Cost income ratio 527 520Normalised Profit before tax margin 111 127Normalised Return on average equity 118 104Normalised Return on average assets 20 17
Asset qualityCost of risk
- Online 295 289- TBI Bank 47 45- Overall group 174 184
Net impairment interest income 323 304Gross NPL ratio
- Online 283 227- TBI Bank 160 173- Overall group 222 204
Overall group NPL coverage ratio 1035 1064
See appendix for definitions of key metrics and ratios
key ratios
33
GlossaryDefinitionsbull Adjusted EBITDA ndash a non-IFRS measure that represents EBITDA (profit for the period plus tax plus interest expense plus depreciation and amortization) as adjusted by incomeloss from discontinued operations non-cash gains and losses
attributable to movement in the mark-to-market valuation of hedging obligations under IFRS goodwill write-offs and certain other one-off or non-cash items Adjusted EBITDA as presented here may not be comparable to similarly-titled measures that are reported by other companies due to differences in the way these measures are calculated Further details of covenant adjustments can be found in the relevant bond prospectuses available on our website
bull Adjusted interest coverage ndash Adjusted EBITDA interest expense for the relevant period (nb not equal to the full covenant coverage ratio calculation)
bull Cost of risk ndash Annualised net impairment loss average gross receivables (total gross receivables as of the start and end of each period divided by two)
bull Cost income ratio ndash Operating costs operating income (revenue)
bull Equity assets ratio ndash Total equity total assets
bull Equity net receivables ndash Total equity net customer receivables (including accrued interest)
bull Gross NPL ratio ndash Non-performing receivables (including accrued interest) with a delay of over 90 days gross receivables (including accrued interest)
bull Gross receivables ndash Total amount receivable from customers including principal and accrued interest after deduction of deferred income
bull Intangible assets ndash consists of deferred tax assets intangible IT assets and goodwill
bull Interest income ndash Interest and similar income generated from our customer loan portfolio
bull Loss given default ndash Loss on non-performing receivables (ie 1 - recovery rate) based on recoveries during the appropriate time window for the specific product reduced by costs of collection discounted at the weighted average effective interest rate
bull Net effective annualised yield ndash annualised interest income (excluding penalties) average net loan principal
bull Net impairment to interest income ratio ndash Net impairment losses on loans and receivables interest income
bull Net interest margin ndash Annualised net interest income average gross loan principal (total gross loan principal as of the start and end of each period divided by two)
bull Net receivables ndash Gross receivables (including accrued interest) less impairment provisions
bull Non-performing loans (NPLs) ndash Loan principal or receivables (as applicable) that are over 90 days past due (and for TBI Bank shown on a customer level basis)
bull Normalised ndash Adjusted to remove the effect of non-recurring items net FX and one-off adjustments to intangible assets and for 2018 ratios only adjusted to reflect the opening balance of 2018 balance sheet after IFRS 9 effects
bull Profit before tax margin ndash Profit before tax interest income
bull Return on Average Assets ndash Annualised profit from continuing operations average assets (total assets as of the start and end of each period divided by two)
bull Return on Average Equity ndash Annualised profit from continuing operations average equity (total equity as of the start and end of each period divided by two)
bull Return on Average Tangible Equity ndash Annualised profit from continuing operations average tangible equity (tangible equity as of the start and end of each period divided by two)
bull Tangible Equity ndash Total equity minus intangible assets
bull TBI Bank Capital adequacy ratio ndash (Tier One Capital + Tier Two Capital) Risk weighted assets (calculated according to the prevailing regulations of the Bulgarian National Bank)
34
Contacts
Investor Relationsinvestorrelations4financecom
James EtheringtonHead of Investor RelationsPhone +44 7766 697 950E-mail jamesetherington4financecom
Paul GoldfinchChief Financial OfficerPhone +371 2572 6422E-mail paulgoldfinch4financecom
Headquarters17a-8 Lielirbes street Riga LV-1046 Latvia
4finance Holding SA
Disclaimer
Agenda
Q1 2020 business and financial highlights
Slide Number 5
Current trading and outlook
Review of three month 2020 results
Summary of three month 2020 results
Interest income remains well diversified
Slide Number 10
Strong financial profile ndash stability and profitability
Funding strategy
Diversified loan portfolio
Analysis of net impairments and cost of risk
Asset quality and provisioning
Recent collections performance
Slide Number 17
Thank you and Questions
Appendix ndash responsible lending and regulatory overview
Sustainability through good governance and responsible lending
Regulatory overview
Regulatory overview (continued)
Appendix ndash strategic evolution of portfolio
Evolving and broadening our business model
Evolution of product mix
Slide Number 26
Asset quality and provisioning ndash loan principal
Appendix ndash financials and key ratios
Slide Number 29
Balance sheet
Statement of Cash Flows
Slide Number 32
GlossaryDefinitions
Contacts
Q12018
Q1 2020
9M 2018
Q1 2019
FY 2017
Net receivables (eurom) of which
5426
5408
5477
- Principal
272
5147
5144
5165
208
- Accrued interest
98
279
265
312
39
Total assets (eurom)
9724
10238
10147
Total equity (eurom)
221
1605
1607
1637
335
Capitalisation
Equity assets
147
165
157
161
127
Equity net receivables
195
296
297
299
267
Adjusted interest coverage
233
18x
25x
20x
223
TBI Bank consolidated capital adequacy
231
188
241
210
239
240
Profitability
Q12018
Net interest margin
- Online
764
882
802
- TBI Bank
246
280
252
- Overall group
500
648
557
Cost income ratio
527
520
520
Post-provision operating profit margin
145
166
177
Normalised Profit before tax margin
111
154
127
Normalised Return on average equity
118
375
104
Normalised Return on average assets
20
56
17
Asset quality
Cost of risk
- Online
295
237
289
- TBI Bank
47
86
45
- Overall group
174
181
184
Net impairment interest income
323
259
304
Gross NPL ratio
- Online
283
222
227
- TBI Bank
160
154
173
- Overall group
222
196
204
Overall group NPL coverage ratio
1035
1156
1064
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
505
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(06)
57
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
50
199
199
(248)
(301)
0800
Impairment losses on loans
1485
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(120)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(73)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
568
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
09
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2599
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
108
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(11)
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2637
2840
2840
1756
2279
00
Increase in loans due from customers
(2248)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1453
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1120
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(15)
(13)
(84)
(128)
(131)
(21)
Net cash from Purchase Sale of financial instruments
39
(118)
(136)
mdash
Repayment of financial instrument
-
-
Loans issued to related parties
-
-
(26)
(06)
(43)
(23)
Loans repaid from related parties
0
40
74
23
109
54
Interest received from related parties
31
01
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
00
(01)
0-
mdash
Disposal of subsidiaries net of cash disposed
(13)
-
(59)
(45)
(44)
mdash
(Acquisition)Disposal of equity investments
(14)
-
Acquisition of non-controlling interests
(04)
(04)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
-
-
mdash
0-
(00)
Prepayment for potential acquisition
-
00
208
0-
(208)
mdash
Acquisition of shares
-
00
00
Net cash flows from investing activities
25
(94)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
0
05
2999
1637
05
Repayment and repurchase of loans and notes
(164)
(133)
(272)
(1737)
(580)
(01)
Interest payments
(06)
(35)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
-
00
(00)
(192)
(58)
mdash
FX hedging margin
14
82
42
(140)
(88)
Payment of lease liabilities
(11)
(1)
mdash
Dividend payments
-
-
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(167)
(95)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
333
35
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
985
1488
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
(01)
0
01
10
10
03
Cash and cash equivalents at the end of the period
1318
1524
1488
2040
1319
681
TBI Bank minimum statutory reserve
242
354
234
230
230
242
Total cash on hand and cash at central banks
1560
1878
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
02
119
526
495
107
17000
Adjustments for
Depreciation and amortisation
32
32
121
64
83
1700
Impairment of goodwill and intangible assets
-
-
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
131
63
199
(248)
(301)
0800
Impairment losses on loans
364
359
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(20)
01
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
01
01
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(19)
(19)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
127
150
621
455
619
13300
Non-recurring finance cost
32
-
mdash
mdash
63
Other non-cash items
14
0
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663
707
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(137)
(82)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
(09)
(15)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(39)
(81)
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
479
530
2840
1756
2279
00
Increase in loans due from customers
(132)
(468)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
71
161
819
333
542
160
Increase in deposits (customer and bank deposits)
77
74
165
265
338
110
Deposit interest payments
(15)
(10)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
481
288
1233
524
442
(535)
Corporate income tax paid
(06)
(63)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
475
225
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(83)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(196)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
Q12018 (unaudited)
31 March 2020 (unaudited)
1 January 2018 (post IFRS 9 unaudited)
31 December 2019
Cash and cash equivalents of which
1538
1560
1549
1257
- Online
535
834
658
767
- TBI Bank
1003
725
892
490
Placements with other banks
57
127
70
64
Gross receivables due from customers
7156
7042
6588
7337
Allowance for impairment
(1665)
(1616)
(1575)
(1548)
Net receivables due from customers of which
5491
5426
5013
5789
- Principal
5147
5026
5480
- Accrued interest
277
264
309
Net investments in finance leases
93
45
105
47
Net loans to related parties
631
594
598
607
Property and equipment
96
182
101
178
Financial investments
183
502
184
564
Prepaid expenses
87
40
108
45
Tax assets
212
174
221
213
Deferred tax assets
371
353
368
330
Intangible IT assets
281
168
286
178
Goodwill
214
165
214
165
Other assets
678
392
573
295
Total assets
9932
9727
9390
9731
Calculation for Presentation - other assets (not loans or cash)
Loans and borrowings
4672
3849
3794
3846
Deposits from customers
2728
3333
2710
3222
Deposits from banks
94
95
mdash
130
Corporate income tax payable
178
124
198
95
Other liabilities
799
718
765
780
Total liabilities
8471
8119
7466
8074
Share capital
358
358
358
358
Retained earnings
1475
1628
1350
1657
Reserves
(343)
(378)
(323)
(357)
Total attributable equity
1490
1608
1385
1658
Non-controlling interests
(28)
00
(24)
(00)
Total equity
1461
1608
1362
1658
Total shareholders equity and liabilities
9932
9727
8828
9731
In millions of euro
Q1 2020 (unaudited)
Q1 2019 (unaudited)
change YoY
Interest Income
966
1065
(9)
Interest Expense
(127)
(150)
-(16)
1000000
Net Interest Income
839
915
(8)
Net FampC Income
24
21
12
Other operating income
23
22
7
Non-Interest Income
47
43
10
Operating Income (Revenue)
886
957
(7)
Personnel costs
(221)
(221)
(0
Discretionary bonus
(18)
(19)
(6)
Marketing
(91)
(96)
(5)
IT costs
(39)
(45)
(12)
DampA costs
(35)
(32)
+8
Other costs
(98)
(118)
(17)
Total operating costs
(467)
(498)
(6)
Pre-provision operating profit
419
459
(9)
Net impairment charges
(312)
(324)
-(4)
manual
Post-provision operating profit
107
135
(21)
Depreciation and amortisation
(32)
(32)
-+0
manual
Non-recurring income(expense)
(39)
(01)
nm
Non-recurring finance cost
mdash
mdash
+0
Net FX gain(loss)
(34)
16
nm
One-off adjustments to intangible assets
-
-
(0)
manual
Profit before tax
02
119
nm
Income tax expense
(27)
(62)
-(57)
manual
Net profit(loss) after tax
(25)
57
nm
manual
Adjusted EBITDA
233
294
-(21)
Costincome ratio
527
520
30
Balance sheetIn millions of euro
31 March 2020 (unaudited)
31 December 2019
Cash and cash equivalents of which 1560 1257- Online 834 767- TBI Bank 725 490
Placements with other banks 127 64Gross receivables due from customers 7042 7337Allowance for impairment (1616) (1548)Net receivables due from customers of which 5426 5789
- Principal 5147 5480- Accrued interest 277 309
Net investments in finance leases 45 47Net loans to related parties 594 607Property and equipment 182 178Financial investments 502 564Prepaid expenses 40 45Tax assets 174 213Deferred tax assets 353 330Intangible IT assets 168 178Goodwill 165 165Other assets 392 295Total assets 9727 9731Calculation for Presentation other assets (not loans Loans and borrowings 3849 3846Deposits from customers 3333 3222Deposits from banks 95 130Corporate income tax payable 124 95Other liabilities 718 780Total liabilities 8119 8074Share capital 358 358Retained earnings 1628 1657Reserves (378) (357)Total attributable equity 1608 1658Non-controlling interests 00 (00)Total equity 1608 1658Total shareholders equity and liabilities 9727 9731
Balance Sheet
31
Statement of Cash FlowsIn millions of euro
2020 2019Cash flows from operating activitiesProfit before taxes 02 119
Adjustments forDepreciation and amortisation 32 32
Impairment of goodwill and intangible assets - -
Net (gain) loss on foreign exchange from borrowings and other monetary items 131 63
Impairment losses on loans 364 359
Reversal of provision on debt portfolio sales (20) 01
Write-off and disposal of intangible and property and equipment assets 01 01
Interest income from non-customers loans (19) (19)
Interest expense on loans and borrowings and deposits from customers 127 150Non-recurring finance cost 32 -
Other non-cash items 14 0
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663 707
Adjustments forChange in financial instruments measured at fair value through profit or loss (137) (82)(Increase) decrease in other assets (including TBI statutory reserve placements amp leases) (09) (15)
Increase (decrease) in accounts payable to suppliers contractors and other creditors (39) (81)
Operating cash flow before movements in portfolio and deposits 479 530
Increase in loans due from customers (132) (468)
Proceeds from sale of portfolio 71 161
Increase in deposits (customer and bank deposits) 77 74
Deposit interest payments (15) (10)
Gross cash flows from operating activities 481 288
Corporate income tax paid (06) (63)
Net cash flows from operating activities 475 225
3 months to 31 March In millions of euro
2020 2019
Cash flows used in investing activitiesPurchase of property and equipment and intangible assets (15) (13)
Net cash from Purchase Sale of financial instruments 39 (118)
Loans issued to related parties - -
Loans repaid from related parties 0 40
Interest received from related parties 31 01
Disposal of subsidiaries net of cash disposed (13) -
(Acquisition)Disposal of equity investments (14) -
Acquisition of non-controlling interests (04) (04)
Net cash flows from investing activities 25 (94)
Cash flows from financing activitiesLoans received and notes issued - 0
Repayment and repurchase of loans and notes (164) (133)
Interest payments (06) (35)
FX hedging margin 14 82
Payment of lease liabilities (11) (1)
Dividend payments - -
Net cash flows used in financing activities (167) (95)
Net increase (decrease) in cash and cash equivalents 333 35
Cash and cash equivalents at the beginning of the period 985 1488
Effect of exchange rate fluctuations on cash (01) 0
Cash and cash equivalents at the end of the period 1318 1524
TBI Bank minimum statutory reserve 242 354
Total cash on hand and cash at central banks 1560 1878
3 months to 31 March
Cash Flow
Cash Flow (2)
Cash Flow
Cash Flow (2)
32
Key financial ratiosQ1 2020 Q1 2019
CapitalisationEquity assets 165 161Equity net receivables 296 299Adjusted interest coverage 18x 20xTBI Bank consolidated capital adequacy 188 210
ProfitabilityNet interest margin
- Online 764 802- TBI Bank 246 252- Overall group 500 557
Cost income ratio 527 520Normalised Profit before tax margin 111 127Normalised Return on average equity 118 104Normalised Return on average assets 20 17
Asset qualityCost of risk
- Online 295 289- TBI Bank 47 45- Overall group 174 184
Net impairment interest income 323 304Gross NPL ratio
- Online 283 227- TBI Bank 160 173- Overall group 222 204
Overall group NPL coverage ratio 1035 1064
See appendix for definitions of key metrics and ratios
key ratios
33
GlossaryDefinitionsbull Adjusted EBITDA ndash a non-IFRS measure that represents EBITDA (profit for the period plus tax plus interest expense plus depreciation and amortization) as adjusted by incomeloss from discontinued operations non-cash gains and losses
attributable to movement in the mark-to-market valuation of hedging obligations under IFRS goodwill write-offs and certain other one-off or non-cash items Adjusted EBITDA as presented here may not be comparable to similarly-titled measures that are reported by other companies due to differences in the way these measures are calculated Further details of covenant adjustments can be found in the relevant bond prospectuses available on our website
bull Adjusted interest coverage ndash Adjusted EBITDA interest expense for the relevant period (nb not equal to the full covenant coverage ratio calculation)
bull Cost of risk ndash Annualised net impairment loss average gross receivables (total gross receivables as of the start and end of each period divided by two)
bull Cost income ratio ndash Operating costs operating income (revenue)
bull Equity assets ratio ndash Total equity total assets
bull Equity net receivables ndash Total equity net customer receivables (including accrued interest)
bull Gross NPL ratio ndash Non-performing receivables (including accrued interest) with a delay of over 90 days gross receivables (including accrued interest)
bull Gross receivables ndash Total amount receivable from customers including principal and accrued interest after deduction of deferred income
bull Intangible assets ndash consists of deferred tax assets intangible IT assets and goodwill
bull Interest income ndash Interest and similar income generated from our customer loan portfolio
bull Loss given default ndash Loss on non-performing receivables (ie 1 - recovery rate) based on recoveries during the appropriate time window for the specific product reduced by costs of collection discounted at the weighted average effective interest rate
bull Net effective annualised yield ndash annualised interest income (excluding penalties) average net loan principal
bull Net impairment to interest income ratio ndash Net impairment losses on loans and receivables interest income
bull Net interest margin ndash Annualised net interest income average gross loan principal (total gross loan principal as of the start and end of each period divided by two)
bull Net receivables ndash Gross receivables (including accrued interest) less impairment provisions
bull Non-performing loans (NPLs) ndash Loan principal or receivables (as applicable) that are over 90 days past due (and for TBI Bank shown on a customer level basis)
bull Normalised ndash Adjusted to remove the effect of non-recurring items net FX and one-off adjustments to intangible assets and for 2018 ratios only adjusted to reflect the opening balance of 2018 balance sheet after IFRS 9 effects
bull Profit before tax margin ndash Profit before tax interest income
bull Return on Average Assets ndash Annualised profit from continuing operations average assets (total assets as of the start and end of each period divided by two)
bull Return on Average Equity ndash Annualised profit from continuing operations average equity (total equity as of the start and end of each period divided by two)
bull Return on Average Tangible Equity ndash Annualised profit from continuing operations average tangible equity (tangible equity as of the start and end of each period divided by two)
bull Tangible Equity ndash Total equity minus intangible assets
bull TBI Bank Capital adequacy ratio ndash (Tier One Capital + Tier Two Capital) Risk weighted assets (calculated according to the prevailing regulations of the Bulgarian National Bank)
34
Contacts
Investor Relationsinvestorrelations4financecom
James EtheringtonHead of Investor RelationsPhone +44 7766 697 950E-mail jamesetherington4financecom
Paul GoldfinchChief Financial OfficerPhone +371 2572 6422E-mail paulgoldfinch4financecom
Headquarters17a-8 Lielirbes street Riga LV-1046 Latvia
4finance Holding SA
Disclaimer
Agenda
Q1 2020 business and financial highlights
Slide Number 5
Current trading and outlook
Review of three month 2020 results
Summary of three month 2020 results
Interest income remains well diversified
Slide Number 10
Strong financial profile ndash stability and profitability
Funding strategy
Diversified loan portfolio
Analysis of net impairments and cost of risk
Asset quality and provisioning
Recent collections performance
Slide Number 17
Thank you and Questions
Appendix ndash responsible lending and regulatory overview
Sustainability through good governance and responsible lending
Regulatory overview
Regulatory overview (continued)
Appendix ndash strategic evolution of portfolio
Evolving and broadening our business model
Evolution of product mix
Slide Number 26
Asset quality and provisioning ndash loan principal
Appendix ndash financials and key ratios
Slide Number 29
Balance sheet
Statement of Cash Flows
Slide Number 32
GlossaryDefinitions
Contacts
Q12018
Q1 2020
9M 2018
Q1 2019
FY 2017
Net receivables (eurom) of which
5426
5408
5477
- Principal
272
5147
5144
5165
208
- Accrued interest
98
279
265
312
39
Total assets (eurom)
9724
10238
10147
Total equity (eurom)
221
1605
1607
1637
335
Capitalisation
Equity assets
147
165
157
161
127
Equity net receivables
195
296
297
299
267
Adjusted interest coverage
233
18x
25x
20x
223
TBI Bank consolidated capital adequacy
231
188
241
210
239
240
Profitability
Q12018
Net interest margin
- Online
764
882
802
- TBI Bank
246
280
252
- Overall group
500
648
557
Cost income ratio
527
520
520
Post-provision operating profit margin
145
166
177
Normalised Profit before tax margin
111
154
127
Normalised Return on average equity
118
375
104
Normalised Return on average assets
20
56
17
Asset quality
Cost of risk
- Online
295
237
289
- TBI Bank
47
86
45
- Overall group
174
181
184
Net impairment interest income
323
259
304
Gross NPL ratio
- Online
283
222
227
- TBI Bank
160
154
173
- Overall group
222
196
204
Overall group NPL coverage ratio
1035
1156
1064
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
505
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(06)
57
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
50
199
199
(248)
(301)
0800
Impairment losses on loans
1485
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(120)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(73)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
568
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
09
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2599
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
108
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(11)
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2637
2840
2840
1756
2279
00
Increase in loans due from customers
(2248)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1453
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1120
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(15)
(13)
(84)
(128)
(131)
(21)
Net cash from Purchase Sale of financial instruments
39
(118)
(136)
mdash
Repayment of financial instrument
-
-
Loans issued to related parties
-
-
(26)
(06)
(43)
(23)
Loans repaid from related parties
0
40
74
23
109
54
Interest received from related parties
31
01
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
00
(01)
0-
mdash
Disposal of subsidiaries net of cash disposed
(13)
-
(59)
(45)
(44)
mdash
(Acquisition)Disposal of equity investments
(14)
-
Acquisition of non-controlling interests
(04)
(04)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
-
-
mdash
0-
(00)
Prepayment for potential acquisition
-
00
208
0-
(208)
mdash
Acquisition of shares
-
00
00
Net cash flows from investing activities
25
(94)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
0
05
2999
1637
05
Repayment and repurchase of loans and notes
(164)
(133)
(272)
(1737)
(580)
(01)
Interest payments
(06)
(35)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
-
00
(00)
(192)
(58)
mdash
FX hedging margin
14
82
42
(140)
(88)
Payment of lease liabilities
(11)
(1)
mdash
Dividend payments
-
-
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(167)
(95)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
333
35
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
985
1488
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
(01)
0
01
10
10
03
Cash and cash equivalents at the end of the period
1318
1524
1488
2040
1319
681
TBI Bank minimum statutory reserve
242
354
234
230
230
242
Total cash on hand and cash at central banks
1560
1878
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
02
119
526
495
107
17000
Adjustments for
Depreciation and amortisation
32
32
121
64
83
1700
Impairment of goodwill and intangible assets
-
-
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
131
63
199
(248)
(301)
0800
Impairment losses on loans
364
359
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(20)
01
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
01
01
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(19)
(19)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
127
150
621
455
619
13300
Non-recurring finance cost
32
-
mdash
mdash
63
Other non-cash items
14
0
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663
707
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(137)
(82)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
(09)
(15)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(39)
(81)
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
479
530
2840
1756
2279
00
Increase in loans due from customers
(132)
(468)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
71
161
819
333
542
160
Increase in deposits (customer and bank deposits)
77
74
165
265
338
110
Deposit interest payments
(15)
(10)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
481
288
1233
524
442
(535)
Corporate income tax paid
(06)
(63)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
475
225
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(83)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(196)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
Q12018 (unaudited)
31 March 2020 (unaudited)
1 January 2018 (post IFRS 9 unaudited)
31 December 2019
Cash and cash equivalents of which
1538
1560
1549
1257
- Online
535
834
658
767
- TBI Bank
1003
725
892
490
Placements with other banks
57
127
70
64
Gross receivables due from customers
7156
7042
6588
7337
Allowance for impairment
(1665)
(1616)
(1575)
(1548)
Net receivables due from customers of which
5491
5426
5013
5789
- Principal
5147
5026
5480
- Accrued interest
277
264
309
Net investments in finance leases
93
45
105
47
Net loans to related parties
631
594
598
607
Property and equipment
96
182
101
178
Financial investments
183
502
184
564
Prepaid expenses
87
40
108
45
Tax assets
212
174
221
213
Deferred tax assets
371
353
368
330
Intangible IT assets
281
168
286
178
Goodwill
214
165
214
165
Other assets
678
392
573
295
Total assets
9932
9727
9390
9731
Calculation for Presentation - other assets (not loans or cash)
Loans and borrowings
4672
3849
3794
3846
Deposits from customers
2728
3333
2710
3222
Deposits from banks
94
95
mdash
130
Corporate income tax payable
178
124
198
95
Other liabilities
799
718
765
780
Total liabilities
8471
8119
7466
8074
Share capital
358
358
358
358
Retained earnings
1475
1628
1350
1657
Reserves
(343)
(378)
(323)
(357)
Total attributable equity
1490
1608
1385
1658
Non-controlling interests
(28)
00
(24)
(00)
Total equity
1461
1608
1362
1658
Total shareholders equity and liabilities
9932
9727
8828
9731
31
Statement of Cash FlowsIn millions of euro
2020 2019Cash flows from operating activitiesProfit before taxes 02 119
Adjustments forDepreciation and amortisation 32 32
Impairment of goodwill and intangible assets - -
Net (gain) loss on foreign exchange from borrowings and other monetary items 131 63
Impairment losses on loans 364 359
Reversal of provision on debt portfolio sales (20) 01
Write-off and disposal of intangible and property and equipment assets 01 01
Interest income from non-customers loans (19) (19)
Interest expense on loans and borrowings and deposits from customers 127 150Non-recurring finance cost 32 -
Other non-cash items 14 0
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663 707
Adjustments forChange in financial instruments measured at fair value through profit or loss (137) (82)(Increase) decrease in other assets (including TBI statutory reserve placements amp leases) (09) (15)
Increase (decrease) in accounts payable to suppliers contractors and other creditors (39) (81)
Operating cash flow before movements in portfolio and deposits 479 530
Increase in loans due from customers (132) (468)
Proceeds from sale of portfolio 71 161
Increase in deposits (customer and bank deposits) 77 74
Deposit interest payments (15) (10)
Gross cash flows from operating activities 481 288
Corporate income tax paid (06) (63)
Net cash flows from operating activities 475 225
3 months to 31 March In millions of euro
2020 2019
Cash flows used in investing activitiesPurchase of property and equipment and intangible assets (15) (13)
Net cash from Purchase Sale of financial instruments 39 (118)
Loans issued to related parties - -
Loans repaid from related parties 0 40
Interest received from related parties 31 01
Disposal of subsidiaries net of cash disposed (13) -
(Acquisition)Disposal of equity investments (14) -
Acquisition of non-controlling interests (04) (04)
Net cash flows from investing activities 25 (94)
Cash flows from financing activitiesLoans received and notes issued - 0
Repayment and repurchase of loans and notes (164) (133)
Interest payments (06) (35)
FX hedging margin 14 82
Payment of lease liabilities (11) (1)
Dividend payments - -
Net cash flows used in financing activities (167) (95)
Net increase (decrease) in cash and cash equivalents 333 35
Cash and cash equivalents at the beginning of the period 985 1488
Effect of exchange rate fluctuations on cash (01) 0
Cash and cash equivalents at the end of the period 1318 1524
TBI Bank minimum statutory reserve 242 354
Total cash on hand and cash at central banks 1560 1878
3 months to 31 March
Cash Flow
Cash Flow (2)
Cash Flow
Cash Flow (2)
32
Key financial ratiosQ1 2020 Q1 2019
CapitalisationEquity assets 165 161Equity net receivables 296 299Adjusted interest coverage 18x 20xTBI Bank consolidated capital adequacy 188 210
ProfitabilityNet interest margin
- Online 764 802- TBI Bank 246 252- Overall group 500 557
Cost income ratio 527 520Normalised Profit before tax margin 111 127Normalised Return on average equity 118 104Normalised Return on average assets 20 17
Asset qualityCost of risk
- Online 295 289- TBI Bank 47 45- Overall group 174 184
Net impairment interest income 323 304Gross NPL ratio
- Online 283 227- TBI Bank 160 173- Overall group 222 204
Overall group NPL coverage ratio 1035 1064
See appendix for definitions of key metrics and ratios
key ratios
33
GlossaryDefinitionsbull Adjusted EBITDA ndash a non-IFRS measure that represents EBITDA (profit for the period plus tax plus interest expense plus depreciation and amortization) as adjusted by incomeloss from discontinued operations non-cash gains and losses
attributable to movement in the mark-to-market valuation of hedging obligations under IFRS goodwill write-offs and certain other one-off or non-cash items Adjusted EBITDA as presented here may not be comparable to similarly-titled measures that are reported by other companies due to differences in the way these measures are calculated Further details of covenant adjustments can be found in the relevant bond prospectuses available on our website
bull Adjusted interest coverage ndash Adjusted EBITDA interest expense for the relevant period (nb not equal to the full covenant coverage ratio calculation)
bull Cost of risk ndash Annualised net impairment loss average gross receivables (total gross receivables as of the start and end of each period divided by two)
bull Cost income ratio ndash Operating costs operating income (revenue)
bull Equity assets ratio ndash Total equity total assets
bull Equity net receivables ndash Total equity net customer receivables (including accrued interest)
bull Gross NPL ratio ndash Non-performing receivables (including accrued interest) with a delay of over 90 days gross receivables (including accrued interest)
bull Gross receivables ndash Total amount receivable from customers including principal and accrued interest after deduction of deferred income
bull Intangible assets ndash consists of deferred tax assets intangible IT assets and goodwill
bull Interest income ndash Interest and similar income generated from our customer loan portfolio
bull Loss given default ndash Loss on non-performing receivables (ie 1 - recovery rate) based on recoveries during the appropriate time window for the specific product reduced by costs of collection discounted at the weighted average effective interest rate
bull Net effective annualised yield ndash annualised interest income (excluding penalties) average net loan principal
bull Net impairment to interest income ratio ndash Net impairment losses on loans and receivables interest income
bull Net interest margin ndash Annualised net interest income average gross loan principal (total gross loan principal as of the start and end of each period divided by two)
bull Net receivables ndash Gross receivables (including accrued interest) less impairment provisions
bull Non-performing loans (NPLs) ndash Loan principal or receivables (as applicable) that are over 90 days past due (and for TBI Bank shown on a customer level basis)
bull Normalised ndash Adjusted to remove the effect of non-recurring items net FX and one-off adjustments to intangible assets and for 2018 ratios only adjusted to reflect the opening balance of 2018 balance sheet after IFRS 9 effects
bull Profit before tax margin ndash Profit before tax interest income
bull Return on Average Assets ndash Annualised profit from continuing operations average assets (total assets as of the start and end of each period divided by two)
bull Return on Average Equity ndash Annualised profit from continuing operations average equity (total equity as of the start and end of each period divided by two)
bull Return on Average Tangible Equity ndash Annualised profit from continuing operations average tangible equity (tangible equity as of the start and end of each period divided by two)
bull Tangible Equity ndash Total equity minus intangible assets
bull TBI Bank Capital adequacy ratio ndash (Tier One Capital + Tier Two Capital) Risk weighted assets (calculated according to the prevailing regulations of the Bulgarian National Bank)
34
Contacts
Investor Relationsinvestorrelations4financecom
James EtheringtonHead of Investor RelationsPhone +44 7766 697 950E-mail jamesetherington4financecom
Paul GoldfinchChief Financial OfficerPhone +371 2572 6422E-mail paulgoldfinch4financecom
Headquarters17a-8 Lielirbes street Riga LV-1046 Latvia
4finance Holding SA
Disclaimer
Agenda
Q1 2020 business and financial highlights
Slide Number 5
Current trading and outlook
Review of three month 2020 results
Summary of three month 2020 results
Interest income remains well diversified
Slide Number 10
Strong financial profile ndash stability and profitability
Funding strategy
Diversified loan portfolio
Analysis of net impairments and cost of risk
Asset quality and provisioning
Recent collections performance
Slide Number 17
Thank you and Questions
Appendix ndash responsible lending and regulatory overview
Sustainability through good governance and responsible lending
Regulatory overview
Regulatory overview (continued)
Appendix ndash strategic evolution of portfolio
Evolving and broadening our business model
Evolution of product mix
Slide Number 26
Asset quality and provisioning ndash loan principal
Appendix ndash financials and key ratios
Slide Number 29
Balance sheet
Statement of Cash Flows
Slide Number 32
GlossaryDefinitions
Contacts
Q12018
Q1 2020
9M 2018
Q1 2019
FY 2017
Net receivables (eurom) of which
5426
5408
5477
- Principal
272
5147
5144
5165
208
- Accrued interest
98
279
265
312
39
Total assets (eurom)
9724
10238
10147
Total equity (eurom)
221
1605
1607
1637
335
Capitalisation
Equity assets
147
165
157
161
127
Equity net receivables
195
296
297
299
267
Adjusted interest coverage
233
18x
25x
20x
223
TBI Bank consolidated capital adequacy
231
188
241
210
239
240
Profitability
Q12018
Net interest margin
- Online
764
882
802
- TBI Bank
246
280
252
- Overall group
500
648
557
Cost income ratio
527
520
520
Post-provision operating profit margin
145
166
177
Normalised Profit before tax margin
111
154
127
Normalised Return on average equity
118
375
104
Normalised Return on average assets
20
56
17
Asset quality
Cost of risk
- Online
295
237
289
- TBI Bank
47
86
45
- Overall group
174
181
184
Net impairment interest income
323
259
304
Gross NPL ratio
- Online
283
222
227
- TBI Bank
160
154
173
- Overall group
222
196
204
Overall group NPL coverage ratio
1035
1156
1064
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
505
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(06)
57
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
50
199
199
(248)
(301)
0800
Impairment losses on loans
1485
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(120)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(73)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
568
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
09
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2599
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
108
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(11)
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2637
2840
2840
1756
2279
00
Increase in loans due from customers
(2248)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1453
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1120
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(15)
(13)
(84)
(128)
(131)
(21)
Net cash from Purchase Sale of financial instruments
39
(118)
(136)
mdash
Repayment of financial instrument
-
-
Loans issued to related parties
-
-
(26)
(06)
(43)
(23)
Loans repaid from related parties
0
40
74
23
109
54
Interest received from related parties
31
01
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
00
(01)
0-
mdash
Disposal of subsidiaries net of cash disposed
(13)
-
(59)
(45)
(44)
mdash
(Acquisition)Disposal of equity investments
(14)
-
Acquisition of non-controlling interests
(04)
(04)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
-
-
mdash
0-
(00)
Prepayment for potential acquisition
-
00
208
0-
(208)
mdash
Acquisition of shares
-
00
00
Net cash flows from investing activities
25
(94)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
0
05
2999
1637
05
Repayment and repurchase of loans and notes
(164)
(133)
(272)
(1737)
(580)
(01)
Interest payments
(06)
(35)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
-
00
(00)
(192)
(58)
mdash
FX hedging margin
14
82
42
(140)
(88)
Payment of lease liabilities
(11)
(1)
mdash
Dividend payments
-
-
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(167)
(95)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
333
35
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
985
1488
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
(01)
0
01
10
10
03
Cash and cash equivalents at the end of the period
1318
1524
1488
2040
1319
681
TBI Bank minimum statutory reserve
242
354
234
230
230
242
Total cash on hand and cash at central banks
1560
1878
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
3 months to 31 March
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2020
2019
2018
2017
Cash flows from operating activities
Profit before taxes
02
119
526
495
107
17000
Adjustments for
Depreciation and amortisation
32
32
121
64
83
1700
Impairment of goodwill and intangible assets
-
-
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
131
63
199
(248)
(301)
0800
Impairment losses on loans
364
359
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(20)
01
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
01
01
29
15
114
0100
Provisions for unused vacations
-
mdash
(04)
00
0600
Interest income from non-customers loans
(19)
(19)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
127
150
621
455
619
13300
Non-recurring finance cost
32
-
mdash
mdash
63
Other non-cash items
14
0
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
663
707
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(137)
(82)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
(09)
(15)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
(39)
(81)
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
479
530
2840
1756
2279
00
Increase in loans due from customers
(132)
(468)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
71
161
819
333
542
160
Increase in deposits (customer and bank deposits)
77
74
165
265
338
110
Deposit interest payments
(15)
(10)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
481
288
1233
524
442
(535)
Corporate income tax paid
(06)
(63)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
475
225
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(83)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(196)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
In millions of euro
12 months to 31 December
12 months to 31 December
12 Months to 31 Dec 2017
Q12018 (unaudited)
2019
2018
2018
2017
Cash flows from operating activities
Profit before taxes
508
526
526
495
107
17000
Adjustments for
Depreciation and amortisation
165
121
121
64
83
1700
Impairment of goodwill and intangible assets
(00)
00
57
mdash
259
mdash
Net (gain) loss on foreign exchange from borrowings and other monetary items
48
199
199
(248)
(301)
0800
Impairment losses on loans
1482
1789
1789
969
1365
28700
Reversal of provision on debt portfolio sales
(121)
(366)
(366)
(123)
(189)
(2800)
Write-off and disposal of intangible and property and equipment assets
16
29
29
15
114
0100
Provisions for unused vacations
(01)
-
mdash
(04)
00
0600
Interest income from non-customers loans
(76)
(81)
(81)
(68)
(92)
(2200)
Interest expense on loans and borrowings and deposits from customers
565
621
621
455
619
13300
Non-recurring finance cost
00
00
mdash
mdash
63
Other non-cash items
11
25
25
mdash
04
mdash
Equity-settled share-based payment transactions
00
00
mdash
0-
00
mdash
Profit before adjustments for the effect of changes to current assets and short-term liabilities
2591
2918
2918
1555
2033
57200
Adjustments for
Change in financial instruments measured at fair value through profit or loss
(59)
(113)
(113)
224
246
8200
(Increase) decrease in other assets (including TBI statutory reserve placements amp leases)
91
(03)
(03)
(22)
(74)
(22100)
Increase (decrease) in accounts payable to suppliers contractors and other creditors
02
37
37
(01)
74
(2300)
Increase of obligatory reserve
00
00
mdash
0-
mdash
mdash
Operating cash flow before movements in portfolio and deposits
2625
2840
2840
1756
2279
00
Increase in loans due from customers
(2244)
(2551)
(2551)
(1799)
(2672)
(797)
Proceeds from sale of portfolio
632
819
819
333
542
160
Increase in deposits (customer and bank deposits)
475
165
165
265
338
110
Deposit interest payments
(44)
(40)
(40)
(31)
(45)
(08)
Gross cash flows from operating activities
1444
1233
1233
524
442
(535)
Corporate income tax paid
(333)
(275)
(275)
(243)
(336)
(102)
Net cash flows from operating activities
1112
959
959
281
105
(637)
Cash flows used in investing activities
Purchase of property and equipment and intangible assets
(75)
(84)
(84)
(128)
(131)
(21)
Purchase of financial instruments
(308)
(136)
(136)
mdash
Loans issued to related parties
-
(26)
(26)
(06)
(43)
(23)
Loans repaid from related parties
41
74
74
23
109
54
Interest received from related parties
82
28
28
10
18
17
Disposal of subsidiaries net of cash disposed
-
(01)
(01)
0-
mdash
(Acquisition) Disposal of equity investments
79
(59)
(59)
(45)
(44)
mdash
Acquisition of non-controlling interests
(04)
(44)
(44)
0-
mdash
mdash
Acquisition of subsidiaries net of cash acquired
(03)
-
mdash
0-
(00)
Prepayment for potential acquisition
-
208
208
0-
(208)
mdash
Acquisition of shares
00
00
00
Net cash flows from investing activities
(188)
(38)
(38)
(145)
(300)
27
Cash flows from financing activities
Loans received and notes issued
-
05
05
2999
1637
05
Repayment and repurchase of loans and notes
(841)
(272)
(272)
(1737)
(580)
(01)
Interest payments
(496)
(527)
(527)
(306)
(516)
(34)
Costs of notes issuance and premium on repurchase of notes
00
(00)
(00)
(192)
(58)
mdash
FX hedging margin
90
42
42
(140)
(88)
Payment of lease liabilities
(43)
-
mdash
Dividend payments
(140)
(01)
(01)
(100)
(260)
mdash
Net cash flows used in financing activities
(1430)
(753)
(753)
524
135
(30)
Net increase (decrease) in cash and cash equivalents
(506)
168
168
660
(61)
(641)
Cash and cash equivalents at the beginning of the period
1488
1319
1319
1370
1370
1319
Effect of exchange rate fluctuations on cash
03
01
01
10
10
03
Cash and cash equivalents at the end of the period
985
1488
1488
2040
1319
681
TBI Bank minimum statutory reserve
272
234
234
230
230
242
Total cash on hand and cash at central banks
1257
1722
1722
2271
1549
924
157793
ERRORREF
32
Key financial ratiosQ1 2020 Q1 2019
CapitalisationEquity assets 165 161Equity net receivables 296 299Adjusted interest coverage 18x 20xTBI Bank consolidated capital adequacy 188 210
ProfitabilityNet interest margin
- Online 764 802- TBI Bank 246 252- Overall group 500 557
Cost income ratio 527 520Normalised Profit before tax margin 111 127Normalised Return on average equity 118 104Normalised Return on average assets 20 17
Asset qualityCost of risk
- Online 295 289- TBI Bank 47 45- Overall group 174 184
Net impairment interest income 323 304Gross NPL ratio
- Online 283 227- TBI Bank 160 173- Overall group 222 204
Overall group NPL coverage ratio 1035 1064
See appendix for definitions of key metrics and ratios
key ratios
33
GlossaryDefinitionsbull Adjusted EBITDA ndash a non-IFRS measure that represents EBITDA (profit for the period plus tax plus interest expense plus depreciation and amortization) as adjusted by incomeloss from discontinued operations non-cash gains and losses
attributable to movement in the mark-to-market valuation of hedging obligations under IFRS goodwill write-offs and certain other one-off or non-cash items Adjusted EBITDA as presented here may not be comparable to similarly-titled measures that are reported by other companies due to differences in the way these measures are calculated Further details of covenant adjustments can be found in the relevant bond prospectuses available on our website
bull Adjusted interest coverage ndash Adjusted EBITDA interest expense for the relevant period (nb not equal to the full covenant coverage ratio calculation)
bull Cost of risk ndash Annualised net impairment loss average gross receivables (total gross receivables as of the start and end of each period divided by two)
bull Cost income ratio ndash Operating costs operating income (revenue)
bull Equity assets ratio ndash Total equity total assets
bull Equity net receivables ndash Total equity net customer receivables (including accrued interest)
bull Gross NPL ratio ndash Non-performing receivables (including accrued interest) with a delay of over 90 days gross receivables (including accrued interest)
bull Gross receivables ndash Total amount receivable from customers including principal and accrued interest after deduction of deferred income
bull Intangible assets ndash consists of deferred tax assets intangible IT assets and goodwill
bull Interest income ndash Interest and similar income generated from our customer loan portfolio
bull Loss given default ndash Loss on non-performing receivables (ie 1 - recovery rate) based on recoveries during the appropriate time window for the specific product reduced by costs of collection discounted at the weighted average effective interest rate
bull Net effective annualised yield ndash annualised interest income (excluding penalties) average net loan principal
bull Net impairment to interest income ratio ndash Net impairment losses on loans and receivables interest income
bull Net interest margin ndash Annualised net interest income average gross loan principal (total gross loan principal as of the start and end of each period divided by two)
bull Net receivables ndash Gross receivables (including accrued interest) less impairment provisions
bull Non-performing loans (NPLs) ndash Loan principal or receivables (as applicable) that are over 90 days past due (and for TBI Bank shown on a customer level basis)
bull Normalised ndash Adjusted to remove the effect of non-recurring items net FX and one-off adjustments to intangible assets and for 2018 ratios only adjusted to reflect the opening balance of 2018 balance sheet after IFRS 9 effects
bull Profit before tax margin ndash Profit before tax interest income
bull Return on Average Assets ndash Annualised profit from continuing operations average assets (total assets as of the start and end of each period divided by two)
bull Return on Average Equity ndash Annualised profit from continuing operations average equity (total equity as of the start and end of each period divided by two)
bull Return on Average Tangible Equity ndash Annualised profit from continuing operations average tangible equity (tangible equity as of the start and end of each period divided by two)
bull Tangible Equity ndash Total equity minus intangible assets
bull TBI Bank Capital adequacy ratio ndash (Tier One Capital + Tier Two Capital) Risk weighted assets (calculated according to the prevailing regulations of the Bulgarian National Bank)
34
Contacts
Investor Relationsinvestorrelations4financecom
James EtheringtonHead of Investor RelationsPhone +44 7766 697 950E-mail jamesetherington4financecom
Paul GoldfinchChief Financial OfficerPhone +371 2572 6422E-mail paulgoldfinch4financecom
Headquarters17a-8 Lielirbes street Riga LV-1046 Latvia
4finance Holding SA
Disclaimer
Agenda
Q1 2020 business and financial highlights
Slide Number 5
Current trading and outlook
Review of three month 2020 results
Summary of three month 2020 results
Interest income remains well diversified
Slide Number 10
Strong financial profile ndash stability and profitability
Funding strategy
Diversified loan portfolio
Analysis of net impairments and cost of risk
Asset quality and provisioning
Recent collections performance
Slide Number 17
Thank you and Questions
Appendix ndash responsible lending and regulatory overview
Sustainability through good governance and responsible lending
Regulatory overview
Regulatory overview (continued)
Appendix ndash strategic evolution of portfolio
Evolving and broadening our business model
Evolution of product mix
Slide Number 26
Asset quality and provisioning ndash loan principal
Appendix ndash financials and key ratios
Slide Number 29
Balance sheet
Statement of Cash Flows
Slide Number 32
GlossaryDefinitions
Contacts
Q12018
Q1 2020
9M 2018
Q1 2019
FY 2017
Net receivables (eurom) of which
5426
5408
5477
- Principal
272
5147
5144
5165
208
- Accrued interest
98
279
265
312
39
Total assets (eurom)
9724
10238
10147
Total equity (eurom)
221
1605
1607
1637
335
Capitalisation
Equity assets
147
165
157
161
127
Equity net receivables
195
296
297
299
267
Adjusted interest coverage
233
18x
25x
20x
223
TBI Bank consolidated capital adequacy
231
188
241
210
239
240
Profitability
Q12018
Net interest margin
- Online
764
882
802
- TBI Bank
246
280
252
- Overall group
500
648
557
Cost income ratio
527
520
520
Post-provision operating profit margin
145
166
177
Normalised Profit before tax margin
111
154
127
Normalised Return on average equity
118
375
104
Normalised Return on average assets
20
56
17
Asset quality
Cost of risk
- Online
295
237
289
- TBI Bank
47
86
45
- Overall group
174
181
184
Net impairment interest income
323
259
304
Gross NPL ratio
- Online
283
222
227
- TBI Bank
160
154
173
- Overall group
222
196
204
Overall group NPL coverage ratio
1035
1156
1064
33
GlossaryDefinitionsbull Adjusted EBITDA ndash a non-IFRS measure that represents EBITDA (profit for the period plus tax plus interest expense plus depreciation and amortization) as adjusted by incomeloss from discontinued operations non-cash gains and losses
attributable to movement in the mark-to-market valuation of hedging obligations under IFRS goodwill write-offs and certain other one-off or non-cash items Adjusted EBITDA as presented here may not be comparable to similarly-titled measures that are reported by other companies due to differences in the way these measures are calculated Further details of covenant adjustments can be found in the relevant bond prospectuses available on our website
bull Adjusted interest coverage ndash Adjusted EBITDA interest expense for the relevant period (nb not equal to the full covenant coverage ratio calculation)
bull Cost of risk ndash Annualised net impairment loss average gross receivables (total gross receivables as of the start and end of each period divided by two)
bull Cost income ratio ndash Operating costs operating income (revenue)
bull Equity assets ratio ndash Total equity total assets
bull Equity net receivables ndash Total equity net customer receivables (including accrued interest)
bull Gross NPL ratio ndash Non-performing receivables (including accrued interest) with a delay of over 90 days gross receivables (including accrued interest)
bull Gross receivables ndash Total amount receivable from customers including principal and accrued interest after deduction of deferred income
bull Intangible assets ndash consists of deferred tax assets intangible IT assets and goodwill
bull Interest income ndash Interest and similar income generated from our customer loan portfolio
bull Loss given default ndash Loss on non-performing receivables (ie 1 - recovery rate) based on recoveries during the appropriate time window for the specific product reduced by costs of collection discounted at the weighted average effective interest rate
bull Net effective annualised yield ndash annualised interest income (excluding penalties) average net loan principal
bull Net impairment to interest income ratio ndash Net impairment losses on loans and receivables interest income
bull Net interest margin ndash Annualised net interest income average gross loan principal (total gross loan principal as of the start and end of each period divided by two)
bull Net receivables ndash Gross receivables (including accrued interest) less impairment provisions
bull Non-performing loans (NPLs) ndash Loan principal or receivables (as applicable) that are over 90 days past due (and for TBI Bank shown on a customer level basis)
bull Normalised ndash Adjusted to remove the effect of non-recurring items net FX and one-off adjustments to intangible assets and for 2018 ratios only adjusted to reflect the opening balance of 2018 balance sheet after IFRS 9 effects
bull Profit before tax margin ndash Profit before tax interest income
bull Return on Average Assets ndash Annualised profit from continuing operations average assets (total assets as of the start and end of each period divided by two)
bull Return on Average Equity ndash Annualised profit from continuing operations average equity (total equity as of the start and end of each period divided by two)
bull Return on Average Tangible Equity ndash Annualised profit from continuing operations average tangible equity (tangible equity as of the start and end of each period divided by two)
bull Tangible Equity ndash Total equity minus intangible assets
bull TBI Bank Capital adequacy ratio ndash (Tier One Capital + Tier Two Capital) Risk weighted assets (calculated according to the prevailing regulations of the Bulgarian National Bank)
34
Contacts
Investor Relationsinvestorrelations4financecom
James EtheringtonHead of Investor RelationsPhone +44 7766 697 950E-mail jamesetherington4financecom
Paul GoldfinchChief Financial OfficerPhone +371 2572 6422E-mail paulgoldfinch4financecom
Headquarters17a-8 Lielirbes street Riga LV-1046 Latvia
4finance Holding SA
Disclaimer
Agenda
Q1 2020 business and financial highlights
Slide Number 5
Current trading and outlook
Review of three month 2020 results
Summary of three month 2020 results
Interest income remains well diversified
Slide Number 10
Strong financial profile ndash stability and profitability
Funding strategy
Diversified loan portfolio
Analysis of net impairments and cost of risk
Asset quality and provisioning
Recent collections performance
Slide Number 17
Thank you and Questions
Appendix ndash responsible lending and regulatory overview
Sustainability through good governance and responsible lending
Regulatory overview
Regulatory overview (continued)
Appendix ndash strategic evolution of portfolio
Evolving and broadening our business model
Evolution of product mix
Slide Number 26
Asset quality and provisioning ndash loan principal
Appendix ndash financials and key ratios
Slide Number 29
Balance sheet
Statement of Cash Flows
Slide Number 32
GlossaryDefinitions
Contacts
34
Contacts
Investor Relationsinvestorrelations4financecom
James EtheringtonHead of Investor RelationsPhone +44 7766 697 950E-mail jamesetherington4financecom
Paul GoldfinchChief Financial OfficerPhone +371 2572 6422E-mail paulgoldfinch4financecom
Headquarters17a-8 Lielirbes street Riga LV-1046 Latvia
4finance Holding SA
Disclaimer
Agenda
Q1 2020 business and financial highlights
Slide Number 5
Current trading and outlook
Review of three month 2020 results
Summary of three month 2020 results
Interest income remains well diversified
Slide Number 10
Strong financial profile ndash stability and profitability
Funding strategy
Diversified loan portfolio
Analysis of net impairments and cost of risk
Asset quality and provisioning
Recent collections performance
Slide Number 17
Thank you and Questions
Appendix ndash responsible lending and regulatory overview
Sustainability through good governance and responsible lending
Regulatory overview
Regulatory overview (continued)
Appendix ndash strategic evolution of portfolio
Evolving and broadening our business model
Evolution of product mix
Slide Number 26
Asset quality and provisioning ndash loan principal
