DGAP-News: TF Bank AB / Key word(s): IPO
TF Bank AB: TF Bank AB prepares for IPO in Frankfurt
20.08.2015 / 10:02
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TF Bank AB prepares for IPO in Frankfurt
- TF Bank, a Fintech company offering consumer finance products, sales
finance and e-commerce payment solutions online, plans an initial
public offering (IPO) on the Frankfurt Stock Exchange
- The offer comprises a strongly expanding customer base driven by
versatile partnership models to enable growth across Europe as well as
a favorable market environment
- The company has a lean, efficient cost structure and a scalable
IT-platform with which it increased total operating income to EUR 50.6
million and operating profit to EUR 14.9 million in the last twelve
months ended June 30, 2015
Stockholm/Frankfurt, August 20, 2015 - TF Bank AB (together with its
consolidated subsidiaries hereafter "TF" or "Group"), a pure online and
mobile bank based in Sweden, is preparing for its initial public offering
on the Frankfurt Stock Exchange. TF was granted a Swedish banking license
in 2012 and as at 30 June 2015 had a total of 1.1 million active customers
in its two segments and a combined 2.2 million user profiles for scoring in
its database. The Group currently operates in seven European countries in
Northern Europe, the Baltics as well as Central and Eastern Europe, and is
currently expanding to the Czech Republic and Slovakia. Moreover, the Group
is analyzing a market entry in five further European countries. With the
planned IPO proceeds, TF seeks to finance its Fintech growth strategy and
its loan portfolio growth.
ICF BANK AG has been appointed as Sole Global Coordinator, Sole Bookrunner
and Joint Lead Manager. M.M.Warburg & CO (AG & Co.) KGaA is acting as Joint
Lead Manager and DZ BANK AG as Co-Lead Manager.
Two focused business segments
In its Sales Finance & E-Commerce Segment, TF offers innovative payment and
invoice solutions, which are merchant-tailored and merchant-branded (so
called "white label" solutions). In addition to these invoice solutions, TF
also provides financing to consumers who purchase goods through e-commerce
merchants' websites. Thereby, TF creates Win-Win-Situations: online
merchants benefit as their customers receive goods before settling the
invoice, which often leads to higher conversion rates, and consumers
receive goods before payment is made and without entering personal credit
card data online. With the shipment of goods the merchants receive
immediate payments plus a commission from TF. This strengthens the
merchant's liquidity and at the same time improves their operating margins.
As a result, receiving a commission is much more advantageous than paying
fees to credit card companies. Consumers can finance their purchase via
online financing that is provided after an instantaneous, risk-assessed
credit decision with a term of up to 36 months, repayable early and without
penalty at any time during the term.
In March 2015, TF started initial operations of its joint venture Avarda
together with Intrum Justitia AB, one of the leading credit management
services companies in Europe which is active in 20 countries with 75,000
corporate clients. Avarda provides TF's sales finance & e-commerce invoice
solutions to merchants that Intrum Justitia helps to sign up through its
experienced sales team. Avarda is limited to the Nordic countries. TF
considers Avarda as a key growth driver in the near and long-term future.
The Group's separate Sales Finance & E-Commerce Segment has established
agreements with four e-commerce merchants with a combined EUR 120 million
turnover in 2014, generating additional operating income of EUR 15 million
in the last twelve months. In the initial start-up phase between March and
July 2015, Avarda has already signed-up eleven e-commerce merchants with a
combined Avarda relevant annual turnover of EUR 620 million. This is five
times more than TF's existing customer base in that segment. Avarda has a
significant pipeline of further merchants that TF's management believes can
be signed up in the near and mid-term. As a result, once Avarda starts full
operations in the fourth quarter of 2015, TF's management believes that it
will significantly increase its current operating income and operating
profits for the Group's Sales Finance & E-Commerce Segment. The Sales
Finance & E-Commerce Segment showed an operating profit of EUR 1.9 million
in the last twelve months period ended June 30, 2015.
Mattias Carlsson, chairman of TF, explains that the planned IPO is
connected to Avarda's growth strategy: "The partnership with Intrum
Justitia allows us to shift our company into a substantial growth path. The
IPO gives us the opportunity and the necessary equity capital to finance
this growth while keeping our regulatory capital ratios comfortably above
targeted levels."
In the Group's Direct Consumer Business Segment, TF focuses on unsecured
loans to consumers with amounts up to EUR 6,000 and a length of up to 5
years that are provided online and via mobile devices after an
instantaneous, risk-assessed credit decision. These loans are granted for
example for home improvements, car repairs, holiday travel or the purchase
of goods. As at June 30, 2015, the Group had EUR 139.1 million in unsecured
loans outstanding in this segment. TF also recently acquired the
Norwegian-based financial services company BB Finans ASA and as a result
can now offer credit cards to consumers. Furthermore, a Franchise Agreement
signed in June 2015 with SafeCharge Card Services Ltd, a global provider of
payment services means that the Group can apply its plug-and-play credit
assessment technology to a virtual payment card service via this new
partnership model.
As its principal source for financing, TF offers savings accounts to retail
customers in both Sweden and Finland subject to the Swedish deposit
protection scheme (up to EUR 100,000 per depositor). As at June 30, 2015,
the Group had a total amount of EUR 219.5 million in deposits. The Direct
Consumer Business Segment showed an operating profit of EUR 13.1 million in
the last twelve months period ended June 30, 2015.
Declan Mac Guinness, CEO of TF explains: "The heart of our company is
Fintech. That is why we want to leverage our experience in unsecured
consumer financing, big data scoring and on our highly profitable
operations in the direct consumer loan business, for instance with virtual
credit cards marketed via mobile applications."
Lean overhead and clean balance sheet principle
In the last twelve months ended June 30, 2015, TF generated total operating
income of EUR 50.6 million and an operating profit of EUR 14.9 million.
Backed by a highly scalable IT-platform, TF employs a lean operational
structure with only 77 employees(10). As a result, the Group had a stable
adjusted cost/income ratio of 35.3% as at June 30, 2015, leading to a net
profit margin of 23.7% in the first half year of 2015 (FY 2014: 23.6%). As
at June 30, 2015, TF had a CET 1 ratio of 15.5% and a Group-wide return on
equity of 35.6% for the last twelve months.
"A key driver for our success is the clean balance sheet principle",
explains Mikael Meomuttel, CFO of TF. "By selling non-performing loans
after 69 days on average, the company reduces balance sheet risks and
manages profitability, while staying focused on its core business. With our
strong financial track record and successful business model, we have
already turned Fintech into reality!"
<pre>
In EUR '000 H1 2015(1) H1 2014(1) LTM(1,2) FY 2014 FY 2013 FY 2012
Total
operating income 25,635 20,050 50,570 44,985 36,385 33,972
Net profit for
the period(3) 6,023 5,096 11,867 10,940 9,978 7,724
Net profit
margin(4) 23.7 % 24.1 % 23.4 % 23.6 % 25.2 % 20.8 %
Adjusted cost /
income ratio(5) 35.5 % 35.5 % 35.3 % 35.2 % 34.0 % 36.4 %
Earnings per
share in EUR(6) 0.28 0.24 0.55 0.51 0.46 0.36
Total Assets 263,067 211,904 263,067 250,416 208,626 184,457
Return
on equity(7) n/a n/a 35.6 % 39.1 % 39.7 % 34.5 %
CET1 ratio(8) 15.5 % 13.5 % 15.5 % 13.3 % 14.7 % 12.7 %
Deposits from
the public 219,462 173,814 219,462 207,964 171,833 147,212
Credit volume(9) 86,650 52,026 165,412 130,788 76,530 79,770
Total number of
full time
employees (FTEs) 77 (10) 45 77 (10) 51 36 31
Net loan
loss ratio(11) n/a n/a 4.7 % 5.0 % 5.4 % 5.7 %
</pre>
(1) Preliminary IFRS figures, unaudited
(2) Period ended June 30, 2015 / LTM = Last twelve months
(3) Attributable to shareholders of the Company (i.e. without Avarda
minority stake held by Intrum Justitia)
(4) Net profit for the period attributable to shareholders of the Company
divided by interest income for the period
(5) Operating expenses divided by total operating income, adjusted to
exclude the new business segment Sales Finance & E-Commerce
(6) Net profit for the period attributable to shareholders of the Company
divided by 21,500,000, the number of shares currently outstanding
(7) Net profit for the period attributable to shareholders of the Company
divided by average total equity attributable to the shareholders of the
Company
(8) Calculated based on SEK
(9) The paid-out credit (the cash flow) in the period (for Sales Finance
the volume is reduced by product returns)
(10) Total full time employees including parental leave and including 9 BB
Finans employees as of July 2015
(11) Net loan losses divided by total assets at the end of the period
Geographic Expansion and Partnerships as Key Element for Growth Strategy
TF benefits from a favorable market environment for unsecured loans and
double digit growth rates in the E-Commerce sector. In its target markets
in Central Europe, annual online sales grew on average by 20% from 2010 to
2014. "E-Commerce is still in its early days and innovative payment and
sales finance solutions offer strong advantages - both for the merchants
and their customers", comments Declan Mac Guinness. "We want to take
advantage of this positive market environment by growing organically,
offering new Fintech products and expanding geographically." After entering
Poland in 2013 and the Baltics in 2014, the Group is currently in the
process of starting its operations in the Czech Republic and Slovakia.
Moreover, TF is analyzing the possibility of a market entry in Germany,
Austria, the United Kingdom, the Netherlands and Lithuania to establish
itself as a pan-European online bank.
Mattias Carlsson, chairman of the board of directors, embraces the planned
IPO as a great opportunity to push TF towards a pan-European online bank:
"The banking sector is in a time of change: payment, embedded in any kind
of e-commerce/online order process, demands fast, risk-assessed financing
decisions and new payment solutions - we offer both. The IPO gives us the
opportunity to finance our growth strategy!"
In 2014, TF made a fundamental strategic change from a purely
dividend-focused company to a growth-focused company. Within this strategic
shift, TF has sought to engage in a variety of partnerships that enable TF
to increase its end customer base, most notably the Avarda joint venture in
the Sales Finance & E-Commerce Segment. In the Group's Direct Consumer
Business Segment, TF has signed agreements to establish various
international partnerships and is in the process of negotiating further
partnerships with the objective to expand its end customer base rapidly.
For example the Franchise Agreement with SafeCharge Card Services Ltd,
where the partner is developing an online digital wallet mobile application
to enable customers to use their smart phones as a virtual payment card,
for which TF will subsequently offer credit. The launch for this
partnership is expected in the fourth quarter of 2015 or the first quarter
of 2016. The Group has also, through BB Finans ASA, partnered with Odin
Kapital to provide credit solutions to Norwegian dental patients. This
partnership is already in a pilot phase. Additionally, TF is negotiating
various partnerships in the Baltics including a partnership with an
international physical payment terminal provider for the integration of
credit solutions in all of its payment terminals.
Declan Mac Guinness summarizes TF's strategic shift towards growth and
partnerships: "We realized that partnering allows us to apply our highly
effective plug-and-play IT scoring technology to a wide variety of products
and distribution channels that can, together with partners, increase our
customer base significantly. Partnerships, specifically Avarda, also allow
us to leverage on significant cross selling potentials to newly acquired
customers and to our existing customer base."
Further information on TF Bank is available on the company's website
www.tfbankgroup.com in the Investor Relations section.
About TF Bank AB
TF is an online bank which offers consumer finance products directly to
retail customers and offers e-commerce solutions to merchants in seven
countries in Northern Europe, the Baltics and Central and Eastern Europe.
As at 30 June 2015, the Group had a total of 1.14 million active customers
in its two segments and a combined 2.18 million user profiles for scoring
in its database. TF's banking services include unsecured loans, credit
cards and savings accounts for retail customers which are insured by the
Swedish deposit protection program. TF uses various distribution channels
to market its products, including through partnerships and physical payment
terminals.
Contact
<pre>
Declan Mac Guinness Ulrich Wiehle
TF Bank cometis AG
Norrlandsgatan 7-9 Unter den Eichen 7 / Gebäude D
111 43 Stockholm, Sweden 65195 Wiesbaden
Tel: +46 33 722 35 65 Tel: +49 611 205 855 11
Mail: declan.macguinness@tfbank.se Mail: wiehle@cometis.de
Web: www.tfbankgroup.com Web: www.cometis.de
</pre>
Disclaimer
This press release does not contain or constitute an offer of, or the
solicitation of an offer to buy or subscribe for, securities to any person
in the United States, Australia, Canada or Japan or in any jurisdiction in
which such offer or solicitation is unlawful. The securities referred to
herein may not be offered or sold in the United States absent registration
under the US Securities Act of 1933, as amended (the "Securities Act"), or
an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act. The securities referred to herein may
not be offered or sold in the United States of America, Australia, Canada
or Japan or to, or for the account or benefit of, any national, resident or
citizen of the United States of America, Australia, Canada or Japan. The
offer and sale of the securities referred to herein has not been and will
not be registered under the Securities Act or under the applicable
securities laws of Australia, Canada or Japan. There will be no public
offer of the securities in the United States.
This press release is directed at and/or for distribution in the United
Kingdom only to (i) persons who have professional experience in matters
relating to investments falling within article 19(5) of the Financial
Services and Markets Act 2000 (Financial Promotion) Order 2005 (the
"Order") or (ii) high net worth entities falling within article 49(2)(a) to
(d) of the Order (all such persons are referred to herein as "relevant
persons"). This press release is directed only at relevant persons. Any
person who is not a relevant person should not act or rely on this press
release or any of its contents. Any investment or investment activity to
which this press release relates is available only to relevant persons and
will be engaged in only with relevant persons.
A public offer may only be made in Germany after publication of a
prospectus prepared in accordance with Swedish securities laws and approved
by the Swedish Financial Supervisory Authority. Any securities orders
received prior to the commencement of a public offer will be rejected. If a
public offer is made in Germany, a prospectus prepared in accordance with
the provisions of Swedish securities laws will be published and will be
available free of charge in electronic form on the Company's website at:
www.tfbankgroup.com and in printed form at the offices of the Company at
Ryssnäsgatan 2, Borås, alternatively Norrlandsgatan 7-9, Stockholm, Sweden
until and including the date of admission.
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20.08.2015 Dissemination of a Corporate News, transmitted by DGAP - a
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388223 20.08.2015
DGAP-News: TF Bank AB: TF Bank AB prepares for IPO in Frankfurt
| Source: EQS Group AG