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