Published: 2020-08-07 07:00:00 CEST
Half Year financial report

Inbank Unaudited Financial Results for Q2 and 6 Months 2020

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)

6 months 20206 months 2019
Interest income10 3938 97421 28017 129
Interest expense-2 005-1 396-3 941-2 786
Net interest income8 3887 57817 33914 343
Fee income263228557432
Fee expense-512-427-1 002-802
Net fee and commission income-249-199-445-370
Net gains from financial assets measured at fair value02660266
Other operating income222308362553
Total net interest, fee and other income8 3617 95317 25614 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 loans4 1173 9018 5807 417
Share of profit from associates17605920
Impairment losses on loans and advances-3 740-1 752-6 159-2 947
Profit before income tax5532 1493 0134 470
Income tax3174-276-125
Profit for the period5562 3232 7374 345
incl. shareholders of parent company5562 3232 7374 345
Other comprehensive income that may be reclassified subsequently to profit or loss    
Currency translation differences40-50-76-51
Total comprehensive income for the period5962 2732 6614 294
incl. shareholders of parent company5962 2732 6614 294

Consolidated statement of financial position (in thousands of euros)
Due from central banks70 31983 080
Due from credit institutions22 20920 655
Investments in debt securities20 0430
Loans and advances 348 977338 157
Investments in associates3 4923 276
Tangible assets879840
Right of use asset567773
Intangible assets14 10911 721
Other financial assets1 3781 692
Other assets969588
Deferred tax asset1 8811 985
Total assets484 823462 767
Customer deposits401 589377 518
Other financial liabilities9 13313 545
Other liabilities2 2822 837
Debt securities issued4 0104 010
Subordinated debt securities17 54417 537
Total liabilities434 558415 447
Share capital909903
Share premium16 08215 908
Statutory reserve capital9088
Other reserves1 4781 463
Retained earnings31 70628 958
Total equity50 26547 320
Total liabilities and equity484 823462 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
+372 553 3550


Inbank Interim Report Q2 2020 ENG.pdf