November 2, 2018
SIA ExpressCredit financial results for 9 months of 2018
SIA ExpressCredit group's turnover for the nine months of 2018 reached EUR 14.1 million. The Group`s unaudited profit for this period was EUR 3.46 million.
The Group's turnover during 9 months of the year 2018 in comparison with the corresponding period of the previous year has increased by 5%, while the company's profit during this period has increased by 54.3%.
In June 2018, the Parliament of the Republic of Latvia, on the basis of proposals from individual Parliament members, began to evaluate the changes in the Consumer Rights Protection Law, which resulted in the adoption of amendments to the law. The changes in the law will have an impact on the companies operating in the consumer lending industry. The most significant change, effective as of 1st July 2019, will be the limit of the total cost of credit for consumer loans, which cannot exceed 0.07% per day. Also, as of 1st July 2019, a restriction on consumer lending advertisements will come into force. Approved amendments to the law also include several minor changes that SIA ExpressCredit sees as adding value, such as access to information.
Although legislative changes are voluminous, we see us in the Latvian consumer credit market in the long term. Legislative changes provide both constraints and opportunities. As a result of these changes, the boundary between the classic banks and non-bank loans will actually be broken down. The company anticipates that there will be a transformation of the services in the sector, and in the short term decline in turnover is expected, which will be partly offset by lower advertising costs, as well as a review of other costs. In the longer term, the market will move towards more sustainable development. Although the industry's loan portfolio will certainly grow in the long run, there will be separate customer groups that will no longer be able to receive the loan. This should be considered as a disadvantage of legislative planning, as some individual groups of clients will not be profitable to lend due to inherent credit risk. It is positively appreciated that various professional government institutions such as the Consumer Rights Protection Centre and the Bank of Latvia consider the regulation for the sector more liberal.
SIA ExpressCredit welcomes the legislator's efforts to improve the exchange of information with borrowers' data, as well as intended positive changes in terms of solvency assessment rules. Clearly, by eliminating the price as a competitive element, other product quality aspects will set at the forefront of a struggle as the elements of competition, where we see the benefits of competitiveness. We think that customers will less likely choose service providers by business type, rather will opt for a product that meets the customer's values, needs, and lifestyles.
In the 3rd quarter of 2018, sale of goods online was established. The online store provides an additional channel for the sale of goods, significantly increasing the range of potential customers. The online store provides for customers an opportunity to easily purchase items that are sold at different branches in one place. Delivery will be provided all over Latvia.
In October 2018, in line with the Company's goals to maintain orderly internal processes and ensure high quality of process management, there was successfully completed an annual ISO certification audit in accordance with ISO 9001: 2015 (Quality Management) and ISO 50001: 2012 (Energy Management System) standards.
In general, we see the end of 2018 and 2019 tight and laborious, but we also see the enormous opportunities to be used. The company has successfully managed changes on several occasions and we are fully prepared for them at the moment.
By implementing the business strategy and planned activities, the following financial indicators of the Group were achieved in 9 months of 2018:
|Position||EUR, million||Change* %|
|Net loan portfolio||19.0||+19.9|
* - comparison to the amounts as at 31.12.2017, except for net profit that is compared to a respective period of the year 2017.
In the 3rd quarter of 2018, the company entered into a contract with AS Baltic International Bank for a new round of financing, which is intended to provide asset and share capital collateral security and target interest rate of 11% per annum.
SIA ExpressCredit delivers unaudited condensed interim consolidated statements for 9 months of the year 2018.
SIA ExpressCredit submits investor presentation for the operational results of the 3rd quarter of 2018. Presentation in English.