EQS-News

Iute Group reports unaudited results for 9M/2023 – Performing loans portfolio and revenue continued to grow – with fewer and better customers - Seite 3

In this context, the number of loan applications also decreased slightly by 2% in Q3. More importantly, however, we tightened the loan approval criteria. As a result, the approval rate in Q3 fell to about 60%, compared to over 66% in the past. Ultimately, a decline in the performing customer pool in conjunction with an increase in late repayments was intensified by slightly lower loan demand and a significantly lower approval rate.

On the positive note, the performing loans portfolio and revenue continued to grow, as we had planned – with fewer but better customers. It is clearly paying off that we take larger exposure per performing customer: Revenues continued to increase. Understanding who these fewer but better customers are requires data science, effort, and investments. So, the biggest challenge is to improve quality. And although we are profitable, we have not yet reached our full potential to reduce the cost-to-income ratio to below 40%, which is becoming increasingly important given the rising cost of capital and overall higher risk in the consumer lending business. The same applies to a CPI30 of over 90 points, which is our Group benchmark for “optimal” in consumer lending. Part of risk reduction is also the Iute Group’s increased involvement in legislative initiatives. Which means that not only we are increasingly adapting to ever-changing requirements, but in turn, we are also being consulted more and more frequently by the regulatory authorities in various countries on our understanding of the role of microfinance, digitalization of finance, responsible lending, and compliance. Tangible examples include the ongoing Wallet development and the Energbank turnaround, which place additional strain on the Group’s compliance and risk procedures in view of the primacy of profitability.

We are sticking to our annual targets. The forecast assets have already been exceeded and the Group’s revenue will surpass the 100 million EUR mark. Somewhat disappointingly, the Group’s net profit may fall short of the 12 million EUR net profit target under a sudden change in corporate income tax laws in Macedonia and the imposition of a one-time solidarity tax of 1,3 million EUR,” said Tarmo Sild, CEO of Iute Group.