Inbank's Strong Financial Performance in Q3 2024
In the third quarter of 2024, Inbank achieved a remarkable consolidated net profit of 3.1 million euros, reflecting a 7% increase compared to the same period last year. Over the first nine months of the financial year, the net profit rose significantly to 10.8 million euros, showcasing an impressive 46% year-over-year growth. Additionally, the return on equity (ROE) for the third quarter was recorded at 8.8%, with an average of 10.9% for the first nine months.
Growth in Assets and Portfolios
Loan and Deposit Portfolios Surge
During Q3, Inbank's loan and rental portfolio saw a substantial growth of 14.2% year-on-year, reaching an impressive 1.11 billion euros. Mirroring this trend, its deposit portfolio also expanded by 14%, totaling 1.16 billion euros. By the end of the quarter, Inbank's total assets had increased to 1.43 billion euros, illustrating the bank's robust expansion strategy.
Record Gross Merchandise Value
The Gross Merchandise Value (GMV) for the third quarter set a new record at 184 million euros, which is not only a 4% uptick from the preceding quarter but also a 1% gain from the previous year. The growth in net interest income was particularly noteworthy, soaring by 25% from last year, which underscores the strong underlying performance of Inbank.
Strategic Segments and Performance Metrics
Dominance of Auto Marketplaces
Inbank's auto marketplaces and dealers portfolio has emerged as the largest segment, experiencing an extraordinary growth of 42% year-on-year by reaching 64 million euros in GMV during the third quarter. This segment has significantly outperformed others, showcasing the bank's effective market positioning.
Stable Performance Across Other Segments
While most product segments maintained consistent GMV levels compared to last year, merchant solutions sales saw a decline of 15%, resulting in 61 million euros of GMV. This decrease was attributed to strategic repricing initiatives in specific markets. Additionally, Inbank's retail portfolio's Effective Interest Rate (EIR) rose to 11.21%, up by 0.41% from the previous year, a testament to recent repricing efforts.
Management Insights and Future Prospects
Priit Põldoja, Chairman of the Management Board, expressed satisfaction regarding the company's strong results and ongoing revenue growth. He emphasized that despite a fair value adjustment of 1.2 million euros on financial instruments used for interest rate risk management, the company remained on a positive trajectory. Furthermore, Inbank’s commitment to raising capital was highlighted by a significant equity raise of 10.14 million euros, primarily supported by Swedbank pension funds and backed by 52 other investors in total.
Innovations and Collaborations
This quarter also marked an important step forward for Inbank, which divested its 21% stake in the financial technology startup Paywerk to Swedbank AB, generating a profit of 0.7 million euros. Although Paywerk faced challenges as an independent entity, the value attributed to the technology developed by Inbank’s team by a leading regional bank indicates strong market confidence in their capabilities. Moreover, Inbank launched a Smart Rent service for renting Apple products, covering all three Baltic countries, and initiated a collaboration with Datart, a prominent electronics retailer in Czechia.
Ongoing Growth and Market Impact
As the interest rate environment evolves, Inbank anticipates that the current decline in interest rates will favorably impact its financial performance. The combination of Inbank's advanced embedded finance solutions with the shifting interest rate landscape is expected to bolster its growth ambitions in the forthcoming quarters and beyond, setting the stage for continued expansion and development.
Frequently Asked Questions
1. What were Inbank's profits for Q3 2024?
Inbank earned a consolidated net profit of 3.1 million euros in Q3 2024, a 7% increase from the previous year.
2. How much did Inbank raise in equity?
Inbank raised 10.14 million euros in equity in August 2024 to support its growth plans.
3. What are the key financial highlights for Inbank in 2024?
Key highlights include a significant 46% increase in profit for the first nine months, a 14.2% growth in loan and rental portfolios, and a record GMV of 184 million euros.
4. How has Inbank's auto marketplace segment performed?
The auto marketplace segment grew by 42% year-on-year, reaching 64 million euros in GMV, making it Inbank's largest segment.
5. What is the outlook for Inbank’s financial performance?
The outlook remains positive as the decline in interest rates is anticipated to support future financial performance and growth.
