Inbank Shows Impressive Results
In the recent fiscal year, Inbank demonstrated remarkable growth, highlighted by a substantial increase in total net income and net profit. The company successfully engaged in a notable significant risk transaction (SRT) with the European Investment Bank Group (EIB), reinforcing its commitment to innovative financial solutions.
Financial Achievements in 2024
Inbank's total net income surged to 75.5 million euros, marking a 26% increase compared to the previous year. This remarkable growth was driven primarily by enhanced margins and an expanding portfolio across both the Baltics and Central Eastern European regions.
Consolidated Net Profit
For the fiscal year, Inbank reported a consolidated net profit of 12.2 million euros, a 20% year-on-year growth, resulting in a return on equity (ROE) of 9%. It’s important to note that these results were influenced by one-off expenditures, which included costs associated with the discontinuation of Inbank’s credit card business and advisory fees.
Normalized Net Profit Overview
Excluding these extraordinary items, Inbank's normalized net profit rose to 15.4 million euros, reflecting a 51% growth from the previous year and achieving a normalized ROE of 11.3%.
Key Milestones and Growth Indicators
The total loan and rental portfolio reached an impressive 1.15 billion euros, showcasing an 11% increase year-on-year. The deposit portfolio also saw an 8% rise, amounting to 1.17 billion euros. By year-end, the total assets of Inbank stood at 1.44 billion euros, a 9% growth from the preceding year.
Record Sales Volume
Inbank set a record sales volume of 715 million euros in 2024, with a Gross Merchandise Value (GMV) increase of 4%. The car finance portfolio emerged as the largest product segment, registering a remarkable growth of 43% to 350 million euros.
Merchant Solutions Expansion
Merchant solutions, in terms of GMV, remained the crucial sales engine for Inbank, delivering a new volume of 255 million euros. Notably, the Buy-Now-Pay-Later (BNPL) service nearly tripled its sales year-on-year, reaching 45 million euros, solidifying its status as a mainstream offering among Baltic online merchants.
Effective Interest Rates and Portfolio Management
Inbank showed diligence in managing its financial portfolio; the Effective Interest Rate (EIR) increased from 10.80% in 2023 to 11.28% in 2024. The decrease in funding costs to 4.40%, down from 4.46% the previous year, allowed the total income margin to achieve a 23 basis point improvement, reaching 5.37%.
Maintaining Credit Quality
In an environment of rising inflation and higher interest rates burdens on consumers, Inbank maintained stable credit quality. Impairment losses to the average credit portfolio slightly increased to 1.65%, primarily due to adjustments in provision methodology.
Q4 2024 Financial Highlights
For Q4 2024, Inbank recorded an exceptional total net income of 20.7 million euros, reflecting a 28% year-on-year increase. However, net profit for the quarter declined to 1.4 million euros, a drop of 50% year-on-year due to one-off expenses linked to the closure of its credit card business.
Quarterly Growth Metrics
The normalized net profit for the fourth quarter, excluding extraordinary costs, reached 4.4 million euros, demonstrating a 59% growth compared to the same period last year. The GMV for Q4 hit 191 million euros, mainly supported by the car finance segment.
Improved Quarterly Margins
In an effort to enhance profitability, Inbank’s loan portfolio EIR was adjusted to 11.63%. This adjustment, along with a decrease in funding costs, allowed the company's margins to improve significantly, with net interest margin rising to 5.77% during Q4.
Inbank's Strategic Vision
Comments from Priit Põldoja, the Chairman of the Management Board, reflect on Inbank's strategic focus and resilience, emphasizing the excellent revenue and sales results while outlining plans to drive growth and enhance financial performance in future years.
Positive Market Developments
He highlighted key transactions such as the synthetic securitization deal with the EIB, which not only bolstered Inbank's capital foundation but also supported its innovative financing for solar panel loans in the Polish market.
Looking Ahead: Strengthening Position
As Inbank prepares for 2025, it remains committed to leveraging its strong capital base, focusing strategically on enhancing customer confidence and responding to evolving market dynamics for sustained growth.
Frequently Asked Questions
What were Inbank's total assets by the end of 2024?
Total assets stood at 1.44 billion euros by the end of 2024.
How much did Inbank's net profit increase in 2024?
Inbank's net profit increased by 20% year-on-year to 12.2 million euros.
What was the significant transaction completed with the EIB?
Inbank signed a synthetic securitization transaction, providing substantial capital relief.
What changes were made regarding Inbank's credit portfolio?
Impacts to the credit portfolio arise from updating provisioning methodologies, slightly increasing impairment losses.
How did Inbank perform in Q4 2024?
Q4 2024 showed total net income of 20.7 million euros but a decline in net profit to 1.4 million euros due to one-off expenses.
Inbank is a financial technology firm, boasting an EU banking license, with partnerships across Europe, and its bonds are traded on the Nasdaq Tallinn Stock Exchange. For further inquiries, you can reach out to Styv Solovjov, Head of Investor Relations, at +372 5645 9738 or via email.
