Inbank's Unaudited Financial Results for the Fourth Quarter and Full Year 2023

In 2023, InBank's consolidated net income amounted to 10.2 million euros. His return on equity in 2023 was 9%.

Consolidated net income for 2023 was 10.2 million euros, an increase of 5% compared to the previous year, excluding the 11.4 million euros extraordinary gain from the sale of 29.8% of Makshekeskus AS shares held by Inbank in 2022.
Inbank's loan and rental portfolio reached €1.03 billion, an increase of 26% year-on-year, and its deposit portfolio increased by 30%, reaching €1.08 billion at the end of the year. At the end of 2023, InBank's total assets amounted to EUR 1.3 billion, an increase of 29% compared to the previous year.
Total net income in 2023 increased by 17% year-on-year to €60.2 million, and operating expenses increased by 22% to €36.9 million.
In 2023, sales volumes increased across all markets and product groups. Gross merchandise value (GMV) in 2023 was €688 million, up 19% year-on-year.
In terms of product segments, 2023 was a landmark year for automotive finance, with GMV increasing by 74% to €159 million. Rental services, including car rentals, increased by 44% to €59.8 million. Merchant Solutions' GMV reached €285.2 million, an increase of 3% year-on-year. Green Finance's trading volume recovered well, increasing by 20% to €95.9 million in 2023. Direct lending volumes remained very stable, increasing by 2% to €87.8 million.
Despite high inflation and economic downturn, our creditworthiness remains strong. Impairment losses for the average credit portfolio were 1.6%.
By the end of 2023, Inbank had 892,000 active customer contracts and 5,400 active retail partners.

Q4 2023 Results

Net income for the fourth quarter was 2.8 million euros, an increase of 30% compared to the same period last year. Return on equity for the quarter was 9.4%.
Total net income for the quarter was 16.2 million euros, an increase of 21% compared to the same period last year, and operating expenses for the quarter were 9.7 million euros, an increase of 13%.
GMV in the fourth quarter was 167 million euros, an increase of 14% year-on-year.
By product division, Green Finance's sales amounted to EUR 21.4 million, an increase of 12% compared to the previous year. Auto financing in the fourth quarter showed very strong growth, with sales up 82% year-on-year to €39.7 million. Furthermore, rental services he increased by 54% to 15.5 million euros. At the same time, direct lending decreased by 4% to a total of 19.1 million euros, and sales of merchant solutions decreased by 5% to a total of 70.9 million euros.
Inbank impairment losses were 1.4% of the credit portfolio in the fourth quarter.

Commenting on the results, Prith Pordoya, Chairman of the Management Board, said:

“Despite facing continued headwinds from high interest rates and the economic downturn, InBank ended a difficult year with a strong quarter and solid annual profit of €10.2 million.

In 2023, sales volumes increased across all markets and product groups despite a challenging macro and interest rate environment. Still, there was a slight slowdown in sales in the fourth quarter, consistent with declines in consumer confidence and retail sales. In the Baltics, InBank remains the market leader and continues to benefit from a strong distribution network in all markets.

In 2023, InBank continues to focus on investing in product development, successfully launching an innovative rental service for electronic equipment in Estonia and Latvia, and signing a cooperation agreement with iDeal, Apple's premium reseller. We plan to expand our partnerships with Apple and other electronics retailers into additional markets in 2024.

To maintain our rapid growth and pursue new development opportunities, we continually raise new capital. At the end of October, the company issued new shares worth €12 million to shareholders, employees and new investors. The company ended the year with the issue of 8 million euros of subordinated debt with an interest rate of 9%. The stock was oversubscribed 7.6 times, reaffirming the strong confidence investors have in InBank's business model and growth plans. In 2023, the company raised new funding totaling €31 million to support international growth around his Inbank products.

We are pleased with our fourth quarter and 2023 results. Despite facing external headwinds, we grew our business, strengthened our capital base, and expanded our product and technology teams. We also launched a refreshed brand and laid strong foundations for our business in the Czech Republic. Although the market environment remains challenging, we believe some positive trends will emerge for InBank in 2024. ”

Key financial indicators as of December 31, 2023 and for the fourth quarter

Total assets 1.3 billion euros
Loan and rental portfolio 1.03 billion euros
Deposit portfolio 1.08 billion euros
Total capital: 124.1 million euros
Net profit 2.8 million euros
Return on equity 9.4%

Consolidated income statement (unit: thousand euros)

	Q4 2023	Revised Q4 2022	12 months 2023	Revised 12 months 2022
Interest income based on EIR	27 249	20 300	98 723	68 204
Interest expense	−12 841	-7 583	−45 331	−20 152
net interest income	14 408	12 717	53 392	48 052

Fees/commission income	114	120	473	387
Fees and commission costs	−1 137	−962	-4 199	−3 275
Net fees and commission income/expenses	−1 023	−842	-3 726	−2 888

Income from rental services	6 869	5 154	23 905	18 152
Sale of assets previously rented to customers	3 571	2 827	14 155	9 928
Other operating income	220	122	769	541
Rental service cost	-4 808	−4 112	−15 896	−13 317
Cost of assets previously rented and sold to customers	−3 303	−2 558	−12 556	−8 363
Net operating income/loss	2 549	1 433	10 377	6 941

Net income from financial assets measured at fair value	−90	twenty three	−14	32
exchange rate gain/loss	341	1	128	−780
Net profit or loss from financial items	251	twenty four	114	−748

Total net interest, fees, and other income and expenses	16 185	13 332	60 157	51 357

personnel costs	−4 476	-3 801	−16 628	−13 822
marketing costs	−848	-1 071	−3 266	−3 350
Management fee	−2 960	−2 549	−11 033	-8 675
Depreciation and amortization expenses	−1 406	−1 186	−6 007	−4 472
total operating expenses	−9 690	−8 607	−36 934	−30 319

Distribution of profits from employees	−72	−11	250	11 419
Loan impairment loss	−3 235	−2 460	−13 203	−11 170
Pre-tax profit	3 188	2 254	10 270	21 287

income tax	−412	−120	-68	−196
Net income	2 776	2 134	10 202	21 091

Other comprehensive income that may be subsequently reclassified to profit or loss
Differences in currency conversion	−403	−268	−415	−2
Total comprehensive income for the period	2 373	1 866	9 787	21 089

Consolidated statement of financial position (Unit: thousand euros)

	2023.12.31	Revised December 31, 2022	Revised December 31, 2021
assets
cash and cash equivalents	172 921	130 889	87 419
Central bank reserve requirement	21 020	14 446	7 904
investing in bonds	33 581	8 415	7 684
Financial assets measured at fair value through profit or loss	79	37	0
loans and prepayments	942 056	755 100	604 848
Investment in affiliated companies	141	1 065	774
Assets classified as held for sale	0	0	4 203
Other financial assets	5 268	3 387	2 151
tangible assets	75 206	48 533	19 147
Right to use assets	26 716	23 247	25 231
intangible assets	30 906	26 249	22 423
Other assets	8 185	5 961	2 769
Deferred tax asset	4 505	3 166	2 401
Total assets	1 320 584	1 020 495	786 954

liabilities
customer deposit	1 081 566	828 894	617 857
Financial liabilities measured at fair value through profit or loss	50	0	0
Other financial liabilities	60 927	55 240	49 188
Current tax liability	311	0	284
Deferred tax liability	204	187	125
Other debts	3 691	3 680	3 296
subordinated bonds	49 745	30 570	37 187
Total debt	1 196 494	918 571	707 937

capital
share capital	1 086	1 026	997
capital surplus	43 563	31 855	30 436
legal reserve	103	100	96
Other reserves	1 543	1 421	1 625
retained earnings	77 795	67 522	45 863
Total capital	124 090	101 924	79 017

Total debt and equity	1 320 584	1 020 495	786 954

Inbank is a financial technology company with an EU banking license, connecting merchants, consumers and financial institutions with a next-generation embedded financial platform. Inbank partners with his 5,400 merchants, has 892,000 active contracts and collects deposits across his eight markets in Europe. Inbank bonds are listed on the Nasdaq Tallinn Stock Exchange.

Additional Information:

merit alba
AS inbank
Head of Communications
merit.arva@inbank.ee
+372 553 3550

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