The COVID-19 pandemic
The Group decided, in the early stages of the COVID-19 pandemic, to limit lending activities to higher risk customers in both the consumer and SME lending segments. After having revised its loan policies and scoring algorithms in Q2 2020, to improve underwriting in times of such high volatility, the company found itself in Q3 2020 in a healthy position to actively target customers that were in a stable financial situation despite the ongoing pandemic.
The adjusted algorithms and scoring policies helped the Group to maintain and even improve payment behaviour in certain countries during Q2 2020, and this healthy payment behaviour has been maintained during Q3 2020, Q4 2020 and Q1 2021, while disbursement rates have increased as demand has returned in key markets.
The Group continues to tightly monitor its underwriting performance for any early indications of deteriorating payment behaviour and properly judge the impact of governmental measures.
Due to this combination of tighter monitoring and a better understanding of the economic impacts of COVID-19-related lockdowns, The Group has maintained healthy portfolio quality through the pandemic and has not seen any significant impact on materialised credit losses.
The Group manages its risk provisioning in accordance with IFRS 9, that relies on a forward oriented methodology. Based on future macroeconomic indicators and previously recorded correlations, the reserving model is adjusted in accordance with the macroeconomic outlook. Based on this rigorous reserving model, the company increased its credit loss provisioning by EUR 7.8 million in Q1 2020, which remained unchanged as of March 31, 2021.
The Group retained its current provisioning unchanged after having taken cognisance of the economic forecasts for 2021, thereby assessing the impact of the COVID-19 outlook for 2021 macroeconomic forecasts. Accordingly, the expected credit loss model inputs utilised during Q1 2020 were deemed adequate to determine its Expected Credit Losses based on management judgement, and management will continue to closely monitor the economic forecasts releases and adjust the model inputs and assess its outcomes in the light of revised macroeconomic data and other quantitative and qualitative information.
Rating updates
Fitch Ratings affirmed in March the Long-Term Issuer Default Rating (IDR) of both Ferratum Oyj and the senior unsecured callable floating rate bonds, issued by Ferratum Capital Germany GmbH, at 'B+'. The Outlook on the Long-Term IDR is Negative.
Annual General Meeting
The Group's Annual General Meeting was held on 20 April 2021 under special arrangements due to the COVID-19 pandemic. The Annual General Meeting adopted the Annual Accounts including the Consolidated Annual Accounts for the financial year 2020 and discharged the members of the Board of Directors and the CEO from liability for the financial year 2020. The Annual General Meeting decided in accordance with the proposal of the Board of Directors that for the financial year ended 31 December 2020, no dividends be distributed.
The board members were re-elected during the Annual General Meeting, Goutam Challagalla, Michael A. Cusumano, Jorma Jokela, Clemens Krause, Lea Liigus, Frederik Strange and Juhani Vanhala, each one for a term ending at the end of the next Annual General Meeting.
PricewaterhouseCoopers Oy, with APA Jukka Karinen as the responsible auditor, was appointed as auditor of the Company for a term ending at the end of the next Annual General Meeting.
An authorization to the Board of Directors to decide to repurchase a maximum of 1,086,198 shares in the Company was given. This authorisation is in force until the end of the next Annual General Meeting, however, no longer than until 30 June 2022. The Board of Directors was also given an authorisation to decide to issue a maximum of 3,258,594 shares, which corresponds approximately to 15 per cent of the Company's total amount of shares, this authorisation is in force until the end of the next Annual General Meeting, however, no longer than until 30 June 2022.
For further information on the Annual General Meeting, please visit the Groups website.
Subsequent events
Board of Directors proposed the change of the Group name to Multitude SE
The Board of Directors proposed on May 11 the change of the Group name from Ferratum Oyj to Multitude SE.
The new name emphasises the Group's role as an enabler, or a platform. The Primelending and Mobile Wallet business have been rebranded SweepBank, a brand with a very clear customer focus and an ambition to make its clients' lives easier. The name Ferratum has been reserved for the Near Prime (Microloan, PlusLoan and Credit Limit) lending business. The Groups SME lending remains under the CapitalBox brand.
About Ferratum Group: Ferratum Group is an international provider of mobile banking and digital consumer and small business loans, distributed and managed by mobile devices. Founded in 2005 and headquartered in Helsinki, Finland, Ferratum has expanded to operate in 19 countries across Europe, Africa, South and North America, Australia and Asia.
As a pioneer in digital and mobile financial services technology, Ferratum is at the forefront of the digital banking revolution. Ferratum has approximately 480,000 active customers that have an open Mobile Bank or Wallet account or an active loan balance in the last 12 months (as at 31 March 2021).
Ferratum Group is listed on the Prime Standard of Frankfurt Stock Exchange under symbol 'FRU.' For more information, visit www.ferratumgroup.com.
Contacts:
IR@ferratum.com https://www.ferratumgroup.com/investors/ir-contact -----------------------------------------------------------------------------------------------------------------------
2021-05-12 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Archive at www.dgap.de -----------------------------------------------------------------------------------------------------------------------
Language: English
Company: Ferratum Capital Germany GmbH
Helmholtzstraße 2 - 9
10587 Berlin
Germany
Phone: + 49 (0) 30 921005844
E-mail: ir@ferratum.com
Internet: www.ferratumgroup.com
ISIN: SE0011167972
WKN: A2LQLF
Listed: Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf,
Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange
EQS News ID: 1195480
End of News DGAP News Service
=------------ 1195480 2021-05-12
Image link:
https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=show_t_gif&application_id=1195480&application_name=news(END) Dow Jones Newswires
May 12, 2021 01:30 ET (05:30 GMT)
