4finance Group’s profit before tax was 48.9 million euros, of which 10% was profit from commercial activities in Latvia.
The group paid 5.2 million euros in taxes in Latvia last year, which is 39% more than a year ago.
The financial report of AS 4finance now reflects all 4finance retail brands that were merged in 2022. The increase in profit was mainly achieved due to this reorganization of the company, which simplified its structure, as well as the wider use of automation processes in the company’s business processes. The increase in turnover reflected the increase in lending volume last year, which in turn was facilitated by the country’s economic conditions. Profit before tax from commercial activity in Latvia in 2022 was 4.9 million euros, which is an insignificant increase compared to the indicators of 2021. This indicator has grown thanks to the included dividends from other countries of the Group, in which AS 4finance is a shareholder.
The steady growth of lending volumes is explained by the general inflation rate in the country and is proportionally equivalent to the general trend in the national lending sector.
As a result, AS 4finance’s total turnover from lending services in Latvia increased by 20.5% compared to 2021. A similar trend can be observed in the banking sector, which, unlike alternative financial service providers, was also affected by the increased EURIBOR rates of the European Central Bank, as a result of which the interest rates for both active and newly issued loans for bank customers increased at least twice.
“The Latvian market is very sensitive to any shocks and crises. During the period of COVID-19, there was a sharp reduction in lending volumes, as people were uncertain about tomorrow and took out loans more cautiously. At that time, in 2020, 4finance suffered a loss of 3.6 million. The lending industry also experienced a similar contraction in 2022 with the start of the war in Ukraine and the sanctions against Russia and Belarus, which contributed to a rapid rise in inflation. At the moment, when the pandemic is already in the past, but the society has more or less got used to the war situation, the market is gradually stabilizing and returning to the previous habits of using lending services,” said Guido Endlers, regional manager of AS 4finance in Latvia.
“The increase in turnover and profit of AS 4finance in Latvia in 2022 can be explained by the fact that consumers need more financial resources to compensate for the increase in the price of goods and services.
Despite the fact that the total volume of loans issued by non-bank lenders increased in 2022, data from the Consumer Rights Protection Center (PTAC) show that the quality of the loan portfolio of this lending sector has remained stable, and 91.16% of loans from the total loan portfolio are repaid without delay. This, in turn, means that people use credit services thoughtfully, do not borrow impulsively, but plan their finances for the long term. However, regardless of demand, we continue to adhere to the principles of responsible lending, cooperating only with clients who are able to qualify for the company’s solvency assessment criteria. Thus, we approve credit applications of only 10% of new customers. Thanks to this, 4finance’s customer repayments are better than the average in the industry – within thirty days our customers repay 93.7% of their loans, while in the period up to 90 days we recover a total of 96.7%,” adds Endler.
By 4finance
Founded in 2008, 4finance is one of Europe’s largest digital consumer credit groups, operating in 10 countries around the world. Using automation and a data-driven approach in all business processes, 4finance Group has developed rapidly, issuing more than 10 billion euros worth of short-term and long-term loans, lines of credit and other related lending services since its inception.
4finance manages a portfolio of market-leading brands, offering simple, useful and transparent products to millions of customers. The group responsibly provides convenient products to many consumers who are underserved by traditional service providers.
The group offers deposits as well as consumer and small and medium-sized business financing through its subsidiary TBI Bank, an EU-licensed institution with operations in Bulgaria, Romania and Greece.
2023-08-07 08:14:36
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