Investor Presentaiton
Asset Quality -
Breakdown of Receivables
Comments
■ Due to the stringent loan application procedure and credit scoring applied by the Group,
Ferratum ensures high quality customers from the outset
■ Also, the Group constantly reviews its receivables portfolio and receivables that are overdue are
impaired in accordance to a statistical model, described on the following slide
■ As of December 2018, gross receivables amounted to EUR 468 million while the net amount on
balance sheet amounted to EUR 321 million
Non-performing-loans (NPLs), defined as receivables that are more than 90 days past due,
amount to 17.8% of net receivables
■ Ferratum has been able to improve its asset quality due to improved and rigorous credit
scoring over the years, however the adoption of IFRS 9 from 2018 had an impact on the Group's
impairment and credit loss models, making the NPL evolution of FY 2018 incomparable to
earlier years (see slides 54-56 in appendix for further information)
■ Adoption of IFRS 9 led to an instant additional EUR 21 million provision, as net receivables
decreased from IAS 39 compliant EUR 259 million to IFRS 9 compliant EUR 236 million
■The NPL ratio would be significantly lower if taking into account that due to focus on short term
lending the yearly lending volume is much higher than the portfolio on balance at year end
Due to small average amounts, loans that are overdue by 180 days still have relatively high
market values and Ferratum seeks to sell older NPL portfolios and thus limit the volume in this
overdue bucket
Collection processes are initiated immediately when a payment is overdue
■ In the first 60-90 days primarily internal soft collection employing a series of text messages,
letters, and phone calls to encourage customer payment
"
After the first 60-90 days, external debt collection partners take over collections
Impaired loans may also be sold to third parties through forward flow in Finland, Sweden,
Estonia and Latvia or through auction processes
Source: Company filings. Interim financials for FY 2018 restated. Note: Adoption of IFRS 9 makes historical figures non-comparable
to FY 2018 figures due to varying credit loss provisioning models
Portfolio Ageing Profile (net carrying value) (EURm)
IAS 39
IFRS 9
Non-comparable to historical figures
% of current
portfolio
320.5
15%
47.0
257.4
236.5
10.0
3%
16.7
11.7
71.8
22.2
30.5
22%
184.3
8.7
51.7
15.3
61.5
106.8
10.9
6.2
12.0
206.8
60%
191.7
146.1
145.6
133
35.0
77.7
31-Dec-14
31-Dec-15
31-Dec-16
31-Dec-17
1-Jan-18
Not due 1-90 days due ■91-180 days due ■> 181 days due
31-Dec-18
NPL Evolution (% of NPLs of Net Receivables)
50%
37%
40%
33%
29%
30%
20%
10%
0%
31-Mar-14
Adoption of IFRS 9
Non-comparable to
historical figures
21% 21% 19%
16% 16%
14% 14% 14% 12% 11% 13% 12% 11%
17% 18% 18% 18% 18%
30-Jun-14
30-Sep-14
31-Dec-14
31-Mar-15
30-Jun-15
30-Sep-15
31-Dec-15
31-Mar-16
30-Jun-16
30-Sep-16
31-Dec-16
31-Mar-17
30-Jun-17
30-Sep-17
31-Dec-17
1-Jan-18
31-Mar-18
30-Jun-18
30-Sep-18
31-Dec-18
ferratum
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