TF Bank AB
TF Bank AB: TF Bank AB prepares for IPO in Frankfurt
TF Bank AB / Key word(s): IPO TF Bank AB prepares for IPO in Frankfurt – TF Bank, a Fintech company offering consumer finance products, sales finance and e-commerce payment solutions online, plans an initial public offering (IPO) on the Frankfurt Stock Exchange – The offer comprises a strongly expanding customer base driven by versatile partnership models to enable growth across Europe as well as a favorable market environment – The company has a lean, efficient cost structure and a scalable IT-platform with which it increased total operating income to EUR 50.6 million and operating profit to EUR 14.9 million in the last twelve months ended June 30, 2015 Stockholm/Frankfurt, August 20, 2015 – TF Bank AB (together with its consolidated subsidiaries hereafter “TF” or “Group”), a pure online and mobile bank based in Sweden, is preparing for its initial public offering on the Frankfurt Stock Exchange. TF was granted a Swedish banking license in 2012 and as at 30 June 2015 had a total of 1.1 million active customers in its two segments and a combined 2.2 million user profiles for scoring in its database. The Group currently operates in seven European countries in Northern Europe, the Baltics as well as Central and Eastern Europe, and is currently expanding to the Czech Republic and Slovakia. Moreover, the Group is analyzing a market entry in five further European countries. With the planned IPO proceeds, TF seeks to finance its Fintech growth strategy and its loan portfolio growth. ICF BANK AG has been appointed as Sole Global Coordinator, Sole Bookrunner and Joint Lead Manager. M.M.Warburg & CO (AG & Co.) KGaA is acting as Joint Lead Manager and DZ BANK AG as Co-Lead Manager. Two focused business segments In its Sales Finance & E-Commerce Segment, TF offers innovative payment and invoice solutions, which are merchant-tailored and merchant-branded (so called “white label” solutions). In addition to these invoice solutions, TF also provides financing to consumers who purchase goods through e-commerce merchants’ websites. Thereby, TF creates Win-Win-Situations: online merchants benefit as their customers receive goods before settling the invoice, which often leads to higher conversion rates, and consumers receive goods before payment is made and without entering personal credit card data online. With the shipment of goods the merchants receive immediate payments plus a commission from TF. This strengthens the merchant’s liquidity and at the same time improves their operating margins. As a result, receiving a commission is much more advantageous than paying fees to credit card companies. Consumers can finance their purchase via online financing that is provided after an instantaneous, risk-assessed credit decision with a term of up to 36 months, repayable early and without penalty at any time during the term. In March 2015, TF started initial operations of its joint venture Avarda together with Intrum Justitia AB, one of the leading credit management services companies in Europe which is active in 20 countries with 75,000 corporate clients. Avarda provides TF’s sales finance & e-commerce invoice solutions to merchants that Intrum Justitia helps to sign up through its experienced sales team. Avarda is limited to the Nordic countries. TF considers Avarda as a key growth driver in the near and long-term future. The Group’s separate Sales Finance & E-Commerce Segment has established agreements with four e-commerce merchants with a combined EUR 120 million turnover in 2014, generating additional operating income of EUR 15 million in the last twelve months. In the initial start-up phase between March and July 2015, Avarda has already signed-up eleven e-commerce merchants with a combined Avarda relevant annual turnover of EUR 620 million. This is five times more than TF’s existing customer base in that segment. Avarda has a significant pipeline of further merchants that TF’s management believes can be signed up in the near and mid-term. As a result, once Avarda starts full operations in the fourth quarter of 2015, TF’s management believes that it will significantly increase its current operating income and operating profits for the Group’s Sales Finance & E-Commerce Segment. The Sales Finance & E-Commerce Segment showed an operating profit of EUR 1.9 million in the last twelve months period ended June 30, 2015. Mattias Carlsson, chairman of TF, explains that the planned IPO is connected to Avarda’s growth strategy: “The partnership with Intrum Justitia allows us to shift our company into a substantial growth path. The IPO gives us the opportunity and the necessary equity capital to finance this growth while keeping our regulatory capital ratios comfortably above targeted levels.” In the Group’s Direct Consumer Business Segment, TF focuses on unsecured loans to consumers with amounts up to EUR 6,000 and a length of up to 5 years that are provided online and via mobile devices after an instantaneous, risk-assessed credit decision. These loans are granted for example for home improvements, car repairs, holiday travel or the purchase of goods. As at June 30, 2015, the Group had EUR 139.1 million in unsecured loans outstanding in this segment. TF also recently acquired the Norwegian-based financial services company BB Finans ASA and as a result can now offer credit cards to consumers. Furthermore, a Franchise Agreement signed in June 2015 with SafeCharge Card Services Ltd, a global provider of payment services means that the Group can apply its plug-and-play credit assessment technology to a virtual payment card service via this new partnership model. As its principal source for financing, TF offers savings accounts to retail customers in both Sweden and Finland subject to the Swedish deposit protection scheme (up to EUR 100,000 per depositor). As at June 30, 2015, the Group had a total amount of EUR 219.5 million in deposits. The Direct Consumer Business Segment showed an operating profit of EUR 13.1 million in the last twelve months period ended June 30, 2015. Declan Mac Guinness, CEO of TF explains: “The heart of our company is Fintech. That is why we want to leverage our experience in unsecured consumer financing, big data scoring and on our highly profitable operations in the direct consumer loan business, for instance with virtual credit cards marketed via mobile applications.” Lean overhead and clean balance sheet principle In the last twelve months ended June 30, 2015, TF generated total operating income of EUR 50.6 million and an operating profit of EUR 14.9 million. Backed by a highly scalable IT-platform, TF employs a lean operational structure with only 77 employees10. As a result, the Group had a stable adjusted cost/income ratio of 35.3% as at June 30, 2015, leading to a net profit margin of 23.7% in the first half year of 2015 (FY 2014: 23.6%). As at June 30, 2015, TF had a CET 1 ratio of 15.5% and a Group-wide return on equity of 35.6% for the last twelve months.
Geographic Expansion and Partnerships as Key Element for Growth Strategy TF benefits from a favorable market environment for unsecured loans and double digit growth rates in the E-Commerce sector. In its target markets in Central Europe, annual online sales grew on average by 20% from 2010 to 2014. “E-Commerce is still in its early days and innovative payment and sales finance solutions offer strong advantages – both for the merchants and their customers”, comments Declan Mac Guinness. “We want to take advantage of this positive market environment by growing organically, offering new Fintech products and expanding geographically.” After entering Poland in 2013 and the Baltics in 2014, the Group is currently in the process of starting its operations in the Czech Republic and Slovakia. Moreover, TF is analyzing the possibility of a market entry in Germany, Austria, the United Kingdom, the Netherlands and Lithuania to establish itself as a pan-European online bank. Mattias Carlsson, chairman of the board of directors, embraces the planned IPO as a great opportunity to push TF towards a pan-European online bank: “The banking sector is in a time of change: payment, embedded in any kind of e-commerce/online order process, demands fast, risk-assessed financing decisions and new payment solutions – we offer both. The IPO gives us the opportunity to finance our growth strategy!” In 2014, TF made a fundamental strategic change from a purely dividend-focused company to a growth-focused company. Within this strategic shift, TF has sought to engage in a variety of partnerships that enable TF to increase its end customer base, most notably the Avarda joint venture in the Sales Finance & E-Commerce Segment. In the Group’s Direct Consumer Business Segment, TF has signed agreements to establish various international partnerships and is in the process of negotiating further partnerships with the objective to expand its end customer base rapidly. For example the Franchise Agreement with SafeCharge Card Services Ltd, where the partner is developing an online digital wallet mobile application to enable customers to use their smart phones as a virtual payment card, for which TF will subsequently offer credit. The launch for this partnership is expected in the fourth quarter of 2015 or the first quarter of 2016. The Group has also, through BB Finans ASA, partnered with Odin Kapital to provide credit solutions to Norwegian dental patients. This partnership is already in a pilot phase. Additionally, TF is negotiating various partnerships in the Baltics including a partnership with an international physical payment terminal provider for the integration of credit solutions in all of its payment terminals. Declan Mac Guinness summarizes TF’s strategic shift towards growth and partnerships: “We realized that partnering allows us to apply our highly effective plug-and-play IT scoring technology to a wide variety of products and distribution channels that can, together with partners, increase our customer base significantly. Partnerships, specifically Avarda, also allow us to leverage on significant cross selling potentials to newly acquired customers and to our existing customer base.” Further information on TF Bank is available on the company’s website www.tfbankgroup.com in the Investor Relations section. About TF Bank AB TF is an online bank which offers consumer finance products directly to retail customers and offers e-commerce solutions to merchants in seven countries in Northern Europe, the Baltics and Central and Eastern Europe. As at 30 June 2015, the Group had a total of 1.14 million active customers in its two segments and a combined 2.18 million user profiles for scoring in its database. TF’s banking services include unsecured loans, credit cards and savings accounts for retail customers which are insured by the Swedish deposit protection program. TF uses various distribution channels to market its products, including through partnerships and physical payment terminals. Contact
Disclaimer This press release does not contain or constitute an offer of, or the solicitation of an offer to buy or subscribe for, securities to any person in the United States, Australia, Canada or Japan or in any jurisdiction in which such offer or solicitation is unlawful. The securities referred to herein may not be offered or sold in the United States absent registration under the US Securities Act of 1933, as amended (the “Securities Act”), or an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The securities referred to herein may not be offered or sold in the United States of America, Australia, Canada or Japan or to, or for the account or benefit of, any national, resident or citizen of the United States of America, Australia, Canada or Japan. The offer and sale of the securities referred to herein has not been and will not be registered under the Securities Act or under the applicable securities laws of Australia, Canada or Japan. There will be no public offer of the securities in the United States. This press release is directed at and/or for distribution in the United Kingdom only to (i) persons who have professional experience in matters relating to investments falling within article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (ii) high net worth entities falling within article 49(2)(a) to (d) of the Order (all such persons are referred to herein as “relevant persons”). This press release is directed only at relevant persons. Any person who is not a relevant person should not act or rely on this press release or any of its contents. Any investment or investment activity to which this press release relates is available only to relevant persons and will be engaged in only with relevant persons. A public offer may only be made in Germany after publication of a prospectus prepared in accordance with Swedish securities laws and approved by the Swedish Financial Supervisory Authority. Any securities orders received prior to the commencement of a public offer will be rejected. If a public offer is made in Germany, a prospectus prepared in accordance with the provisions of Swedish securities laws will be published and will be available free of charge in electronic form on the Company’s website at: www.tfbankgroup.com and in printed form at the offices of the Company at Ryssnäsgatan 2, Borås, alternatively Norrlandsgatan 7-9, Stockholm, Sweden until and including the date of admission. 2015-08-20 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. Media archive at www.dgap-medientreff.de and www.dgap.de |
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