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DelfinGroup updates its strategy and forecasts stable development for the next three years


The Management Board of AS DelfinGroup has developed, and the Supervisory Board has approved an updated strategy for 2022-2024. It comprises four main development directions - improvement of retail loan segment, expansion of branch network and customer service, development of circular economy services (purchase and sale of pre-owned goods), digitization and deployment of the new technologies. AS DelfinGroup expects that by continuing to develop these key directions, the next three years will be the most financially successful in the history of the company.


In the retail loan segment, the focus will be on the improvement of existing products and user experience by simplifying obtaining and repayment of loans. It is planned to improve the customer service experience in both lending segments - loans against collateral (Banknote pawn loans) and loans unsecured loans (VIZIA retail loans and credit line, Banknote retail loans, including loans designed for seniors). In the coming years, serious work will be done to improve the automation of services and loan repayment options, like, expanding of automatic payments.


Banknote branch network is one of the company's biggest competitive advantages, so in the coming years, along with the increase of market share and number of branches, an assessment of the network's coherence and financial efficiency will be carried out. Each branch must serve the common goal of increasing the availability of services and growing profits, revenue, and the total value of the company. One of the tasks of the branch network will be to improve the availability of circular economy services by developing a single platform for buying and selling pre-owned goods both on-site and online.


It is expected that by implementing the priorities of the European Green Deal, while promoting more environmentally friendly habits, the demand for services in the circular economy will increase, including retail of pre-owned and little-used goods. Therefore, the purchase and sale of pre-owned goods will be one of the focus areas of AS DelfinGroup in the coming years. The new Banknote online store will facilitate both the possibility to buy pre-owned and little-used goods and sell any belongings that are no longer needed by somebody.


Banknote pawnshops will continue to undergo changes, becoming more like modern electrical appliances and jewellery stores. Thanks to its extensive branch network, Banknote, alongside the sale of pre-owned and little-used goods, in many regions has become almost the only up-to-date financial services provider for seniors and other groups in society with limited digital skills and mobility opportunities.


In the trade of little-used goods, it is planned to increase cooperation with the largest online stores in the region, which are stocking returned goods. Returned goods have already been shortly used by customers and cannot be traded as brand new in online stores. E-commerce volumes grow each year, so does the number of goods returned to online stores. Therefore, this is a relatively new and growing market niche in which AS DelfinGroup plans to expand its activity.


In the field of technologies, AS DelfinGroup will continue to develop advanced business information software that will ensure data-based decision-making. This will allow for a much faster response to customer needs and information inquiries.


For employee retention, AS DelfinGroup uses employee motivation and loyalty methods that are innovative in Latvia but recognised internationally. As additional motivation for employees, a stock option programme has been created, giving employees the opportunity to become shareholders of the company and earn additional income as the value of the company increases in the future. In Latvia, this type of employee motivation practice is innovative, but it is quite common in companies in developed countries.


The strategic financial indicators have been determined in accordance with the previously set goals of the company, and their fulfillment is carried out in accordance with the forecasts - this year a profit before taxes of 8.7 million euros is planned, which will be an increase of 67% compared to 2021. EBITDA is expected to increase by 17.6% this year, reaching 12 million euros. The loan portfolio is expected to grow by 18.6% to 51 million euros. While in 2024, it is planned to achieve a net loan portfolio of 70 million euros, a pre-tax profit of 12.9 million euros, and an EBIDTA of 17.6 million euros.


Indicator 2022 2024
Net loan portfolio (EUR, millions) 51 70
Profit before tax (EUR, millions) 8.7 12.9
EBITDA (EUR, millions) 12 17.6
Return on Equity (ROE) >30% >30%
Cost to income ratio <52% <45%
Equity ratio >27% >27%
Dividend payout ratio >50% >50%
Cost of capital raised 8% <8%


When raising funds, DelfinGroup will continue to follow a diversified financing structure, attracting funds by issuing bonds and using bank loans in addition to capital offered by the investment platforms. This flexible approach will ensure that the capital expenditure will decrease in the coming years.


In 2021, AS DelfinGroup achieved record turnover and profit - revenue increased by 7.7%, reaching 25.5 million euros, while profit before tax reached 5.2 million euros, which was an increase of 7.2%. More information on the financial results of AS DelfinGroup is available on the company's website: www.delfingroup.lv or on the website of the stock exchange Nasdaq Riga: https://nasdaqbaltic.com/lv/.


About AS DelfinGroup

AS DelfinGroup is a licenced technology-based financial services company that was established in 2009 and operates under the brand names Banknote and VIZIA. The company continuously develops and offers consumer and pawn loans, loans developed for senior citizens, Buy now pay later loans (BNPL loans), as well as sale of pre-owned goods both online and at more than 90 branches across Latvia. On average, 35 thousand loans are issued every month and serviced by the professional team of more than 270 AS DelfinGroup employees. The company has a total of over 400,000 registered customers. Since 2014, AS DelfinGroup has been known on the Nasdaq Riga Stock Exchange as a bond issuer and since 2021 as a share issuer on the Baltic Main List. The company’s IPO in 2021 attracted almost 6000 new shareholders. The company regularly pays dividends to its shareholders. In 2021, the company's net loan portfolio grew to EUR 43 million, while its EBITDA reached EUR 10.2 million, with profits before income tax for dividends EUR 5.2 million. The company’s sustainability is based on focused corporate governance, fintech innovation, responsible lending, financial inclusion, and facilitating the circular economy. The company has been profitable every year since 2010.


For further information, please contact:
Aldis Umblejs,
AS DelfinGroup Chief Financial Officer
Phone: +371 26189988
E-mail: [email protected]

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