LONDON (Alliance News) - MCB Finance Group PLC Friday reported a swing to first-quarter pretax profit, due to an increase in revenue and falling impairments more than offset an increase in administrative and operating expenses.
In a statement, MCB Finance said it made a EUR277,067 pretax profit in the three months ended March 31, compared with a EUR731,741 pretax loss in the comparative quarter a year earlier. Revenue increased to EUR8.4 million, from EUR7.8 million, while impairment fell to EUR1.6 million, from EUR2.0 million. Administrative and direct operating expenses increased to EUR4.9 million, from EUR4.6 million.
The revenue increase was due to a rise in the net amount owed to MCB Finance by its customers. MCB Finance said impairments fell due to the selective tightening of credit settings in Latvia and Finland, as well as changes made to collection partners in Latvia.
MCB lends money to retail consumers in Finland, Estonia, Latvia and Lithuania, as well as in Australia. It provides unsecured credit in the form of loans up to EUR3,000 with maturities of up to two years. The lender has been investing in its central functions, including an upgrade of its technology platforms, the development of new products, as well as entering new markets. With much of that investment complete, MCB said it expects its new products and markets to contribute significantly to growth and profitability.
In addition, MCB said it intends to diversify its funding sources in order to reduce its cost of debt.
"Discussions on the refinancing of the Company's senior and subordinated debt are underway and are expected to be completed well in advance of the maturity of the senior and subordinated bonds in March 2015, with a view to recapitalising the company's balance sheet to reduce financial leverage and to improve the company's effective cost of funding," MCB Finance said in a statement.
MCB Finance shares were Friday quoted at 62.75 pence, down 2.7%.