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MCB Finance Swings To Second Quarter Profit On Lower Impairments

August 5, 2014

Samuel Agini

LONDON (Alliance News) - MCB Finance Group PLC Tuesday reported a swing to second quarter profitability, driven by an increase in revenue and fall in impairments.

In a statement, the lender said it made a EUR1.4 million pretax profit in the three months ended June 30, compared with a EUR74,000 pretax loss in the corresponding period last year. Revenue increased to EUR9.1 million from EUR8.8 million, coinciding with a fall in impairment to EUR1.8 million from EUR2.6 million due to stronger credit and collection performance. Administrative and direct operating expenses fell to EUR5.0 million from EUR5.9 million.

Second quarter growth was aided by a 15.7% increase in net customer loan receivables to EUR44.9 million in the established markets.

For the entire first half, MCB reported a EUR1.7 million pretax profit, a swing from a EUR805,740 pretax loss in the corresponding period last year.

Under its Credit24 brand, MCB lends to retail customers in Finland, Estonia, Latvia and Lithuania, together its established markets, as well as in Australia. In its established markets, MCB provides loans and credit lines of up to EUR3,000 to qualifying customers with maturities of up to two years. MCB has invested in various of its central functions and upgrades to its technology platforms, as well as the development of new products and entry into new markets.

"As the company continues to grow, management expect to realise significant operating leverage from the new platform, product and geographical investments. Management also intends to seek opportunities to diversify the group's sources of funding, thereby reducing the group's cost of debt," MCB said in a statement.

"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 added.

MCB shares were Tuesday quoted up 7.8% at 62.00 pence.

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Source: Alliance News

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