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Good morning, and welcome to the Multitude 9-month 2021 Earnings Call. Today, we will hear a presentation regarding the 9-month results. And afterwards, there will be a questions-and-answer session. [Operator Instructions] Today's call features the presentations by CEO, Jorma Jokela; CapitalBox Tribe CEO, Oscar Barkmann; ESG Officer, [ Nontokozo Khumalo ]; and CFO, Bernd Egger.I would now like to hand over to Multitude's CEO, Jorma Jokela. Go ahead, Jorma.
Good morning, everybody. And nice to see all of you here, and welcome to our 9-months earning call. My name is Jorma Jokela. I'm the CEO and the Founder. And today, we have little bit special events because we have 3 of my colleagues here. [indiscernible] our CFO, the Bernd Egger; our newcomer on the team, Oscar Barkmann. He take a lead on to our SME business, our CapitalBox Tribe. And [ Nontokozo Khumalo ], and she have responsibility running our ESG initiative. We used a little bit liberty for using the same metaphor this earning call, what we used in Capital Markets Day on the June this year, the spaceship builder and building the planets, what we like to call like a tribes.And we as a Multitude, we want to build the most valued financial ecosystem democratizing amazing financial service through digitalization, making them easy, fast and [ treated ], where naturally, the customer experienced technology and thereby is always middle of everything. But let's go to look our presentation. So we have 3 planets or tribes how we realize those call. And we have 4 different trends, what we can call like a megatrends, which are driving all our 3 planets to growth on the future, where the post-COVID boost is the first one. The second one is financial inclusion. And the third one is online shopping. And the last one is customer experience over the products. All these 3 planets, they have a old customer segment and unique customer experience for their own customer segment. They have a own strategy, own resource, and they have full P&L responsibility, they own activity behind there.If you look those 3 planet, our newest comer or the newest and the smallest planet is SweepBank. And the SweepBank, we want to digitalize digital financial solution for online shoppers and consumers with planned financial needs, up to EUR 30,000. The second planet in CapitalBox, it's 5 to 6 years old today, where we want to service our SME customers who are under service by traditional banks. The offering there is up to EUR 350,000, the working capital loan type of the service. And then it's our biggest planet and oldest planet Ferratum, where we want to serve the consumers with unplanned financial need because the people different unexpected life events happened. There we offer the digital credit limit and small loans up to EUR 4,000.If we look what's the similarity, all these our 3 different planets, they are all -- it's a pure digital base. We offer the customer very simple and fast solution and naturally, amazing customer experience. The Multitude, as like a planet builder, our spaceship, our role is very simple. We practically want to do the competence development on the all planets and our spaceship. We want to offer the banking as a service for all our business, all our tenants, and also the technology and data platform. And naturally, the support of all growth acceleration activity what they have it there.Okay. Let's go to look the first 9-months spotlights. So we have a strong execution market, and we can really see that a child transformation and our team's hard works is start to pay back. We have a portfolio growth with the costs scalability. We have strong liquidity and payment behavior, and we're doing the amazing successful loans with SweepBank app application in Finland through the Q3. And we delivered a strong profitability in Ferratum Tribe. When you look at our KPIs or the financial part, the revenue, we delivered EUR 158 million, where the net profit was EUR 2.7 million. And net AR, it was EUR 429 million, our lending portfolio, what is, by the way, the 19% growth comparison for the begin of the year, the end of the last year numbers.The same time, if you look the middle of this picture, you can see that our cost rate is -- it's pretty flat. So we have managed to deliver the growth even, at the same time, keep the cost stable. And we have increased our equity from EUR 127 million to EUR 176 million, thanks to [indiscernible], what we issue in July on this year. When we look the future as a whole Multitude group, we focused very strongly, executed our new group strategy vision to come to most valued financial ecosystem, exploring the new opportunities, new countries, new product, partners, M&A activity just to accelerate our growth. We naturally driving the profitability organic growth and increase the scalability as well. This is the really, really important element for us as well. And we are commitment, our guidance to deliver between 2022 and 2024, over 50% growth from our EBIT level.Let's start to look the SweepBank little bit more deeper here. Amazing start. I cannot say anything else. I think it's very easy to see today that our team was right when we know in only 2 years back when we started this activity that we've been in something really, really unique. After 6 to 8 weeks, launching in the Finland market, what was our first relaunch in the -- our SweepBank application. Our mobile banking application was one of the top position on the Google Play and Apple Play -- Apple store. And this is something amazing achievement what I can say. Of course, at the same time, we have attained until today, over 30,000 new customers just using this our SweepBank application. And that's a amazing achievement.Of course, when we talk there that the conversion rate was amazing and really above at the market level, market standard, that's something what our team has showed with really, really proud. If we looked at the financial point of view, we practically -- net AR, our lending portfolio was growing 25% from Q2 to Q3. So only quarter growth is over 25% and customer base over doubled -- almost doubled. Of course, it's still the investment case. What's important to understand, when our net AR is growing the EUR 76 million, over EUR 76 million, and EBIT, we investment the negative EUR 14.8 million there.When we look the future now in the SweepBank, we will focus the near future at the few different activity. First one, we will launch our lending business in Denmark and under the SweepBank. We will launch the totally new product, the credit card product in our product offering in Finland in the near future as well. We will bring our SweepBank mobile banking application in German as well. And we're launching with MasterCard the cashback online shopping campaign on the near future as well. Of course, it's very easy to smile in now, when our team have worked so hard to get this SweepBank onto life.And in this victory and this craft, you can see the outcome from that. That after the 2 years hard working, the lending portfolio have a growing the stable every each quarter. Customer base have growing the stable as well. But if you look the Q3 and you look the current Q4 where we're working today, this is just exploding there. And that's something what I think is our team have been doing the extremely great job there. And I mean, I'm so proud of that.Good. But let's start to look the next one, Ferratum Tribe, Ferratum planet. Here I think I can just say that we are back to growth and very, very strong profit. Sales over EUR 135 million, earning before interest and tax, EUR 32.7 million, what is, by the way, over 24% the margin, the EBIT margin, what's the really, really great on this industry and this business. Net AR, EUR 280 million. We have a third consecutive quarter in the row of the positive revenue growth. We launched the Credit Limit in Romanian. Credit Limit is our biggest product and one of the most profitability product in our portfolio. But in the same time, our Ferratum Tribe or Ferratum planet, our team managed to reduce the cost per new customer acquisition cost by 15% over the last 6 months.And if we look the future in the Ferratum planet, our near future, we want to open the new country in Slovenian, where our team recognized that we will come in the one of the pioneer, the first fully digital lender in this country. We want to continue to proceed the Credit Limit product rollout. And of course, we continue to look in the new country opening as well. In the Ferratum Tribe or Ferratum planet, we have over 10 years proven growth track record. I think this is one of the -- we have a 2 key message on this slide, what I want to share with you that in our 2021, our lending portfolio is back to growth. And if you look, that's the first key message.The second key message is that if you look at the 2020, when the COVID was start, the half of this lending portfolio reduction was coming from the COVID restriction. And the second half comes from the suspended lending in the some of the markets, what was not anymore our focused market. And when you eliminate those 2 elements behind there, when you eliminate the suspended markets there, you can see that our core countries, our focus market, our business was, over the time, was delivered to growth there. And that's the really good evidence for the team and the Ferratum planet team, what they can do and what they have done there and what we see in the future as well. The future will be focused on core market. We will open the new core market, and we will accelerate our offering on those market.Good. I think it's -- I think my part is -- this presentation is done. And I want to hand over to Oscar. And I'm very happy to introduction our newest CEO into our team to take care of our CapitalBox Planet. Go on, Oscar.
Thank you very much, Jorma, and hi, everyone. It's nice to meet you. My name is -- could you change the slide, please? My name is -- thank you. My name is Oscar Barkmann. I have more than 15 years' experience from the banking, FinTech and payment industry. So from more larger companies, the global companies as MasterCard and Nordea to more to smaller FinTechs and growth cases, I would say, in the Nordics, a smarter group, which was sold to Bauer Media Group in Germany. And also, I've been together building a bank in Norway. It's called MyBank. So more for growth cases.And I will say that why did I join CapitalBox and Multitude group. First of all, as we said in the first picture, I think the market is -- the SME market is underserved, and the potential of the growth is quite big, I would say. That's one of the reasons, of course. But I really like the approach from CapitalBox and the Multitude group that you have a growth case, growth mindset and a digital mindset and to serve the customers as they want to be served. We today, trying to do as digital as possible. But in some cases, we need to take care of our customers also off-line, so to say. So that's why, and I really believe in CapitalBox the next coming years.For the highlights, yes, we had a revenue of almost EUR 17 million and EBIT of EUR 1.3 million. The net AR was EUR 71 million. And as you can see, we had -- we were on a higher stage before COVID, and we decided to pause the landing. And now we are back on track, I would say, and slightly going back to the numbers as we had before. The highlights from Q3. I would say that we are constantly working with changing our offers to the customers. We have launched some new product offerings in purpose to increase the performance, and it's been going quite well, I would say, in all of the countries.We decided to disconnect business -- the business in the U.K. One of the reasons is the Brexit, of course, but we see it's another bigger potential, I would say, in some other countries. Also, our portfolio, we have shifted from -- to a non-COVID affect businesses, and that means that we have -- yes, shifted from more risky -- the COVID business or affected business to non-COVID affected. We have made -- signed a large agreement with the athletes in Sweden and Finland. One -- 2 of them are actually Olympic gold medals, Armand "Mondo" Duplantis and Daniel Stahl in the Swedish team. We have a longer contract with them, and we see a great potential of the cooperation of building the brand of CapitalBox.Yes. So what do we see going forward? I would say that we are both growing in the number of countries, what we want to do and products, where we will launch new countries in the Nordics, the next year and next coming years. Also, we will improve our new customer onboarding process. This is what we're working constantly, for example. So -- but we improve that all the time, and we can see that it gives great results. We are also launching new products next year, which is -- we have launched the purchase finance product together with the Masku. It's a furniture store in Finland, which have over 40 stores, both stores on-site and online shop. So we offered a loan product and a credit product for the SMEs. And this is just the beginning, and it's a proof of concept, and I believe everything been going good so far. So let's see the results later. And also, we are launching a credit line, and it will be launched in the 1st of December, offering our existing customers' credit line and then in Sweden, and then we roll it out in Nordic countries and new customers as well.Yes, that was it. For the time line, if we go further, I would just show you that we have had, I think, a great growth from starting 2015. As you know, the COVID hit, but we are now back on track. And what we have done, we have increased our maximum amount -- offered amount to EUR 350,000. And the terms for 36 months, going from EUR 250,000 to 24 months.So that's the highlights. So I would like to hand over to [ Nontokozo ]. Thank you from me.
Thank you, Oscar. As a quick introduction, my name is [ Nontokozo Khumalo ], has been mentioned just by the previous speakers. But I joined Multitude as ESG Officer in July this year to drive implementation and development of the ESG strategy and program together with the leadership team. My background is in sustainability and ESG within the banking and asset management sectors. Most recently, our space at the Climate Disclosure Standards Board that has since been part of a merger, which is basically to form the [ effortless ] International Sustainability Standards Board.Having joined Multitude in the early stages of the ESG journey, I see the opportunity we have to meaningfully implement ESG within what is an agile growing FinTech, committed to supporting the global transition to a sustainable economy and effectively managing ESG risks and opportunities. The commitment to managing ESG risks and opportunities has been evidenced by which I have observed to be the necessary buying from the management team and Board. During Q3, we focused on developing our ESG approach and outside the management team and with Board oversight. We convened an ESG steering committee, which is really to support these efforts. The ESG steering committee is chaired by the group CEO, Jorma and me in my capacity as the ESG Officer.In terms of the aspects that I highlighted on this slide. So what we've been doing is really putting together the foundational elements of our ESG approach, which is our purpose, with which we have now articulated in a shorter form and our mission that you were previously aware of. So in terms of our purpose, we really want to change the world by making banking and finance accessible to everybody and positively impacting society. Our purpose aligns with what we want to do as an organization, which is to democratize financial services through digitalization, making them fast, easy and green, as Jorma has mentioned.And building on our purpose and mission, we are thinking about how we can actually positively impact society by implementing green and sustainable practices in our ways of working and through our strategy. We started to define high-level ambitions for 2025 that will enable us to achieve that. So in the box on your right, you can see the group goals and tribe goals for 2025. We want to focus on our people and our ways and how we can embed ESG consciousness within our processes, policies, governance and strategies.So what we have also been doing is increasing our engagement with employees on ESG matters, including working with them to draft ESG values that define a common approach to how we'll consider ESG across the organization. Then we'd also like to actively address the well-being of our stakeholders. For example, through customer engagement and using the outcomes of this engagement to enhance customer experiences and our product offering, including when it comes to sustainable product development. The well-being of our employees is a further key aspect of this goal, so focusing on enhancing our employee value proposition.Finally, at group level, we want to understand our environmental footprint and undertake carbon reduction initiatives we needed to support global and EU-wide emissions for a greener economy. Regarding the tribes, our 3 tribes commenced work to define the industry goals that incorporates their unique consideration of unique customer segments that they would have, as you can see on the right. So SweepBank being digital bank promoting already cardless banking to its customers has an opportunity to further tap into the sustainable banking segment, leveraging of the strategic objective they already have, which is really delivering personalized shopping and banking experience to their customers. The goal of the tribe then is to really become a leader in providing sustainable personalized banking and shopping in the EU by 2025.For CapitalBox, we see a really great opportunity to be the -- a leading SME FinTech, which provides sustainable solutions, financial solutions, which really drive transition to the sustainable economy. This means expanding the offering of the products within the tribe. Then for Ferratum Tribe, the goal is really to position a platform as a leader in responsible lending to customers that have traditionally and excluded in terms of access to finance. We want to continue to enhance our processes that we have which reduce the risk of over-indebtedness of the customers. So ensuring that we are working to balance access to finance with protection of financial wellbeing of those customers.And then in terms of these goals, we really like to -- would like to stress that we're really at the beginning of articulating the approach. And we are really looking forward to publishing the detailed strategy in the next annual report. And we are also available for discussion on our progress in this area. We've already started to speak to some of you, and we look forward to continuing to discuss these issues with you in order to be able to provide you with decision-useful information, which really helps you invest in a sustainable business.So I'll now hand over to Jorma, and of course, at the end, if you have any questions, you're welcome.
Thanks, [ Nonto ], and thanks, Oscar. I have to say that we're doing the very, very nice step for the related to our ESG and the whole team is super exciting that one. But let's start to go look at our financial performance for the first 9 months as well. And Bernd, Please go ahead.
Yes. Thank you very much, Jorma. Good morning, everybody. My name is Bernd Egger. Let's jump to the next slide right away. Thank you very much. Yes, let me start with revenue. Earlier this year, we have given the financial guidance that the intention is to essentially go back, start going back to growth mode from a revenue perspective during H2 2021. We have actually seen a slight increase in revenue Q2 over Q1 already. And now in Q3, we have seen another increase of revenue to EUR 54.1 million. So that is an increase of EUR 1.8 million or 3.5% compared to the average of the previous 2 quarters.From an EBIT performance perspective, I would say the earnings before interest and tax profitability performance is solid. We see a EUR 19.1 million earnings before interest and tax. That is essentially exactly the same level as last year despite the fact that we have invested more in some areas, also have incurred marketing expenses, roughly EUR 4 million more than last year. Positively, I would like to highlight that the credit quality is still good. So the underwriting performance is good, hence, the impact of impairment for credit losses on the P&L is still in a very good shape.Operational expenses, practically stable, where we see an increase. This is essentially related predominantly to new initiatives, other than that, personnel expenses, other expenses, pretty stable. Also finance costs have reduced compared to last year by roughly EUR 2.5 million despite the fact that we essentially have increased the net loan book by around about EUR 70 million compared to last year.On the next slide, I would like to briefly talk about the balance sheet. Total assets up by roughly 23%. 2 key drivers for that. One, obviously, the increase in the loan book. So from beginning of the year '21 until end of Q3, we've increased the loan book by around about EUR 68 million. That is, as we will see a little later predominantly driven by the quite rapid growth in the SweepBank offering. The second driver is cash, plus EUR 75 million. That is obviously anticipating the expectation that we see growth also in the forthcoming quarters, above all in this, but not only in the SweepBank offering.Liability structure. Deposits have increased by roughly EUR 135 million this year. Again, as you know, the intention is to shift the funding mix to deposits to increase the utilization of deposits. And obviously, we want to be prepared for future growth for increased lending activities. We have, during Q3, reduced the outstanding bonds, the 2 capital market debt instruments expiring in '22 and '23 by EUR 35 million. That was a part of the transaction of issuing the perpetual bond. That brings me to equity increased by 40%, a little bit more than 40% in 2021.That is mainly -- not exclusively, but mainly, obviously driven by the fact that we have raised EUR 15 million in IFRS equity via the perpetual instrument. The positive side effect and actually the intended effect of that is that equity ratio improved to 21.2%. And even more importantly, net debt-equity ratio at 1.94. So here, we have, for the first time in the last couple of years, achieved net debt-equity ratio below 2, which gives us room to grow for the next couple of quarters.If we move on and have a look at the segments. So as you know, the segment reporting is now in line with the tribes, the 3 tribes, Ferratum, CapitalBox and SweepBank. The key message here is that quarter-on-quarter, all tribes are growing from a revenue perspective. CapitalBox and Ferratum quite moderately, but a positive growth development in terms of revenue in SweepBank, we see a quite significant increase in revenue. The key messages on a tribe level essentially would be that in Ferratum, we see that revenue are quite significantly below previous year's level.But that was, if you recall, not only driven but the COVID impact, but even more so driven by the fact that we decided to discontinue lending activities in a number of market, and that has paid off quite positively or very positively when it comes to credit losses in the Ferratum tribe. So taking both factors into consideration: reduction in revenue; at the same time, decrease in impairment for credit losses plus a very stable cost base, we have actually improved the profitability and increased profit in the Ferratum Tribe. And that was the logic behind the actions taken in the beginning of 2020.From CapitalBox perspective, we are currently building up the portfolio in a risk-sensitive way. So the steps are not huge yet. So from a portfolio size, we are increasing portfolios step by step. At the same time, we are focusing on new initiatives. The fact that the focus is risk-sensitive growth is obviously also reflected in the credit losses. So here, we, as in Ferratum see a much lower level of credit losses compared to last year. Obviously, the intention going forward is to accelerate growth also in CapitalBox. Briefly talking about SweepBank. This is really -- the intention is to generate a real growth case here. Revenue up by 144% in the first 9-months '21 compared to last year. In absolute numbers, EUR 6.1 million revenue compared to EUR 2.5 million revenue last year.We can also see that on the next slide reflected graphically. This slide basically shows revenues per tribe for the first 9-months 2021 and 2020. The ring represents the revenue split, whereas the loan portfolio is represented by the circle. And as you can see, the piece of cake of SweepBank is growing quite significantly. So as I mentioned, revenue up from EUR 2.5 million to EUR 6.1 million. In terms of revenue share from 1% to 4% within this year. The portfolio size in the SweepBank offering is also quite significant and essentially the key driver currently of the portfolio growth. So we see a growth within the last 12 months of almost growth by [ fact of ] 4 comparing mid-2020, the portfolio in the SweepBank offering mid-2020 to end of Q3 2021 is equivalent to a growth by [ fact of ] 5 in the SweepBank offering.On the next slide, as in the previous presentations, I actually would like to stay on this message as this obviously has a significant impact on the profitability, but also I think it's important to understand what the balance between growth and credit risk actually is about. We have continued to improve the asset quality also during 2021. So what you can see on this slide is a decreasing trend, a decreasing development of impairment losses of net accounts receivables, which is equivalent to an increasing asset quality. That is a trend that has been continued and sustained for more than 2 years now and reflects the balance between growth and risk appetite.Finally, on the next slide, I would like to spend a minute or 2 on the funding structure because during Q3, we have completed one transaction that is also reflected here. That has also been reflected on the balance sheet as equity. We now, in end of Q3 2020, have introduced this EUR 50 million as a new instrument, perpetual bond. At the same time, we have reduced the 2 outstanding bonds by EUR 35 million, and we have accelerated actually the -- to increase the utilization of deposit funding with more than EUR 450 million, actually EUR 475 million in deposits for -- also the growth in Q4 and 2022. That also brings down the deposit -- the cost of debt funding to 2%, starting from 3.25% in 2019. I have to note that this excludes the deposit funding -- sorry, the cost for the perpetual bond. Why? Because it's an equity instrument, where we need to add back the cost also for the perpetual instrument, then we would see a stable level of 2.4 in terms of cost of funding.That concludes my presentation, and I would like to hand over back to you, Jorma.
Thanks, Bernd. And I think I want to really quickly take key takeaways from today, our first 9-months earning calls. So if we look that we are back to growth track. The Q3 revenue exceed the previous quarters. Asset quality continues to be at the high -- very, very strong. We does the very successful launch related to SweepBank app in the Finland. And Ferratum tribe, we delivered a really strong profitability position, and we see this continue. And we have in the CapitalBox, we have on boarded the new CEO, the Oscar, who you just met today as well. And our common goal is start to scaling on the CapitalBox on the totally new level there with the new product offering, a new service offering and new tropical expansion as well. And we kick off our ESG approach on this year and [ Nontokozo ] was presentation for you, this our first initial thinking process behind there. And what we have done and what we will do with there and what are our calls on the each of the planet as well.But that's more or less what we'd like to share with you. I think it was -- I really -- I'm very happy with our team performance, and I think we are ready to take all your questions.
[Operator Instructions]
Good. I think there was coming to a lots of questions. So there is a lot of question. Maybe we can start, Bernd. Can you start to take -- there is -- if we start to go through those chronological orders, some of those questions are overlapping. But first question has come from the Philipp Hassler, Pareto Bank.Given your strong deposit level, do you plan to buy back any of your senior bonds? Bernd, please?
Yes. I think there are 2 elements to the answer to that. Firstly, we need to take into consideration that we cannot use all deposits to repay or rebuy essentially the bonds as we cannot use deposits freely throughout all organizations. And the bonds were not issued by the bank, but by some capital -- Germany as an issuing entity. However, I think that does not mean that the intention is not to buy back bonds. We do have liquidity currently. And this is definitely an option that we buy back the 2022 bond and '23, predominantly '22 as we are in a process of defining the strategy to replace the '22 bond, which is due in May anyway. So yes, that is an option.
Okay. Then the next question, Philipp Hassler as well. I think Oscar, this is maybe more for you. I know you are very early on the team and it's hard to comment. But the loan volume CapitalBox was only stable in the quarter-on-quarter. Is there any reason why?
Sorry, loan volume CapitalBox was only stable...
Yes. Loan volume CapitalBox was only stable between the quarter 3 and quarter 2. And is there any reason why is that one?
What I say -- what I would say is that, I mean we're coming from the COVID times and we did pause the lending. And when yes, open up, we didn't open up 100%. We try to do it in stages. So I would say that is the answer on that.
Yes. And I understand it's a little bit hard for you to answer that you have not been on the team under this time. It's -- but yes, exactly. I think it's -- our team have a little bit like what I see as well that on capital books, we have been the very -- like we have tried to do in the positive selection on the customers. So focus on the low-risk customer segment and the pricing those product as well the right. And that was naturally -- and not investment so much on the marketing yet behind there.
Yes. You're right. Yes.
So next question, Philipp Hassler as well. The revenue outlook Q4, how was the quarter start in the COVID-19 impact?I think maybe I can -- I mean, we didn't want to give the guidance for the Q4 now here is. But I think it's generally, we are okay. We feel okay. Naturally, there is some countries, where is a lockdown, like example, Latvia, where we know that there is always when countries call the lockdown, there is, at least we have learned in the last 2 years that 1 or 1.5 year that during the lockdown, the demand of the loans is might be little bit lower. However, in currently, it's so many other countries have opened and the people consumption have start to increase. So we can see that this is a little bit cumulative of this effective or like neutralize this effective. So currently, I don't believe, Bernd, we have anything to comment that more than we feel okay.
Yes, yes. I would agree.
Okay. Good. Then the next question, SweepBank still negative, what's the loan volume you need to reach the breakeven?This is the third question. And the third answer there is that this is depends, of course, how we look in that one because what is the key driver for us. We look in the SweepBank currently on the unit level profitability. So we know that the each of our customer, who we on boarded, we like to get in the unit-level profitability. Average profitability per customer is really high. It's a really high in the SweepBank. We try to monetize this even further on the coming year. So in the next year, our main focus would be the increase the customer lifetime value even further there.And there was a -- later on, there was one question what was related as well the -- our new products behind there and the features.And I think it's our -- I can maybe answer the same time that one. So we practically try to increase the customer lifetime value even higher what it is today. It's today, it's a really high and through the different third-party service, third-party product and maybe some of our own product as well and doing the cross-selling behind that. When we look the revenue point of view, it's currently, if we stop the all activity, and we can start to focus only like one countries, we can get this very quickly profitability. But currently, we investment on the future growth behind there. So it's very hard to give the one stable number that when we hit this revenue, we are in the breakeven because we actually steering this profitability behind there an investment as well. So that's the reason why there is no really like one right answer behind there. Our aim is on the future to start to share with you the more information on the -- our unit level profitability as well. So then you can model in that on the future yourself as well.Good. And the next question. Could you perhaps provide new segment report figures for the Q1 2021 as well? Bernd?
Yes, absolutely. Absolutely, happy to provide this information for all quarters going forward definitely.
Perfect. Then the next question comes from the [ Stefan Hirschauer ]The growth rate of AR of the Ferratum segment and the CapitalBox with each 0.3 from Q2 to Q3 is very low. What's the reason behind that one?I think the Oscar already answered the CapitalBox part. And the Ferratum point part, I think it's -- the answer is I tried to give this answer actually, but maybe I was very successful that one. So practically, we have suspended the lending in the several countries on the last 2 years. And those revenue is actually -- and portfolio have fallen down there. And based in that one, it's new countries. Our focus countries have a growing there, but those combination there was been the -- those combination behind there was they have neutralized each other. Then there is a second driver behind this is that we have a look in there in the some portfolio, the selling as well there. Bernd, do you want to comment that anything more?
No, no, that is fine.
Okay. Good. Then the next question, question #7, it's Harald Hof.Do your team Multitude, could you provide us with more information on the accounting impact of the new bond and its interest payment?
Yes. Of course. So the purpose of the transaction was predominantly to increase equity, IFRS equity. So from a balance sheet perspective, it is treated as equity. The -- at the same time, we have reduced the bond. The 2 outstanding bonds totaling EUR 35 million, reducing debt accordingly. From an ongoing perspective, as it is an equity instrument interest paid for those instrument are reflected -- are not reflected in profit and loss statement, but are reflected in balance sheet is directly offset from retained earnings.So maybe I move forward since there is another bond-related question, if that is okay? [ Stefan Hirschauer ].The bond 2022 with outstanding volume of EUR 84 million is repaid in May 2022. I expect that no new bond issues planned, and this helps to reduce financial cost next year. So yes, the intention is to reduce financial cost next year by shifting funding mix further to deposits. At the same time, as I said, there's not an unlimited possibility to use deposit funding to repay the bond instrument as there are also lending operations outside the bank. So from that perspective, the intention is to prepare to issue new instrument in -- most likely in Q1 2022. But it's not going to be a massive instrument most likely, unless, of course, we want to replace both the 2022 bond and the 2023 bond. At the same time, this is something that we are going to define over the next couple of weeks. So to summarize that, we will issue a new product in 2022. But we would like to continue on the path to increase utilization of deposit funding further to bring finance costs down.
Thanks, Bernd. And maybe we can actually -- we will stay in the same topic. We can actually -- there is some later on our chat is -- it's a few question from [indiscernible].Question 14, 15. Bernd? So can you help? So slow...
Yes, [indiscernible]. Question concerning net finance cost. You report that the cost of debt capital decreased substantially from 3.2% to 2% in '21. Regarding the equally relevant finance cost per in relation to accounts receivable, this is not the case. This is still at 5% cost like in 2019. Do you have this figure as in KPI? How much of the net finance cost is negative interest on a substantial cash equivalent? Can you specify how much an increase in interest would affect the finance cost?Maybe to start with the last question. The impact of a potential interest increase on the finance cost. The key target that we had over the last year was to -- I have to repeat that to increase the utilization of deposit funding. Now the average -- now the deposit interest rates are between 0 for overnight money to 90 basis points for 36 months. That is the pricing level that we currently offer. Obviously, when it comes to longer maturities, there are still some outstanding deposits with a slightly higher interest rate level. But what that points down to is the fact that on average, we pay around about at the cost related to deposits are way below 1% -- around about 80 basis points, whereas the senior -- the debt instrument [ bearing ] coupon of 5.5%. So the key incentive that we see is to increase utilization further. That will also mitigate the potential impact of a potential future interest rate level increase.What the net effect of that is how much we are going to be able to pass on to clients on assets. That is something that remains to be seen. But of utmost importance is actually the -- to increase the utilization of deposit funding. On the other topic, let me go back. Yes, the reduction from 3.2% to 2%. That is the weighted average cost of all our instruments. And obviously, the cash -- we have substantial cash on the balance sheet, which drives up cost a bit because we have EUR 470 million deposits, currently EUR 300 million, a little bit more than that in cash to anticipate growth. The comparison with the 2019 KPI, I have to look at that, and I'm happy to get back to you. But yes, I mean, it definitely does make sense to look at it from that perspective as well.
And maybe my -- sorry, Bernd, please go ahead. Maybe my side, just a short comments related to that question that related KPIs. I mean the naturally, we're following the -- our cost of capital, and we look in that one, but that's not in the impact for the -- our internal bonus KPIs or to anybody that like a bonus related KPIs. That's the type of approach we don't have it there.
Then there is one additional question raised by Mr. -- think there was a negative -- if I recall that correctly, negative interest?Yes, we -- as everybody who holds cash, we do have this problem. Obviously, we try to keep it as low as possible. That is altogether a low 6-digit amount and negative interest that we currently pay.
Yes. Okay. There is coming so many question. We have to some way the -- there is one question. If I go back to then, there is a question. Looking at Slide 23, back up slide. Loan volume disbursed per month. I see that stock rate [ slides ] May 2021. Why?I think this is the question where we already answered with the related for the Ferratum and the CapitalBox part because that's the main drivers there as well.The next question from the [ Robert ] [indiscernible]. Your vision is to build the most valued financial ecosystem. All other financial components we are following in a similar context are far above the pre COVID level in term of business performance and valuation. When you finally start to create the value for the shareholders?I hope we're doing this every day. It's -- but I think it's a fair question. And I think it's a really fair question. I think its answer is much longer. But if I give the very short answer and I really try to simplify that answer. During the COVID, it's -- during the COVID, our lending portfolio is very well adopted different risk position. Thanks to that one that our matter is really shared as well. It's -- and it benefits us in the many, many different economical crisis situation. And it's one way that benefits us in this COVID situation as well, like we can all see the -- our payment behavior have a all-time high in the last 16 years. In the same time, when the maturity is so short, there is actually coming to challenge on that when people consumption is reduced, they don't actually need -- they don't need the funding similar way what they need the pre COVID period as well.And that's something what have to start to change now, and we can see that. You can see that as well in the -- when you look our numbers that the portfolios have start to increase and lending demand have start to increase behind there. It's a lending -- it's start to increase. And that's something what -- if you look to -- you have to look little bit divide our business on the different way, [indiscernible]. If you look the Ferratum planet or Ferratum Tribe, our profitability is a really nice level that we really delivered the very nice shareholder value behind there. Of course, we have make a new initiative related, example, the SweepBank, where we're doing the big investment for the future road. And this is the time effective now. So when you do in the lending portfolio issue, it's take always time because although your cost is upfront loaded. So your old cost is coming to day 1 and then your revenue and profit is coming to after growth.And it's taken between 6 to 12 months. Some case in the 18 months, depends to your pricing and the credit risk, what you take it there when you start to keep it to pay back -- get the pay back there. And that's the reason why it's not the time effective. But if you look the Ferratum Tribe independently, I think there, you can see the very shortly this impact. When you look the SweepBank, it's taken longer. And when you look at the CapitalBox, it's taken longer as well, not as long as the SweepBank currently due to the reason that we don't optimize the profitability. We actually invest in the future growth behind there. But when the share market start to appreciate that one, that's not question for me as like a CEO, I think I'm not capable to answer that one. I just tried to focus my -- with my team to deliver the profitability growth and bringing the customers amazing experience there because then we know that they are really sticking with us, and they like us to -- they want to staying with us.Good. There is a next questions. Question 12, [ Philip Valiant ]. Oscar noted that sometimes it's necessary to reach out the customer off-line. How is this implemented operational? Are there a dedicated conduct for the customer? Or does this happen via call center? How many people are employed to provide this type of the support?That's a good question. And maybe, Oscar, you can help me answer that one. I first answer as like a Multitude level here. So in a Multitude level, we have tried to everything doing as much automatization we can. And we metric this as like automatization [ ration ] that on the way that how many customers -- or when they have something needed, they want to check the next due date. They want to change the due date. They want to pay back little bit more or they want to pay back little bit less or the -- every change related that one, we have opinion like the sales service center, where the customer can dig it out [ face. ] They can go and do the all change related the customer relationship.And this activity during the last 2 years have reduced the significant our connection with our customer service, on the consumer board. And the SME part, we have not going there yet. But we are currently moving there step by step. And in the group level, we have a total headcount on the customer service people. We talk about around 100 people. When the pre COVID period, we was almost 150 to 180 people. So we talk about a quite significant improvement during the COVID time there. But, Oscar, related to CapitalBox, do you want to comment that?
Yes, yes, absolutely. I think that -- I mean, I'm also in the belief that we should do as much digital as possible for onboarding of the customers. And our customers are different. Some people -- some customers want them full automated journey, and some customers needs to be held in the hand. Also note that SME customers, there are more demands depending on the volumes, of course, ask of the documentation. But I would say, for this, in CapitalBox, we have total 10 loan officers or salespeople and for all the 5 countries. That's it.
Good. Thanks, Oscar.
Also -- yes. We have one more question, Jorma. #13, maybe I can answer that.
Go ahead.
Yes. So the #13 was from [indiscernible]. When you're talking about new products, are they all new lending products or all something else to come?I would say, in the coming years, there are lending products and payment products. Short answer. Yes.
Good. Thanks, Oscar.
Thank you.
Question 16, [ Philip Valiant ]. In which tribe did they release the macroeconomic referred of EUR 1.4 million? Bernd?
Basically, [ off rate ] biggest impact on Ferratum, as also the reserve -- that EUR 7.8 million reserve, the biggest impact on Ferratum. Number two, CapitalBox. Number three, Sweep.
Good. Thanks. Question 17, [indiscernible]. Considering SweepBank, are there other revenue drivers beside interest of AR? Could you specific which has the potential revenue source are, if any? And how big the share of other revenue is instead of the strategically?Yes, we are definitely looking for the -- we call the non-risk-based revenue as well. This is coming to play in the bigger role in the SweepBank on the future. We are currently positioned that we billing those elements. So I don't have a lots of -- to very give you the detailed answers there. But the strategic point of view, they play in the peak and important role for SweepBank on the future as well. And I hope that the next year, I can speak more detail and more precise that one for you and start to share with the financial tracking there as well.Good. Next question, Oliver [indiscernible]. Pardon me. And my question was answered during the call. I was -- could you please comments your plans for outstanding '22, '23 point?I think we already cover that question. I think, Bernd, it's the [indiscernible]
Yes. It is in one sentence. Maybe Oliver, translate. Yes, there is the intention to refinance those instruments. We -- in the next couple of weeks, we'll define whether we are aiming at replacing both instruments in spring 2022 or focus on 2022 instrument. First, I would like to reiterate that the overall funding strategy is to maintain a balanced solid funding mix, but to overweight deposit funding. So from that perspective, we are not aiming at huge capital market transactions.
Right. Then is the next question, Frederik Jarchow. Could you please explain the bit incentive scheme for the employees?That's great. I really like that one. So we have like -- very shortly, we have 2 different programs. First program is a matching share program. What we call that, it's all the Multitude people have opportunity by the Multitude shares. And after the 2 years period, we're matching this 1:1. So it's a very simple program. It's approximately all people -- it can participation there who work in the Multitude, and we're matching those after the 2 years period 1:1. This is what we -- but there's a limited amount how much people can bought those shares. So it's not naturally as much they want. It's -- there is a limit that in the -- each percent of the yearly salary.Acquisitions can happen 2x per year, only like a -- during the previous period time. The previous period was in this autumn to Q3 actually. And demand was really nice there. So there was -- we see the lots of people on the Multitude team who was participation of this program. The second program, what we have, it's more like selected key peoples there, where we have like a performance share program, where people have like a pre-agreed amount of the shares, what they can gain there over the next 3 years, after the next year period. And it's a main driver is our share price. So depends -- our [indiscernible] own driver is our share price. So it's how well we bring the value increase for shareholders. That's the benefit for the key people as well. So those are the 2 programs what we have it, it's on currently. Both are launched on during this year.The second question from Frederik is coming that, can you please comment on current customer acquisition cost and customer lifetime value of the SweepBank?I recommend that we're doing this more deeply on the future our earning calls. Due to the reason that we are quite sensitive situation for the competitor point of view. And we are not very keen to share the very precise data on that today before we are the -- before we have decide the internal, what type of the data we start to share. But we will come back that one because we will share the data. Yes, we will start to share the data then.Then the next question, question #21 is Peter [indiscernible]. The impairment in CapitalBox was quite low. Was there any one-off or is that sustainable at this level? Bernd, do you want to comment that one?
Yes. I think the EUR 0.9 million, that is the Q3 impairment in CapitalBox. After 9 months, the CapitalBox impairment level is roughly EUR 4.5 million. So yes, there is -- there are 2 aspects. First, the performance is good risk. Performance is good, but there is also a couple of 100,000 impact in CapitalBox in Q3. That means it is not fair to assume that less than EUR 1 million on a quarterly basis is a sustainable impairment level, even more so as the intention is to go back to growth and then to only the front-loaded credit loss impairment for the expected loss for the first 12 months that needs to be built initially will not make it possible to stay on that level. So for that, I would rather take the average of the first 2 quarters and take into consideration future growth as something that can be assumed to future levels provided performance remains on the same level.
Good. Good. Thanks. And then we have a next question, [ Jan Engelmann ]. When are you planning to launch the SweepBank in German? And more important, how you are planning to fund the market entry? Especially I'm concerned that your competitor are growing really fast and late market entry might be more expensive.Well, that's a great question. I really liked that question. It's a reason why I liked that one because I can talk about little bit how SweepBank's strategy and our -- how we see at the landscape with competitors there. The first one, we will launch in soon in the German. We did not have a [ public ] external the -- exactly month or the day. But this is our road map, and we will -- team is currently working that one, and that we will launch it that soon. What is coming to landscape of competitors and how we see that one, that if you really looked our SweepBank, we try to solve the problem for the consumers who want to do in the online shopping and that they want to do in this as smoothly and easy they can. And they have lots of paying points there related to financial point of view or the funding point of view or the payment method point of view. And those are like elements where we try to focus in the unsegment in the SweepBank.Of course, we have a traditional mobile banking users behind there as well. But that's something what we -- what is more like additional rather than main focus behind there. If you look at the peer group behind there, there is like 2 different -- there's 2 different way. There is a companies like we try to work in -- like a partner who try to work in on the softer problem with the e-shops to make the customer experience as smoothly they can. But we see this situation little bit different because we see that we can work in directly with the consumers and help the customers directly related whatever the shops they are there. So it's a more close like, "I now pay later" type of the offering where we are rather than traditional mobile banking, what is the [ level or income ] fix are present in the market.The additional important point is there that we focus the customers with the high customer lifetime value. So we -- our metrics is not how many customers we have it there. We don't want to come to outside and said, "Oh, okay, we have lots of users behind there." This is nice, but that's not our focus. Our focus is billing the profitably the customer base behind there. And that's the way how we refunded our entry in the German market. That's why. And I can talk about 1 hour that one. That's one of my favorite topics there. It's -- but yes, that's the way how we look.Question 23, the next, Peter [indiscernible]. What coupon spread will you expect a new bond?
Yes. Great question. I mean, it's difficult to give a precise number. But when we briefly of what actually defines the pricing then in that capital market instruments, this has a lot to do with stability and predictability. And in terms of stability, I think that over the last 2 years -- and I'm obviously, as also read between the lines and on the lines, it would be great if we had higher growth rates already. But from a stability perspective, I think we are in a very good shape. We have demonstrated that we are able to reduce our cost base significantly, credit [ line ] organization, maintain cost levels low. We have reduced the credit loss impairments drastically over the last 2 years.We have improved the balance sheet structure quite significantly. So we had an all-time high when it comes to equity. We are at an all-time low when it comes to net debt-to-equity ratio. We have made progress when it comes to diversification of revenue streams with the new structure. And again, I mean, this is -- it's still early stage, and there is a lot to do also with SweepBank, for instance, but it's 150% revenue increase within 1 year. So I think it also this diversification of revenue streams is important. And I think also a lot of dependency on capital markets. And all those factors should help us to achieve an attractive coupon level.
Good. I think we see that the time is flying. It's almost 15 past 11:00, so CET. So I think it's time to ending our Q&A session. There is a lots of question left, but we have to come back those later, maybe one to one. And those people whose question we did not have opportunity answer today here, can we do another way that -- can you send this our IR e-mail? And we will take care of those question. We definitely want to answer the -- all your questions. But now I think the time is ending up for us.And good. I think it's -- please send your question through the Q&A -- through the IR e-mail on the -- and then, we will take care to answer those. Hannes Merlecker and Bernd, they will be take care of to answer those question. And if there is something related for me, I can take those always as well or to direct it to Oscar or the [ Nontokozo ]. I'm sure that the e-mail is public as well. So if you have any question related to our ESG, you can always contact [ Nontokozo ] as well. Good. Thanks, everybody, your time, and thanks to your participation our 9-months earning call. We -- I think behalf of our team, it's really, really happy that you join here, and then we are very proud of our team and what they have achieved during the first 9-months. Thanks, everybody. Stay safe, and let's keep in touch.
Thank you, everyone, for joining the call. This concludes our call for today. Thank you, and goodbye.