NEO Finance : interim financial information for H1 2023

NEO Finance, AB

Interim financial information for 2023 H1

Vilnius 2023-07-31

NEO Finance, AB Interim financial information for 2023 H1

NEO Finance, AB Confirmation of the responsible persons at the Company

We hereby confirm that, to the best of our knowledge, that NEO Finance, AB Interim financial information for 2023 H1 is a true and fair representation of the quarterly performance.

NEO Finance, AB	NEO Finance, AB
Head of Administration	Chief Financial Officer
Evaldas Remeikis	Tomas Savickas
31 July 2023
Vilnius

NEO Finance group

2

NEO Finance, AB Interim financial information for 2023 H1

Contents

NEO Finance, AB manager's comment	4
NEO Finance, AB company structure	7
Q2 2023 developments at NEO Finance, AB	9
Main NEO Finance, AB 2023 H1 financial indicators	10
Main NEO Finance, AB 2023 Q2 financial indicators	12
Financial reporting on the principle of business management	14
Capital of NEO Finance, AB	15
P2P lending platform Paskolų Klubas	17
NEO Finance, AB's investments	28
Institutional investor	30
Neopay	32
FinoMark	35
NEO Finance, AB financial statements	39

3	NEO Finance group

NEO Finance, AB Interim financial information for 2023 H1

NEO Finance, AB manager's comment

The company's revenues in Q2 2023, compared to Q2 2022, surged by an impressive 45%, reaching EUR 1,094 thousand.

In the second quarter of 2023, NEO Finance, AB, experienced continued growth across all business segments, similar to the first quarter. The company's revenues in Q2 2023, compared to Q2 2022, surged by an impressive 45%, reaching EUR 1,094 thousand. The significant boost in revenues can be attributed to a substantial increase of 47% in

income from peer-to-peer lending activities. Additionally, with the rise in demand for consumer loans and active investments in consumer loans to ensure speedy loan financing, investment-related income skyrocketed by an outstanding 124%, reaching EUR 53.9 thousand. Furthermore, payment-related revenues saw a commendable growth of 27% during the comparative period.

The administered loan portfolio in the peer-to-peer lending business reached EUR 62.6 million by the end of the second quarter, marking a considerable increase of EUR 4.9 million from EUR 57.7 million at the

beginning of the quarter. Operating expenses also experienced a moderate rise of 3.9%, from EUR 444 thousand in Q2 2022 to EUR 461 thousand in the second quarter of this year. The company's EBITDA for Q2 2023 impressively surged by 281%, reaching EUR 200 thousand, whereas it was merely EUR 52.5 thousand in Q2 2022. Moreover, NEO Finance continues to successfully enhance its pre-tax profit line, achieving a pre-tax profit of EUR 99.9 thousand in Q2 2023, as opposed to a loss of EUR

19.4 thousand in the same quarter of 2022.

NEO Finance group

4

NEO Finance, AB Interim financial information for 2023 H1

It is worth noting that NEO Finance	recession continues, we can expect	of the first half. This amount is not
has not only improved the operational	the demand for consumer loans to	reflected in the Company's balance
scale of all business segments	keep increasing. It is important to	sheet.
but has also managed to increase	emphasize that the loan delinquency	All these facts indicate that we are
revenues and profitability, despite	rate at the end of the second quarter
heading in the right direction and
the constant tightening of regulatory	was only 8.44%, compared to 8.59%
successfully advancing our business.
requirements for Fintech companies.	at the end of the first quarter. This
We are hopeful that in the future, we
The company remains committed to	indicates that the "Paskolų klubas"
will achieve even more successful
elevating investments in compliance,	team effectively manages risk. During
results and strengthen our position in
risk management, internal control,	Q2, we continued to focus significantly
the market.
information security, and anti-money	on improving customer experience
Neopay
laundering and terrorist financing	and refining internal processes
prevention. During Q2, NEO Finance	to ensure a smooth and efficient	NEOPAY's second quarter of this year
significantly enhanced the processes	investment and loan application
proved to be quite successful, as the
related to international sanctions	procedure.
transaction volume increased by 36%
implementation and improved
The first-half results reflect excellent	compared to the same quarter in
the necessary technical measures
growth and successful operational	2022. We took another step forward
to ensure compliance with these
performance. The total amount of	in the Polish market by successfully
requirements.
loans co-financed on the "Paskolų	adding a new product - BLIK - to our
As the business volumes continue	Klubas" platform during this period	portfolio. This payment settlement
to grow and in order to tackle the	exceeded EUR 20.8 million, which is	product already holds over 70% of the
challenges arising from increased	19% more compared to the same	market share. With the introduction of
regulation, NEO Finance is further	period last year when the total co-	this product into our existing offering,
expanding its workforce, with an	financed loans reached EUR 17.6	we expect faster expansion and
approximately 10% increase in staff	million. The "Paskolų Klubas" team	consolidation in the Polish market.
during the quarter and over 20%	remains actively engaged in creative	Furthermore, this quarter marked
increase year-on-year. At the end of	efforts to attract loan seekers, and
the emergence of the first customers
Q2, the company had 42 employees,	with favorable market conditions, we
who integrated the "Neopay 3" ("Buy
whereas on the reporting date, the	continue to increase our market share
now - pay later") service into their
number reached 44.	in the consumer lending segment and
online stores. The Baltic countries and
	successfully compete with established
Furthermore, in line with its strategic	Poland remain our largest markets in
peers.
goal to expand and strengthen	terms of transaction volume. We are
market positions in different business	During this half-year, intermediary	delighted to see our foothold in the
directions, NEO Finance successfully	and other platform-related revenues	Polish market growing stronger.
issued the first tranche of non-public	reached EUR 1.406 million, marking a	FinoMark
bonds with a maturity of 2 years on	remarkable growth of 40% compared
The crowdfunding platform
June 27. The value of the issued bonds	to the same period last year. We are
in the first tranche amounted to EUR	particularly pleased with the second	"FinoMark" acted as an intermediary
640 thousand.	quarter of this year, as we achieved	for issuing business loans amounting
Paskolų klubas	several records. Firstly, we listed more	to EUR 930 thousand in Q2 of 2023,
than EUR 354,900 worth of credits	compared to EUR 416 thousand of
Despite the rising EURIBOR interest	on the primary market in a single day	business loans financed in the same
rate index, which influences increasing	- historically the highest number of	quarter of 2022. The company's
interest rates on the "Paskolų Klubas"	consumer loan applications. In June,	revenues for the first half of 2023
platform, we observe that the	the platform co-financed a record-	reached EUR 163 thousand, whereas
demand for loans is not diminishing	breaking amount of loans - over	they amounted to EUR 68 thousand in
but rather growing. The second	EUR 4.2 million. Additionally, in June,	the first half of 2022. As "FinoMark" is
quarter saw a surge in consumer	we paid a record amount of interest	still in the early stages of its operation,
loan demand, leading us to assume	to investors, surpassing EUR 600	it has not yet generated positive
that a challenging economic situation	thousand.	pre-tax profit for the first half of
has affected a larger portion of	Accrued future intermediary fees	2023, which amounted to EUR -68.3
Lithuanian residents. As the economic	thousand.
reached EUR 9.708 million at the end
5		NEO Finance group