June 2, 2025

Tarmo Sild
CEO of Iute Group

Iute Group is oriented towards top performance and profit. Our DNA is entrepreneurial and customer-centric, intertwined with a systematic approach and the ability to learn from mistakes and adapt to changing environments.

“We are confident that the 2025 balance sheet target of 510 million EUR, the annual revenue target of 130 million EUR, and the consolidated net profit target of 13 million EUR will be achieved in spite of dynamic global environments. The growth of the active customer pool target, however, remains the most challenging. While we are seeing growing traction from wallet and insurance services in some markets, we also face increasing competition from traditional banks aiming to retain already acquired and committed customers.

In Q1 2025, all key performance indicators continued to rise – except for the number of active customers. Existing customers are using more of our financial services – loans, wallets, and insurance intermediation – and are also paying more for these services. Revenue grew faster than operating expenses, credit quality improved, and overall net profit increased year-over-year. We created more value for both our customers and investors. On the downside, we did not manage to grow the number of active customers at Group level. This reflects growing competitive pressure and demographic decline, requiring more effort to win over customer segments that are less tech-savvy or already loyal to traditional banks. As an organization, we are still learning how to create the ultimate customer experience, which is the driving force behind our growth.

Although Q1 is typically the weakest quarter of the year, total assets increased by 3,6% to 430 million EUR. Year-over-year, Iute Group’s revenue grew by 6,5% to 28,8 million EUR, while operating expenses rose by 5,4% to 11,0 million EUR.

The revenue structure is also becoming more diversified. In Q1 2025, 89,9% of total revenue came from loans, while wallet services contributed 4,5%, insurance intermediation 3,7%, and investments in fixed-income securities 1,9%. We remain committed to our long-term goal of generating 20% of total revenue from wallet and insurance services.

Profitability remains under pressure due to declining APRs and volatile capital markets. All Group loans issued in Q1 2025 carried a weighted average APR of 36,6%, down from 37,3% for full-year 2024. Nevertheless, we are confident that the positive effects of our measures to improve operational efficiency and credit quality outweigh the decline in loan yields.

Operational efficiency improved as we continue to benefit from past initiatives and pursue ongoing incremental gains. The cost-to-income ratio improved to 38,3%, compared to 39,6% in the previous year. Economies of scale and digitalization are becoming increasingly evident. Notably, Iute Group reduced its headcount to 900 as more customers shift to digital channels. The MyIute app has been downloaded over 1,3 million times. The number of Iute partners and agents rose to more than 4.200. Meanwhile, the branch network was reduced from 43 at the end of 2024 to 38. We have also implemented our first AI-driven operational function in the area of customer interactions quality assurance, which has already begun to reduce costs and improve our understanding of customer experience.

Profitability further benefited from improved credit risk management. Loan impairment charges declined by 3,8% year-over-year. This is also reflected in an improved CPI for non-bank loans, which increased to 87,9% from 86,8% in FY 2024.

Foreign exchange gains and losses were close to zero, whereas a solidarity tax of 1,3 million EUR was incurred in North Macedonia. As a result, Q1 2025 net profit reached 3,4 million EUR, aligning well with the annual target and representing a significant improvement compared to 2,2 million EUR in Q1 2024.

Looking ahead, we are increasingly prioritizing the evolution of value proposition for customers. Our goal is to deliver fully digital, personalized banking services via the MyIute SuperApp, aspiring to reach over one million active customers by the end of 2027,” said Tarmo Sild, CEO of Iute Group.

The full unaudited report for 3M/2025 is available under www.iute.com/investor/reports-and-presentations.