Merger before payday - Newspaper Kommersant No. 219 (7420) dated 11/25/2022

Merger before payday - Newspaper Kommersant No. 219 (7420) dated 11/25/2022

IFC "Financial Support Center" (FSC) has completed the acquisition of the company "Loan Online", following which the group will strengthen its position in the top three largest. The deal will enable the FTC to enter the short payday loan market with a ready-made customer base and technology. In a crisis, the MFO segment traditionally shows high profitability, which contributes to the growth of interest in this business. However, not all large companies consider M&A transactions as a possible option for growth.

IFC CFP in the second half of November completed the purchase of the company "Loan Online". Kommersant was told about this at the CFP. The loan portfolio of the combined companies will amount to 10 billion rubles, estimates Andrey Moskalenko, the company's risk director. For comparison: the largest MFI in the market, Seimer, had a loan portfolio of 16.2 billion rubles in the first half of the year.

According to Expert RA, the CFP loan portfolio as of July 1, 2022 amounted to 7.7 billion rubles. Almost 100% of the portfolio accounted for medium-term loans. Loan Online portfolio — 1.9 billion rubles. 56% of the portfolio were medium-term loans. The net profit of CFP for the reporting period amounted to 249 million rubles. "Loan Online" - 58 million rubles. Own capital - 804 million rubles. and 149 million rubles. respectively.

The merged companies will continue to work under their own brands and retain their specialization: CFP - on medium-term loans (instollement), "Loan Online" - on short-term payday loans (PDL). This will allow diversifying product risks, Mr. Moskalenko is sure. At the same time, he emphasizes that CFP is interested in buying other assets on the market. “Purchasing a profitable company and acquiring its client base can strengthen the position of the TFV. In addition, Loan Online has a slightly different specialization, which will allow the buyer to successfully master other niches of the microfinance market using already tested technologies,” Ivan Uklein, director of banking ratings at Expert RA agency, assesses the effect of the transaction.

The company did not name the amount of the transaction, experts found it difficult to give an estimate. Ivan Uklein only emphasized that “the microfinance segment of the financial market is one of the few where the sale of companies is still taking place with a multiplier. But such transactions are targeted, and the conditions are always individual, sometimes non-monetary.”

The crisis of 2022, like the pandemic of 2020, which led to an increase in the population's need for borrowed funds along with a significant tightening of bank scoring, made MFOs the beneficiaries of the situation and allowed the segment to maintain high profitability, experts say. According to Dmitry Afrikanov, CEO of Unicom, 15% of companies allow M&A deals to be carried out as part of their business. And only 25% are not ready to consider growth options through mergers or acquisitions. “The top 20 MFIs account for 55-60% of the market, and the process of consolidation is likely to continue. Large players will absorb small regional ones: for the latter, this is a way not to lose business, for the former, to enter a region where they are poorly represented, ”explains the expert.

However, market participants are in no hurry to claim that this transaction opens a period of active mergers and acquisitions. This is the strategy of a particular company - growth through M&A deals, says one of Kommersant's interlocutors. “It is not always that a larger company will gain additional competence if it buys a smaller one. Market leaders can increase their competencies without buying and selling,” he is sure. “For mergers and acquisitions, the interests of sellers and buyers must coincide, so only deals with niche synergies are possible. The largest players are cheaper and easier to increase their competitive positions organically, and the owners of small MFIs cannot afford the purchase of a large company,” says Mr. Uklein.

Polina Trifonova, Olga Sherunkova

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