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#TrustBuddy: No surprises in Q3 2014 report, $LC

TrustBuddyLogoThe world’s only listed P2P lending provider TrustBuddy just released its Q3 2014 report. The company had already given a trading update in connection with the two milestone acquisitions it announced last week.

Net revenues amounted to SEK 30.3m which marked a year-over-year increase of 43%. EBIT came in at a negative SEK 6.2m. For the first nine months of 2014, net revenues were up 42% compared with the same period one year ago and amounted to SEK 86.7m. The total amount of loans during the first nine months of 2014 was 185,640, up 53.1% y-o-y.

TBDY Q32014Says CEO Jens Glaso: “TrustBuddy reports strong growth…, and I can also state that loans granted increased by as much as 47% to SEK 196m, compared to the same period last year. The increase is very gratifying as this is performed while we have implemented our new platform which, according to plan, called for extra caution by implementing a less active marketing during Q3.…During Q3 we have among others introduced a more sophisticated scoring process on the platform that now is contributing towards improved and risk-adjusted returns for our lenders. The new scoring process is a valuable addition as we are now seeing an increasing share of institutional lenders and capital on the platform. I am proud that during the period have had the opportunity to make public a framework agreement with a large institutional investors that provide the platform with sought after capital. This injection strengthens our ability to continue to create an accelerating growth in the P2P segment.
The successful implementation of our new platform has inspired us to continue our expansion and I am pleased to announce that the company recently acquired two companies. With the conditional agreement to acquire Geldvoorelkaar in Holland and Prestiamoci in Italy, which was announced in November, we hope to not only gain access to two new markets, but also to gain expertise in two new segments, P2P loans for SME business and consumer loans with long duration. With the expanded product offering TrustBuddy has become the world’s most diversified P2P actor.
The successful implementation has been made possible by our highly
skilled and dedicated employees who will soon exceed 70 people in total. The key employees who were contracted in the second quarter are now established and contribute fully. They have in an active and positive way elevated the company´s know-how and experience. Among the key employees we have among others a new CTO and also new country managers in Denmark, Spain and in Holland.
In order to proactively meet the growing number of borrowers and TrustBuddys on-going geographic expansion, our support department has received additional staff. Through this, and through the introduction of new channels of communication, we can fulfill our mission to always satisfy our customers’ needs for support, service and assistance.
As a result of the FSA’s rejection of our license application in July, we have initiated a merger plan. The merger is a step towards simplifying the company structure and thereby improve transparency. These plans have progressed during this fall and has just recently been approved by the shareholders at the Extraordinary General Meeting held on 17 November. Operations in Denmark continues after positive dialogue with the Danish FSA.
Finally, I would like to welcome the new board, elected at the EGM, and I
look forward to working together toward our common goals.

In its outlook for 2014, the company writes as follows:

“TrustBuddy are market leaders in P2P, Peer-to-Peer, short-term lending
in Europe. Early in 2013 the company was launched in Spain, Poland
and Estonia, and in the third quarter, also in Germany, the Netherlands,
the UK and the U.S. was included thus initially for lenders only.
TrustBuddy’s savings product is now available in a total of 11 different
countries. In 2013 TrustBuddy has further strengthened its leading position
and continue to successfully take shares in all active markets.

The company estimates that the market for P2P lending will continue
growing strongly in 2014. It is expected that the American player, LendingClub,
will conduct an IPO in 2014. The introduction will help create
greater global interest and focus on the P2P industry, both from borrowers
and from new lenders who want a more attractive alternative to
conventional bank interest.
We expect an increased focus from major global investors wanting to
take ownership stakes in the P2P industry during 2014. Our assessment
is that the increased interest benefits the industry as a whole as it provides
liquidity and prospects for continued growth for both TrustBuddy and
other major global P2P players.
TrustBuddy intend to continue its expansion into new markets during
2014. During the remaining quarter of 2014, the company’s focus will
be on enhancing the product offering, operations and profitability for our
customers and for TrustBuddy as a company. The clear trend of increasing
volumes as we have seen in the previous year will continue in 2014,
resulting in a significant increase in lending volume.”

Overall, the Q3 2014 report does not offer any major surprises. The company continues to grow strongly and, more importantly, has been taking important steps in recent weeks and months in order to enable further geographic and product expansion. Furthermore, by changing the company structure and its leadership, TrustBuddy has been taking important steps when it comes to regulatory requirements. Insiders are confident in their strategy and have been buying aggressively ever since early summer. We believe the upcoming IPO of US P2P lender Lending Club will put more investor focus on the sector and lead to a multiple expansion for TrustBuddy.

Nordic Investor

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