Adalan Ventures Regulatory News (ZAIM)

For Immediate Release

22 June 2022

Zaim Credit Systems Plc

("Zaim" or the "Group")

First quarter 2022 trading update

Zaim Credit Systems plc (the 'Group' or 'Zaim'), the fintech group, announces a trading update from its wholly owned subsidiary, Zaim-Express LLC, ('Zaim Express') in respect of the first quarter of the financial year ended 31 December 2022.

First Quarter 2022 Highlights[1]:

· Strong quarterly performance with continued growth of the key business metrics both quarter-on-quarter and year-on-year.

· Loans issued grew by 5% quarter-on-quarter and 61% year-on-year basis to £8.2m. On a constant currency basis, Loans issued increased by 24% quarter-on-quarter and 81% year-on-year

· Loans issued online reached £6.9m growing by 6% quarter-on-quarter and 60% year-on-year, which corresponded with 25% and 80% growth on constant currency basis respectively

· Loans issued via mobile application launched in Q2 2021 increased by 28% quarter-on-quarter to £0.9m in Q1 2022 or by 49% on constant currency basis (no year-on-year comparison)

· Significant foreign exchange fluctuations between the functional currency and the reporting currency were observed during Q1, these moves reversed during Q2. Constant currency comparisons are presented to assist the presentation

· Online and mobile segments continuing to be the key engines for growth representing 84% and 10% of loans issued respectively

Siro Cicconi, Zaim's CEO commented:

"Despite the economic volatility the business performance of the Group remained strong, demonstrating the seventh consecutive quarter of growth.

As our operating currency is the Russian rouble and reporting currency is the British pound, the fluctuation of exchange rate of these currencies affects our reported performance.

Even with this negative influence of the forex rates our business continued to grow both on quarter-on-quarter (5% in GBP terms and 24% on constant currency basis) and year-on-year (61% in GBP terms and 81% on constant currency basis). We are significantly overperforming a very fast-growing market: the Russian microfinance market grew by 37% year-on-year[2] on constant currency basis (22% in GBP terms). In Q2 2022 we saw the reversal of the forex trend with Russian rouble significantly strengthening vs. British pound, which will positively influence our reported numbers in the second quarter of 2022.

In Q2 2021 we launched our branded mobile application that became an important sales channel and significant growth driver of our business. In Q1 2022 the mobile application was responsible for over 10% of loans issued, which now represents a significantly larger proportion than our physical store business"

First quarter 2022 trading update 5

The table below presents the two main KPI's (loans issued and default rate) for the last five quarters:

In order to eliminate the effect of GBP/RUB fluctuations on the financial results of Zaim Express, below is the table of loans issued on constant currency basis. For the purpose of this calculation average GBP/RUB exchange rate for Q1 2021 (102.5048) is used.

Zaim Express continued to see growth in loans issued by 5% QoQ (24% on constant currency basis), driven by expansion of the online and mobile platforms and funded from its existing cash resources. Group policy remains to operate the Company and Zaim Express as two self-funded entities.

The weighted average default rate decreased slightly to 21.9% in Q4 as a result of more conservative approach to the credit scoring in line with the management expectations.

Notes: 

1 All figures presented throughout this announcement represent unaudited management information taken from the internally generated management accounts of Zaim-Express LLC

2 According to the Central Bank of Russia's latest available data, growth of the in the loans issued in Q1 2022 was 37% compared to Q1 2021

 3 Default rate is defined as no payment received after 120 days of the origination of the loan

4 Data is not yet available for the quarter ended 31 March 2022 as the earliest time to determine default rates is 120 days after the end of the period

5 Starting from our Q1 2022 trading update we are introducing the new reporting segment - "Loans issued via mobile application". Starting from Q2 2021 loans issued via mobile application were accounted within "Loans Issued Online" category. In the table below loans issued via mobile application for Q2 2021 to Q4 2021 are deducted from the previously reported loans issued online, which explains the difference in the numbers of loans issued online compared with previously reported for the respective periods

*Ends*

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The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR").