Fitch improves ID Finance Spain’s outlook to stable

ID Finance reports that the company’s revenue globally was €43.4M in Q1 2022, 60% more than during the same period of 2021. ID Finance further shares that its business in Mexico signed a new funding agreement totalling €1.9M with US platform Percent and aiming to increase the facility further in the coming weeks. The company has provided the following operational and financial information:

Fitch Rating confirmed

Fitch Rating has improved ID Finance Spain’s outlook from negative to stable after the company closed Q1 with solid results. In addition, Fitch has affirmed the rating of the company’s non-guaranteed long-term debt (ID Finance Spain SAU 9,5% 20/23 Bond) listed on Frankfurt, at ‘B-‘ with a Recovery Rating of ‘RR4’.

The improvement of ID Finance’s outlook reflects the consistency of the company’s operating margins in Spain, its lean cost structure, a short-dated loan portfolio, moderate market risk and an experienced management team, as the rating agency states in its latest report.

Positive results in Q1

ID Finance has closed the first quarter with a 60% year-over-year increase of its global revenue, up to €43.3M, after registering its best yearly results ever in 2021. YoY credit issuance grew by 70% up to €91.8M, due to a stable credit demand both in Spain and Mexico.

In Spain, ID Finance’s performance has been particularly positive during the first three months of the year. Revenue in this market grew 59% YoY up to €28.6M, whereas net profit increased 62%, from €1.8M in Q1 of 2020 to €2.9M. Overall, in 2021, the Spanish business hit a record result after increasing its profit fourfold to €10M. In this regard, the result of Q1 shows that the steady growth trend continues.

Besides, with an equity to assets ratio of 19%, IDF Spain keeps a strong and healthy equity position that significantly exceeds the industry’s average level of around 15%.

2021 key achievements

In June 2021, ID Finance successfully launched neobank Plazo in Spain in a record time. Since then, the use of Plazo’s finance solutions has been growing consistently. Up to date, Plazo has already issued 100 000 free Mastercard debit cards.

Overall, 2021 closed as the best result in ID Finance’s history. Global revenue increased 37%, up to €142M, reinforcing the company’s position as one of the few profitable fintechs in Spain and Mexico. The strong growth of the business has come with a significant increase in qualified talent, one of the key pillars of ID Finance since its inception. The team already exceeds 600 employees. As a result, the company has expanded its office spaces both in Mexico and Spain.

In addition, at the beginning of 2022, ID Finance was included in the FT 1000 ranking for the fifth year in a row as one of the 13 fastest growing fintechs in Europe, and the only Spanish company in this sector.

“The improvement of Fitch’s outlook reinforces the solvency and consistency of our business model, which continues showing strength. At ID Finance, the sustainability of the business has always been one of our priorities. Being a profitable company, we can keep fueling growth and keep developing our neobank Plazo.”

Boris Batin, co-founder and CEO of ID Finance

About ID Finance

ID Finance is a financial technology company based in Spain with operations in this country and Mexico. Its main offering is focused on providing retail banking and finance solutions. The company is the fastest growing Fintech in Spain, according to the FT 1000 ranking, and it is also the first carbon-neutral financial technology firm in the region. The company is consistently profitable, and since its inception in 2015 has processed around 9 million credit applications. In 2021 ID Finance launched Plazo, the first Spanish credit-led challenger bank, which is currently offering a free Mastercard debit card with one of the most attractive cashbacks in the country. ID Finance is working to expand its services to a wide range of purchase and credit solutions that will soon be available, such as fractional payments, BNPL and salary advances, among others.

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