Eleving Group S.A. (OT8) Earnings Call Transcript & Summary

Good afternoon. Welcome to Eleven Group's earnings call. We will start with the company's presentation followed by a live Q&A session. [Operator Instructions] Now I'm turning the call over to our host, Eleven Group's CEO, Modestas Sudnius and CFO, Maris Kreics, please.

Thank you very much, and good day for everyone on the call. So it's our pleasure today present LVGroup's results for the first 6 months of 2026. Before joining -- before turning into presentation, a few remarks, what you expect today? So firstly, we'll deep dive in all the latest changes of the newest products launched new market added Also, we'll deep dive in how our portfolio composition is changing. And test we are quite excited for the results what we have achieved in the first 6 months because you will definitely see that -- it has been a growth period for the company. And yes, apart from that, we will also tell like what to expect in upcoming 6 months. So now we can start. Let's start with Slide #6. Number four, sorry, group performance. Let's start with 2 graphs on the left, net portfolio development and revenue development -- so if we look at the net portfolio development first 6 months of 2025 versus last 6 months of 2026. We see that we've actually grown rather significantly, most what we've done in past 3, 4 years. So we've added close to EUR 150 million portfolio, which is first .1 billion growth from EUR 375 million to EUR 522 million. So we finally reached this milestone of having more than EUR 0.5 billion of net loan portfolio. And looking for the groups where this growth came. So first of all, like this green part, which we actually starting this quarter slightly merged because before we had the 2 separate categories, vehicle and then flexible financing, but now we see that kind of more correct to report it as 1 category. So vehicle financing products were basically 2 main categories: car financing, then the motorcycle financing -- so this category grows significantly to EUR 270 million of net loan portfolio than consumer financing mainly from the new launch products grew to EUR 225 million. And we gradually keep growing like this newly established category of device financing, which is smartphone financing in 3 of our African markets. So mid this year, portfolio stands at EUR 25.6 million. So again, very well diversified in between the product categories. If we look below at revenue development, so similar review, was good that actually revenue grew at pretty much same rate, 40%. That means that with this growth, we're not losing kind of the revenue like with the revenue growth, we're not losing profitability side with portfolio growth, we're not losing this profitability side. That means we're able to generate same returns from portfolio. Of course, mix is very diverse from shorter-term products higher pricing to unsecured products, also having higher pricing to lower pricing in the vehicle financing segment. But all along the revenue grew to EUR 165 million for the first 6 months of this year. And lastly, talking about net profit. So here in the first 6 months, we have earned EUR 16.5 million, which represents 8.6% growth year-on-year. Of course, lower number compared to the revenue and portfolio growth and main reasons will still dig deeper in the upcoming slides. But obviously, we've accelerated growth of certain impairment charges, there are kind of more front loaded, also we've been investing a little bit more in this FX hedging. But because of that, we have very stable results and limited fluctuations. And lastly, obviously, some products which were recently launched, we still need to do certain collaboration effects. But all in all, we do expect that we still have quite a significant growth cushion here in terms of net profitability, and we do expect that kind of growth rate here will start catching up of the portfolio revenue growth. With this, we can move to Slide #5. Business segment development. So here again, to explain a little bit more in details this shift into installment loans in some markets are actually not ship, but adding as additional products. So as we've been communicating in previous quarters, already in 5 of our European markets, Baltics, Romania and Armenia, we have launched and then kind of started scaling these installment loan products at different times. But we see that depending on the market in some markets, both products grow and installment loans are just added on top. In some markets, we probably reach kind of plateau when it comes to vehicle financing and then this consumer financing goes on top, but the overall trend is definitely there's still quite a lot of potential in this consumer financing both for existing customers and already over the last 6 months, we've unlocked the opportunity also for new customers to be onboarded on this product. When it comes to device financing, so key markets here remain the same. Kenya and Uganda, where biggest growth comes from mobile phone finance in Kenya, like in Uganda, we're actually quite flat because also, we need to take into account that this is a shorter-term product and to scale the portfolio in a significant terms, you need like quite high insurances. But on top of that, we also have Tanzania launched. So in combination, as mentioned before, we already have EUR 25 million in smartphone financing. And as a result of that, like if we look at kind of the split secured and secure like vehicle on device financing versus consumer financing. So we have 57% in vehicle financing and vehicle and device financing and 4% to 3% of net loan portfolio in consumer financing. Going forward to next slide. So some of the growth highlights obviously, to maintain such portfolio growth. We need to grow sales in a significant way, and this is what has been done. And so there's no issues with demand. Actually, we see for both products, significant locations, which allowed us to issue of -- to issue EUR 308 million of loans just in the first 6 months of the year. So obviously, the all-time best result for our company. And then what's also good that it really comes from very different sources, different channels and different markets, both online and offline as well as, as I said, very well diversified in between the markets. When it comes to products, so mobile phone development, we've already covered Worth to mention that we launched kind of pilot project, a completely new product in Kenya, our biggest market in Africa and biggest market overall. So we launched the stills loans, which is a product very similar to what we have in several African countries like Namibia or Botswana based where we're financing the civil severance and kind of payment is deducted from their salaries. So we have a very vast network in Kenya of our own branches. So we actually don't have to invest in infrastructure to launch this product, and we believe that it could be a good potential here. So we start with the biggest market and we'll test, I think, this year is still going to be in decode, but in the future, it could be additional product for this market, which would diversify the portfolio ever. On the expansion side, we recently announced that we have entered the 18th market for the group, which is South Africa market. We launched in Capetown where we both opened the branch and as well as launched digital operations. So we're starting with installment loan product, which is, I would say, rather common in this market and in general in South Africa, probably is the most developed African market when it comes to data availability, database availability and in general, people's ability to borrow. So from that angle, it's a very market with a lot of potential also quite strong economy. But of course, we need to acknowledge that competition there is also quite tough with a lot of players, but we do see a niche in this market, and then we are quite confident that we will find our place in this quite competitive market. So going forward, just in the third quarter, we started first issuance. So 1 should not expect very high portfolio development in first months, but we will be reporting and providing additional information on that in upcoming quarters. And when it comes to Tanzania, as already mentioned, actually, the portfolio is developing nicely and as per expectations. So now we have too many products, car financing both define or other cycle of financing and smartphone financing, which moved from, I would say, test phase to just regular product scale-up phase. When it comes to business optimizations. So here's a few important angles. So 1 is we continue investing in AI technologies, we do kind of 2 directions: one, using our own developed tools for different sub processes, let's say, as well as for partials. So 1 is already what we have communicated is AI agents in call centers, which we already have working in 2 markets, 2 of our biggest markets, but we're rolling out it in further in other markets. We already also have internal kind of dedicated department with Head of AI function graded. So slowly, we do see that there's quite a few processes, which can be improved, automated with the help of AI and will be exploring and the other factor is, in general, the group's admin expense development and goods optimization. So our cost-to-income ratio has reduced significantly to 34% from for what we had in 2025, and we see a really positive trend. And we do see that this trend has a potential to continue because also, we've done some of the admin optimization activities in first and second quarter. And to be honest, not full effects are still seen a number. So I think really the full effect we'll see in fourth quarter. So we do expect cost-to-income ratio going down kind of further as well. Now let's move to the next slide, which is our global scope. So apart from adding new market in Grady South Africa, nothing has changed dramatically here. We remain extremely well diversified. If we would look at markets which has above 10% of total net loan portfolio share. We have 3 markets like that, like Romania and Kenya. So Kenya being the biggest 1 with 17% and pretty much all the other markets are from 5% to 10% from overall net loan portfolio. So really a very well diversified business and again, this is our strategy going forward, and we're really happy that we're able to grow across all of our jurisdictions, maybe at a different pace but still like not being too dependent on 1 or a few particular jurisdictions. And also probably worth to mention that you other markets like Albania is up soon will reach EUR 40 million. Net loan portfolio, which is like the biggest consumer finance market and on African side, we see also good encouraging developments as already mentioned in Tanzania, which is in slightly less than a year of where stands at EUR 7 million net loan portfolio. So which is as expected, and I think it soon will enter this faster growth stage. And also our smaller African markets are developing very nicely. So Namibia, Zambian and Lasota. Yes, with that, we can go to the KPI, nonfinancial KPI here, I suggest to look at the graphs at the second part of the slide. So if we look at applications received on vehicle financing side, we were more or less flat over last quarter on consumer financing obviously driven by additional product launches, number of applications quarter-to-quarter growing in a very significant way. That's represented in loan issuances. But I think most important is the conversion rate, so what we see that on cars, again, quite flat. So no big changes. I think we have a very stable market position and we are so kind of stable around 8% to 9% every quarter. When it comes to motorcycles in last quarter, actually, it has conversion rates slightly went up. But it, again, all relates to, I would say, last 12 months transition when we are putting more and more emphasis to our own branch network where we can control customer flow better. and brand, our brands better not working -- not relying so much on partnerships. So that obviously allowed us to increase the conversion rate and also the fact that we're already multiple years in these markets. So we have higher and higher rate of returning customers who repaid 1 loan, want to take additional bike or maybe the bike which was repaid already not fit for you, so we're buying another other cycle. So that helps with a kind of increasing conversion rate and on consumer finance, since we're unlocking multiple new channels and launching consumer financing in multiple iresdictions, okay, number of locations have been growing significantly, but conversion rates, we're adjusting unit economics. So it went down now on a blended level, at around 2%, 3%, but we do see that maybe in the future, we still have place to even strict certain underwriting rules. And I think there could be an expectation for it to be going down even more because we don't -- but we don't like demand, let's say, our products so we can be more and more selective. So with this, I'm finishing this operational KPI part of the presentation and hand it over to my colleague, Maris, for financial highlights.

Thank you, and welcome, everyone, on the call from my side as well. Let's start with the financial highlights on Slide 9, and namely with the upper left corner with EBITDA and adjusted EBITDA development. So for the first 6 months of this year, we managed to achieve EUR 65.5 million of accounting EBITDA, which was actually a 28% higher figure than it was in the same period last year. And adjusted EBITDA stood at EUR 62.6 million, which was almost 40% higher figure than it was in the equal period of last year. So you notice that the -- the main driver of the EBITDA growth must be revenue growth. Revenue growth was actually a bit higher than that than the EBITDA. But here, one of the factors will definitely be the more or less upfront cost in form of impairment expenses, which in the periods of very rapid portfolio growth, which was actually the first 6 months of this year. This takes a bit of a toll on the P&L in the form of upfront costs due to IFRS specifics. However, since reaching these more or less mid long-term products, the profitability and due to stable revenue flows will actually -- is expected actually to maintain or recover more in the upcoming quarters, provided the loan portfolio growth moderates. If we look at the net profit, the net profit before ForEx. So if we start with the first one, so net profit stood at EUR 16.5 million, which was close to 10% higher figure than in the equal period last year. And net profit before ForEx, we're looking at EUR 23.5 million, which is 12% higher figure than the same period last year. So again -- so here, the underlying story is growth, development of the company, growing profitability. At the same time, of course, we need to take notice of the fact that the growth is lower than you can see that in the EBITDA figures and here, the main bridging factors would essentially be corporate income tax. So as we are making more and more profits, especially in developing markets, namely African markets, for instance, we need to take into account the fact that corporate income tax rates in African markets are actually, in many instances, 2x higher than they are in, for instance, in Baltics or any European markets. So that is definitely going to be a factor. Also going forward. At the same time, also our interest expenses have increased. They have increased in absolute terms. It doesn't necessarily mean that our cost of debt has increased as well. Our cost of debt, especially if we think about euro, cost of debt has not increased or even has decreased, I would say. At the same time, we are strategically growing our non-euro funding base, and that usually comes in local currencies, and this is the higher expense funding sources, then you would see that if we would borrow in euros. But of course, think about that as a more or less embedded ForEx expense because we have talked about this numerous times and quarters before, 1 of our strategic priorities is to basically achieve a perfect asset liability matching in terms of currency perspective specifically. Then if you look at equity development. So we have added almost EUR 10 million during the first 6 months of this year to our equity. The main driver, of course, would be organic growth or profit retention. At the same time, we have made our semiannual dividend payment in the month of June. So we have done that already for the second year in a row. The next upcoming dividend payment is expected to be somewhere around month of November this year. Simultaneously, we have continued our strategic capital allocation exercise in the format of a minority share repurchase. So these activities, we take once there is an opportunity to do so. And the 1 and only goal is basically to increase the profits attributable to the shareholders or majority of shareholders basically including all of you also on the call. So if we then move to the lower ratios on the lower part of the slide, we can look at equity to assets ratio, so that ratio stood at 17.3%, which was 1 percentage point lower figure than it was as of the end of last year. Here, of course, the main driver is our growing portfolio. So we talked about this already for several times. Now during this presentation that the portfolio has grown quite right rapidly during this year. And what it means for the ratio, basically the nominator grows and total assets also grow the company. with the gold net profits and equity would follow. Then moving on to return on equity here for the first 6 months of this year, we stood at 28.8% of return on equity ratio. So you can see that we have been basically operating within our target level of around 30% return on equity, ensuring quite a nice return to our shareholders. And then lastly, already cost-to-income ratio, it was already mentioned before. So for the first 6 months of this year, we are looking at 34.2% of cost income. So basically, these are all costs, excluding funding costs and impairment expenses, again, measured against revenues. Of course, the ratio actually works twofold. So 1 is the cost control. which we spoke about earlier, but the other is also growing revenues. Our costs have not necessarily decreased in absolute terms and most likely, they won't decrease in absolute terms also in the upcoming quarters. However, here with this ratio, we can already see these economies of scale in practice. So that means we are adding more portfolio, which generates revenue on the same or existing cost base. So this is positive news, basically for all our stakeholders, be it more holders or shareholders, that means that there is efficiency in the business and as we are growing and adding new investments in the form of net loan portfolio. Let's move on to the next slide, please now. So here, if we look at our liability structure. So again, as before, if we start up with the upper left corner of this slide, we can see that 3/4 of our funding to come from 2 issued year bonds. So 9 bonds, which are maturing in 2028, 275 million bonds which are maturing in year 2030. So we feel quite comfortable with this maturity profile, specifically from a duration perspective. So we don't have this 1 single large debt refinance role. But speaking on the refinance, worth to mention that, as you can see also here, and now us being in year 2026 already, it is worthwhile to potentially think about refinancing 2028 bond. As a small reminder, the bond initially was issued in a format of EUR 50 million in year 2023, and it carried an annual coupon rate of 13%. Subsequently, it was stepped last year, EUR 40 million were issued with a yield to maturity of 10%. So what it means, I think about the blended cost for this bond around 11%, 11.5% on annual terms. So this is a bit higher than we are borrowing currently, let's say, or we have the chance to borrow currently in euro terms. So think about the Mitas platform where we have raised more than EUR 50 million at 8.7% of blended cost of financing and also same bond issued during the last year, which carries 9.5% coupon rate. So all this indicates that there is a potential for further cost savings and a format of decreasing our funding costs. If we would go into the market say, for instance, this year. Yes. So we don't -- currently, we don't have any more information on this activity other than that, that we are keeping eye on it. We're discussing preliminary with the bank's potential investors already sounding on our opportunity how a potential bond refinance activity would look like if that would be carried out already in upcoming quarters. Yes. Basically, for our bondholders, I can always say stay tuned. More information might follow in the upcoming quarters. Yes. On the Minto side, we already mentioned stats there. And as always, we are actively raising local debt, especially in African markets. Now already, if you look at our biggest African market, Kenya, 85% funding stack is already financed with local sources in local currencies. So we're really happy with that development. That means in practice, we need to purchase less hedging instruments and we can ensure a stability in our P&L through stable cost, let's say, ForEx cost, which is embedded in the cost of funding in this instance. Then on the lower part of the slide, you can see the development of our 3 financial covenants, which are present in both 1 year bonds. So if we start off with the interest coverage ratio, so basically here, the underlying story is stability, we are 2.3x for the first 6 months of this year. sufficiently above 1.25, which is minimal level ratio. Moving on, on net leverage. We are at 3.5x as of end of June for this year. worth to say that the ratio has slightly increased due to the growing total asset base, which is in turn fueled by the growth of net on portfolio. At the same time, there's plenty of headroom if we think about maximum level of 6x. And lastly, on the capitalization ratio. So here, we are looking at 22.1% as of end of June for this year. Again, same dynamic, as discussed before, on the equity ratio, there's a small decrease if we compare to the end of last year figure, mainly driven by the increase in total asset base. If we move on to next slide, please. So here's a slide on our net loan portfolio and its quality. So if we look at vehicle and device financing products, so we're looking at 5.2% of NPLs as of end of June. And in turn, if we then look at the consumer financing business segment, we're looking at 4.2% of net NPLs as of end of June in the loan portfolio. On the right-hand side, you can see the gross NPL rate development for both of these business lines as well as net NPL developments. Maybe worth mention here that on the gross NPLs -- NPL development. There might be occasional upticks as we especially deploy net loan portfolio and the new products as it is in the case of device financing, for instance, but here, I would like to draw your attention to the stability on -- in the net NPL rates. Basically, what it means there's any kind of volatility in the gross NPLs is basically amortized through provisions we're making sufficient provisions for our gross NPLs. That is further evidenced by the impairment coverage ratio, which remains high. So we're looking at 101.2% coverage for vehicle and device financing and more than 135% coverage on our consumer financing business lines. If we continue on the next slide, please. So here, there's a bit of a detail on our share performance. Basically, our share price has been trading around the same IPO price, which was EUR 1.7 per share. Here, you can see the causing share prices as of end of July in both stock exchanges when shares trading. So NasteBaltics as well as Factory Stock Exchange. The company's market capitalization stood at close to EUR 200 million with quite an attractive from shareholders or investors perspective, ratio. Looking at this ratio, you can definitely make a conclusion that the share is not overbought. So it is actually quite attractively valued on a relative basis compared to other PE ratios available in the market. And speaking on the attractiveness of the share, I think it's worth to also mention the analysts that are covering our stock. So all of them, they remain bullish basically on our share price. All of them do foresee that the target or fair value price of our share should be more than EUR 2 per share. I think let's move on to the next slide now. So here, we do have our 3 financial targets. So those of you who have participated or followed our IPO in year 2024. I would remember that during the second half of that year, just before IPO or during the IPO process, we announced to the market our goals for year '24, '25 and '26 in in terms of net profit, revenue and the net portfolio revenue and net profit before ForEx. So here, we wanted to take a look, firstly, and the achievements or progress that was done for the last year, for the last year 2025, which starts on the left part of the slide. You can see that as of the end of last year, we already exceeded our net portfolio target, quite with a large margin. The actual versus budget or target 1 was 124%. If we look at the revenue and net profit before ForEx achievements. So here, we almost achieved our targets that we set for ourselves. And now where do we stand during this year, so half of the year has passed, and if you look at the year 2026, it is quite obvious to see that net portfolio target is already overachieved. So we are at EUR 522 million for the net profit, while the target was EUR 520 million. So basically, the homework has been done. So the target is achieved and that's why maybe we can still go back to the previous discussion during the slide that most likely, there is going to be a moderation in the net loan portfolio growth and more focused on the bottom line. Speaking of which, we can then look at the revenue development. So for the first 6 months, we achieved EUR 165 million. Actually, if you would annualize this figure using the annual run rate. So most likely, you would then have the figure, which would indicate that there -- there should be no problems for us to exceed the revenue target as well for this year. So we feel quite comfortable about that figure. And lastly, on net profit before ForEx -- so here, we're looking at EUR 24 million, while the target was EUR 54 million. So again, if we look at the run rate, you can conclude that we are slightly behind the pace that we need to make sure to achieve the target, although I need to mention that usually, the net profitability picks up during the second half of the year, we have seen that in all of the previous years before, and this was also anticipated and built in once the targets and the forecast and budgets were prepared. Nevertheless, I would probably repeat myself by saying that the focus will be on the bottom line if we speak about the upcoming few quarters. So I believe that's it on this slide. I'll hand over back to you, Modestas for the next one.

Thank you, Maris. So now let's go to the to the outlook slide, business outlook. I'll not go into details. I think just this is a reminder, like of goals, which we have set for the company for the year to bind some products and markets and actually leading across the board like we have very good progress and achieved kind of majority of those already now. So just to sum up today's presentation, I would say we really entered a very exciting period for the company like a fast growth pace, which we have demonstrated last 6 months and actually even before in fourth quarter of 2025. And we see that the product that we have launched successful kind of scaling up our portfolio that we except role some tweaks will still be needed. So we were working on that. It's a normal collaboration process -- and yes, just to repeat that expectation is that most likely growth will slightly slow down in the second part of the year, and bigger focus will be on unit economics and together increasing or actually decreasing cost-to-income ratio. We do expect that profitability will be going up due to lower impairments and due to continuous growing revenue and kind of well intact is cost-to-income ratio. So with that, finishing today's presentation. Now it's time for your questions and handing over to the operator. Thank you.

[Operator Instructions] The first question submitted by the investors. What was the reason of selling shares by the main leaders of the company?

Sure. So I think in first and second quarter, some of the management sold some of their shares in Group, but to be told, this is rather insignificant amount, both for the company and for the management in place. And then the reason is purely personal liquidity.

Is Elvin considering early redemption of all 13% 2028 bonds under the prospectus? Or will they remain until maturity? Is there anything you'd like to add in addition to what was said prior?

Pretty much, I would say, nothing to add to what was said prior. So I can just repeat and maybe for someone who just joined the presentation for Q&A. So yes, as the question rightfully also prospectus, there is going to be an opportunity to possibly refinance the 2028 bond. It does make sense from the -- also economic perspective because the bond was a bit on the expensive side, then most likely, it is the year of capital would be available for the company if we would tap into the market right now. So it's a viable question, viable topic, and we are actually keep an eye on it and discussing with the stakeholders in the background. And there is a potential that this -- there might be a transaction in the upcoming quarters of this year.

Why is net profit not ahead with revenue growth? What measures will you implement to improve the net profit?

Yes. So I think these dynamics were kind of also explained in the slides before. So first of all, that's the impairment expense, the portfolio quality. We spoke about the net loan portfolio moderation of growth, also focus on the unit economics of the products. So this should drive down the impairment expenses pleased on a relative basis versus revenue or versus gross portfolio. And then also, let's say, if we would also tap into the capital markets, probably there is also some savings realized mostly also outside of this transaction. But nevertheless, the company remains focused on the efficiencies of scale that is evidenced by the cost-to-income ratio, which is also expected to to actually remain at this level or even decrease in the upcoming summer quarters. So all these activities taken together should bridge that growth gap if you look at the net portfolio growth versus revenue growth.

Our next question, will you prioritize reaching your goal of 25% capitalization ratio. What strategy do you have in tighter global credit scenario?

Yes. So first of all, addressing 25% capitalization goal. So -- you can also see here in the slide on Slide 14 and capital management. So 25% is basically maybe worth mentioning. It's not something that's set in stone. You can also see it's approximate target. So think about the goalpost more or less. And -- but yes, so basically what I already said before on the focus on the profitability on the unit economics of the products, all these should drive up the profits, which in turn would increase the equity of the company and in turn, that should increase the capitalization ratio as we look at it. So yes, we do expect that the capitalization ratio will slightly improve. Whether or not it will reach 25% in the upcoming several months or quarters, we would not be able to promise that, but the company's focus is on the efficiency on the profitability if we think about the remainder of this year.

What is the reason for such a rapid growth in reserves? Do you expect a decline in administration expenses related to salaries in third quarter 2026?

Yes. So here, maybe question doesn't specify what is actually meant by a reserve. So here, I guess I need to imply that it is -- it refers to impairment expense or provisions. So again, we've spoken about that before, the rapid net loan portfolio growth is pretty much the main driver of the impairment expense/provisions. So once the portfolio growth will moderate, the same will also happen with the persons and also through the focus of our companies and management and employees focus on the portfolio quality. The provisions are also expected to decrease at least on a relative basis if we think about revenue and gross portfolio. Then the question -- the second part of the question was about, I believe, capital markets, right, and our credit markets?

The administration expenses, salaries.

Okay. administration and salaries. So maybe in the upcoming several months and quarters, we would not signal that there is going to be a decrease in the admin expense as the company is still growing. The company is still developing. The company's focus is on cost income ratio. So that -- the expenses they need to be looked relative to the revenue, to the net loan portfolio. So let's say that's the main message that we're trying to deliver here in absolute terms you might see actually the same expenses or even increasing slightly. But on relative terms, you'll see a nice improvement, especially in cost-to-income ratio.

[Operator Instructions] Meanwhile, we can start with the questions submitted during the session. The first 1 of those, have you done any buybacks.

I guess your question is about shares. So we have not done any share buybacks.

You mentioned that profit growth should start catching up with revenue growth. Could you be more specific about the drivers -- is that mainly lower impairment intensity as portfolio growth moderates. Is it funding cost savings from refinancing or operating leverage?

And maybe just to add, I think Maris has already commented in multiple occasions on that. But all of the above. And again, I think what's important to understand that once you add a lot of new portfolio, you need to book upfront impairment cost for that. So kind of impairment costs have to grow at a faster pace to once kind of portfolio growth in a significant way. So this is kind of not unexpected. But obviously, what we mentioned that second part of the year that we are not launching so many new initiatives as we've done in last -- in previous 12 months. So portfolio growth will slightly go down. And also, since we're issuing, as we've mentioned, this mid- to long-term portfolio, which was already provisioned, we do not expect significant new provisions for that part. So -- but of course, all the other actions are in place as well.

How do you see the effective tax rates and ForEx developing, given both moved against you in the first half of the year?