Multitude AG (0R4W) Earnings Call Transcript & Summary

Good morning, and welcome to the Multitude's 2022 Preliminary Results Earnings Call. Today, we will hear a presentation regarding 2022 preliminary results by CEO, Jorma Jokela; and CFO, Bernd Egger. We also have Chief Strategy and IR Officer, Lasse Makela available on the call. [Operator Instructions] I would now like to hand over to Multitude's CEO, Jorma Jokela. Please go ahead, Jorma.

Hello, everybody. So my name is Jorma Jokela. I'm the CEO and the Founder of the Multitude. And I want to walk through Multitude's preliminary results and achievements from 2022 with my colleague, our CFO, Mr. Bernd Egger. I'm so proud to publish our full year results. Our main thanks goes to our amazing people. They have stretched themselves and executed our common plans and strategy, so disciplined and professional. Well done and really, really big thanks for the team. Good. But before we start walking through our financial and business performance from the last year, I want to share with you some words about Multitude and about our direction. We have an 18-year track record of building a successful and profitable global fintech ecosystem with our roots coming from Scandinavia, Finland, with our headquarter located in Helsinki. We have full EU-wide banking license, and we are listed in the Frankfurt Stock Exchange in the prime standard. Today, we operate our business through 3 different business units, SweepBank, Ferratum and CapitalBox. We have over 400,000 customers in 19 countries with 700 colleagues. Last year, we delivered over EUR 212 million net sales and EUR 222 million as a gross revenue. We have amazing track record and capability of delivering profitable growth and paid dividends for shareholders over our 18-year system, excluding the 2 years during the COVID time. Again, last year, 2022, was a great manifestation for our capability. Our inspiration to deliver amazing financial track record year after year comes from Multitude people, passion to change the world and democratize financial service through digitalization, making them fast, easy and green. We want to build something unique or extraordinary, like I like to say it, something where everyone can be proud of. Our vision, create the most valued financial ecosystem, gives our people one goal and direction to all the actions and decisions they daily works. Our financial ecosystem is built in the way that Multitude acts as a platform where all our scale up of elements are, like funding, technology, regulatory experience and of course, more. Additionally, all our central functions are also there to share our customers' business unit or our partners. Today, we have those 3 independent business units on the platform, where the SweepBank focus on shopping and mobile banking app, Ferratum on digital consumer lending and CapitalBox on digital SME lending. All business units are different life cycle position. Newest and smallest, SweepBank, focus on achieving the profitability growth. Oldest and biggest, Ferratum, continue to deliver amazing profitability growth year-on-year. And CapitalBox focus on scaling up growth and profit in current situation. On Multitude platform, we focus on improving scalability elements and exploring the new opportunities for the growth. Today, our target is to leave 7 key takeaways for you from this call. First one, we exceed our EBIT guidance, EUR 31.6 million. Second, strong growth in profitability, net income EUR 12 million. Third one, strong payment behavior continues. Fourth one, successful placement of EUR 50 million bond. Fifth one, our Board have yesterday evening our meeting to decide to propose the AGM to share the dividends, EUR 0.12 each share. This means over a 3% dividend yield on the current share price level. Sixth one, we confirm our EBIT guidance on this year to deliver the EUR 45 million, epic. And the last one, the seventh, current macroeconomic environment is very favorable and support us in the future. But let's go to look -- let me explain why we believe that current macroeconomic environment supports us. When we look at what happened during the COVID pandemic time, people stopped spending and started building savings. Naturally loan demand decreased, and we lost 23% of our revenue. At the same time, customers' payment behavior stayed strong and loans were repaid. So lending portfolio decreased and this has naturally impacted our sales. During that time, we adapted this new situation and reduced the fixed costs significant, our head count reduced from 900 people to less than 700 people, and we introduced the new agile organization model to weighing and working the more efficient. Now today, this situation is totally different when we compare to COVID time. We expect loan demand to increase as people continue spending and inflation is supporting this. At the same time, new customer segments coming in with higher mortgage rates are looking short-term funds. In general, customers price sensitivity is lower today than before as well. Interesting in this macroeconomic situation is the fact that we see the demand increase, at the same time, the payment behavior staying stable. And main drivers for this situation is low unemployment rate, increase in salaries and government support. Relatively stable fixed cost base gives us a great opportunity for higher scalability on the future. We want to get the confirmation from our customers about those our views. Last month, we conducted our survey with 8,000 replies from customers across the Europe to confirm our assumptions. If you are interested, you can go to our website and learn more about this survey. Our view for the next 2 years is that loan demand will increase and payment behavior will remain relatively stable. Of course, we understand that there are lots of additional risks on the market, like we all have seen during the last days in the U.S. banking sector. However, we have protected ourselves against those kinds of risk by good diversification and conservative approach. But let's jump to our last year numbers, Multitude level. So EBIT continued to grow through the whole year, ending EUR 9.9 million in Q4 and full year, we were -- we exceed our EBIT guidance ending EUR 31.6 million despite the current market situation. During 2022, we delivered stable revenue growth, 4% year-on-year, with revenue ending EUR 212.4 million. Lending portfolio grow over several quarters on the row, 12.8% year-on-year, ending EUR 509.5 million. Payment behavior and cash position remained stable. And our point forward, we want to focus on utilizing our agile organization to scale down cost and scalability even higher, accelerate our profitability short and midterm and build our growth platform strategy value. Based on that one, we want to confirm this year our EBIT guidance to deliver the EUR 45 million EBIT. But let's go to look to SweepBank. Growth continues with the shift towards short-term profitability. We continue to deliver the strong revenue growth of 102% year-on-year, reaching EUR 13.9 million during the last year. Solid lending portfolio growth over 39% year-on-year, ending EUR 122.7 million. The last year, we promised to reduce our operational cost over 50%, and main decisions are done and implemented, but naturally, we will see the financial impact during this year. We also promised to focus the higher profitability countries, and we decided to hold back new customer intake in Sweden and Denmark and focus all our resources at the moment for Finland, Germany and Latvia. Going forward, we will shift focus from fast growth to profitable growth. We continue to reduce all operational costs and free digital credit card or shopping card with the mobile banking is one of our key focus products. We confirm our earlier target to improve EBIT significantly. We intend to have our EBIT loss from the last year and by 2024 to achieve positive EBIT. But let's jump to Ferratum. Solid performance continues. We continue to deliver stable revenue and EBIT. Revenue growth slightly from EUR 175.8 million to EUR 178.2 million in 2022. In Q4, we ended EUR 47.7 million of revenue. EBIT growth strongly from EUR 45.4 million to EUR 54.9 million in last year and EBIT margin from 25.8% to 30.8%. This is amazing improvement, and team have been working really hard to deliver. Portfolio quality remained robust and we continue to improve our efficiency via implementation of the customer service outsourcing outside of EU. We suspended lending in Brazil and Australia through the last year to focus more on core markets. Our focus going forward is to shift resource to higher profit countries. We continue the strong cost control and process automatization, credit risk and underwriting innovations. We continue to roll out Credit Limit product to our main countries. And naturally, we continue to listen to our customer needs and to explore the new product opportunities and countries. We confirm our financial targets to continue to deliver over 5% EBIT growth year-on-year, what we naturally achieved last year. And then the last one, CapitalBox. This is traditional turnaround, back to growth and profit. We have a huge market opportunity to digitalize further SME financial industry. We have identified our shared comments and made needed decision. We all know this market opportunity is still there, and we will catch it during the coming years. Our revenue and EBIT in 2022 was below our expectation. Revenue decreased from EUR 21.6 million to EUR 20.3 million and EBIT from EUR 2.4 million to negative EUR 1.1 million in the last year. But to be fair, we have to say that the current CapitalBox team has started a new direction. They are strongly driving turnaround decision, and we have done a lot of improvement in sales activity, cost reduction and credit loss control during the second half last year. CapitalBox business unit and team is now on good hands with the new CEO, who is really driving this change, understanding customers, industry and our people. Naturally, this process continues during this year as well, and we will see the first financial impacts. Our focus going forward is 3 things. One, to building the new distribution channels to get customers cheaper in, double the approval rate with the product and underwriting innovation, but not to make -- but not to increase our credit risk at the same time, reduce cost base with automatization and underwriting and sales process. We are comfortable with the change and improvement with what we have done, and we confirm our earlier targets to deliver EUR 5 million EBIT on this year and double it on the following year. In addition of our business overview, I would like to update you our ESG matters as well. On ESG, we continue our efforts to align with the needs of our customers and employees, implementing the process toward achieving our long-term objectives. As part of our ESG program, we finalize metrics and targets showing in this dashboard here, you can see that one. We partnered with the carbon accounting firm to start piloting measurement of our carbon emission, laying on the ground work for target setting, and we are publishing our Scope 2 covering our billing and electricity and heating process and Scope 2 emission, which covered the process and the financed emission for the first time in the probed ESG report, which formed part of the annual report. Our carbon footprint measurement program is in early stage still today. And we aim to advance our data in both quality and particular for our financed emissions under the CapitalBox business unit, we are working to improve our effort. We will continue to focus on improving our key business-related ESG metrics, and we also published our diversity and inclusion statement that sets our target of 38% of the both management and the Board in terms of inclusion of the women. We continue the development and embedded our ESG policies and process in the practice. We welcome your engagement on our ESG program and focus always having updated our material assessment and engaging with some of you. We will continue to engage with the stakeholders to support our focus and preparation for the upcoming requirements under this new corporate sustainability reporting directives. Good. But finally, let's jump to financial part with Bernd taking over.

Good morning, everybody. My name is Bernd Egger, and I'm going to present the key financial highlights and the most relevant financial metrics for the year 2022, which we think was a very successful one. To start with revenue development on the first slide, exactly, up by 4% to EUR 212.4 million. I would like to explain that in the past, we have presented revenue on a gross basis, so the equivalent gross revenue would be EUR 222.2 million, the increase of 4% compared to previous year's unaffected by a different way of presenting revenue. Just to shed a little bit of light on the logic behind that and to clarify what this is about, we are netting directly attributable customer acquisition cost from revenue. Correspondingly, we see an offsetting reduction in selling and marketing expenses. This is, by the way, also an adjustment that we have made for 2021, which didn't affect numbers massively, in a slight positive manner -- a slight positive impact on EBIT in 2021 was to be recorded. Secondly, impairment for credit losses. I guess this is something of particular interest in this challenging market environment and market economic circumstances. Credit loss impairments at EUR 78.7 million. That is [indiscernible] increase of 9.3%, but we really think that this is a satisfactory overall result given the challenging market environments. Nonetheless, and Jorma has pointed that out already, with regards to CapitalBox, we were not 100% satisfied with credit loss levels during the full year. We had some elevated levels of credit losses, for instance, in CapitalBox during the first half in Sweep prime lending later in 2022 around summer and also Q3, but the respective teams have taken corrective actions, both in underwriting, but also from a lending portfolio perspective. And as a consequence, the overall performance in terms of credit losses for 2022 has developed really positively. With regard to selling and marketing expenses, I've highlighted that already we see a reduction of around about EUR 10 million due to the netting of acquisition cost. But in general, irrespective of this accounting treatment, we have been very selective and cost sensitive in our marketing and sales approach. That means that, in general, cost levels have reduced in respective tracks. Personnel expenses. Over the last couple of years, we have tried to explain that we have set up a lean organizational structure and operating model that gives us the scalability that we want to achieve. That is reflected very well in the 2022 personnel expense levels with EUR 34 million, which is de facto the same level as in 2021. So only a minor increase in personnel expenses. The number of head counts has increased only minimally to 683, practically the same level as in 2021. This is, in our view, the result of and is also reflecting the overall strategy that we are trying to offset cost increases, inflation pressure, cost pressure by efficiency gains, by improvements in our processes and by focusing on profit accretive businesses. Other operating expenses, quite a significant reduction by EUR 2 million to EUR 24.4 million. Key drivers that is essentially the same logic. So the boost in automation of our processes, the leaner organizational structure, a reduction in number of legal entities, all that is paying off by a significant reduction in operating expenses. Depreciation and amortization, an increase of some EUR 2 million that is due to a little bit of a cleaning up exercise with regard to intangible assets during the second half to slightly accelerated depreciation schedule. All in all, this means the cost structure reflects what we wanted to achieve, that is a stable and scalable cost base. And taking all those factors together results in an EBIT, we think, in a very strong EBIT level of EUR 31.6 million. Hence, we are comfortably above the target level of EUR 30 million. Half a year ago -- a little more than half a year ago, we've presented road to EUR 30 million as our project to get us to the target level. And we have completed this project very successfully. We, meaning the 683 people working in our organization. Let me continue with finance expenses, down by EUR 4.7 million. That is a reduction of almost 21%. What are the key drivers behind this development, and there are essentially 4 drivers. One is a very consequent deleveraging strategy with regards to debt capital markets. Secondly, continuation of improving the utilization of deposit funding. Thirdly, the perpetual bond, which we issued in 2021, has been on the balance sheet for the full year 2022 whereas only 6 months in 2021, and interests are reflected directly in equity. Number four, also, I think, quite remarkable, we have reduced hedging costs and foreign exchange losses despite the fact that we have operated in an extremely volatile environment. All that together results in a profit before tax of EUR 13.8 million, which is an increase of almost 200% compared to last year. Corporate income tax, EUR 1.8 million, which essentially is composed by EUR 1.2 million effective corporate income tax. In terms of cash out, the rest is the net effect of movements in deferred tax assets and tax liabilities. You might notice that corporate income tax levels are considerably below last year's level despite the fact that we have such a strong profitability. We've been quite cautious already last year in reassessing the value of some deferred tax assets, so an excellent shape also from a corporate income tax performance or cost level. Net results, this all -- taken altogether translates into a net profit of EUR 12 million. And I have to say in financial terms, we consider this to be a very strong comeback, a very strong financial performance for the year 2022. Let us very briefly move on to the balance sheet, to assets to begin with. Business portfolio, loan portfolio has been increasing by some 13%. We are currently at a level slightly above EUR 0.5 billion, EUR 509 million to be precise. On top of that, we have, especially during the second half of '22, built up already meaningful warehouse lending portfolio, which is reflected as noncurrent financial assets in the balance sheet, which totals at close to EUR 29 million. The second statement with regards to assets I would like to make is cash as there is an obvious delta between the cash levels '21 and '22. End of '22, we are at a cash and cash equivalents a level of EUR 153 million. And this is -- the reduction compared to the previous year is reflective of a deleveraging strategy. So we have, as most of you might know, redeemed 2 outstanding bonds in full, so the '22 and '23 instruments were redeemed successfully. We have issued a new debt capital market instrument of a lower volume, EUR 50 million in December 2022. And that brings us to a cash level, which is pretty spot on in terms of target level. So much on the group's assets. Let's move on to liabilities and equity, and let us take a look at equity first, equity up to EUR 182 million, which is equivalent to an equity ratio of a little bit more than 24%. And I also would like to present a new metric in this context, the net equity ratio of 30.2%. I'm presenting this metric as this is the relevant covenant in our new bond terms. For those of you who were invested in the old -- in '22 and '23 bonds, these participants might be familiar with the net debt equity ratio of 3.5. For the sake of completeness, we are talking about a net debt equity ratio of 2.31. So extremely sound and excellent net debt equity ratio as well. From a liability perspective, 3 short key messages: one, capital market exposure down significantly. Secondly, a shift towards deposits. So deposits slightly up with a focus on longer terms. And thirdly, in this a little bit challenging market environment, super important, there are currently no short-term borrowings other than deposits, obviously, but no upcoming repayment obligations. On next page, 1 or 2 sentences, you are familiar with the structure of this slide. So we'll not spend too much time on that. The key message here is that from a portfolio size perspective and the lending portfolio is represented in the circle and the inner circle on the left-hand side for 2022, all lending and investment portfolios are growing. And this is reflected on the left-hand side in this chart, EUR 509 million lending book, the composition of which is 300 million Ferratum, up from EUR 288 million. Also CapitalBox increasing loan portfolio close to EUR 88 million, up from EUR 76 million. Here, we see a little bit of a time lag in terms of revenue, but we support [indiscernible] we will also see increasing revenue levels in the year '23. And finally, Sweep, quite significant increase from EUR 88 million to EUR 152 million. Here, in this EUR 152 million includes the warehouse lending, EUR 29 million. Revenue development, 2 out of 3 businesses are growing. The third one is about to return -- actually return back to growth in -- towards the end of the year 2022. On the next page, I would like to take a very short look on the business segments. Ferratum to start with. I'm really happy about the performance for 2 facts. One is, the outcome is really almost sensational, really great. And secondly, the pattern -- the economic pattern of Ferratum is 1% (sic) [ 100% ] identical to what we have described to be the target 2 years ago. When we have given the guidance for '21, for '22, for '23 and for '24, the logic was revenues are expected to increase slightly. That is exactly what happened in '22. Second key message was that we try to keep credit losses well under control. In '22, we have seen slightly decreasing credit losses, both in absolute and in relative terms. So really great performance. And the third key message here was that we are aiming to establish a scalable organization. Expenses of Ferratum were actually reduced in 2022. The combined result of all that is a significantly improved profitability, so really great performance. Sweep characterized by significant portfolio and revenue increase with a focus on higher yielding and better performing businesses, especially in H2, reflecting somewhat elevated credit losses in Q3. But in its totality, very well on track in light of the ambition that also Jorma has just pointed out to be full cost breakeven EBIT positive in 2024. So well on track. And the expectation to -- just to reiterate that is to cut negative EBIT contribution in half in 2023. CapitalBox, a little bit of a challenging year, 2022. I don't have to repeat what Jorma has already pointed out. What I would like to highlight is that those actions that Jorma has described have been paying off positively already during the second half of 2022. So we have actually seen positive momentum, both in terms of revenues, but also in terms of financial performance. CapitalBox Q4 already positive contribution of around about EUR 0.5 million. Credit losses, for instance, EUR 4.5 million in the first half, EUR 3.3 million in second half. So credit loss reduction of 25%. So really positive signals in the CapitalBox business. On the next page, a classic slide that you are already familiar with. And we still are showing the long-term development of our asset quality represented by credit loss impairments over net accounts receivable. Still very strong, slightly going down, meaning asset quality going up. Very strong payment behavior, strong performance in underwriting and collection. Credit losses in its totality in very good shape. As mentioned out -- as mentioned earlier, there were some issues during the year but teams reacted quickly, and we see the success of those actions reflected in the credit loss financials. Finally, on the next page or next 2 pages, I would like to briefly talk about cash and funding. On this slide, you will notice that we are back to the kind of long-term average level in terms of cash, EUR 150 million. This is pretty much the target level that we want to have in terms of cash. The reduction in cash is a consequence of the fact that we've utilized excess cash to repay the 2022 and 2023 bond. That is also reflected on the next page on the funding slide. And here, we see a -- if we move on to the next page, please, we see the 2 pie charts. They obviously look quite differently why we have repaid those EUR 140 million, a little bit more than that, in outstanding bonds. Issued a new instrument in December 2022. We've also issued, for the first time, it's a 2 instrumental level of the bank. Going forward, we want to be more active also on the bank level, most likely going to contemplate a rating -- a separate rating for the bank. So all in all, a very stable funding situation. We do not have any upcoming repayments before December 2025, which gives us a lot of comfort. In terms of cost -- funding cost structure, obviously, there is upward pressure. So this is -- it would not be fair to assume that this does not affect us at all. But I would like to highlight that we are still benefiting from the strategy of moving our funding structure from debt capital markets more and more to deposit funding. If we, for instance, look back 3 years to the 2019 financials that we've presented pretty much exactly 3 years ago in March 2020, we had a ratio of 1:1 between debt capital market exposure versus deposits, now with a ratio of 1:10. And that -- I'm really happy that we achieved together with the bank and the organization treasury and the bank to establish a much higher utilization of deposit funding ahead of the increasing interest rate levels. Nonetheless, for the second quarter, should the market conditions be supportive, we are considering a small tap issue on the 2022 bond. But yes, we are not under pressure at all. We will see how the market conditions look like and then act accordingly. With that, I would like to hand over to you again, Jorma.

Okay. Thanks, Bernd. So I think it's -- like we have said before, today, we want to leave all of you those 7 key takeaways. We beat our guidance. We have very strong profit behind. We have a strong payment behavior. We have a successful placement of our EUR 50 million bond in the last year. We see the current macroeconomic environment very favorable and support us. And we confirm this year guidance on the EUR 45 million. And the last one, the Board have proposed dividends on the AGM on the EUR 0.12 per share. So this is more or less in our part. Thanks, Bernd. And I think we are ready to take -- answer all your questions. And I think we can see that we have a lot of questions already coming by the chat here. But I think maybe we have some phone questions here as well.

[Operator Instructions] And we are looking forward to your questions, and I hand over to Jorma and Bernd.

Good. Good, good. Maybe -- and just please let us know when the question is coming on the phone line, but we have a few questions on the chat. So maybe we can start with that one. Good. So the first question is coming from [indiscernible], and you have actually 3 different questions. Thank you and congratulations for the good result in 2022. My question is regarding performance of SweepBank Tribe. In Q4 with EBIT of minus EUR 5.8 million, I cannot see any upside trend. How can the minus EUR 10 million this year target to be reached? Bernd, if I answer that shortly.

Yes, yes, yes. Go ahead.

I think we said, yes, we understand that the SweepBank, our target is ambitious, and we understand that we have to work hard to get in that one. We have 3 very simple elements how we can see our [indiscernible] one base assumption. So the first one is that it's the cost base. We have made a big cut off the cost. So we can see that when that show to start working during this year. Of course, this always takes a little bit longer time when you have to do in this change because you cannot reduce your all cost overnight. It takes time to -- you have your [indiscernible] agreements and so on. So the cost part is a one part. Second part is the marketing cost. And marketing cost is something what we have changed a lot of our approach to do in the market in more like a traditional way even more purely the down marketing approach, what is really our key confidence. We appointed Aksels as a CMO here from the group level, Aksels who have been working with our company and working with us in over 10 years and is really special as with Julie, they have started to improve our digital marketing approach there. And that's the second point where we can see the customer -- new customer acquisition cost, all we can see that it's coming significantly down over the last year. And the third one is a focused products where the pricing is a little bit higher end and the reason is that then we can utilize for the lower customer acquisition cost, higher pricing, and of course, the basic assumption. This is the fourth one here, it's the payment behavior remains stable behind. So practically those 4 elements, we are -- we still see today that we can achieve our target and scaling the business up in the same time. Good. And [ Stefan ] have 2 additional questions here. What are the current condition of interest rate that Multitude offers to customers? And will there be the Capital Markets Day in this year? And maybe Bernd, if I take a Capital Markets Day and you can take interest rates there.

Go ahead. Yes.

Capital Markets Day, we have a plan to organize the Capital Markets Day on this year. And we feel that it is coming in this spring on the 2 years when we introduced this Multitude to our new trend and our new strategy. And we see that it's maybe good timing on this year to keep the people updated how the business are going in the different business units and how this platform strategy have [indiscernible]. And what is our view in the next few years on that. Because the earning cost that's -- we don't have always time to do in that. But when it's exactly, we don't have a decided final date yet. But we -- that's our thinking process.

Good. On the interest -- deposit interest rate levels, I think we need to differentiate a bit between the interest rates that we are offering to new clients and the effective interest rate that we are paying. With regards to new clients, we, of course, have to go with the market. That means that those interest rates for new clients vary between 1% for overnight money and that is obviously going up in a staged manner to 3.45% for the 24 months and 3.6% for the 36-month money. However, that looks still quite different when we look at the effective interest rate that we are paying because not everybody is super quick in asking for a renewal of terms, plus we've incurred quite a significant proportion of the longer-term funds already before interest rates went up that significantly. So that means that in average -- weighted average cost of deposit base currently is 1.2%. But naturally, I mean we do expect interest rates to continue to at least remain on a higher level, if not go up a little bit. And I think I've also noticed a question on what the interest rate environment does to funding costs. This is something we just need to offset and factor in, but it would not be fair to assume that funding cost would be remaining on the same level. But currently with 1.2% weighted average still on a very attractive level.

Good.

Okay, thank you ...

And Maybe just a clarity on this Capital Markets Day question that our thinking process is before the summer holiday season. So -- but we have to finalize the exact date. But please?

I received the question by audio line. [Operator Instructions] Well, it seems that it's not working. Then I kindly ask you to place your question in the chat. But we also received a question by audio line from [indiscernible].

I then also, in parallel, was writing my question on the chat function, so then you can later ignore it, but let me quickly read it from here. So first, yes, thank you for this results, great results, I think. The question I have is about the customer deposits given the current environment. My question would be, how many of your deposits in percentage are fully covered by the deposit insurance scheme? If you could remind us about the percentage of your total customer portfolio, that would be helpful.

Bernd, do you want to take that one?

Yes. I mean just to familiarize everybody with what this is about. So I guess most of you know that up to EUR 100,000 deposits are protected, but it was a competition scheme, so are effectively guaranteed. We are lucky to have a very well-diversified deposit structure. That means we have literally a handful of deposit clients that exceed this level. That means that we're above 90% in fact. We are rather talking about 99% of those deposits are protected and guaranteed, which in turn means and I guess that is the economic rationale behind the question, we do not see a significant risk of bank run. We have seen that larger deposit exposures can bring financial institutions under pressure. As I said, we have an extremely well-diversified deposit portfolio in that respect.

And I think maybe support a little bit Bernd's comments and this is a little bit coming the nature of our business as well. So we don't have a like type of the customers who [ wanted to ] come out of the liquidity in our bank accounts. So we have a more smaller amounts, and that's the reason why -- that very well protected us in this point of view. Good. Let's continue. Any other audio question or we continue to chat questions?

[Operator Instructions] Please go ahead. Well, it seems that it's not working. So I would -- well, it's working. Give him a second. Hello, can you hear us? Unfortunately, we can't hear you. So I kindly ask you to place your question in the chat, and we'll move forward with the questions that are placed in the chat.

Okay. We can try that later on. It's -- but the next question is on the row here is coming from Harald Hof and he have probably 3 questions. How does the global change in the interest rate impact Multitude? How does it impact the loan portfolio and customer behavior? And is this the first time in history of Multitude plans to [ face ] a dividend? Bernd, if you can take the first 2, and I can take the last one. Is that -- how this sounds for you?

Yes. What should I do it other than saying it sounds fair. No, I think it is perfect. So first of all, I've briefly elaborated on how we look at the current interest rate environment. We do not think that this is something that will go away or interest rate pressure I am talking about go away quickly. So we will see high interest rate levels going forward. Over the last years, we have shifted -- 2 years, 1.5 years, we've shifted our assets as much as we can into a shape that allows us to pass on increases on the liability side also to clients. So that's principle #1. Principle #2, we just need to factor in and live with the fact that higher interest rate levels mean and are equivalent to higher funding costs. That is just a fact. But as I said, we're trying to offset as much as we can and pass on to the assets of the clients -- to loan clients as much as we can. On the loan portfolio and customers' behavior. We see still a very strong customer payment behavior and the asset quality is high. In fact, it has continued to improve. One fundamental aspect that we need to factor -- or take into consideration here is that underwriting decisions do factor in forward-looking type of parameters. So an affordability check, for instance, doesn't only reflect current cost levels, but also expected inflation, expected cost increases going forward. So this is why the models have anticipated already before, interest rate and cost levels increased these elements and these variables in underwriting decision. Therefore, this should not have a substantial impact on the loan portfolios. Yes. With that, I pass on to you about the dividend.

Thanks, Bernd. About the dividend, we have 18 years history as a Multitude and earlier called as Ferratum. And we have had like a principle that all year, every year, we want to pay the dividends. But naturally in 2020 and 2021, we decided not to propose at the AGM to pay the dividends out. 2020, we have it, the opportunity, because we have a really good year in 2019 behind. But we decided to hold in a little bit in liquidity and say that, okay, we hold in the dividends paid out. And same with us in the 2021 as well. And based now in the first time after 2 years, we go back to dividends payment approach, practically EUR 0.12 per share is the same level of dividends we had in 2017. And 2018 and '19, we paid EUR 0.18 per share. So that is the more or less in our approach that we want to definitely improve our dividends payment in the future as well, but of course, step-by-step. But we had 16 out of the 18 years when we have paid dividends on the history, and we like to continue that. Good. So the next question is coming from Marius Fuhrberg. There was quite many questions. So I don't know how we should -- some of questions, we already answered here. But maybe I read the questions quickly, and then we can look what's already covered question. So first, you are focusing on profitability now instead of the growth strong. Should we therefore expect overall growth rates to remain rather in the middle single-digit area for the next couple of years? That's the first question. Please elaborate a little bit your strategic plan for SweepBank. When do you expect to continue with your expansion plan? Would you plan -- do you plan to attract further customers by offering positive interest rate on deposit in the current investment environment? What is the composition of the loan losses? How much of it were provisioned and how much actual loss? And then the fourth one, what is your expectation on how the current interest rate environment affect your business, especially on the deposit side as you have a high interest margin on your loan, anyways? So maybe Bernd, I take SweepBank question shortly and the growth part. And then if you can take the loan loss composition part. Is that okay?