Multitude AG (0R4W) Earnings Call Transcript

Good morning, and welcome to the Ferratum H1 Report 2020. [Operator Instructions] I will now hand over to Jorma Jokela, CEO; and Bernd Egger, CFO. Please begin your meeting.

Okay. Good morning, everybody. My name is Jorma Jokela. I'm the CEO and the founder of Ferratum Group, and welcome to Ferratum first half year result publication. And me and my colleague, Mr. Bernd Egger, we will go through with you today how Ferratum Q2 went through and a little bit give the news in the behind the Ferratum as well. Let's jump to the first slide. So Slide #3 on the presentation. [Technical Difficulty] So we are at the Slide #3 now. And just a few words about the Ferratum background. So Ferratum Group, we have always last 15 years the focus to bringing the customers the fast, easy, pure digital financial solution. On the way that people can -- anyone can use those, any time people can use that and anywhere they want. And this is the core DNA on the Ferratum all share is what we're doing. Today, we operate in 20 countries. We have 3 different business units or business line where the consumer lending is the first one, what is our main business, the business line, the revenue line, brings the 87% of revenue. The SME lending, what we call the capital books. I will be a -- little bit tell this later on. It brings the 12%. And mobile banking and the prime consumer lending is 1%. Today, one of the key takeaway that I want to leave for you is Ferratum -- the first one, at Ferratum, we have a very successful executed our 4 Stage COVID-19 reaction plan, and this is something that we are really, really proud. The second one, we have very strong operational improvement in Q2 compared to Q1. And the last one that we are back to continue to focus on the future growth. Our H1 revenue, EUR 121 million, what -- unfortunately, the year-on-year revenue is minus 16%. And Q2, the strong EBIT, EUR 12.3 million what's driving that H1 in the first 6 months, the year -- the half year EBIT in EUR 10 million. We will jump to next slide. We can see a little bit more deeper in -- where the dynamic coming from. So the first one, the Primeloan. The Primeloan, we have our own EUR 6,000 average loan amount, matured in 5-year loans. This business was pretty more the flat during the last 6 months compared to last year. And it's mainly impacted because we was very restricted into our lending in the beginning of this year. And -- but it's not decreased because we was portfolio behind there, what's generating the revenue and profit behind there. SME lending, in the Q1, we do a very strong sales activity, and that's something what you can see it's impacted in Q2. And the whole first 6 months, we can record a 15% year-on-year growth, what's really, really good. Average loan amount in the EUR 14,600 and maturity around 1.5 years. SME lending is operated today in the 6 different markets. Credit limit, what is our biggest lending product, average loan amount EUR 1,600 to EUR 1,400. It's coming year-on-year to 8% down. Mainly due the reason that during the COVID time, during the Q2, the customers' average balance was a little bit coming down because people did not using so much on the credit limit product. And of course, with new lending sales there as well, what means. And of course, we was a little bit restricted the new loan lending sales there as well. What's mean that there was not so many new accounts. However, the impact was pretty -- not as big, as some of the PlusLoan or the Microloan. PlusLoan, it's our second largest product. Average loan amount around EUR 850, EUR 900; maturity, a little bit 1, 1.5 years. It's come at -- to a 33% down. It's over 8 countries today. The main driver behind the coming -- the PlusLoan is coming down is that we suspend a few big markets, like the example of Poland and the U.K. and Canada as well. And that was an impact there. But of course, top of that one because we restructured the lending on the several -- practically all our markets and the impact was much higher on the PlusLoan. The Microloan, EUR 200 average loan amount, around 1 month. It's coming to 46% down year-on-year. The story is very similar like PlusLoan. So we restriction our lending activity in the -- quite strongly in the microlending countries and that was the impact for our sales. I want to jump to Slide #5. And this is one of the key takeaway that I want to leave all of you. So end of the March, when whole Ferratum leadership team, when we realized the COVID-19 impact in our business, we made the action plan. We booked them into 4 different elements. The first one, we said is we have to liquidity management. That's key things that we have to be sure that during the crisis and after the crisis, we have a very strong liquidity position. We want to tighten our risk control, to be sure that we onboarded profitability customer segment in and of course, we want to reduce our cost base. And top of that one, we make the decision that we want to be sure that when this COVID prices is start to come over, we are the -- we come a very strong company out of this crisis. Liquidity management, we can statement that our deposit is increased significant here, and Bernd can explanation those a little bit more later. We have a cash resource. It's today, the EUR 382 million. We don't have any bond repayment due in this year or the next year. What's make our liquidity position extremely strong. What's giving us the good basement for the -- to go back to growth position. Tighter risk control, we -- suspension of the lending those selected market, what I earlier mentioned. We can see the very solid payment patterns for the customer point of view, and we are -- we practically see the very stable risk KPIs in all our countries. Thanks, of course, those actions, what we does as well. Reduced cost base. There we can -- I think that Bernd can go into more deeper here but -- on his presentation, but we can see here that we have made a significant reduce in our personnel expenses and other operating expenses. And of course, the marketing cost, what we have reduced in the -- during this Q2 period. In the overall, we can say that in the today, Ferratum Group is much, much more leaner, much, much more efficient than we're doing in the January on this year, the 6 months ago. And just if you look at the headcount point of view, we can see that we have reduced 200 people in our headcount. So we have a mix of very, very strong correction over here. What's, of course, to help us on the future. Go for opportunities, the fourth point. This is one of the most exciting for my point of view. We have doing our SME lending. We have doing the structuring, the SME lending around the new own entity, and we have rebranded that one. So we really want to see that we want to invest in our SME business in the future. Our mobile wallet, we have a really good experience in Latvia, where we're launching this in the [ Vilaka ]. And we can see that we have implemented all nice features, like example, the NFC payments and fast car deliver and so on. And customer feedback was so far been very, very, very positive. And we can see that conversion to lending customers are looking pretty good as well. So we have learned a lot, we are very happy and we will see that Ferratum start to scale in our wallet on the new countries and start to scale in the bigger customers base as well. Operating model, we have strengthen that one. And we have a middle of the transformation to transfer the Ferratum more agile. We start this project on the 3, 4 months ago when we realized that we have to be more closer to customers, and we practically want to support the innovation there and keep our operating costs into much lower, the efficient level. And that's one of the driver why we decide to go in that direction. We will tell a little bit later on that more in the next calls. Yes. And the last, but the most important, of course, our loan sales. We can see that it's back to growth, and this is definitely what we want to support in now. So those are the 4 main action plan what we have it. And the support in this last point, if you jump to Slide #6, you can see the little bit our reactivation growth in the H2 and the management view is that we will accrue the selected countries and selected customer segments, we will accelerate our growth. And you can always see that since May, we have start to increase significant our loan disbursement. So how many new loans we give out and the existing -- new and existing customers. We haven't just visualized that when we have take suspended markets out here to be sure that you can understand more the dynamics behind there as well. And we have a positive view on the [indiscernible] fraud. Yes. Good. In the next slide, in Slide #7. There is a few words about the Ferratum SME business. And I'm super exciting to announcement today that Ferratum SME business is today on the capital books. So we have made a big refunding exercise here. And we -- like I mentioned earlier, we have build a totally independent legal entity behind the SME business as well. And the drivers behind this thinking process is that we want to be in more autonomy and independency around this organization and accelerate the growth on the future. Of course, we want to leverage in Ferratum operational efficiency in the payment and customer service and different process behind there and the collection as well. It's -- they're really efficient and super digitalize what we're doing at the group level. And of course, some other proof of confidence and elements, but we want to run in this more and more autonomy and keeps the opportunity growing faster and more profitability, what we have doing before there. And of course, we are feeling the H2 in this year is that one that we will continue to investment a growth, but we're doing this in a very -- we will maintain the risk sensitive approach there, especially the look in those high-risk or highly affected industries where we have suspended our lendings on the SME customer segment. But I really recommend for you to take your time, go to click to visit the capitalbox.com website. And you can see the all new branding there. And I hope you are as exciting like I am as well on this initiative. So I think this is my part of the business overview, the first 6 months is done. And I'm happy to hand over to Bernd Egger to go more deeper from financial part.

Good morning, everybody. I'm glad to see that there are quite a number of people interested in understanding how we have actually performed over Q2, which was not an easy period, but I think we have managed really well. And I would like to go into a little bit more detail and help you understand the key drivers, both in terms of revenue development, profitability, liquidity position and so on and so forth. Let me jump right into the P&L. Revenue has managed already EUR 121.1 million in the first half of 2020, which is a decrease of 16.8% compared to 2019. What is actually driving this, it's important to understand from our point of view that there are 2 drivers. One is, obviously, market-related, that is predominantly driven by COVID-19. But there's a second element, an active decision earlier this year prior to the peak of the -- or actually prior to kicking in the COVID-19 crisis. The active decision to suspend lending in some markets early 2020, simply as a consequence of the fact that we think that we can allocate capital liquidity in more profitable and more promising market. So there are 2 elements to the revenue development. We'll come to that in a little bit more detail later on. On profitability. On an EBIT level, we have achieved turnaround for the second quarter and for the full first half year of 2020. The second quarter EBIT is EUR 12.3 million, which means that for the first full half year of 2020 EBIT is at EUR 10 million, and adjusting positive EUR 10 million, I have to say, after Q1 and adjusting for the EUR 7.8 million impairment result in an adjusted EBIT of EUR 17.7 million for the first 6 months of the year. What is actually driving this? That is on the one-hand side, a continued cost reduction, both compared to 2019 but also compared to the first quarter in 2020. We have reduced personnel expenses by more than EUR 3.5 million for the first 6 months compared to the previous year is a consequence of the fact that we've reduced headcount by more than EUR 200 million compared to last year, which is not just simply a cost-cutting exercise but goes hand-in-hand and is closely related to the implementation of an operating model that is focusing on automation and is more efficient than we had in the past. Naturally, also some operational expenses went down during Q2 related to sales, related to marketing but also related to administrative expenses, travel being one of that office-related expenses and so on and so forth. The second key driver of the very strong profitability during Q2 and essentially also in H1 is credit risk management. So the level of impairment for loan losses has come down significantly to EUR 19 million in Q2 compared to EUR 35 million in Q1. What it means is that in absolute terms, we're exactly on the same level as in the first half of 2019, which is EUR 54 million. Taking out or adjusting for the onetime effect of COVID-19, this means that actually credit loss impairments are going down some 13% year-on-year for the first 6 months of the year. In terms of impairment of the net sales, adjusted for COVID-19, practically at the same level, H1 2019 to H1 2020, currently, at a little bit more than 38%. So what were the decisive? There were 2 decisive reasons for the strong performance on credit risk management. And again, that's important for us to understand what the driving forces behind that is essentially very strong payment behavior throughout the pandemic. So we have given you an update, and I'll get to more details on that a little later, but one of the key messages in our update on how we started managing the COVID pandemic was that we obviously, pay very lot -- very large attention to payment behavior. And I'm glad to say that up until now -- up until not only the end of H1, but up until mid-August, payment behavior remains to be very strong. The second driver in terms of risk management and credit loss impairment is that from today's perspective, given the macroeconomic development and especially diverse from payment behavior, we currently do not see substantial reasons to amend our assumptions and to build additional impairments related to macroeconomic variables. What that means is that we maintain the provisioning level that we built at the end of Q1 to EUR 7.8 million for the full first half year 2020. On profitability, I would also like to highlight that we have not only achieved a turnaround in Q2 on an EBIT level but also on EBT level, whilst EBT was negative in Q1, it was quite strongly positive in Q2 with a plus of EUR 6.8 million. What that means for the first 6 months is slightly negative EBT EUR 1.5 million. But again, adjusting for the COVID-19-related impairment also for the first 6 months, we would result -- would show an adjusted EBT of plus EUR 6.3 million. I will move on to the balance sheet and explain a little bit on the key movements of the balance sheet compared to the end of 2019. I guess I can boil that down to 2 or 3 key messages. Message number one, total assets went up significantly by 28%. The key driver behind that is a very strong cash base. So we actually built up more than EUR 200 million cash during the first 6 months of 2019 -- 2020, I'm sorry. That is driven again by 2 factors. One is a very strong repayment behavior and a more cautious approach in giving out new loans. What that means is that from a net perspective, loan repayments exceeded disbursements, so cash in essentially; and secondly, very strong development on the deposit side, which maybe looks a little bit interesting at first sight, but there is an intrinsic logic that comes with that. Maybe I'll get to that also a little bit later, but what I can highlight already at this point is that one of the key targets during the last 4 months was to strengthen deposit base, not just increase the value, but to make sure that we are very well protected for a bank run for any substantial disruptive negative contact scenario, and we increased the proportion of deposits with longer maturities significantly. Partly offsetting from a total asset perspective, EUR 50 million reduction in assets loans to client, which is apparently a function of the reduction of lending activities in the suspended market and to a certain extent, also, but not in full, to COVID-19. And as pointed out by Jorma already, we are back to growth mode from a loan sales perspective from May onwards. Other assets, there's not much to say. Basically, noncurrent assets, stable, you are familiar with that. Intangible deferred tax assets, no substantial movement. Other receivables reduced slightly, which is due to the fact that we actually did not want to engage in any prepayments. So any client reduce that position also as part of our liquidity management process throughout the pandemic and reduced our open position from loan sales. So that is all in very good shape. From an equity and liability perspective, I would highlight that equity is up at EUR 125.4 million, which is practically close to the level of EUR 129 million at the end of the financial year 2019. Noncurrent liabilities. That goes in hand with what I've just said, also strengthened EUR 42 million term deposits build up during the first half of 2020, with a residual maturity of more than 1 year, which I think is really a remarkable achievement by Ferratum Bank since essentially at the beginning of the year, there was no such product with a residual maturity of longer than 12 months, we've established a 24-month product, a 36-month product and the bank managed very well to incur long-term deposits. In terms of current liabilities, we see 2 movements: one, an increase also in short term deposits, which is something that will show a slightly different picture in Q3. We're actually achieving an outflow agreement in shorter term, and we had a reduction in current liabilities related to the repayment of EUR 40 million bank bond in Q1. Finally, as regards balance sheet structure, I would like to highlight that the net debt equity per ratio is down at very healthy 2.27%. You might recall that our bonds are under covenant, all bonds now under a covenant of 3.5, so we are considerably below the level of 2.59 at the end of the year 2019, and also very strongly below the 2.72 at end of first half 2019. So what it means is we have absolutely both the liquidity and the room to move from a balance sheet structure perspective. Let me briefly move on to the segments, product segments, and I'll reduce it to a number of statements here. What is important to understand, again, with regards to the revenue development in 2020 that, essentially, we have to differentiate between micro lending and PlusLoans on the one hand side, which is still generating cash. But at the same time, it's not at the core of the strategic development. At the core of the strategic development and our strategic interest is, obviously, the credit limit product, which has developed tremendously well in the past, CapitalBox. I can just reiterate what Jorma said, this is absolutely at the core of our strategic interest and naturally also wallet and prime lending. Now in the first 6 months, the revenue reduction of EUR 24 million, EUR 20 million of that related to Microloan and PlusLoan. Only EUR 6.4 million, which is less than 8%, are related to the credit limit product. So credit limit portfolio performed reasonably well throughout the pandemic and now accounts for 60% of total revenue. I think it's really remarkable to see that the SME revenue increased during the first 6 months of 2020, plus EUR 2 million from EUR 13 million to EUR 15 million, which is an increase of 15%. Obviously, the driver of that is a very strong performance in building up the portfolio throughout 2019 and also the beginning of 2020, so in the SME business with record month essentially in January and February 2019. Obviously, we reduced lending activities significantly during the pandemic, did not continue lending activities in industries that were highly affected, directly or indirectly by the pandemic but are in very good shape to reignite growth if economic conditions allow us to do that, which we actually have started already in May. On the new segment, prime and wallet, we have not stopped the activities during the pandemic. Prime is currently live in 4 markets that is, Latvia, Finland, Sweden and Germany. We are about to getting back to growth mode with those products. Wallet live in Latvia, very encouraging data and KPIs that we see from both a qualitative and quantitive perspective. That is important for us to increase the engagement with clients, to attract new clients, to reduce customer acquisition costs, to bring incremental business to the Ferratum Group. I would like to briefly go back to the revenue development and really make sure that everybody sees and understands what the revenue development actually means with regards to our strategic ambition. Here in this revenue bridge, the purpose of this slide is to give you this insight. There are 2 key drivers. So we're starting off with EUR 146 million in 2019, reducing to EUR 121 million in 2020. More than 50% of that, the EUR 14 million revenue reduction is the direct consequence of an active decision. So this is not driven by COVID-19 or any other market parameters, this is driven by management's decision to discontinue at least to suspend lending activities in markets that were not as profitable as we would have wished them to be. So this is important to understand when we have a closer look at what that actually does to revenue development in the active market. In the active markets, which is all but the suspended ones, a reduction of EUR 13 million plus EUR 2 million in the SMEs, so net reduction of only EUR 11 million during the first half, which is less than 8%. Let me move on to the second key driver of strong performance in the first half of 2020, that is cost reduction. And this relates to both personnel expenses and operational expenses. You might recall for those who have participated in the Q1 presentation that during the presentation, we outlined that the ambition is to reduce headcount significantly during the first half essentially to achieve a number which is by some-200 below the level of the previous year that is done and completed and pays off in terms of quite strongly reduced personnel expenses. But again, I would like to reiterate, it's not just a cost-cutting exercise, it goes in hand with the creation of a more lean process-related, automation-related organization and operating model. Also on operational expenses, cost management is and remains under our control. Marketing and sales-related expenses down, both compared to the previous quarter but also compared to the previous year, significantly, which obviously will go up slightly as we increase sales down the road. If the economic conditions permit that during the year, administrative expenses down, other operational expenses also down on a quarterly basis compared Q4 2019 to Q1 2020 and Q2 2020, a clear downward trend. The target here is to continue to keep the costs low also during a period of pre [indiscernible] growth. The third key driver of the strong profitability in Q2 and also H1 is certainly credit risk management and underwriting. I would like to briefly recap the key message from -- again, from the 20th of May, exactly 3 months ago, when we presented Q1 results. One of the very important key messages we wanted to bring across is that the payment behavior, at the beginning of the crisis of the pandemic, measured as a percent of due payments actually paid on time or within a limited number of days past due was stable back then. 3 months later, I can confirm -- we can confirm that the percentage of repayments made within 7, 14 and 30 days past due is still stable. And in fact, it is upward slope. So it's improving and to show you the development of the first 6 months, please refer to the graph. This gives you the full picture throughout the prices. So slightly increased volatility but the trend is clearly upward slope. So how did we get that throughout the first 6 months? Obviously, we've adjusted the scoring and underwriting criteria for a deteriorating macroeconomic environment. So we anticipated what is reflected also in the P&L from an underwriting perspective. As pointed out already, we've suspended lending prior to the crisis already in a number of jurisdictions. We have introduced selective and country-specific lending guidelines in the active markets. We had to observe and actually accept and manage for an approval rate, which was down by 45% at the peak of the pandemic but at the end of H1 2020, it is almost back to pre-COVID-19 levels. Obviously, the reduced disbursement is driven by or was driven by a combination of restricted lending, lower marketing expenses and also less demand, which is picking up again. I will not go into more detail on the impairment. I've highlighted that already. Overall, I would like to reiterate and to update the statement from May that on -- dated 20th of August 2020, the payment behavior up until today has remained stable. Now I'm trying to move to the next slide, which technically, it doesn't seem to work. [Technical Difficulty] Right. Right. Anyway, I'll start talking about what the key message on the next slide, please, or actually would be, it's about collection performance. So it's not only important to make sure that people pay on time but also to make sure that the collection process for those who do not wish or unable to pay on time works well. And basically, the graph that you cannot see yet but, hopefully, can see in a second, also shows an upward trend for the collection performance. What that means is that despite the fact that cash flow plans for individuals and businesses were impacted during second quarter of 2020, the collection performance has improved. We know that during this phase, there were a number of COVID-19-specific laws, moratoria, for instance, that's been implemented to support individuals and actually, we were restricted from a perspective of collection activities. But despite this fact, the performance improved. The approach that we have chosen to take in our collection activities during a not really simple and easy period of time was to apply on a project operation, flexibility and we can search for consensual solution, which means rather staying in touch with customers and finding solutions together with them, which has paid off very successfully during the first 6 months. Obviously, it looks like you cannot -- and also Jorma just mention, turn the slides. It doesn't really matter. I go on, and we'll be very pleased on the next slide and explain what you could see on that. The key message, and that's the third key message related to credit loss and to credit management. Now you know that over the last couple of quarters, there was some volatility in the performance of -- or in actually the KPIs related to impairment levels both in comparison to net sales, but also in comparison to net accounts receivables. On Slide 16, you will see either now or after the meeting, you will see the graph, which shows the clear downward trend, which -- in impairment losses over net sales -- sorry, of net accounts receivables, over 2.5 years. What we're trying to show here is that despite the fact that there is some volatility, the overall trend in credit loss management is downward sloping, which is a positive sign. What is also important to highlight is that probability of default, one of the decisive factors in credit risk management is also going down significantly. Over 15 months, the overall probability of default reduced by 23%. We have, as you know, and also highlighted in the graph in color also reflected the impairment related to COVID-19. We have factored that in. But I would like, again, to reiterate that the payment behavior currently has mitigated the impairment in full. So payment behavior, as mentioned before, is stable. On Slide 17, you can see, just as a summary, the earnings before interest and tax development from the beginning of 2018 on a quarterly level to the second quarter of 2020, which, I guess, given the challenges during the last 6 months is a fairly healthy picture. Finally, I would like to briefly jump to Slide #18, which is a slide that normally is somewhere in the appendix. But this time, we chose to show the slide and also add 1 graph to that. That is the graph on the upper right-hand side of Slide #18, which basically shows you the development of deposits with 9 months or longer residual maturity. What that actually means is that we started off the year with close to no deposits with a residual maturity of more than 9 months. Now we are -- we actually started this and that, again, I think, interesting to see. We started this process, not as a reaction to the pandemic, but actually decided together with the bank to kick off this process and basically aim for a transition of the term deposit structure, towards the longer end at the beginning of the year. So by end of Q1, we already had EUR 39 million in the bucket, 9-month plus maturity. And at the end of the first half year 2020, the amount increased to roughly EUR 100 million. What it means is that we increased the term deposits, the relevant term deposits by factor between 20 and 25 within 6 months during the pandemic. That basically concludes the highlights of this first 6 month financials. We have on Slide 19, management's view on H2. Jorma, if you want to continue, you can do that or otherwise, I continue.

As you want, I can do it as well. It's...

Yes. Please, go ahead.

And thanks Bernd for the -- and thanks for the going through more deeper into our financial part. It's well done. Our management view, we have concluded this in the H2, how we see on the [ Q3 ]. Of course, we are positioned that we don't want to give any guidance on this year or the next year. But of course, we can see in the management point of view, we see that a little bit shorter term, what will be happening, what we will see that will happen in the next 6 months. And I think the first one is the lending activity. We definitely see that this will be increased. This will be accelerated, especially for the good quality customer segment and where we can see the very high customer lifetime value. And that's the customer segment where we want to entry and we want to push the more and more effort over it there. The credit loss or impairments, in the same time, we see that -- the channel of the payment behavior is staying good, we don't see any risk to -- or there any challenge that it start to worsening. However, when you accelerate your lending portfolio, it's an increase your natural -- your impairments on the new lending portfolio as well. And that's the reason why we see that the impairments likely will increase the line with the lending activity as well. Yes. And then the marketing expenses, we can see that in the H2, in this year, we will see the more actively marketing actions and naturally, that's increased the cost base on the marketing part as well. Cost part in the overall cost and the operational cost point of view, we can see that whole automatization and efficacy, what we have done, this will be flying us to driving the much more efficient cost base, what we -- on the second half 2020 as well. Funding part we have very strong fundamental liquidity position, like we mentioned. And we don't have any -- we don't meet any funding activity during 2020. Then our future growth drivers. We will see that our SME lending business, this will be definitely in -- the go back to core position as well. And we will see that there is a lot of customer segment in SME customer segment, where you -- what is not effective so strongly from the COVID or effective have already happened and then we start to recovery now. And those are the segments, what we are really interested in and what we have -- where we see the lending portfolio start to increase. Same situation in the consumer lending, especially when we see the credit limit part. We see the prime lending part, those definitely will be growing in all our consumer lending part, we will see that the future growth there as well. About the profitability point of view, we did not want to give any guidance on this year but we see lots of positive momentum here, like you can see on our management's view as well. Bernd, do you want to add something on that one or? You are in the mute, if you speak.

I'm perfectly fine with your view on the remainder of the year 2020, absolutely. It is about regarding growth. We are on good track on that. I think we are in very good shape for the second half of 2020 and beyond.

Great. I fully agree. And I have to thank -- and I have to use the opportunity, thanks in this point for our management and our team that -- I mean, everybody have been doing super great job for the recovery for this pandemic and the preparation to Ferratum to turn stronger growth position in the H2 and '21 and '22, and that's something what I'm super exciting over here. Good. Then I think it's -- we have a last slide on our presentation. If you can jump the last slide. So I think I just want to repeat our key takeaways. I just want to repeat our key takeaways, what we -- what I earlier mentioned. So if you look to our presentation, I think we have extremely well-executed our 4 Stage COVID-19 pandemic plan. And the second one is that we have a very strong operational improvement in the Q2. This is extremely -- I'm very happy with that one. And of course, we have lots of growth opportunities on the table now related to our mobile wallet, our consumer lending and our SME lending, and we are happy to accelerate those on the future. So I think I'm in the -- and there is one slide, it's Slide #21, but this is just a shareholder instruction. So I think we are ready for the questions. I think we have -- on the chat box -- oh yes, sorry.

No. I was just going to inform that there appear to be no audio questions. You can go ahead with any webcast questions.

Okay. Thanks, operator. Good. So on the chat box, we have several questions, and the first one comes from the Philipp Häßler, Pareto Securities. And there is -- the first question is, can you please give us the rates you pay the average for daily and 12-month term deposit? The second question is -- Bernd, do you want to answer that first one or?

Yes, yes, yes. There's issues with -- the computer's on freeze, but I understood the question. So and I can maybe combine that with -- and there was another question on the deposits and how we actually managed to incur EUR 200 million in deposits, maybe I can combine those 2. So what we have done is we remain the interest rate level actually stable throughout the pandemic and implemented new products. So up until beginning of 2020, we had overnight money as a product 3 months, 6 months and 12 months term deposits. We were aiming at increasing the longer maturity, so we implemented a 24-month product and 36-month product. And they've been, maybe surprisingly, but in fact, extremely positive in terms of generation of inflow of cash. In terms of interest rate level, we have not changed much. So obviously, during the crisis, we actually maintained our pricing level stable, obviously, with the 24 months and the 36 months product with some 1.2%, 1.4%, 1.6%, a little bit more expensive than that. However, that is something I would like to also mention as it is super interesting to see. This had a very strong impact on the inflow and longer ends. Now the target KPI that we have is that essentially from this below 5% of term deposits with a residual maturity of more than 9 months, we are aiming at a ratio of between 25% and 30%. And that is where we are. So we actually now, given that we have a very strong liquidity base reduced earlier in this quarter, actually in July. Interest rate levels significantly for all periods. So overnight money, down to basically 10 basis points and also 36 months, 24 months, 12 months, 6 months and 3 months reduced significantly all between 30% and 40%. So we are currently now at the level of between 10 basis points for overnight money to 90 basis points for a new 36-month money.

So next question. Bernd, do you want to take the next question?

Yes. So the next one I see is Philipp Häßler. Could you give us some color in terms of dividends from share buybacks, obviously, share price extremely low and buying back shares at the level -- at this level, could generate significant value for shareholders. Yes, please continue. Yes. Maybe you want to start with the dividend?

Yes. Maybe I can just to share my view here is I think in technicality point of view, in the last AGM in the June, we give the quarter the right to rather to pay the dividends on the latter end of the year or buyback the shares. So this is probably the technicality. We have opportunity doing that one without big formality process or the formal process. On the management point of view and the core point of view, we are, of course, want to look carefully how this situation development. But I think in that personal point of view, I want to definitely -- I mean, I'm very, very keen to put off the options, the dividends and the share buyback program. I am, at the personal level, I'm very, very exciting and keen for both options. But we don't have any final decision here what I can state it over here. So we -- in this point, I'm not capable to answer the more in this point. But then technically, we can do On. And personal level, I'm very keen to doing that type of transaction or rather the dividends or the share buybacks, maybe even looking more to share buyback type of things. But in the official decision, we don't have done that one. So it might be that we don't do it or we can do it. I cannot give the more detailed answer than that on this point. Then there's a next question from [ Daniel Keller ] about how we achieved increased deposit by EUR 200 million.

Yes, I think that was covered. I tried to combine Mr. Kellers and Mr. Häßler's question in one.

Yes. Please go ahead.