Alisa Bank publishes previously unpublished financial information and specifies its outlook for 2024

ALISA BANK PLC STOCK EXCHANGE RELEASE 16.5.2024 AT 15.10 EEST

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Alisa Bank publishes previously unpublished financial information and specifies its outlook for 2024

Alisa Bank Plc ("Alisa Bank" or the "Company") announced on 15 May 2024 that it has completed its combination with PURO Finance Ltd ("PURO Finance") (the "Combination"). In connection with the completion of the Combination, 58,878,721 new shares in Alisa Bank (the "New Shares") were issued to the shareholders of PURO Finance in relation to the respective number of shares in PURO Finance Ltd sold in the Combination (the "Directed Share Issue").

Alisa Bank publishes previously unpublished financial information and specifies its outlook for 2024. The aforementioned information is included in the listing prospectus (the "Prospectus") prepared for the purpose of listing the New Shares, which is expected to be published on or about 16 May 2024.

Specified outlook for the year 2024

Alisa Bank has on 16 May 2024 specified its financial targets and outlook for 2024 as follows:

"The uncertainty of the operating environment and delays in measures aimed at strengthening the company's capital structure continues to challenge the financial performance in 2024. Similarly, the expected decline in interest rates will have a slightly weakening impact on Alisa Bank's result.

Alisa Bank announced on 10 April 2024 the combination with PURO Finance Ltd. The key drivers of the combination are the estimated strong synergies on both revenue and cost side. If synergies are realised, total income will increase in 2024 compared to 2023 and profit before one-off items and taxes for the financial year 2024 is estimated to be slightly profitable (EUR 0.5-1.5 million). Profit before one-off items and taxes for the first half of 2024 is estimated to be slightly negative (EUR 0.5-1.5 million).

The target for the group's total capital ratio is 16 percent."

Alisa Bank previously presented the following financial targets and outlook for 2024 in its Financial Statements Bulletin published earlier on 15 February 2024 and in the Annual Report for the financial year 2023:

"In 2023, we achieved a positive result, but due to the unfavorable market situation, the measures aimed at strengthening the capital structure did not proceed according to the targeted schedule during 2023.

The uncertainty of the operating environment and the company's capital structure continue to challenge the earnings development in 2024. Likewise, the expected decrease in interest rates will have a slightly weakening effect on the bank's result. In preparation for these, we have adjusted the company's cost structure during the second half of 2023.

We believe that we will be able to implement the actions to strengthen equity during the first half of 2024. If this happens, the total income will increase in 2024 compared to 2023, and the result before non-recurring items and taxes for the financial year 2024 is estimated to be profitable. However, the result for the first half of 2024 before one-off items and taxes is estimated to be slightly loss-making.

The target for the group's total capital ratio is 16 percent."

Changes in the financial position, result and capital adequacy after the financial statements 2023

There have been significant changes in Alisa Bank's financial position and result between 31 December 2023 and the date of the Prospectus. Alisa Bank's financial performance has been unprofitable during the first half of 2024. The weakening of the profit development in early 2024 is a continuation of the actual development in the second half of the financial year 2023. Due to the unfavourable market situation, the measures aimed at strengthening the capital structure did not proceed according to the targeted schedule. In its profit warning issued on 24 October 2023, the Company announced that lending has been limited taking into account Alisa Bank's capital adequacy target. In addition, the growth of the loan portfolio has been limited by prudence in lending related to the weakened economic situation, especially for business customers. For the above reasons, Alisa Bank's income development weakened, and the Company gave a financial outlook on 15 February 2024 in connection with the Financial Statements Bulletin 2023, according to which the result before one-off items and taxes for the first half of the financial year 2024 will be slightly negative. Alisa Bank's result for the first half of 2024 includes changes to the ECL model and parameters of the credit portfolio of private customers, which will materialise the negative impact of expected credit losses at an earlier stage. The Company estimates that there will be no such significant further changes weakening the result during the first half of the year, and the overall development of the business will be more favourable towards the end of the current half of the year than in the first half of the year. In addition, the Combination is estimated to have a positive impact on the results, but the estimates are subject to uncertainty.

There have been no significant changes in Alisa Bank's capital adequacy between 31 December 2023 and the date of the Prospectus, except for a decrease in Alisa Bank's leverage ratio from 5.8 percent to 3.4 percent due to the increase in the deposit portfolio.

Pro forma financial information

The Prospectus contains unaudited combined pro forma financial information (the "Pro Forma Information") presented for illustrative purposes to describe the financial information of the entity formed in the Combination as if the Combination and the Directed Share Issue had taken place at an earlier date. The pro forma income statement for the financial year ended 31 December 2023 presents the effects of the Combination and the Directed Share Issue as if they had taken place on 1 January 2023. In the pro forma balance sheet as at 31 December 2023, the effects of the Combination and the Directed Share Issue are presented as if they had occurred on that date. The Pro forma Information is unaudited.

The Pro Forma Information included in the Prospectus is attached to this release in its entirety.

In preparing the Pro Forma Information, adjustments have been made to the historical financial information of Alisa Bank and PURO Finance, which directly concern the impact of events arising from the Combination and the Directed Share Issue. The Pro Forma Information is presented for illustrative purposes only. The hypothetical financial position and results included in the Pro Forma Information may differ from Alisa Bank's actual financial position and results. In addition, the Pro Forma Information is not intended to give an indication of Alisa Bank's future financial position or results. Furthermore, the Pro Forma Information does not describe cost savings, expected benefits of the Combination, the impact of Alisa Bank's strategy on the financial position or results, or future integration costs that may arise after the Combination.

In the Pro Forma Information, Alisa Bank and PURO Finance have made a preliminary allocation of the acquisition consideration based on estimates that are believed to be reasonable based on PURO Finance's balance sheet as at 31 December 2023. Alisa Bank has not had access to PURO Finance's detailed information, so the pro forma adjustments presented are preliminary and based on currently available information. In the pro forma calculations, the acquisition consideration is allocated entirely to goodwill. The final allocation of the acquisition consideration will be based on the fair values of PURO Finance's acquired assets and liabilities assumed on the completion date of the Combination and the final values will change from the acquisition calculation presented in the Pro Forma Information.

The following table presents a summary of Alisa Bank's unaudited Pro Forma Information at the times and periods indicated:

	Alisa Bank Group IFRS 1-12/2023 and 31 Dec 2023	PURO Finance Group FAS1-12/2023 and 31 Dec 2023		IFRS adjustments to PURO Group	Pro forma adjustments	Pro forma 1-12/2023 and 31 Dec 2023
(EUR thousand)	(audited)	(unaudited)		(unaudited)	(unaudited)	(unaudited)
Income statement information
Net interest income	14,757	3,132		-4	1,312	19,198
Net fee and commission income	1,785	0		0	0	1,785
Net income from investing activities and other operating income	158	0		0	0	158
Total income	16,701	3,132		-4	1,312	21,141
Total operating expenses	-11,398	-2,164		1	-1,259	-14,820
Realized and expected credit losses	-4,999	-413		-180	-	-5,592
Profit before taxes	303	556		-182	53	730
Income taxes	3	-167		0	0	-164
Profit (loss) for the period	306	389		-182	53	566
Balance sheet information
Assets total	312,841	27,033		-748	-9,272	329,854
Liabilities to credit institutions	0	10,657		0	-10,657	0
Liabilities to the public and public sector entities	268,864					268,864
Debt securities issued to the general public	0	4,355		0	-4,355	0
Subordinated liabilities	6,210	190			-190	6,210
Other liabilities	5,551	6,245		166	0	11,963
Accrued expenses and deferred income	6,054	170		0	0	6,225
Income tax liabilities	0	145		0	0	145
Liabilities total	286,679	21,762		166	-15,202	293,406
Equity total	26,162	5,271		-914	5,930	36,448
Capital adequacy key figures						(unaudited)
Common Equity Tier 1 ratio (CET 1), %						11.9
Total Capital Ratio (TC), %						14.6
Leverage Ratio (LR), %						6.5

Capitalisation and indebtedness

The Prospectus contains information on the capitalisation and indebtedness of Alisa Bank and PURO Finance Group as at 29 February 2024 based on the unaudited financial information of Alisa Bank and PURO Finance Group as at 29 February 2024.

	29 February 2024	29 February 2024
(EUR thousands)	Alisa Bank Group (IFRS)	PURO Finance Group (FAS)
	(unaudited)
Capitalisation
Current interest-bearing liabilities
Secured	-	9,012
Unsecured	440,2191)	-
Total current interest-bearing liabilities	440,2191)	9,012
Non-current interest-bearing liabilities
Secured	-	2,157
Unsecured	26,8781)	5,495
Total non-current interest-bearing liabilities	26,8781)	7,652
Equity
Share capital	18,289	3
Fund for invested non-restricted equity	19,917	4,707
Conversion difference	4	-
Retained earnings	-12,046	172
Result for the financial period	-663	498
Total equity	25,501	5,379
Total equity and interest-bearing liabilities	492,598	22,043
Net indebtedness
Cash and cash equivalents2)	331,194	4,833
Liquidity (A)	331,194	4,833
Liabilities to credit institutions and the central bank	-	9,012
Liabilities to the public and public sector entities	440,056	-
Lease liabilities	163	-
Total current financial debt (B)	440,219	9,012
Total current financial indebtedness (C = B-A)	109,025	-4,179
Liabilities to the public and public sector entities	20,395	-
Loans from financial institutions	-	2,157
Debt securities issued to the general public	6,169	5,495
Lease liabilities	314	-
Total non-current financial debt (D)	26,878	7,652
Total financial indebtedness (C+D)	135,904	11,831

¹⁾ Current and non-current liabilities include lease liabilities in accordance with the Net indebtedness table.

²⁾ Alisa Bank's cash and cash equivalents include the Bank of Finland's minimum reserve deposit of EUR 3.7 million, the usability of which is subject to restrictions.

Off-balance sheet commitments of Alisa Bank amounted to EUR 6,180 thousand on 29 February 2024 and were mainly overdrafts granted to customers that have not been withdrawn by the customer.

PURO Finance Group's off-balance sheet liabilities as of 29 February 2024 consist of lease liabilities and leasing contract liabilities totaling EUR 226 thousand.

ALISA BANK PLC

Board of Directors

Further information

Juha Saari, Interim CEO, Alisa Bank Plc

[e-mail]          

tel. [phone]

Distribution

Nasdaq Helsinki Ltd

major media

www.alisabank.com

Alisa Bank in brief

Alisa Bank Plc is a Finnish digital bank that helps both personal and business customers to manage their day-to-day finances in a flexible and straightforward manner. For savers, we offer an attractive interest rate on deposits. Alisa Bank Plc is regulated by the Financial Supervisory Authority of Finland and listed on Nasdaq Helsinki's main list (ALISA). www.alisabank.com

IMPORTANT NOTICE

This release is not an offer for sale of securities in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. Alisa Bank does not intend to register any securities in the United States or to conduct an offering of securities in the United States.

The distribution of this release may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restrictions. The information contained herein is not for publication or distribution, directly or indirectly, in or into Australia, Canada, Hong Kong, Japan, South Africa or the United States. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. This release is not directed to, and is not intended for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction.

This release does not constitute a prospectus as defined in the Prospectus Regulation ((EU) 2017/1129) and as such, does not constitute or form part of and should not be construed as, an offer to sell, or the solicitation or invitation of any offer to buy, acquire or subscribe for, any securities or an inducement to enter into investment activity.

No part of this release, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. The information contained in this release has not been independently verified. No representation, warranty or undertaking, expressed or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. Alisa Bank or any of its respective affiliates, advisors or representatives or any other person, shall have no liability whatsoever (in negligence or otherwise) for any loss however arising from any use of this presentation or its contents or otherwise arising in connection with this presentation. Each person must rely on their own examination and analysis of Alisa Bank, its respective subsidiaries, its respective securities and the transaction, including the merits and risks involved.

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