|Emitents||Indexo, IPAS (875500AT8JI5HU41AY20)|
|Veids||2.2. Iekšējā informācija|
The pension management company IPAS Indexo (hereinafter - INDEXO) has released its unaudited consolidated report for the first nine months of 2023. The report shows that in the first three quarters of this year, the company has increased its client number by 20,493, or 21%, and by the end of September, the total number of INDEXO pension plan clients was 120,193. Meanwhile, the total assets under management for all INDEXO pension plans at the end of the third quarter were 812 million euros, which is 227 million euros, or 39%, more than at the beginning of the year when the assets under management were 585 million euros. In addition, in the third quarter of this year INDEXO pension management operations have generated a profit of 57,8 thousand euros even after significant investments in client acquisition.
"This year has been very successful for INDEXO, both in the field of pension management and in working on the establishment of the new bank. INDEXO's achievements result from the interaction of several significant components, namely, we attract new clients, our clients' salaries are increasing, which in turn increases pension contributions. Stock markets are also on the rise, positively affecting the volume of assets under management.
This overall development ensures better operational results, allowing us to continuously invest in attracting new clients and, at the same time, invest in the establishment of the new INDEXO bank, which we can consider as accomplished by at least 80%. Our goal is to continue growing, and we reinvest all profits in growth," says Valdis Siksnis, Chairman of INDEXO and one of the company's founders.
During the first nine months of this year, pension assets in the 2nd pillar pension market in Latvia increased by 14%, from 5.67 billion euros at the beginning of the year to 6.49 billion euros at the end of the third quarter. INDEXO continues to grow faster than the market as a whole and during this time increased its 2nd pillar pension plan assets by 38%, from 575 million euros at the beginning of the year to 795 million euros at the end of September. In terms of assets under management, the 2nd pillar pension management segment accounted for 12.2% of market share at the end of the third quarter, compared to 9.8% at the end of the third quarter of the previous year.
Faster growth in the market is achieved, mainly by attracting a larger number of new clients compared to competitors. In the first nine months of this year, INDEXO's 2nd pillar pension plans attracted 16,781 new clients, while the closest market follower attracted only 3,342 new clients, and the next competitor attracted 1,043 new clients. Other market participants have lost clients in the first three quarters of this year.
Profitable third pillar pension plans with significant growth potential
INDEXO's portfolio of 3rd pillar pension plans accounts for a relatively small portion, 2.1% of all assets under management at the end of September of this year. However, this market segment includes significant growth potential, and INDEXO's 3rd pillar pension plan assets increased by 66%, from 10.2 million euros at the beginning of the year to 17.1 million euros at the end of the third quarter. Furthermore, it is evident that an increasing number of clients are making regular contributions to their 3rd pillar pension plans. Specifically, while 58.1% of clients made regular voluntary contributions in the first nine months of the previous year, this year, this figure has increased to 63.7%.
The results for the first three quarters of this year also show that INDEXO's 3rd pillar pension plans are profitable. For example, the INDEXO Equity Plan is profitable for the first time since its establishment, with a return of 16.39% in the first nine months of this year, 11.27% annual return, and 4.89% return since the plan's establishment.
Pension management becomes profitable also after client acquisition investments
During the first nine months of this year, INDEXO group's commission fee income increased to 2.21 million euros, compared to 1.64 million euros in the same reporting period in 2022. The increase in commission fee income reflects the successful attraction of clients during the year and the growth in the volume of assets under management.
INDEXO's profit before investments in attracting new clients in the first three quarters of this year was 1.35 million euros, and after investments in client acquisition, INDEXO's pension management operations generated a profit of 57.8 thousand euros in the third quarter. After investments in client acquisition and employee stock option expenses (which do not affect cash flow), INDEXO's total losses in the first nine months of this year were 330 thousand euros. Considering the rapid growth pace of INDEXO's pension management operations, the company's management predicts that INDEXO's pension management profit will increase rapidly in the coming years.
In parallel with pension management, INDEXO continues to actively work towards starting its banking operations. Currently, the documentation for banking licensing is under review by the Bank of Latvia and the European Central Bank, and confirmation has been received that the submitted documents are complete. INDEXO has already achieved significant progress in establishing the bank, and shortly after the increase in capital and receipt of the license, the new bank would be ready to provide its first services to private individuals.
INDEXO is an asset management company licensed by the Bank of Latvia, which offers modern 2nd and 3rd pillar pension saving plans in Latvia. INDEXO is the fastest growing pension management company in Latvia with more than 120 thousand customers and more than EUR 820 million in assets under management.
INDEXO was established in 2017 by a group of 30 experienced business representatives and managers with an aim to fight for a better financial environment in Latvia. INDEXO vision is to become a financial services group, offering modern and customized services that empower Latvian people to take care of their financial wellbeing.
Additional information is available at www.indexo.lv.