According to the Unaudited Consolidated Interim Report for the first six months of 2022, the pension manager IPAS Indexo (hereinafter – INDEXO) has recorded its historic best year in new client acquisition and has added more than 25 thousand new customers to its 2nd and 3rd pension pillar plans in the last 12 months to June 30, 2022, an increase of 45% year-on-year. The total number of clients reached more than 82 thousand by the end of 2nd Quarter of this year. The Assets under management (AUM) grew by 31%: from EUR 366 million at the end of the 2nd Quarter of 2021 to EUR 485 million at the of June 2022.
“This is a highly important year of growth for INDEXO, as we are strengthening our pension business and successfully completed the Initial Public Offering (IPO) with the aim to build a new bank,” said Valdis Siksnis, one of the founders of INDEXO and Chairman of the company’s Board.
“Over past 12 months INDEXO added significantly more customers than any other pension manager in Latvia. Our growth was a result of the work of our excellent client representatives team and helped by our index investing strategy, which outperforms active investment management and created better value for our customers. For example, after 5 years of operations, the “INDEXO Izaugsme 47-57” pension plan is the best performing fund in the 50% equity weight fund category,” continues V. Siksnis.
The INDEXO market share of the 2nd pillar pension management market by AUM increased from 6.6% in the 2nd Quarter of 2021 to 8.8% at the end of June this year.
Due to growth of assets under management, the revenue of INDEXO also increased significantly and was EUR 1,039 million at the end of the first half of this year, some 50% higher compared to the first six months of 2021 when it was EUR 692 thousand. The Operating income before client acquisition and other business projects, such as IPO expenses and the new bank development expenses, was EUR 630 482.
“Our priority is to grow the pension fund customer base and develop the new bank, and through that create long term shareholder value. This is why we keep investing heavily in customer acquisition and will continue to do so, as well as we will be increasing our investments in the build-up of the new bank operation. This explains why immediate profitability is not our focus at this stage of INDEXO business. Our operating results clearly show, that our underlying business model is fundamentally strong, fast growing and sustainable,” says Henrik Karmo, one of the founders of INDEXO and Member of the company’s Board.
INDEXO invested EUR 773 275 in new client acquisition, the IPO expenses attributed to the first half of 2022 were 63 927. Expenses for the new bank development were EUR 217 134 in the first six months of this year. As a result of these investments in the growth of the INDEXO current business and its future banking operation, the overall net result for the first two quarters of 2022 was a loss of EUR 423 854.
The priorities of INDEXO for the second half of 2022 remain the acquisition of new pension management customers for both 2nd and 3rd pillar plans as well as the ongoing progress in the development of a new bank. INDEXO is currently working on its application for the commercial bank license. Bank (credit institution) licence is subject to authorization granted by European Central Bank based on Financial and Capital Market Commission’s (FCMC) proposal.
For more information visit: www.indexo.lv