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The Board of Directors of Alisa Bank Plc ("Alisa Bank") and the shareholders of PURO Finance Ltd ("PURO Finance") have agreed on the combination of the companies through a share exchange, upon the completion of which Alisa Bank acquires PURO Finance from the current shareholders of the company (hereafter the "Combination" or the "Transaction").

• As a result of the combination of Alisa Bank and PURO Finance, a forerunner in digital banking and finance services for SMEs emerges in the market.
• The Transaction is expected to generate significant short and medium-term synergies, improving especially Alisa Bank's profitability and growth opportunities.
• The Transaction will be carried out by way of a share exchange, following the completion of which, the current shareholders of PURO Finance will own approximately 40 per cent and current shareholders of Alisa Bank approximately 60 per cent of Alisa Bank's shares
• The Combination is aimed to be completed during May 2024. The Combination is conditional upon, among other things, the approval of Alisa Bank's extraordinary general meeting as well as other customary preconditions.
• The shareholders of Alisa Bank, Evli Plc, Taaleri Plc, TN Ventures Oy, Oy Scripo Ab and T & T Nordcap Ltd, holding in aggregate approximately 51 per cent of the shares, have undertaken to vote in favor of the Combination at the Extraordinary General Meeting of Alisa Bank. 
• Alisa Bank will determine more specific medium-term targets and a profit forecast for the year 2024 following the completion of the Combination, by estimation in June 2024.

BACKGROUND OF THE COMBINATION

Going forward, the focus of Alisa Bank's business strategy will primarily be digital banking and finance services for small and medium-sized enterprises ("SMEs"). The Combination supports this strategic transition. 

PURO Finance is a fintech company specialized in invoice financing, with a business model based on cutting-edge technology and services closely integrated with the systems of financial administration service providers and other partners.

The companies see a clear demand in the market for smooth and efficient banking and finance services for SMEs. Together, the companies are able to provide SMEs with a service model that combines cutting-edge and smooth digital banking services, flexible customer service as well as efficient and diverse finance solutions closely integrated with the systems of financial administration service providers.

"The combination with PURO Finance supports Alisa Bank's focus on digital banking and finance services for SMEs. SMEs find the banking services provided by traditional banks as rigid and, especially, the obtaining of financing as difficult. There is room in the market for a flexible, customer-oriented and digital bank focused on serving SMEs. The combination will generate significant short and medium-term synergies improving especially the profitability, and growth of Alisa Bank. The transaction will significantly increase our customer potential and supports our strategy to provide integrated banking services in the channels of financial administration providers and other partners. In addition, the transaction strengthens Alisa Bank's capital structure and efficient allocation of capital and supports the development of shareholder value," states the Interim CEO of Alisa Bank, Juha Saari.

`'Technological trailblazing in invoice financing services for SMEs as well as an efficient service distribution model with integrated partnerships have been at the core of the strong growth of PURO Finance. The combination with Alisa Bank enables the scaling of this technological expertise with broader shoulders. We will be able to provide a wider selection of banking and finance services through our partnership channels, also for larger customers. Reduced financing costs will immediately significantly improve the profitability of our business. Together with Alisa Bank and our partners, we can create a unique service offering in banking and finance services for SMEs," states the CEO of PURO Finance, Junno Roine. 

KEY DRIVERS OF THE COMBINATION

• capital efficient growth;
• growth in customer volume;
• technological trailblazing; and
• strong synergies.

Capital efficient growth

The Combination enables the acceleration of a capital efficient and profitable growth in corporate finance as well as an increase of return on uncommitted capital related to the BaaS-operations. The allocation of capital will be more efficient as lending is concentrated towards more profitable corporate lending, with a focus on invoice financing. In addition, Alisa Bank's solvency is in connection with the Combination strengthened through the increase of own funds by approximately EUR 4 million.

Growth in customer volume

The Combination strengthens Alisa Bank's BaaS-strategy (Banking-as-a-Service), in which banking and finance services are offered integrated in the channels where customers operate on a daily basis. Examples of Alisa Bank's BaaS-integration is the integration of banking and finance services into the systems of financial administration service providers, the integration of bank accounts into the services and deposit comparison portals of asset management providers as well as the integration of finance services as a payment method in web shops. 

Through the Combination, Alisa Bank strives to expand its comprehensive BaaS-services to the current partnerships of PURO Finance, such as Accountor Finago Oy ("Accountor"). PURO Finance and Accountor have agreed on the continuation of PURO Finance's current finance services as part of the finance service package offered by Accountor to, inter alia, its Procountor customers. In addition, Alisa Bank and Accountor have agreed on the launch of integrated banking services to Accountor's clients and will commence investigations regarding cooperation with respect to also other finance services following the completion of the Combination. 

Going forward, Alisa Bank will strive for new significant BaaS-partnerships both domestically and abroad, and thus increase its customer potential in the SME segment.

Technological trailblazing

At the core of the strategies of both companies is the utilization of technology and a digital service model, which enables a high operational efficiency and scalability of the business.

The cutting-edge technology of PURO Finance enables a very high degree of automation in the finance processes and thus the offering of invoice financing in a cost-efficient manner also to smaller companies. In addition, the technology of PURO Finance enables the utilization of real-time data from the financial administration in credit risk management, which is expected to decrease the probability of credit loss.

Strong synergies

The key drivers of the Combination are estimated strong synergies both on the revenue and cost side.

Expected revenue synergies are based primarily on cross-selling opportunities, increase in customer volume and increased competitiveness. Alisa Bank's banking and finance services can be offered to the existing customers of PURO Finance and to the customer base of PURO Finance's partnerships. On the other hand, the competitiveness of PURO Finance is expected to increase significantly due to lower financing costs, which enables the expansion of PURO Finance's invoice financing offering in PURO Finance's customer channels also to larger customers.

The Combination will immediately create significant financing synergies, as the intention is to replace the debt capital of PURO Finance with the financing of Alisa Bank, which is mainly based on deposited funds. As a result, PURO Finance's financing costs are estimated to decrease by approximately five percentage points, which corresponds to annual cost savings of approximately EUR 1.3 million based on the financing base of PURO Finance in 2023.

Cost synergies are also expected to be achieved by the elimination of overlapping operative costs, the use of mutual best practices to enhance operational efficiency and decreased probability of credit losses as a result of a more efficient credit risk management.

The synergies are expected to strengthen the key financial figures of Alisa Bank, including an immediately increased earnings per share (EPS), a better return on equity (ROE) as well as an increased cost/income ratio (CIR).

KEY FACTORS AFFECTING THE TARGETED LEVEL OF RETURN ON EQUITY

During the years 2024-2026, the combined businesses of Alisa Bank and PURO Finance (the "Combined Business") targets an annual growth of the corporate loan portfolio of more than 25 percent.

The gross revenue of the corporate loan portfolio of the Combined Business is estimated to be approximately 15-17 percent and net credit loss to approximately 1.5-2.5 percent. The estimate is based on historical figures for gross revenue and credit loss levels in the current corporate finance businesses of both companies.

Correspondingly, the net financing costs are estimated to be on average approximately 1-2% during the years 2024-2026, which is based on market consensus forecasts regarding the development of interest rates, including the interest income on liquid assets. Thus, the risk adjusted net interest margin is expected to be approximately 10.5-14.5 percent.

The targeted growth is not expected to require significant investment costs or a significant increase in fixed costs.   

Based on previous growth targets and estimates, Alisa Bank targets an annual return on equity of more than 15 percent by the year 2026.

Alisa Bank will determine more specific medium-term targets and a forecast for the year 2024 following the completion of the Combination, by estimation in June of 2024. 

THE TERMS OF THE COMBINATION IN BRIEF

Pursuant to the combination agreement, Alisa Bank will acquire PURO Finance from the current shareholders of PURO Finance in exchange for a purchase price consisting of 58,878,721 new shares in Alisa Bank (the "Consideration Shares").  Prior to the Combination, both companies continue to operate their businesses separately. Following the completion of the Transaction, Alisa Bank remains as the parent company of the group and PURO Finance will at first become its subsidiary. The current shareholders of PURO Finance own approximately 40 percent and the current shareholders of Alisa Bank approximately 60 percent of the shares in Alisa Bank after the completion of the Transaction.

The value of the Consideration Shares to be issued to PURO Finance's current shareholders is approximately EUR 10.4 million (calculated based on the closing price of Alisa Bank's share on the trading day preceding the announcement of the Transaction (EUR 0.177).

The largest shareholders of PURO Finance, Kempinvest Oy, Mika Laine (through companies controlled by him), as well as certain shareholders belonging to the management of PURO Finance, have in connection with the Transaction agreed to a lock-up undertaking concerning the Consideration Shares. The lock-up undertaking is in force for 180 days from the admission of the Consideration Shares to trading. Further, the largest shareholders of Alisa Bank, Evli Plc and Taaleri Plc as well as certain shareholders belonging to the management of Alisa Bank, have with respect to their current shareholding in Alisa Bank agreed on a lock-up undertaking, which is in force as of the signing of the combination agreement until 180 days from the admission of the Consideration Shares to trading.

TIMELINE AND DECISION-MAKING

The completion of the Transaction is conditional upon the general meeting of Alisa Bank having resolved to approve the Combination and authorize the Board of Directors of Alisa Bank to decide on a directed issue of the Consideration Shares to the shareholders of PURO Finance as well as on other customary conditions.

The Board of Directors of Alisa Bank will convene an extraordinary general meeting of Alisa Bank to decide on the authorization of the Board of Directors to resolve on the issuance of new shares in the company, in order to complete the Transaction. The extraordinary general meeting is to be held in May. The parties' intention is to complete the Transaction as soon as possible after the approval of the extraordinary general meeting, by estimation by the end of May 2024.

Alisa Bank will apply for the admission to trading of the Consideration Shares on the official list of Nasdaq Helsinki Ltd as soon as possible after the completion of the Transaction and trading with the Consideration Shares is expected to commence by the end of May 2024.

GOVERNANCE

Having discussed with the two largest shareholders of Alisa Bank and PURO Finance, the Shareholders' Nomination Board of Alisa Bank will propose to the extraordinary general meeting that Sampsa Laine and Jukka Salonen be elected as new members of the Board of Directors of Alisa Bank. It is proposed that of the current members of the Board of Directors, Sami Honkonen, Johanna Lamminen, Markku Pohjola and Tero Weckroth will continue in their positions. It is further proposed that Markku Pohjola will continue as the chairman of the Board of Directors and Johanna Lamminen as the vice chairman of the Board of Directors. 

The election of the proposed new members of the Board of Directors, Sampsa Laine and Jukka Salonen, is conditional upon the customary fit & proper evaluation conducted by the authorities.

The intention is to appoint a new management team of Alisa Bank after the completion of the Combination.

SHAREHOLDER SUPPORT

Evli Plc, Taaleri Plc, TN Ventures Oy, Oy Scripo Ab and T&T Nordcap Ltd, holding in aggregate approximately 51% of the shares in Alisa Bank, have undertaken to attend the extraordinary general meeting of Alisa Bank and vote in favor of the proposal of the Board of Directors, including the authorization of the Board of Directors to resolve on the issuance of the Consideration Shares.

PURO FINANCE IN BRIEF

PURO Finance is a Finnish fintech company specialized in invoice financing for SMEs. Together with its partners, PURO Finance offers a trusted and seamless invoice financing service that combines the clients' invoicing, financing, credit insurance, collection and bookkeeping into a smooth functioning entirety.

PURO Finance's business is based on the cutting-edge technology developed by the company itself, which enables integrations in the systems of distribution partners, a high degree of automation and credit risk management based on real time data from the financial administration. Thanks to PURO Finance's technology, the service is suitable for all sizes of companies and the adoption of the service is fast and seamless.

The financing services of PURO Finance are offered under a number of brands, such as Procountor Kassaturva, Isolta Kassaturva, Ecom Kassaturva, POP Pankin Laskuraha and PURO Finance Laskurahoitus. 

The current largest shareholder of PURO Finance is Accountor Finago Oy, which after the Transaction will be a significant partner of the Combined Business. Prior to the completion of the Transaction, an internal ownership arrangement will be carried out in PURO Finance, in which Accountor Finago Oy will sell its shareholding in PURO Finance to Kempinvest Oy and certain other current shareholders of PURO Finance, following which the most significant shareholders of PURO Finance are the current management team members and personnel of PURO Finance, Kempinvest Oy, Mika Laine (directly and through companies controlled by him), Heikki Vaiste, Mininvest Oy and Veikko Laine Oy. After the completion of the Combination, the current management team members and personnel of PURO Finance would hold approximately 9.1%, Kempinvest Oy approximately 9.1%, Mika Laine and the companies controlled by him in aggregate approximately 6.6%, Heikki Vaiste approximately 5.6%, Mininvest Oy approximately 4.7% and Veikko Laine Oy approximately 3.1% of Alisa Bank's shares.

SELECTED PRELIMINARY FINANCIAL INFORMATION

The selected preliminary financial information presented below is based on Alisa Bank's audited consolidated financial statements for the financial year ended 31 December 2023, prepared in accordance with IFRS, and on PURO Finance's audited financial statements for the financial year ended 31 December 2023, prepared in accordance with Finnish Accounting Standards. The financial statement figures of the companies have been prepared based on different principles, and PURO Finance's figures have not been adjusted to IFRS. The income statement information of PURO Finance has been presented in accordance with the income statement form as set out in the Finnish Financial Supervisory Authority's regulations and guidelines on the financial reporting of credit institutions.

Income statement 2023 (t€) Alisa Pankki PURO Finance
IFRS FAS
Interest income 20,071 5,858
Interest expenses -5,314 -1,821
Net interest income 14,757 4,037
Net fee and commission icome 1,785 -889
Other operating income 158 0
Total income 16,701 3,147
Personnel and operating expenses -9,994 -1,964
Depreciation and amortization -831 -88
Other operating expenses -572 -106
Total operating expenses -11,398 -2,158
Credit loss -4,999 -413
Profit before taxes 303 577

ADVISORS

Alisa Bank is advised by Evli Corporate Finance as financial advisor and EY Law Finland as legal advisor. PURO Finance is advised by Taaleri Kapitaali as financial advisor and Dottir Attorneys Ltd as legal advisor. IR Partners Oy acts as the communications advisor in the Transaction.

MEDIA AND INVESTOR EVENT

Alisa Bank will host a press and investor event today 10 April 2024 at 1:00 p.m., in which the Transaction will be presented. You can follow the event in Finnish at https://alisapankki.videosync.fi/tiedotustilaisuus-10042024. 

The presentation to be presented in the event will be available on Alisa Bank's website at https://www.alisabank.com/reports-and-presentations.

ALISA BANK PLC

Board of Directors

Further information

Juha Saari, Interim CEO, Alisa Bank Plc
juha.saari@alisapankki.fi   
tel. +358 40 6720 595

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 (https://www.alisapankki.fi/henkiloasiakas/saastotili) 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

PURO Finance in brief

PURO Finance is a Finnish fintech company specialized in invoice financing for SMEs. Together with its partners, PURO Finance offers a trusted and seamless invoice financing service that combines the clients' invoicing, financing, credit insurance, collection and bookkeeping into a smooth functioning entirety.

The financing products of PURO Finance are sold under a number of brands, such as Procountor Kassaturva, Isolta Kassaturva, Ecom Kassaturva, POP Pankin Laskuraha and PURO Finance Laskurahoitus. 

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.

This release includes forward-looking statements. These statements may not be based on historical facts, but are statements about future expectations. When used in this presentation, the words "aims", "anticipates", "assumes", "believes", "could", "estimates", "expects", "intends", "may", "plans", "should", "will", "would" and similar expressions as they relate to Alisa Bank, PURO Finance, the transaction or the combination of the business operations of Alisa Bank and PURO Finance identify certain of these forward-looking statements. Other forward-looking statements can be identified in the context in which the statements are made. Forward-looking statements are set forth in a number of places in this presentation, including wherever this release includes information on the future results, plans and expectations with regard to the Combined Business, including its strategic plans and plans on growth and profitability, and the general economic conditions. These forward-looking statements are based on present plans, estimates, projections and expectations and are not guarantees of future performance. They are based on certain expectations, which, even though they seem to be reasonable at present, may turn out to be incorrect. Such forward-looking statements are based on assumptions and are subject to various risks and uncertainties. Shareholders should not rely on these forward-looking statements. Numerous factors may cause the actual results of operations or financial condition of the Combined Business to differ materially from those expressed or implied in the forward-looking statements. Alisa Bank or any of its respective affiliates, advisors or representatives or any other person undertakes no obligation to review or confirm or to presentation publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise after the date of this presentation.

This release includes estimates relating to the synergy benefits expected to arise from the transaction and the combination of the business operations of Alisa Bank and PURO Finance as well as the related integration costs, which have been prepared by Alisa Bank and are based on a number of assumptions and judgments. Such estimates present the expected future impact of the transaction and the combination of the business operations of Alisa Bank and PURO Finance on the Combined Business, financial condition and results of operations. The assumptions relating to the estimated synergy benefits and related integration costs are inherently uncertain and are subject to a wide variety of significant business, economic, and competitive risks and uncertainties that could cause the actual synergy benefits from the transaction and the combination of the business operations of Alisa Bank and PURO Finance, if any, and related integration costs to differ materially from the estimates in this presentation. The financial information presented in this release is unaudited, unless otherwise states.

Further, there can be no certainty that the Combination as described herein will be completed in the manner and timeframe described in this presentation, or at all.