Good morning, and warm welcome to First Public Investor Conference Webinar of Delfin Group. Today, we are hosted by Didi Sadmelynch, Chairman of the Management Board and Christophs Bergmans, Member of the Management Board. Webinar will begin with company's presentation, which will be followed by questions and answers session. You are kindly invited to participate by typing your question in the questions box, which can be found in the settings panel zone. Without further ado, I'd like to hand over to Didismann Kristaps.
Gentlemen, the floor is yours.
Hello. Thank you for introduction. My name is Christophs Bergmans. I'm a member of the management board. And with this first public presentation of Delfin Group, we are we will have a new wave of this kind of conferences as we will go further.
And as we have announced our intention to go public for further quarters, we will handle the same kind of presentations. And so we will be more available to our investors future and current investors. And we will present our case of Delfin Group and our results. So presentation will be based on slides about our company, what we are doing, touching upon the products we are offering, and also incorporating things which have happened during those 6 months of 2021. And I will give floor to Didis.
Thank you, Christophs. I'm Didis Admenich, CEO of the company. And I will tell you about our company, what we are doing and about our plans. So we are on consumer finance business and our products are pawn loans, consumer loans, post loans or buy now, pay later product. And on the other hand, that we are on retail business of Praon goods.
So we are selling and buying Praon goods. We have a strong focus of for good corporate governance, responsible lending and also on ASG matters. So company is established in 2,009 and in terms of revenue at the moment we are 2nd largest non bank lender in Latvia, more than 250 employees. And the main brands, how our customers now is Bank Note and Wizzia. There is the timeline of our development for from 2,009 when we opened our 1st pawnshop till nowadays.
But here I want to stress out 2010. At the beginning, we had a rapid growth and at the end of 2010, we already had more than 50 branches. 2014, when we start to list our bonds on Nazzdecreaga and 2016, when we start a corporation with MINTAS P2P marketplace. And yes, and this year when we announce our plans about IPO. Now I will tell you what our both brands do.
First of all, Banknote. From Banknote, our clients can get all our current service and they are pawn loans and pawn loan is loan against collateral and in that market segment we are leading company in Latvia. And then secondly, it's consumer loans and clients can get consumer loan in all of our branches and also online and basically consumer loans, it's a loan up to EUR 5,000 and in terms of loan term, it's up to 60 months or 5 years. Then there is retail of pre owned goods. We are selling and buying pre owned goods and we have 3 main sources.
When we sell these items and they are from obligations of loans when clients didn't fulfill their obligations to pay back loan. And then there is source when we buy directly these items from our clients. And we at the moment, we have strong focus on that. And also a good development. And also we are buying these items from third parties, for example, from Internet shops.
And also we have our own workshop and also we are repairing these items. And by doing that, selling these items and buying them and also repairing, we are extending the life cycle of these items. And by doing that, so we are part of circular economy. And then the 4th is the buy now, pay later product. And let's go further.
So we have also a wide branch network. Altogether, we have 93 branches and more than 40 in Riga. And we have a lot of clients which are using only offline channels, this mean benches and clients which are using only online channels. But we also have many clients which are using both online and offline channels. And we see a very good competitive advantage here.
And that's very good synergy, how we can use offline and online channels. Actually, we have branch in every town or city where is more than 5,000 inhabitants. And in some smaller towns we are the only place where clients can get financial services or buy electronic goods. Also, we are continuing to expand our branch network. And for example, this year, we opened 4 new branches, 3 in the Riga and 1 in Valmiras.
So let me go first. The Wizzia, Wizzia or 2nd well known brand Wizzia is online service provider and its product is online consumer loan, installment loan and Wizzia use banknotes know how and part of its infrastructure. And in corresponding period of 6 months, we had a very good development of Wizzia in terms of revenue and also in terms of loan issuance. To continue with our organizational structure, as a joint stock company, we have 2 tier organizational structure, which consists of management board and supervisory board. Management board consists of me, myself as CEO, Christoph Bergman and Ivar Schlumbert.
And this year we have strong focus on corporate governance and we had established new supervisory board and we had international competition for that. We had 45 applications from 7 countries and well known FONTA's executive search was involved in recruitment process and across supervisory board we have good competence of audit, banking, fintech and other industries and 3 of 5 supervisory board members are independent ones according to good corporate governance principles. So I will go give a word to Christophs.
Thank you. So I will follow with financials, and these are the main financials. And here, I would like to brought attention to gray area depicted in the slides. And this corresponds to COVID waves. And this has been of attention probably for all of us.
And the loan issuance, we have tendencies here that we are growing. We will cover in next slide this one more. But here, I would like to stress out that even during those COVID times, we have managed to stay profitable. So we've done our best. And also, we have grown in terms of our quarterly revenue.
Yes. And issuance of the loans, it's most is a key element which we are following and which directly shows how we are operating. And here we can see 2 waves of COVID. The first one, it was the steepest decline in our issuance. But if we see at the 2nd wave, so we have experienced that.
It's in terms of consumer loans when we are offering products online. There is not so steep decline. But if you look at the pawnshop, as it is those services are provided offline. So there are restrictions and those affect ones. But what we see that after the wave has the COVID restrictions are lifted, there is a sharp increase.
And also currently in the second quarter, we see the increase both in pound loan segment and also in consumer loan segment. So for the consumer loans, the slide here, which I would like to point out, is that even despite COVID restrictions, we have increased our consumer loan portfolio by 10,000,000 euros and over the year. And also non performing loan ratios has been stable for us and at the level of 5%. For the pound loans, as already mentioned, that as those services are provided offline, those issuance has decreased. And also, the same as the decrease has happened to the portfolio.
And those are the loans of the short period and decreased in issuance directly reflects into the portfolio. What is good that in Q2 of this year, also has increased issuance, the portfolio also increases. And about our retail of pre owned goods, so here, I would like to point out that we have established Internet shop. And there, we have seen a substantial increase. And also slides that showed the Teads.
There are also picture of Internet shop. And this sales increases. This has been good for us. Also pointing out to the drop in 39% for the quarter too. We have promotions, and this resulted in the sales revenue increase.
In general, we look very positive about the pre owned goods sector, especially talking about environmental issues. As before, the pre owned goods segment was and sale of pre owned goods was more subject to economic issues. And as now we see that also sustainability issues are coming to our everyday life. And retail pre owned goods especially covers this particular part as we are extending the life cycle of the goods. And also for financial ratios, we are following on a daily basis.
They are stable. Here, we would like to point out our return on equity. It has dropped. And this is as we are paying our dividends. So the net on the net profit levels, this reflects the decrease from previous periods.
And also, I would like to point out on the cost of interest bearing liabilities. We have succeeded to decrease the cost as refinancing. And this was mainly based on the good performance of our Mintos platform, where we have one of the best ratings over the platform, 8. And this helped us to reduce our cost of borrowing. I will pass further to this.
Thank you, Christoph. So talking about our capital structure, we have 3 main capital sources, equity, interest and bonds. Altogether, we have had 6 successful bond issues. 2 of them is already repaid and in July this year we issued 5,000,000 bond and it was oversubscribed 1.85 times and for the first time we managed to decrease the interest rate under 10%. It shows that investors trust us And still we are using Mintus and if you are asking why we are using Mintus, then Mintus for us works some kind of credit line because if you need additional funds then we can easily get them And if we don't need, we can pay it back.
And also, as Christoph said, on Mintus platform, we have managed to decrease this cost of financing. So we have a good track record, good and real business case and good strategy, but we also pay dividends. And this year we have established new dividend policy, which states that we will pay out dividends every quarter, up to 50% of quarterly profit and additional annual dividends. And we trust that that will be one of the drivers which will have positive impact of our share value. This year we have published our targets for 2022 and 2024 and in terms of credit portfolio, our plans is growth to EUR 70,000,000 and in terms of profit before tax to EUR 12,900,000 and to continue payout dividends.
And these targets are based on assumptions that IPO process is successful and we will rise €10,000,000 to €15,000,000 So basically, thank you. This is all of our presentation, but now we will be happy to answer any questions.
Greta and Kristep, thank you for the presentation. Let's proceed with the questions received before the webinar. A kind reminder to those who haven't yet submitted their questions, you can still do it in the questions box in the settings panel zone. So the first pre received question. The planned growth of Delfin Group over the next few years is very rapid and exceeds the growth that has been achieved over the last few years.
How is the company planning to achieve this rapid growth over the next few years, even though such rapid growth was not achieved during the last few years?
Okay. Thank you. I will cover this. It's quite understandable question. And of course, it's composition of things how we will achieve our targets.
And first of all, we have done a good homework and we have done a lot of things. And also our recent track record shows that the homework was done quite good. And also, we have plans what we already have in our have in our pipeline. And we have new products in our pipeline and we will develop them. But also we have done good homework by decreasing the cost of our financing And we have done good homework in our corporate governance.
And also, we have done good homework in improving our management team. And we see that we can fulfill our strategy and also fulfill our targets. Thank you.
Thank you. The next question, the financial sector in Latvia is quite competitive. In your opinion, what are the main competitive advantages to Delfin Group that allow the company to outcompete other market participants, add clients as well as protect the business from competitive attacks?
So, I will cover this one. So as we see that what stands out from competitors is that we have this combination of pawns, pawns, branches, pawnshop branches and also online segment of consumer loan lending. And these 2 together brings us competitive advantage. We can serve clients both offline and online, and there are clients who are using both of those channels. And also the branch network all over Latvia has for us visibility and we are having the presence in the market and this is valuable valued by our customers.
Thank you. Now let's proceed with the questions received during the webinar. So the first one, how do you see the future of physical pawn shops? How active is this business niche in Estonia, Lithuania and in Western Europe?
Okay. Thank you. I will cover this one. The future of physical pawn shops. For example, last year, we introduced the service that a client is able to fill application for PON loan in our web page and just to finish the service in our branch.
And of course in the future we see that new technologies will come also in this service And but I think that pawn shops will remain because it is needed for society because in many situations it works very well to our clients and also we see that part of retail of pre owned goods when we are buying the items directly from our clients. And we our strategy is to expand this part of our business and that will also help to develop PON products. And if you talk about how this niche works in Estonia and Lithuania, actually in both of those countries, pawn shops are quite similar and they are there. And but it's the market is not so good development as in Latvia because they are not so large networks, but still they are there and they are working in Estonia and Lithuania quite good and also in other European countries.
Thank you. Next question. How is the Delfin Group performing when compared to competitors?
So, if comparing to competitors we could just go to one slide we have also produced and this one is our metrics to the consumer market and also phone market. And here, we can see that over the years, we have grown our market coverage. In 2018, we have 5% of the market. And currently in 2020, according to the data, we already have 10% of the total consumer loan portfolio. And so we are growing.
And this, I think, most the best depicts how we are doing against customers. Thank you.
Thank you. Next question. Does Delfin Group currently has any plans to expand to other Baltic countries?
Thank you. I will cover this one. Of course, we know what is going on, on other Baltic countries and other European countries. And but at the moment, we are focusing on Latvia and that's according to our strategy. And we will keep our strategy right now.
Also, we see that Christoph just show you how we are looking against our competitors and you see that still there is a lot of work to do in our home markets and we see that we can grow our credit portfolio on both our segments in Latvia. Thank you.
Next question. Do you have specific targets for annual dividend yield in terms of percentage with respect to share price?
So what we have seen so far comparing just competitors and to the whole market that dividend yield from 6 to 8 would be the one which would be attractive for our potential investors.
Thank you. All questions are answered. Recording of the webinar will be available on the Nasdaq Baltic YouTube channel and in company's announcements. Gentlemen, thank you for the presentation and for answers given. Participants, thank you for joining.
Until next time.