Digital financial services provider Multitude wants to boost its growth through regional expansion and intensive cross-selling. „The number of customers is not necessarily the decisive factor,“ said CEO Antti Kumpulainen in an interview with Börsen-Zeitung. And the company is happy with its current product portfolio. „The question is how we can use it in other countries and how we can drive cross-selling,“ he explained.

With its 700 employees, Multitude sees itself as an innovative financial company. „We are not just a fintech, and we are not just a bank, but rather a fintech bank,“ is how CEO Kumpulainen, who has been in office since the beginning of the year, defines the company.

Two factors are decisive in this regard: First, the company, which was founded in 2005 under the name Ferratum, operates entirely digitally and therefore, with the exception of wholesale banking, has no physical presence with its customers. Second, Multitude is highly profitable: „These two things are inherent to our nature,“ Kumpulainen states.

According to its own figures, Multitude has around 400,000 customers. In the first half of the current financial year, net interest income fell by 3% to 106 million euros, while the newly established commission business generated a surplus of 5 million euros. Net profit doubled to 14.2 million euros. The company expects to generate 24 to 26 million euros in the current year, and Kumpulainen is targeting 30 million euros in 2026.

The company, which was originally founded in Finland, has held a banking license in Malta since 2012. Three years later, it went public on the Frankfurt Stock Exchange. Its market capitalisation is around 150 million euros. At the end of last year, the parent company relocated its headquarters to Zug in Switzerland.

The company consists of three business units. The consumer credit business under the name Ferratum is active in 14 countries and offers unsecured loans: „The loan approval process takes just a few minutes, and everything is completely digitalized,“ Kumpulainen explains. There is also a credit card, which has been available in Germany since April. In contrast, microloans, the original business approach of founder Jorma Jokela, are now only entry-level products. They account for less than 5% of total revenue.

Multitude addresses small and medium-sized enterprises through its CapitalBox unit, which operates in five different countries and, according to its own figures, has several thousand customers. There are two types of loans, says Kumpulainen: Unsecured loans of up to 300,000 euros, mainly as working capital for small companies. In addition, secured loans of up to 3 million euros are provided. Factoring is also offered, currently in Finland and the Netherlands.

Multitude has been active in wholesale banking—the third unit—since the end of 2023. It currently has around 20 customers. Secured loans of up to 35 million euros are used to finance competitors who are not banks and therefore have no access to deposits: „We know how their business models work", Kumpulainen notes.

Multitude also offers two- to three-year bridge financing for real estate. It is faster than its competitors in granting loans and can also provide smaller loan amounts.

In addition, the wholesale unit offers payment services. Multitude no longer needs correspondent banks in many markets for this, as the company has established its own direct connections to many currencies and central banks. Thanks to this payment infrastructure based on three currencies, Multitude can execute transfers between these currencies extremely quickly. Many fintechs need such services – and traditional banks are often unaware of the challenges faced by fintechs.

In Germany, Multitude has tens of thousands of customers, says Kumpulainen. There, the bank is exclusively involved in consumer loans and deposit business. Most of Multitude's deposits come from Germany. Traditionally, the institution has raised funds through the „Check24“ brokerage portal, but in June of this year, it opened a direct channel for acquiring deposits.

Kumpulainen considers the credit risk provision to be acceptable, saying that "we are doing quite well compared to our competitors.“ In 2024, the risk provision amounted to 96 million euros with net interest income of 220 million euros. It should be noted that most of the loans are unsecured, emphasises the Multitude CEO. In addition, the trend is toward a decline in provisions. In the first half of the current year, they fell by 18%. Since 2020, provisions in relation to net receivables have more than halved to 2.5%.

Kumpulainen sees room for improvement in the cost-income ratio, saying "it is extremely important for us to reduce it. We are not where we want to be.“ It fell from 47% to 45% last year and is to be reduced to below 40% in the next two to three years.

Kumpulainen emphasises that Multitude has sufficient equity capital for growth. This is also reflected in the fact that last year's payout ratio was set at the upper end of the usual range of 25 to 50%. The bank's core capital ratio is around 20%, while the group's equity ratio (including T2 supplementary capital) is 23.0%.

Multitude founder Jokela is the dominant majority shareholder with a 55.3% stake. Kumpulainen says he sees no indication that the main shareholder wants to sell any shares. Other Multitude executives hold more than 5%.

The share price, which had already exceeded 30 euros in 2018 and then slumped to just over 2 euros, has been rising steadily since the end of 2022, and strongly since April this year. It rose from 5 euros in April to a current level of around 6.70. „The trend is nicely upward,“ comments Kumpulainen, who points out that Multitude has consistently achieved its own forecasts over the past four years.

For the Capital Markets Day on November 13, he promises investors more clarity on the positioning and role of the individual segments. Multitude will also publish new long-term guidance there.