(MCRB.L) MCB Finance Group PLC Buy/Sell

Further information:

MCB Finance Group plc:
Rami Ryh?n, Chief Executive +372 5300 8332

rami@mcbfinance.com
Henry Nilert, CFO +358 451 370 065
henry@mcbfinance.com www.mcbfinance.com

Media enquiries:

Allerton Communications:
Peter Curtain +44 20 3137 2500

peter.curtain@allertoncomms.co.uk

Nominated adviser and broker:

Fox-Pitt, Kelton:
Marc Milmo +44 20 7663 6000

Jonny Franklin-Adams

CHAIRMAN'S STATEMENT

Business overview

MCB Finance Group is a consumer finance company providing fast, convenient, easily understood and flexible credit solutions under the Credit24 brand to retail customers in Finland and the Baltic countries of Estonia, Latvia and Lithuania. In its markets, the Company is a leading participant in the non-standard segment of the consumer credit market, providing small denomination, unsecured loans of between EUR100 and EUR2,000 to qualifying customers, with maturities ranging from one month to two years. Loan products are designed to suit customers' needs with simple and transparent terms and flexible repayment schedules. The Company operates in a segment of the market that is typically under-served by larger financial institutions.

Loans are mainly offered online through the Company's Credit24-branded websites in Estonia, Finland, Lithuania and Latvia, as well as through certain distribution partners in the Baltic countries.

Operational update

After a period during the second half of 2008 characterised by steady lending volumes, higher lending margins and adequate credit performance, the first half of 2009 was marked by a pronounced further deterioration of the economies in each of the countries where the Company operates. MCB had since mid 2008 adjusted its business in anticipation of continued economic deceleration; however the scale and speed of contraction during H1 2009 was faster and deeper than expected by most market participants. As a result, repayment performance during the period was below expected levels, as reported by the Company in its trading statements dated 22 May and 18 August 2009.

During the period MCB aggressively responded to the worsened economic conditions by continuing to tighten credit criteria and reducing lending volumes, re-focusing lending to its highest-quality customers and improving credit monitoring and collection processes.

Economic environment and repayment performance:

Economic conditions in all markets in which MCB operates continued to deteriorate materially during the period. As has been widely reported, the Baltics saw a continued drop in economic activity, particularly during the first quarter of the year, resulting in sharp downward reductions in GDP forecasts, increased unemployment, and greater pressure on household finances. Finland experienced similar trends although the deceleration was less severe.

The worsened environment resulted in weaker repayment performance and caused levels of loans in arrears to rise from year-end 2008 levels. The trend was similar in all markets, although Latvia saw the sharpest increase in impairments from a relatively high base, followed by Estonia and Lithuania. Impairment trends in Finland were less pronounced. The increased impairments relate primarily to loans granted late 2008 and early 2009. It is less marked for more recently issued loan pools.

While conditions remain challenging, there are signs the economic slowdown is beginning to bottom out and we believe conditions will stabilise towards the end of the year. Repayment performance has shown early signs of stabilisation over the past couple of months as a result of this and the Company's initiatives described below.

Lending volumes:

The Company extended approximately EUR24.3 million of loan principal during the period, down from EUR26.1 million during the same period last year, and down from EUR30.5m during the second half of 2008. In Q1 and Q2 respectively, EUR13.4 million and EUR10.8 million was extended compared to EUR15.0m in Q4 2009. The reduction in lending was achieved through a significant tightening of the Company's credit criteria which has fed through to improved performance of more recently issued loan pools.

While overall group lending has been reduced, MCB has taken advantage of the significant differences between its markets to focus on the areas of greatest opportunity. As a result MCB has maintained stable lending volumes in Finland and Lithuania, the company's two strongest markets in terms of credit performance, while severely reducing lending in Latvia in light of the particularly difficult economic conditions there. Finland and Lithuania accounted for approximately 70% of total lending during the period, with Estonia accounting for most of the remainder. If economic conditions do not deteriorate still further, the Directors anticipate that lending run rates should remain broadly in line with existing levels.

MCB reduced average loan maturities from approximately five months at the end of 2008 to approximately three months at the end of the period while maintaining lending margins. This gives MCB greater visibility on credit performance and improved returns on capital deployed. We will continue to adjust our product offering as needed.

Other key developments:

MCB initiated a number of changes to its collection procedures to enable more effective management of delinquent accounts. In particular, we improved our CRM systems to allow greater flexibility in arranging repayment plans, re-allocated internal resources to collection activities, and reorganised our relationships with external collection partners to facilitate closer cooperation and ensure better collection performance.

During the period MCB tightened the criteria used in its credit scoring models, a more pronounced continuation of the tightening started mid-2008, and expanded the range of information accessed when determining a customer's eligibility for loans. These changes have resulted in improved repayment performance for more recently issued loan pools. We expect to see continued improvements in performance going forward as we implement further adjustments to the Company's credit scoring models.

In addition the Company has continued to adjust its internal processes and cost structure to ensure maximum operational efficiency, terminated certain non-performing retail partner distribution channels, and reduced costs, among other initiatives. Most of the benefits from these initiatives will be felt during the second half of the year.

We expect all the above activities to significantly benefit the Company going forward.

Financial review

Revenue for the 6 months ended 30 June 2009 totalled EUR8.92m (H1 2008: EUR4.97m), up from EUR8.1m in H2 2008 due to higher lending margins during the period. Direct operating expenses, which include provisions and variable costs related to the Company's lending operations, were EUR6.39m (H1 2008: EUR2.40m). Direct operating expenses excluding provisions were EUR1.16m (H1 2008: EUR0.91m). Proforma administrative expenses were EUR2.94m (H1 2008: EUR2.69m). Net finance costs were EUR0.77m (H1 2008: EUR0.34m). The proforma pre-tax loss for the period was -EUR1.19m (H1 2008 pre-tax loss: -EUR0.45m). Proforma net loss for the period was -EUR1.42m (H1 2008 net loss: -EUR0.45m).

The proforma figures above exclude non-cash reserves arising on employee share options.

Credit loss provisions totalled EUR5.24m for the period, or 59% of revenue, up from 31% of revenue during the second half of 2008. The significant increase in provisions for the period reflects the deterioration in collection performance of receivables in arrears, particularly in Latvia and Estonia. As a result, and as previously announced, the Directors have taken the prudent decision to increase the provisioning levels on loans in arrears on the balance sheet at 30 June 2009. We expect the high provisions in H1 to be exceptional and that provision levels should return to historical levels during the course of the second half of the year.

At the end of the period Customer loan receivables totalled EUR17.6 million (net of provisions), down from EUR20.4 million at the end of 2008. The Company has a committed bank facility of EUR15m with Rietumu Bank of which EUR10.7 million was drawn at 30 June 2009 (EUR12.1m drawn at 31 December 2008). As at 28 August 2009, the amount drawn down was EUR8.7 million, Reduced lending volumes has allowed MCB to repay part of the facility out of internally generated cash flow. The Company has to date met all of its banking obligations and the Board expects the Company will continue to trade within its banking covenants.

A summary of the Company's financial performance for the period is provided below.

Summary financials
(EUR thousands) H1 2009 H2 2008 H1 2008 2008
Principal lent 24,281 30,520 26,086 56,606

Revenue 8,916 8,082 4,973 13,055
Direct operating expenses (6,394) (3,674) (2,403) (6,077)
out of which Credit loss provisions (5,238) (2,534) (1,497) (4,030)
Provisions as % of Revenue 59% 31% 30% 31%
Proforma administrative expenses (2,944) (2,820) (2,687) (5,507)
Net interest expenses (768) (648) (337) (984)
Proforma EBT (loss) (1,190) 939 (453) 486
Proforma net income (loss) (1,422) 857 (453) 404

Customer loan receivables 17,617 20,385 15,014 20,385
Borrowings 10,730 12,050 7,450 12,050
Total equity 7,101 8,522 7,763 8,522

Current trading and outlook

The severity of the challenges facing the economies in which the Company operates has been both unprecedented and unexpected. Against this backdrop MCB has taken aggressive action to adjust lending volumes and improve credit performance. We believe these actions are beginning to bear fruit and that credit performance will be much improved going forward.

Trading has remained steady since the end of the period, with continued improvement in repayment performance. We will be looking carefully at these trends to determine whether the improvements we are seeing today are sustained, and what further actions the Company may need to take going forward.

Despite signs of stabilisation MCB remains cautious in its lending and maintains its current focus on improving credit quality and collections. We will continue to assess the market with a view to resume the growth of the business as soon as conditions are favourable. The Board believes the changes implemented during the past period will bring lasting benefits to the company's financial performance going forward and remains confident of the Company's longer-term prospects.

Bertil Rydevik

Chairman

2 September 2009

For the 6 months ending 30 June 2009
6 months to 30 June 2009 6 months to 30 June Year to 31 December
(unaudited) 2008 2008
(unaudited) (audited)
Note EUR EUR EUR

Revenue 8,915,854 4,973,251 13,055,266

Direct operating expenses (6,393,625) (2,402,852) (6,077,072)

Cost of employee share options (46,583) (111,846) (195,585)
Termination of contract - - (82,250)

payment
Other administrative expenses (2,944,224) (2,686,508) (5,506,839)

Administrative expenses (2,990,807) (2,798,354) (5,784,674)

Finance costs (net) (768,427) (336,691) (984,442)

Loss on ordinary activities (1,237,005) (564,646) 209,078

before taxation
Taxation 3 (231,111) - (82,229)

(Loss)/profit on ordinary (1,468,116) (564,646) 126,849

activities after taxation attributable to the equity shareholders of the parent company Proforma profit/(loss) calculation
Cost of employee share options 46,583 111,846 195,585
Termination of contract - - 82,250

payment
Proforma profit/(loss) (1,421,533) (452,800) 404,684

Basic loss per Ordinary share 4 (0.0844) (0.0330) (0.0075)

All of the activities of the Group during the period are classed as continuous.

There are no recognised gains or losses except as included in the consolidated income statement, and therefore a statement of recognised income and expense has not been prepared.

The accompanying notes on pages 8 to 11 form an integral part of these interim financial statements.

As at 30 June 2009
30 June 30 June 31 December

(unaudited) (unaudited) (audited)
Note EUR EUR EUR

Non-current assets
Goodwill 737,723 737,723 737,723
Intangible assets 31,443 39,595 37,006
Property, plant and equipment 74,856 101,610 84,280
Deferred tax asset 29,709 - 124,776
Total non-current assets 873,731 878,928 983,785

Current assets
Trade and other receivables 5 17,918,986 15,230,969 20,909,025
Assets classified as held for 7,689 - 9,611

sale
Cash and cash equivalents 1,432,545 1,413,951 1,162,765
Total current assets 19,359,220 16,644,920 22,081,401

Total assets 20,232,951 17,523,848 23,065,186

Equity
Issued share capital 6 2,542,460 2,542,460 2,542,460
Share premium account 7 8,453,870 8,469,908 8,453,870
Equity-settled employee 7 574,967 444,645 528,384

benefit reserve
Retained earnings 7 (4,470,322) (3,693,701) (3,002,206)
Total equity 7 7,100,975 7,763,312 8,522,508

Current liabilities
Trade and other payables 8 1,040,215 765,510 983,156
Deferred income 1,361,761 1,545,026 1,509,522
Short-term borrowings 9 10,730,000 7,450,000 -
Total current liabilities 13,131,976 9,760,536 2,492,678

Non-current liabilities
Long-term borrowings 10 - - 12,050,000
Total non-current liabilities - - 12,050,000

Total equity and liabilities 20,232,951 17,523,848 23,065,186

The interim financial statements were approved by the Board of Directors on the 1st of September 2009 and signed on its behalf by:

B Rydevik H Nilert

Chairman Chief Financial Officer

The accompanying notes form an integral part of these interim financial statements.

for the six months to 30 June

6 months to 6 months to Year to 31 December 2008
30 June 30 June (audited)

(unaudited) (unaudited)

Note EUR EUR EUR

Cash flow generated / (used) 11 1,607,603 (6,870,925) (11,679,868)

in operating activities Cash flow from investing activities
Purchase of property, plant (4,407) (50,113) (69,705)

and equipment
Purchase of intangible assets (13,416) (22,074) (28,687)

Cash flow from investing (17,823) (72,187) (98,392)

activities Cash flow from financing activities
Issue of share capital - 5,139,265 5,139,265
Expenses relating to issue of - (188,295) (204,333)

shares
Receipt of short-term 250,000 2,900,000 7,500,000

borrowing
Repayment of short-term (1,570,000) - -

borrowing
Cash flow from financing (1,320,000) 7,850,970 12,434,932

activities
Increase in cash and cash 269,780 907,858 656,672

equivalents
Opening cash and cash 1,162,765 506,093 506,093

equivalents
Closing cash and cash 1,432,545 1,413,951 1,162,765

equivalents

The accompanying notes form an integral part of these interim financial statements.
Notes to the interim financial statements
1. STATUTORY ACCOUNTS

The interim results for the six month period ended 30 June 2009 are unaudited. The financial information contained within this report does not constitute statutory accounts as defined by Section 396 of the Companies Act 2006. Statutory accounts for the year to 31 December 2008, upon which the auditors have given an unqualified report and made no statement under Sections 498(2) or (3) of the Companies Act 2006, have been delivered to the Registrar of Companies. Further copies of the report are available from the Company Secretary at the registered office, and on the Company's website at www.mcbfinance.com.

2. BASIS OF PREPARATION

MCB Finance Group Plc is registered and domiciled in England and Wales.

The interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting, as adopted by the European Union. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements for the year ended 31 December 2008. The financial information is presented in euros and has been prepared under the historical cost convention and on a going concern basis.
3. TAXATION

No corporation tax arises in Estonia unless a distribution is made. No distribution has been made in the periods and so no liability to corporation tax arises. There is no tax charge for the period in respect of the Group's other subsidiary undertakings due to their losses, except for Lithuania, where the calculative tax liability for the period is EUR231,111. Deferred tax asset on past losses in Finland and Latvia of approximately EUR226,092 has not been provided for in the consolidated interim results. At year-end 2008, the Latvian subsidiary was reported to have a tax liability of EUR95,068 which was offset by a recognised tax asset. In 2009 a ruling by the local tax authorities has confirmed the Latvian subsidiary is under no obligation to pay taxes for 2008 so the liability and asset have been reversed from the balance sheet.
4. EARNINGS PER ORDINARY SHARE

The calculation of earnings per ordinary share is based on:
6 months to 30 June 6 months to 30 June Year to 31 December

The basic and diluted weighted 17,394,247 17,324,868 16,992,770

average number of Ordinary shares in issue during the period

The (loss)/profit for the (1,468,116) (564,646) 126,849

period (EUR)

Notes to the interim financial statements (continued)
5. TRADE AND OTHER RECEIVABLES
6 months to 30 June 6 months to 30 June Year to 31 December 2008

Customer loan receivables 17,617,425 15,014,398 20,385,105
Other receivables 301,561 216,571 523,920

17,918,986 15,230,969 20,909,025

Customer loan receivables are stated net of bad debt provisions of EUR9,103,920 (31 December 2008: EUR4,361,291; June 2008: EUR2,433,000). The provision charged and the amount written off to the income statement during period was EUR5,238,566 (31 December 2008: EUR4,030,384; June 2008: EUR1,496,561).

Included in the above are trade receivables due after more than one year:
6 months to 30 June 6 months to 30 June Year to 31 December 2008

Customer loan receivables 127,665 845,865 766,418
Other receivables - 2,172 -

127,665 848,037 766,418
6. CALLED UP SHARE CAPITAL
30 June 2009 30 June 2008 31 December 2008
Number EUR Number EUR Number EUR

Authorised Ordinary shares of 10p each 30,000,000 3,526,922 30,000,000 3,792,000 30,000,000 3,216,600

Issued and fully paid Ordinary shares of 10p each 17,394,247 2,542,460 17,394,247 2,542,460 17,394,247 2,542,460

A Share issues during the period

During the six month period to 30 June 2009 no Ordinary shares were issued.

B Share option schemes

During the six month period to 30 June 2009 no further options over the Ordinary shares of the company were issued.

Notes to the interim financial statements (continued)
7. STATEMENT OF CHANGES IN EQUITY
Share Share Other Retained
capital premium reserves earnings Total

At the start of the period 2,542,460 8,453,870 528,384 (3,002,206) 8,522,508
Loss for the financial period - - - (1,468,116) (1,468,116)
Arising on employee - - 46,583 - 46,583

share options
At the end of the period 2,542,460 8,453,870 574,967 (4,470,322) 7,100,975

8. TRADE AND OTHER PAYABLES
6 months to 30 June 6 months to 30 June 2008 Year to 31 December 2008

Trade creditors 186,952 240,804 186,814
Corporation tax 343,048 - 207,005
Other taxations and social 106,276 159,266 178,921

security
Other creditors 205,220 136,077 204,385
Accruals 198,718 229,363 206,031

1,040,215 765,510 983,156
9. SHORT TERM BORROWINGS
6 months to 30 June 6 months to 30 June Year to 31 December 2008

Bank loans and overdrafts 10,730,000 7,450,000 -

The loan bears interest at 12.5% p.a. and is secured by a floating charge over the Group's outstanding customer loan receivables, certain of the Group's bank accounts, and by all property including existing and future tangible and/or intangible property owned by MCB Finance Latvia SIA. The credit facility has a loan limit of EUR15,000,000 and is repayable on 24 March 2010.

Notes to the interim financial statements (continued)
10. LONG TERM BORROWINGS
6 months to 30 June 6 months to 30 June Year to 31 December 2008

Bank loans and overdrafts - - 12,050,000
11. RECONCILIATION OF LOSS ON ORDINARY ACTIVITIES BEFORE TAX TO CASH FLOW USED IN

6 months to 30 June 6 months to 30 June 2008 Year to 31 December 2008

Loss on ordinary activities (1,237,005) (564,646) 209,078

before taxation
Depreciation 22,840 15,282 38,109
Amortisation 9,970 7,215 16,417
Employee share options 46,583 111,846 195,585
Decrease/(increase) in debtors 2,991,961 (7,043,231) (12,716,803)
(Decrease)/increase in (226,746) 602,609 577,746

creditors
Cash flow used in operating 1,607,603 (6,870,925) (11,679,868)

activities

MCB Finance Group Plc Nominated Adviser
65 Duke Street Fox-Pitt, Kelton Limited
London W1K 5NT 25 Copthall Avenue
London EC2R 7BP
Registrars Auditors
Capita Registrars Mazars LLP
The Registry Tower Bridge House
34 Beckenham Road St Katharine's Way
Beckenham London E1W 1DD

Kent BR3 4TU
Legal
Pinsent Masons
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London EC2
Public Relations
Allerton Communications
106 Weston Street
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