Alisa Bank PLC

Management Reports • Apr 10, 2024

Alisa Bank and PURO Finance have agreed on a combination

Alisa Bank and PURO Finance have agreed on a combination

ALISA BANK PLC STOCK EXCHANGE RELEASE, INSIDE INFORMATION, 10.4.2024 AT 08.30
EEST

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INFORMATION, SEE “IMPORTANT NOTICE” BELOW.

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”).

THE COMBINATION IN BRIEF

· 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

The key drivers of the Combination between Alisa Bank and PURO Finance are the
following:

· 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.

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