0RD4 Evli Pankki Oyj

The Finnish Financial Supervisory Authority has approved the Finnish language Demerger Prospectus relating to the demerger of Evli Bank Plc and the Merger Prospectus relating to the merger of the remaining Evli and Fellow Finance Plc

EVLI BANK PLC STOCK EXCHANGE RELEASE 7 DECEMBER 2021 AT 7:45 PM EET

NOT FOR PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO AUSTRALIA, SOUTH AFRICA, HONG KONG, JAPAN, CANADA OR SINGAPORE, NEW ZEALAND, THE UNITED STATES OR ANY OTHER JURISDICTION WHERE SUCH PUBLICATION OR DISTRIBUTION WOULD VIOLATE APPLICABLE LAWS OR RULES OR WOULD REQUIRE ADDITIONAL DOCUMENTS TO BE COMPLETED OR REGISTERED OR REQUIRE ANY MEASURE TO BE UNDERTAKEN IN ADDITION TO THE REQUIREMENTS UNDER FINNISH LAW. SEE “IMPORTANT NOTICE” BELOW.

THE FINNISH FINANCIAL SUPERVISORY AUTHORITY HAS APPROVED THE FINNISH LANGUAGE DEMERGER PROSPECTUS RELATING TO THE DEMERGER OF EVLI BANK PLC AND THE MERGER PROSPECTUS RELATING TO THE MERGER OF THE REMAINING EVLI AND FELLOW FINANCE PLC

Evli Bank Plc (“Evli”) and Fellow Finance Plc (“Fellow Finance”) announced on 14 July 2021 that Evli and Fellow Finance have signed a combination agreement (the “Combination Agreement”), whereby an arrangement (the “Arrangement”) has been agreed, according to which all of Evli’s asset management services, custody, clearing, settlement, and brokerage services, corporate finance activities and their support services (i.e. the operations falling under the investment firm authorisation) will transfer in a partial demerger from Evli to a new company that will be established in the demerger, Evli Plc (the “Demerger”) without a liquidation procedure in accordance with the Finnish Limited Liability Companies Act (624/2006, as amended) (the “Finnish Companies Act”) and the Finnish Act on Commercial Banks and Other Credit Institutions in the Form of a Limited Company (1501/2001, as amended) (the “Finnish Act on Commercial Banks”), and according to which Fellow Finance will merge immediately thereafter into Evli remaining after the demerger through an absorption merger (the “Merger”). The Arrangement will become effective on the date the Demerger and Merger are registered with the Finnish Trade Register (the “Effective Date”). The planned Effective Date is on or about 2 April 2022.

In the Demerger the shareholders of Evli will receive as demerger consideration one (1) class B-share in Evli Plc for each B-share they hold in Evli and one (1) A-share in Evli Plc for each A-share they own in Evli. In the Merger following immediately after the Demerger, class A-shares of Evli will be converted into the class B-shares of Evli. After the conversion of the shares Evli will have only on single share class. In the Merger Fellow Finance’s shareholders will receive six Evli shares of the single post-conversion share class (the “Merger Consideration Shares”) for each share they own in Fellow Finance.

As part of the Arrangement Taaleri Plc and TN Ventures Oy have irrevocably undertaken in the Combination Agreement, and Evli Plc’s undertaking has been agreed in the Combination Agreement, to subscribe and pay for the new shares in the company to be formed through the Merger (“Fellow Bank”) through a directed share issue (the “Directed Share Issue”), where Fellow Bank will receive approximately EUR 11.7 million of additional capital.

The board of directors of Evli signed on 30 September 2021 a demerger plan (“Demerger Plan”) concerning the Demerger and in accordance with the Combination Agreement, and the boards of directors of each of Evli and Fellow Finance signed on 30 September 2021 a merger plan (“Merger Plan”) concerning the Merger and in accordance with the Combination Agreement. The board of directors of Evli has on 8 November 2021 proposed that the Extraordinary General Meeting of Evli make a decision concerning the Demerger in accordance with the Demerger Plan and a decision concerning the Merger in accordance with the Merger Plan. The board of directors of Fellow Finance has on 8 November 2021 proposed that the Extraordinary General Meeting of Fellow Finance make a decision concerning the Merger in accordance with the Merger Plan.

The Finnish Financial Supervisory Authority has today, on 7 December 2021, approved the Finnish language demerger and listing prospectus concerning the Demerger and applying for Evli Plc’s class B shares to be listed on the official list of Nasdaq Helsinki Ltd (the “Demerger Prospectus”) and the Finnish language merger and listing prospectus prepared for the issuance of the Merger Consideration Shares to Fellow Finance’s shareholders and applying for the new shares to be issued in connection with the Merger to be listed on the official list of Nasdaq Helsinki Ltd (the “Merger Prospectus” and together with the Demerger Prospectus the “Prospectuses”). The Prospectuses will be available on or about 7 December 2021 online at www.evli.com/yhtiokokous. In addition, the Merger Prospectus will be available on or about 7 December 2021 online at www.fellowfinance.fi/ylimaarainenyhtiokokous2021.

Demerger Prospectus

The Demerger Prospectus contains the following previously unpublished financial information in relation to Evli Plc, which will be established in the Demerger:

Certain carve-out financial information concerning Evli Plc

The Demerger Prospectus contains Evli Plc's (i) set of carve-out financial statements comprising audited carve-out financial statements for the years ended 31 December 2020, 31 December 2019 and 31 December 2018 and (ii) unaudited carve-out financial information for the nine months ended 30 September 2021, including unaudited carve-out -financial information for the nine months ended 30 September 2020.

Evli Plc's carve-out financial information has been prepared in accordance with IFRS standards and prin-ciples described in the note Accounting principles of the set of carve-out financial statements. The inde-pendent auditor's report on Evli Plc's set of carve-out financial statements comprising the carve-out finan-cial statements for the years ended 31 December 2020, 31 December 2019 and 31 December 2018, contains an emphasis of matter, where the auditor, without modifying the audit opinion, wants to draw attention to the note Applied Carve-out principles in the set of carve-out financial statements. The note includes a de-scription of the principles applied with regards to the designation of assets and liabilities, as well as reve-nues and costs and cash flows directly attributable to Evli Plc. In addition, the note explains that Evli Plc has not formed a separate legal group of entities during the years presented. Thus, the separate carve-out financial statements included in the set of carve-out financial statements are not necessarily indicative of the financial position, financial performance and cash flows of Evli Plc if it had operated as a separate legal group of entities during the financial years presented, nor future performance.

The following table presents certain key carve-out financial information from the Demerger Prospectus at the indicated dates and periods for Evli Plc. The information presented is unaudited, unless otherwise indicated.

	30.9. and for the nine months ended 30.9.		31.12. and for the year ended 31.12.
(MEUR, unless otherwise indicated)	2021	2020	2020	2019	2018
	(unaudited)		(unaudited, unless otherwise indicated)
Income statement key figures
Net revenue	81.2	51.6	80.11)	74.91)	69.71)
Operating profit/loss	39.7	17.6	32.31)	25.51)	25.61)
Operating profit margin, %	48.8	34.0	40.4	34.0	36.7
Profit for the financial year	32.2	13.7	25.51)	20.21)	20.61)
Profitability key figures
Return on equity, % (ROE)	46.0	27.7	35.6	32.3	35.5
Balance sheet key figures
Equity-to-assets ratio, %	25	10	18	16	17
Other key figures
Expense ratio	0.52	0.66	0.60	0.65	0.67
Recurring revenue to operating costs ratio, %	143	134	134	131	119
Number of personnel at the end of the period	275	251	254	242	247
Assets Under Management, EUR bn.	16.8	13.6	14.1	14.3	11.4

1) Audited

Calculation of key ratios

Key ratio		Formula
Net revenue	=	Income total – fee and commission expenses –interest expenses
Operating profit/loss	=	Operating profit/loss of the comprehensive income statement
Operating profit margin	=	Operating profit/loss divided by net revenue x 100
Return on equity (ROE)	=	Profit / Loss for financial year (annualised1)	x 100
		Total equity (average of the figures for the beginning and at the end of the review period)
Equity ratio	=	Total equity divided by average total assets x 100
Expense/income ratio	=	Personnel expenses + other administrative expenses + depreciation, amortization and impairment on intangible and tangible assets + other operating expenses
		Fee and commission income + net income from securities transactions + interest income + other operating income – fee and commission expenses – interest expenses
Recurring revenue to operating costs ratio	=	All revenues that are not transaction based but time dependant* (Asset management, fund fees, administration of incentive systems, research, custody and client net interest fees)
		All operative expenses excluding reservation for bonuses from review period

1Calculated on an annual basis by dividing the components of the income statement with the number of months in the review period and by multiplying by 12.

Unaudited pro forma financial information concerning Evli Plc

The Demerger Prospectus includes unaudited pro forma financial information (the ”Pro Forma Information”) that is presented for illustrative purposes only to give effect to the financial impacts of the Demerger, certain transactions related to the Arrangement and the dividend distribution to Evli Plc’s business operations’ historical carve-out financial information had the Demerger, certain transactions related to the Arrangement and the dividend distribution occurred at an earlier date. The Pro Forma Information is unaudited.

The pro forma comprehensive income statement for the nine months ended September 30, 2021 and the pro forma comprehensive income statement for the year ended December 31, 2020 have been compiled assuming that the Demerger and certain transactions related to the Arrangement had been occurred on January 1, 2020, and the pro forma balance sheet as at September 30, 2021 has been compiled assuming that the Demerger, certain transactions related to the Arrangement and the dividend distribution had been occurred as at September 30, 2021.

The Pro Forma Information has been compiled in accordance with the Annex 20 to the Commission Delegated Regulation (EU) 2019/980, and on a basis consistent with the accounting policies applied in Evli Plc’s IFRS carve-out financial statements for the year ended December 31, 2020.

The Pro Forma Information is presented for illustrative purposes only, and, therefore, it does not represent Evli Plc’s actual results of operations or financial position. In addition, the Pro Forma Information does not purport to project Evli Plc’s results of operations or financial position as of any future date, and it does not represent the results of operations or financial position of Evli Plc had Evli Plc been an independent publicly traded company during the periods presented. Further, it should be noted that the assets, liabilities, income and costs that have been allocated to Evli Plc for the purpose of presenting historical carve-out financial information may not necessarily represent the amounts that would have incurred for these items if Evli Plc had operated as an independent legal entity. Accordingly, additional costs may be incurred by Evli Plc after the Effective Date, among others, due to the fact that it will be operating as an independent listed company.

The Pro Forma Information is based on Evli Plc’s unaudited carve-out financial information for the nine months ended September 30, 2021 and audited carve-out financial statements for the year ended December 31, 2020 which are adjusted based on management’s estimates on the transactions that have been completed or will be completed related to the Demerger and the forming of Evli Plc and the dividend distribution. The final amounts of the assets and liabilities to be transferred to Evli Plc in the Demerger may materially differ from the amounts presented in the Pro Forma Information, as the final balances will be determined at the Effective Date. Especially, the changes in open trade positions can create large differences between the amounts at the Effective Date and the amounts in the carve-out financial information used as a basis for pro forma figures. This could result in significant differences to Evli Plc’s results of operations and financial position presented in the Pro Forma Information.

The pro forma adjustments are based upon available information and assumptions. There can be no assurance that the assumptions used in the preparation of the Pro Forma Information will prove to be correct.

The following table sets forth a summary of Evli Plc’s unaudited Pro Forma Information on the dates and periods indicated:

	Pro forma
	1.1.–30.9.2021	1.1.–31.12.2020	30.9.2021
(MEUR, unless otherwise indicated)	(unaudited)
Comprehensive income statement
Income total	84.0	84.2	-
Net revenue	81.2	80.1	-
Operating profit / loss	40.0	31.0	-
Profit / loss for the financial year	32.4	24.4	-
Earnings per share, basic, EUR	1.13	0.94	-
Balance sheet
Total assets	-	-	429.2
Total equity	-	-	100.7

Merger Prospectus

The Merger Prospectus contains the following previously unpublished financial information in relation to Fellow Bank, which will be formed through the Merger:

Unaudited pro forma financial information concerning Fellow Bank

The Merger Prospectus includes unaudited pro forma combined financial information (the ”Pro Forma Information”), which is presented for illustrative purposes only to give effect to the Merger between the remaining demerged Evli after the Demerger and Fellow Finance, and the financial effect of the Directed Share Issue as if the Merger and the Directed Share Issue had occurred at an earlier date. The pro forma income statements for the six months ended June 30, 2021 and for the year ended December 31, 2020 present the impacts of the Merger and the Directed Share Issue as if they had occurred on January 1, 2020. In the pro forma balance sheet as at June 30, 2021 the Merger and the Directed share issue are presented as if they had occurred on that date. The Pro Forma Information is unaudited.

The Pro Forma Information is presented for illustrative purposes only. The hypothetical financial position and results included in the Pro Forma Information may be different from Fellow Bank’s actual financial position and results. Further, the Pro Forma Information does not purport to project the financial position or results of Fellow Bank as of any future date. In addition, the Pro Forma Information does not reflect any cost savings, benefits from the Merger, the impact of Fellow Bank’s strategy on its financial position or results or future integration costs that are expected to be generated or may be incurred as a result of the Merger. The Pro Forma Information has been compiled in accordance with the Annex 20 to the Commission Delegated Regulation (EU) 2019/980 and the basis of preparation is consistent with the issuer’s accounting policies, which form the basis of preparation to be applied by the combined Fellow Bank in its next consolidated financial statements after the Merger prepared in accordance with IFRS.

In the financial reporting, the Merger will be accounted for as a reverse acquisition using the IFRS acquisition method of accounting where Fellow Finance is deemed to be the accounting acquirer and the remaining demerged Evli after the Demerger the acquiree. Evli is the legal acquirer, and it issues new shares to the shareholders of Fellow Finance. For the purpose of estimating the purchase consideration transferred in the reverse acquisition whereby Fellow Finance acquires Evli, the acquisition-date fair value of the purchase consideration is based on the number of shares Fellow Finance would have had to issue to give the owners of Evli the same percentage equity interest (approximately 35.63 per cent) in Fellow Bank. In accordance with IFRS, the fair value of consideration transferred will be measured on the Effective Date at the then current market price and accordingly, can result in a value differing from the amount estimated in the Pro Forma Information and that difference may be material.

As part of the Arrangement Taaleri Plc and TN Ventures Oy have in the Combination Agreement undertaken, and Evli Plc’s commitment has been agreed in the Combination Agreement, to irrevocably subscribe and pay in the Merger new Fellow Bank shares in a directed share issue whereby Fellow Bank will receive in the Directed Share Issue a total of approximately EUR 11.7 million of additional equity capital. In the Pro Forma Information, the number of Issue Shares is assumed to be 20,005,924 shares.

The Pro Forma Information reflects pro forma adjustments that are preliminary and are based on available information and certain assumptions, which Evli and Fellow Finance believe to be reasonable under the circumstances. The pro forma adjustments include certain assumptions related to the fair value of the purchase consideration, the fair value of the net assets acquired, accounting policy alignments, Directed Share Issue and other events related to the Merger. There can be no assurance that the assumptions made when preparing the Pro Forma Information will prove to be correct. In addition, the accounting policies to be applied by Fellow Bank in the future may differ from the accounting policies applied in the Pro Forma Information.

The following table sets forth a summary of the Pro Forma Information on the dates and periods indicated:

	Pro forma
	1.1.-30.6.2021	1.1.-31.12.2020	30.6.2021
(EUR thousand, unless otherwise indicated)	(unaudited)
Net interest income	1,596	3,244	-
Total operating income	3,840	7,203	-
Operating profit/loss	-987	-4,729	-
Profit / loss for the financial year	-1,072	-4,356	-
Earnings per share (EPS), basic, EUR1	-0.01	-0.05	-
Earnings per share (EPS), diluted, EUR1	-0.01	-0.05	-
Balances with central banks	-	-	322,690
Debt securities eligible for refinancing with central banks	-	-	32,068
Loans to credit institutions	-	-	84,545
Loans to the public and public sector entities	-	-	20,395
Other assets	-	-	11,308
Total assets	-	-	471,005
Deposits by credit institutions and central banks	-	-	4,051
Deposits and borrowings from the public and public sector entities	-	-	418,651
Debt securities issued to the public	-	-	10,534
Other liabilities	-	-	1,618
Total liabilities	-	-	434,855
Equity attributable to the equity holders of parent	-	-	36,150
Total liabilities and shareholders’ equity	-	-	471,005
1) The historical numbers of shares used by Evli for the calculation of earnings per share have been adjusted in the Pro Forma Information with Merger Consideration Shares and shares to be issued in the Directed Share Issue.

EVLI BANK PLC

Board of directors

Further information:

Juho Mikola, CFO, Evli Bank Plc, tel. +358 40 717 8888, juho.mikola@evli.comDISTRIBUTION:

Nasdaq HelsinkiPrincipal mediawww.evli.com

Evli and Fellow Finance in brief

Evli is a bank specialized in investments that helps institutions, corporations and private persons increase their wealth. The product and service offering includes mutual funds, asset management and capital markets services, alternative investment products, equity research, incentive plan design and administration as well as Corporate Finance services. The company also offers banking services that support clients' investment operations. Evli is the highest ranked and most used institutional asset manager in Finland*.

Evli has a total of EUR 16.8 billion in client assets under management (net 9/2021). Evli Group's equity capital totals EUR 125.4 million and its BIS capital adequacy ratio is 16.1 percent (September 30, 2021). The company has around 280 employees. Evli Bank Plc’s B shares are listed on Nasdaq Helsinki Ltd.

* Kantar Prospera External Asset Management Finland 2015, 2016, 2017, 2018, 2019, 2020, 2021 and SFR Scandinavian Financial Research Institutional Investment Services, Finland 2015, 2016, 2017, 2018.

Fellow Finance Plc is a loan-based crowdfunding and peer-to-peer lending platform. The company’s mission is to transform the traditional financing and payments to direct transactions between people and businesses. Fellow Finance has intermediated consumer and business financing of more than 850 million euros in Finland, Sweden, Denmark, Germany, Poland and the Czech Republic and served more than 950 000 customers. The company is regulated by the Financial Supervisory Authority of Finland as an Authorized Payment Institution and listed on the Nasdaq First North Growth Market Finland. www.fellowfinance.com.

Important Notice

This release is not an offer of shares in the United States and it is not intended for distribution in or into the United States or in any other jurisdiction in which such distribution would be prohibited by applicable law. Evli Plc’s or Fellow Bank’s shares have not been and will not be been registered under the U.S. Securities Act of 1933 (the “Securities Act”), and may not be offered, sold or delivered within or into the United States, except pursuant to an applicable exemption of, or in a transaction not subject to, the Securities Act.

This release does not constitute an offer to sell or a solicitation of an offer to buy any securities by Evli or Fellow Finance.

This release does not constitute a notice to convene a general meeting of shareholders nor does it constitute a demerger or merger prospectus. Any decision with respect to the proposed partial demerger of Evli or the absorption merger of Fellow Finance into Evli should be made solely on the basis of information to be contained in the actual notices to convene the meetings of shareholders of Evli and Fellow Finance, as applicable, and the demerger and merger prospectuses as well as on an independent assessment of the information contained therein. Investors are directed to consult the Demerger Prospectus and the Merger Prospectus for more comprehensive information on Evli Plc, Fellow Bank, their respective shares and the Arrangement.

This release includes “forward-looking statements” that are based on present plans, estimates, projections and expectations and are not guarantees of future performance. They are based on certain expectations and assumptions, which, even though they seem to be reasonable at present, may turn out to be incorrect. Shareholders should not rely on these forward-looking statements. Numerous factors may cause the actual results of operations or financial condition of the Evli Plc or Fellow Bank to differ materially from those expressed or implied in the forward-looking statements. Neither Evli nor Fellow Finance, nor any of their respective affiliates, advisors or representatives or any other person undertakes any obligation to review or confirm or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise after the date of this release.

This release includes estimates relating to the benefits expected to arise from the Arrangement, which have been prepared by Evli and Fellow Finance and are based on a number of assumptions and judgments. The assumptions relating to the estimated benefits and costs arising from the Arrangement are inherently uncertain and are subject to a wide variety of significant business, economic, regulatory and competitive risks and uncertainties that could cause the actual benefits and costs arising from the Arrangement to differ materially from the estimates in this release. Further, there can be no certainty that the Arrangement will be completed in the manner and timeframe described in this release, or at all.

Attachments

• Translation of unaudited pro forma financial information included in the Demerger Prospectus
• Evli Plc’s set of carve-out financial statements comprising the carve-out financial statements for the financial years ended 31.12.2020, 31.12.2019 and 31.12.2018
• Evli Plc’s interim carve-out financial information 1.1.2021-30.9.2021
• Translation of unaudited pro forma financial information included in the Merger Prospectus