Sun Finance Group — Loan Originator Deep Dive

01What Sun Finance is

Sun Finance Group is a consumer fintech founded in Riga, Latvia in 2017 by CEO Toms Jurjevs (previously Regional Director at 4finance) and co-founder Emīls Latkovskis. In eight years they've grown from a three-country startup to a 9-country, 34 million registered customer, €5bn+ cumulative loan issuance platform — while staying profitable every year since 2018.

The company operates across four continents: Europe (Latvia, Poland, Sweden, Spain), Central Asia (Kazakhstan), Southeast Asia (Philippines, Sri Lanka), Africa (Kenya), and Latin America (Mexico). Europe is the core — 83.9% of net portfolio as of Q1 2026. The other regions add growth optionality and FX risk in roughly equal measure.

Sun Finance Treasury Limited, the bond-issuing entity, is listed on Nasdaq First North Baltic. That means quarterly public filings with balance sheet, income statement, and covenant reporting. It's a higher disclosure bar than most P2P originators maintain.

02Business model

Sun Finance targets the underbanked and the convenience-seeking — people banks either won't serve or who want money in minutes rather than days. Four product lines cover the full spectrum of consumer credit need:

• Microloans — up to €4,800, short-term, single payment. Classic payday-adjacent product.
• Line of credit — €20–€10,000, open-ended, flexible repayment.
• BNPL — €20–€10,000 for purchases, up to 36 months.
• Instalment loans — €100–€30,000, 3 to 120 months. The longest-duration product and the one currently driving portfolio mix.

The shift from microloans toward instalment loans is deliberate and shows up clearly in the financials. Interest income grew 10.8% YoY in Q1 2026 (€39.7m → €44.0m) while fee and commission income fell 15.7% (€30.5m → €25.7m). Microloans and BNPL generate upfront fees; instalment loans generate interest over their term. Revenue looks flat (€70.2m → €69.7m) when it's actually being restructured beneath the surface. The loan portfolio that supports future revenue is growing sharply.

Risk management runs on proprietary data science models built across 4,000–7,000 data points per applicant — parameters that traditional banks typically ignore. The CRO (Agris Vaselāns) spent five years as Group Head of Data Science before taking the risk seat, which is a meaningful background signal.

03Financial performance

Sources: Sun Finance Group 3M 2026 unaudited results (May 2026); audited FY2025 annual report (April 2026). All figures in euros.

Revenue dipped in 2024, recovered in 2025 (+5.7%), but net profit fell 18.6% year-on-year. EBITDA has trended down from €119.6m (2023) to €107.9m (2025) to a €22.7m Q1 2026 run rate. None of this should be read as distress — it's a business that is intentionally deferring near-term earnings in exchange for a larger, longer-duration loan book. The question is whether that loan book pays out as modeled. Q1 2026 net portfolio at €217.2m versus €170.5m a year ago (+27.4%) suggests the portfolio is being built.

One number worth flagging: operating costs jumped 32.8% YoY in Q1 2026 (€20.1m → €26.7m). Sun Finance attributes this to "new market research and development projects" — plausible given Sri Lanka launched in September 2024 — but the specifics aren't broken out further in public reporting.

04Balance sheet & funding

Provision rate: €93.9m against €311.1m gross receivables = 30.2% of gross loans provisioned. High in absolute terms, but this is expected for a multi-market consumer lender operating in frontier and emerging markets with an underbanked customer base. The meaningful comparison is whether actual credit losses track below that allowance — which requires vintage data not publicly disclosed.

P2P funding is €30.6m, or 16.9% of total borrowings. Sun Finance is not structurally dependent on retail investor capital. If P2P platforms froze tomorrow, the business would be pressured but not existentially threatened. The bulk of funding is Nasdaq bonds with defined maturities spread to 2029 — they've been active in bond markets (new issuances and exchange offers in 2024 and 2025), which signals continued capital market access.

05Key ratios

Every ratio is moving in the unfavorable direction — but from positions that remain comfortable. A 4.9× interest coverage is not strained. A 47.9% capitalization ratio is strong equity backing for the loan book. Unencumbered receivables at 2.0× means they hold twice the net portfolio versus unsecured debt outstanding — the key bondholder protection covenant, which they confirm has "sufficient headroom."

The cost/income ratio jump of 7.78 percentage points YoY is the one that warrants monitoring. If it's new-market expansion costs (Sri Lanka, product R&D), it should normalize. If it's structural, that's a different story.

06Geographic portfolio

Europe is the engine — mature markets with established credit bureaus, regulated consumer lending, and known FX dynamics. The non-European exposure (16.1% of portfolio combined) adds growth optionality but comes with non-EUR currency risk, thinner regulatory frameworks, and higher political risk. The 2025 net profit took an explicit FX hit; no breakdown of FX impact by market is disclosed publicly.

Kenya represents the Africa book — acquired via the Zenka Group purchase in July 2023. It's 2.6% of the portfolio and described as "closely monitored" — the smallest and newest regional exposure.

07What I like

Track record. Eight years of operation, profitable since year two, through COVID, Baltic recessions, and rate hikes across multiple jurisdictions. That's not luck — it's operational discipline.

Public reporting. Quarterly Nasdaq filings with income statement and balance sheet are a significantly higher bar than most P2P originators maintain. You can see the numbers, not just a dashboard.

Funding diversification. Bonds, related-party loans, and P2P in roughly a 51/32/17 split. The business doesn't collapse if retail P2P capital dries up.

Portfolio growth conviction. Net portfolio up 27.4% YoY in Q1 2026 is real growth driven by higher origination volumes and product mix shift. It's not financial engineering.

Leadership pedigree. Management comes from 4finance, Twino, and other Baltic fintech operators. The CFO came from KPMG. These are people who have run scaled consumer lenders before.

08What to watch

Margin trajectory. EBITDA margin went 40.1% → 43.0% → 37.6% → 32.5% over the last three years. The company explains this as the cost of building a longer-term loan book — returns come later as those cohorts mature. H2 2026 should start showing the payoff. If margins don't recover toward 38%+ by year-end, the explanation weakens.

Net profit. €58.3m in 2025 versus €71.6m in 2024 is a real 18.6% decline. Product mix and FX explain it, but they also need to fix it.

Auditor change. Sun Finance notified a change of auditors in December 2024. Auditors rotate for various non-alarming reasons, but combined with a profitability drop in the same year, it's worth a mental note. The 2025 annual report (April 2026) carries the new auditor's sign-off — review it when it's publicly released in full.

FX exposure. Operations in Kazakhstan, Mexico, Philippines, Kenya, and Sri Lanka generate non-EUR revenue. The 2025 net profit was explicitly dented by adverse FX movements. The 3M 2026 period shows a €1.5m positive FX result — directional improvement, but currency swings are structural, not solved.

Operating cost control. Q1 2026 operating costs up 32.8% YoY while revenue was flat. New market R&D is the stated reason. This needs to normalize.

09Verdict

Sun Finance is a credible, scaled originator with a genuine eight-year track record and public financial reporting that most of its P2P competitors can't match. The business is going through a deliberate transformation — shorter-term, fee-heavy products being replaced by longer-term, interest-income products — and that transition always looks worse on paper before it looks better. The portfolio growth numbers (+27.4% YoY) are the leading indicator; the margin numbers are lagging.

The balance sheet is solid enough that this transformation doesn't threaten the business. The watch item is straightforward: do margins recover through 2026 as the new loan cohorts mature? If yes, the story holds. If not, the explanation needs revisiting.

One note: P2P platform availability and buyback terms vary by platform. Verify the specific terms on whichever platform you're using for Sun Finance exposure — the analysis above is of the originator's financial health, not any platform's guarantee structure.

Sources: 3M 2026 unaudited results (May 2026) · FY2025 audited results (April 2026, Nasdaq) · Sun Finance Investor Relations