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DFC Global Corp. Provides Update On Recent Business Developments

DFC Global Corp. (NASDAQ:DLLR), a leading international diversified financial services company serving primarily unbanked and under-banked consumers for over 30 years, is providing an update on a number of recent business developments.

The third-party national bank that funds the loans that are the basis of the Company’s branded Military Installment Loan and Education Services, or MILES ®, program, has sent a termination notice effective September 13, 2014, two years from now. As the Company has previously disclosed, it is in discussions with potential lending partners that the Company believes will more competitively underwrite the MILES program loans. These discussions are in advanced stages, and the Company believes that these new replacement arrangements will be in place later this fiscal year.

Additionally, on September 11, 2012, a bill was introduced in the Finland Parliament to restrict the interest rate on loans less than €2,000 to 50% APR. If approved by Parliament as drafted, this law would significantly restrict the Company’s present internet-based short-term loan product in Finland. The Company generates approximately €25 million, or less than 3%, of its total consolidated revenues from unsecured short-term loans in Finland. The Company intends to continue to leverage the scalable technology platform and back-office support capabilities of its Finland based internet lending business by offering loans in other countries in Europe. The Company has already successfully leveraged the Finland platform by launching an internet loan product in Poland.

If the Company is not successful in replacing the current lending bank for its MILES loan program, or is not successful in adding other internet-based products in Finland, there is a possibility that future goodwill impairment charges could ensue.

Other Business Developments

The Company has recently expanded its loan collection facilities and automated dialer capabilities in the United Kingdom in anticipation of further growth of its store and internet-based short-term loan products in the U.K., Poland, and other new countries in Europe. In addition, the Company has recently expanded its business development function in Europe, which is responsible for developing, testing, and launching new products and services in the United Kingdom and Europe. This group has recently begun testing longer term loan products in the United Kingdom during the current quarter. The costs of these investments will be incurred during the first half of the current fiscal year, but are anticipated to translate into additional revenue and earnings growth in the second half of the Company’s fiscal year ending June 30, 2013.

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