Avarda Bank Ab · OMXSTO:AVARDA
Avarda Bank Ab — TF Bank — Q2 2024 Earnings Presentation
25 slides from Avarda Bank Ab's earnings presentation, Jul 12, 2024
Slide 1: Track Record Since IPO
TRACK RECORD SINCE IPO 160 25 000 140 20 000 120 100 15 000 MSEK 80 10 000 60 40 5 000 20 0 0 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 16 16 16 17 17 17 17 18 18 18 18 19 19 19 19 20 20 20 20 21 21 21 21 22 22 22 22 23 23 23 23 24 Loans to the p
Slide 2: 2nd Quarter 2024 Result Presentation
2nd Quarter 2024 RESULT PRESENTATION
Slide 3: Highlights April – June 2024
HIGHLIGHTS APRIL – JUNE 2024 • Controlled growth during the quarter Operating profit - 4% in local currencies +29% • Operating profit 158 MSEK, +29% vs Q2-2023 - Credit Cards and Ecommerce Soultions segment drives EPS • Income growing faster than cost, the business is scaling well with improved Cost
Slide 4: Loan Book Growth
LOAN BOOK GROWTH 14% 3% 20 000 • TF Bank: Growth in Q2 = 3% (4%*) - Year-on-year 14% (18%*) 16 000 • Credit Cards: Q2 = 11% (12%*) SEK million 12 000 - Year-on-year 57% (63%*) • Ecommerce Solutions: Q2 = -2% (-2%*) 8 000 - Year-on-year -4% (-2%*) 4 000 • Consumer Lending: Q2 = 0% (0%*) - Year-on-yea
Slide 5: Growth and Diversification
GROWTH AND DIVERSIFICATION Market update Loan book split by market Germany and Austria ▪ Credit card product in high demand. Competitive CAC*. Preparing for launching digital payment solutions in Germany. New markets Sweden Norway ▪ Focus on protecting margins in Consumer Lending. The credit card an
Slide 6: Credit Cards
CREDIT CARDS Highlights • The loan portfolio in Germany now exceeds 6 billion SEK Share of TF Bank's loan book Share of TF Bank’s operating income - Record level in distribution of cards, +56% vs Q2 2023 • Continued scalability in the business model 38% 41% • Improved customer onboarding process inc
Slide 7: Ecommerce Solutions
ECOMMERCE SOLUTIONS Highlights Share of TF Bank’s operating income Share of TF Bank's loan book • Repricing to compensate for higher funding costs is bearing fruit • Continuously improved profitability despite pressure in 14% 22% e-commerce sector in general • Preparing to launch credit offering in
Slide 8: Consumer Lending
CONSUMER LENDING Highlights • Focus on protecting margins Share of TF Bank's loan book Share of TF Bank's operating income • Business as usual with best-in-class performance • Improved credit quality during the last quarters 48% 37% Segment description 9.4bn -1% 10 • Diversified portfolio with Nordi
Slide 9: Stable Risk-Adjusted Margin
STABLE RISK-ADJUSTED MARGIN 595 561 545 529 • Risk-adjusted income* 479 - Stable risk-adjusted margin** SEK Million • Operating income 8,3% 8,1% 8,1% 8,2% - Credit Cards the main driver 8,0% • Net loan losses** - Mix effects impacts loss ratio 172 186 188 202 158 Q2'23 Q3'23 Q4'24 Q1'24 Q2'24 Operat
Slide 10: Opex – Cost/Income Ratio by Segment
OPEX – COST/INCOME RATIO BY SEGMENT 70% 60% 62% 62% 61% • Operating expenses Q2-24 vs. Q2-23, +18% 59% 58% - Sales-related costs and more employees 50% - Expanding our team to cope with larger business 42% 43% volumes 40% 40% 40% 40% 41% • Cost/income ratio per segment in Q2-24 37% 38% 37% 36% - Con
Slide 11: Increased Profit Quarter-by-Quarter
INCREASED PROFIT QUARTER-BY-QUARTER Operating profit 29% 158 148 • Operating profit Q2-24 vs. Q2-23, +29% 139 130 - Growing operating income 122 - EPS driven by Credit Cards and Ecommerce Solutions SEK million • Stable profitability in Q2-2024 - Return on equity, 22.5% - Earnings per share, 5.43 SEK
Slide 12: Credit Cards: Higher Operating Profit
CREDIT CARDS: HIGHER OPERATING PROFIT 52 45 46 42 • Operating profit Q2-24 vs. Q2-23, +105% - Growing operating income - Economies of scale SEK million 25 - Return on allocated equity*, 21.1% • Investments in new markets 6,4% 6,5% 6,3% 5,9% 6,4% - Spain and Italy Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Operat
Slide 13: Ecommerce Solutions: Improved Profitability
ECOMMERCE SOLUTIONS: IMPROVED PROFITABILITY 23 22 17 17 • Operating profit Q2-24 vs. Q2-23, +33% 15 - Higher operating income SEK million - Return on allocated equity*, 22.7% • Higher loan losses during the last quarters 4,3% 3,1% 3,6% 4,0% 4,0% - Loan loss ratio 4.3% - Credit quality in Sweden and
Slide 14: Consumer Lending: Focus on Margins
CONSUMER LENDING: FOCUS ON MARGINS 90 83 80 79 76 • Operating profit Q2-24 vs. Q2-23, +4% - Stabilised risk-adjusted margin - Return on allocated equity*, 24.3% SEK million Positive trend for loan loss ratio 3,0% 2,8% 3,1% 3,0% 2,6% - General improvement in credit quality Q2'23 Q3'23 Q4'23 Q1'24 Q2'
Slide 15: Funding and Liquidity
FUNDING AND LIQUIDITY Deposits from the public 22 000 20,665 20 000 • Retail deposits in Europe 18 000 - Germany (SEK 17.2 billion) 16 000 - New markets (SEK 2.7 billion) 14 000 - Nordics (SEK 0.8 billion) SEK million 12 000 Germany - Fixed-term deposits: 57% 10 000 8 000 • Liquidity reserve: 20% of
Slide 16: Capital Situation
CAPITAL SITUATION 15,6% T1+T2 15,6% 13,5% Headroom 2,8% T1 13,5% 12,0% • Stable capital ratios in Q2-2024 Headroom 3,0% T1+T2 12,8% Headroom 3,2% 10,5% 10,5% • NPL backstop regulations impacts T1 T1 own funds (SEK -92 million) 12,0% CET1 • Optimised capital situation and CET1 8,8% CET1 8,8% CET1 8,8
Slide 17: Looking Ahead
LOOKING AHEAD • Continue the transformation towards becoming more of a European credit and payment platform • Launching credit card product in Italy and digital payment solutions in Germany during the third quarter • Investigating future structure on handling NPLs • Kick-start in July for German cre
Slide 18: Q&A Session
Q&A Session 18
Slide 19: Appendix
Appendix 19
Slide 20: Corporate Profile
CORPORATE PROFILE Our Products Our Geographical footprint Operating with modern and scalable We serve customers in the Nordics, Germany, infrastructure offering our retail customers Austria, Spain, the Baltics, Poland, Ireland online consumer loans, deposits and and the Netherlands. credit cards. Fo
Slide 21: Long Track Record of Profitable Growth
LONG TRACK RECORD OF PROFITABLE GROWTH Long experience and proven Strong track record on growth business model and profitability • 30 years+ experience from Loan portfolio consumer finance industry 20 000 2 500 18 000 • Highly profitable core markets with 16 000 2 000 proven model for geographical 1
Slide 22: Board of Directors
Board of Directors John Brehmer Arti Zeighami Sara Mindus Chairman of the Board since Board member since 2023 Board member since 2020 2020 Current commitments: Current commitments: Board member since 2010 Partner & Director, Senior advisor Board m ember: Styrelseledamot: AI@scale: Boston Consulting
Slide 23: Executive Directors
Executive Directors Joakim Jansson1,2 Mikael Meomuttel1,2 CEO CFO, Deputy CEO and Head of Investor Relations Education: PhD in Economics, Uppsala University. Education: MSc, Business/Economics and Finance, University of Borås/University of Gothenburg. At TF Bank since 2023 as CEO. Has previously hel
Slide 24: Group management team
Group management team Vilma Sool2 Rasmus Rolén2 Claudia Wiese 2 Chief Corporate Officer CEO Avarda & Head of Head of Card Products & Education: LL.M (Master in Law ), Tallinn Corporate Development Operations University Education: State-qualified banker Education: MSc Finance & Accounting, At TF Bank
Slide 25: Contact
Contact Investor relations Mikael Meomuttel +46 706 26 95 33 ir@tfbank.se www.tfbankgroup.com 25