Avanza Bank Holding Ab · OMXSTO:AZA
Avanza Bank Holding Ab — Investor Presentation (February 2024)
44 slides from Avanza Bank Holding Ab's investor presentation, Feb 5, 2024
Slide 1: Company presentation and investment story
February 2024 Company presentation and investment story
Slide 2: Avanza's evolution since foundation in 1999
Overview Avanza’s evolution since foundation in 1999 2
Slide 3: Sweden's leading platform for savings and investments
Overview Sweden’s leading platform for savings and investments SEK 790 bn in savings 1,916,200 No. 1 long-term target to have the most satisfied savings customers in Sweden – capital won for the last 14 consecutive years customers 661 employees and eNPS of 58 6.5% market share of the Swedish savings
Slide 4: Over 80 000 investment opportunities, together with decision-making tools, inspiration and education
Overview Over 80 000 investment opportunities, together with decision-making tools, inspiration and education Securities Mortgages and trading Retirement plans margin lending Mutual funds Savings accounts 4
Slide 5: We don't give advice, but focus on decision-making tools
Overview We don’t give advice, but focus on decision- making tools o The Avanza Academy o The Avanza blog, podcasts and Avanza Play o Auto funds o Portfolio generator o Stock generator o Independent news site Placera 5
Slide 6: Business model built on scale
Overview Business model built on scale 160 900 000 140 800 000 Savings capital, SEK m 142 700 000 120 600 000 100 Basis points 500 000 80 73 400 000 60 300 000 48 40 200 000 20 16 100 000 0 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Savings
Slide 7: Capital light, fee-based business model
Overview Capital light, fee-based business model 2023 % of income Net brokerage income 21 o Mainly fixed costs, ~70% staff related Fund commissions, net 17 o High scalability Currency-related income, net 8 o Self-financed through shareholders’ equity and customer deposits Net interest income (NII) 4
Slide 8: Strong position and asset quality
Overview Strong position and asset quality Limited on balance sheet lending On balance sheet deposits SEK 19.6 bn No realised credit losses SEK 61.7 bn for over 10 years 24.7% Solid financial position 58% 99.8% 38% CET1 ratio 5.0% Leverage ratio ROE Profit margin High platform availability 8
Slide 9: We focus on what's best for the customer
Overview We focus on what’s best for the customer 9
Slide 10: A typical Avanza development team, where business and IT go hand in hand
Overview A typical Avanza development team, where business and IT go hand in hand Product QA specialist Front-end o Full expertise for their respective domain o Innovation, business development and maintenance UX Front-end are done within each team o They define their own mission and sets their own
Slide 11: We innovate together with our customers
Overview We innovate together “Feedback Buddy” Our feedback system keeps with our customers our development teams close to the customers. Customers can sign up as test users to early releases of new functionality and provide feedback. We meet with hundreds of customers for interviews and user tests
Slide 12: A diversified customer base of close to 2 million
Overview A diversified customer base of close to 2 million Our customers have different types of behaviours and needs – our offering includes something for everyone Novice Save Invest Trade For fun Risk-averse, is not Takes an interest in Very interested in Professional trader, Sees investing as a a
Slide 13: A strong brand and a loyal customer base
Overview A strong brand and a loyal customer base NPS Highest considered financial company in Sweden in Kantar 43 Public’s yearly survey Daily active users Churn, % R12M ~ 360,000 Most satisfied savings customers in Sweden – won for the last 14 consecutive years 0.3 13
Slide 14: Our superior customer experience also makes us the perfect partner for product challengers
Overview Our superior customer experience, also makes us the perfect partner for product challengers Mutual fund platform Mortgages Over 1,300 external funds Our partners deliver low Exchange traded products on the platform and Third party savings exclusive cooperations for interest mortgages throug
Slide 15: Social, environmental and economic sustainability are reflected in what we do and who we are
Overview Social, environmental and economic sustainability are reflected in what we do and who we are 15
Slide 16: Customer growth drives net inflow
16 New customers Overview 20 000 40 000 60 000 80 000 0 -40 000 -20 000 100 000 120 000 160 000 140 000 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Customer inflow Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Customer growth dr
Slide 17: Market share of 14% rolling 12M of net savings on the Swedish savings market
Position Market share of 14% rolling 12M of net savings on the Swedish savings market Swedish savings market Net inflow Net inflow, R12m 40% 30% Avanza market share, % 20% 10% Target 2025 of 10% 0% Q4-14 Q1-14 Q2-14 Q3-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18
Slide 18: Significant growth potential with a 6.5% market share of the Swedish savings market
Position Significant growth potential with a 6.5% market share of the Swedish savings market Capital on the Swedish savings market Avanza's share 4 500 1) SEK 4,048 bn 4 000 3 500 o The Swedish savings market 3 000 SEK 10,964bn SEK 2,633 bn o Annual market growth of on 2 500 average 8% last ten year
Slide 19: The largest Swedish participant in stock market transactions and turnover on Nasdaq OMX and First North
Position The largest Swedish participant in stock market transactions and turnover on Nasdaq OMX and First North o Market share of 18.3% in terms of transactions and 6.4% of turnover in Q4 2023 Transactions Turnover Avanza Nordea Swedbank SEB SHB Carnegie Nordnet Skandiabanken 19
Slide 20: Age distribution among new customers
Position Age distribution among new customers Market penetration 7,0 o Total share of Swedish population: 17.5% as of 6,0 1 November 2023 o ages 20-29: 32.9% 5,0 o ages 30-39: 33.3% 2023 o ages 40-49: 24.8% Share, % 2017 4,0 2012 o Highest penetration in urban areas. Stockholm region, 2007 snapshot
Slide 21: Potential in both existing and new customers
Growth drivers Potential in both existing and new customers o Increasing share of wallet in existing customer base o Continue to attract young people and keep them happy as wealth grow by age o The broad offering makes us relevant for larger groups of people o Increased savings among women o Regulat
Slide 22: Savings capital grow by age
Growth potential Savings capital grow by age 4,0% 1,6 3,5% 1,4 Savings capital, SEK m 3,0% 1,2 Customers, % 2,5% 1,0 2,0% 0,8 1,5% 0,6 1,0% 0,4 0,5% 0,2 0,0% 0,0 0 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63 66 69 72 75 78 Age Savings capital by age Total customer base 22
Slide 23: Average savings capital grow by number of years as a customer at Avanza
Average savings capital grow by number of years as a customer at Avanza 600 000 500 000 Savings capital, SEK 400 000 300 000 200 000 100 000 0 1 month 1 year 2 years 3 years 4 years 5 years 6 years 7 years 8 years 9 years 10 years Average savings capital per customer, SEK 23
Slide 24: Strong potential when wealth is transferred to the next generation
24 0,0% 0,5% 1,0% 1,5% 2,0% 2,5% 3,0% 3,5% 18 years Growth potential 21 years 24 years 27 years 30 years 33 years 36 years next generation 39 years Avanza 37 Median age 42 years 45 years 48 years Sweden 48 Median age 51 years 54 years Sweden 57 years 60 years 63 years Avanza 66 years 69 years Age di
Slide 25: One of the fastest growing pension companies in Sweden
Growth potential One of the fastest growing pension companies in Sweden o Competitiveness with broad investment opportunities and no annual insurance fees o The strong offer an advantage when the transfer right is improved to the benefit of the consumer 6.3% 60 000 Savings capital, SEK m 50 000 40 0
Slide 26: Enable customers to apply for mortgages from various external lenders
Growth potential Enable customers to apply for mortgages from various external lenders o Important part of customers’ economy o Frees up savings capital with other banks 0.9% 40 000 35 000 30 000 Volume, SEK m 25 000 20 000 15 000 10 000 5 000 Swedish mortgage market 0 SEK 4,050 billion 2013 2014 20
Slide 27: Prepared to capture opportunities in a digitised world…
Growth potential Prepared to capture opportunities in a digitised world… Increasing digitisation is Data from different financial players A more mobile Increased transparency leading to a more agile can be easily shared with third parties occupational pension and consumer financial market. by custom
Slide 28: Customer satisfaction and employee engagement create shareholder value over time
To summarise Customer satisfaction and employee engagement create shareholder value over time Long-term targets Customer proposition o Customer satisfaction & Employee engagement o Cheaper, better and simpler offering o Growth in customers and savings capital o High user experience o Profitability a
Slide 29: Appendix
Appendix Operations 30-31 Financials 32-37 Balance sheet data 38-43 Contact details 44 29
Slide 30: Targets and fulfilment
Targets and fulfilment Long-term targets Outcome 2023 Comments Sweden’s most satisfied savers according to the √ Achieved in 2023 for the 14th consecutive year Swedish Quality Index Engaged employees, eNPS of at least 50 58 Very strong ambassadorship We will need a couple of good years for the stock
Slide 31: Avanza's targets for a sustainable future
Avanza’s targets for a sustainable future Net Zero emissions Avanza’s goal is to reduce scope 1, 2 and 3 emissions with 50 percent by 2030 and to achieve net zero emissions of greenhouse gases as soon as possible, by 2045 the latest. This includes emissions generated by the bank itself from energy c
Slide 32: Financial overview
Financial overview Q4 23 Q3 22 ∆% Q4 22 ∆% 2023 2022 ∆% Operating income, SEK m 882 854 3 847 4 3,437 2,973 16 Operating expenses, SEK m -306 -266 15 -273 12 -1,148 -1,031 11 Operating profit, SEK m 580 588 -1 573 1 2,292 1,940 18 Operating margin, % 66 69 -3 68 -2 67 65 1 Income to savings capital
Slide 33: Long-term revenue development
Long-term revenue development 4 000 3 500 3 437 3 301 2 973 3 000 2 286 2 500 Revenue, SEK m 2 000 1 500 1 193 1 000 500 0 2019 2020 2021 2022 2023 Total income Income from sales of shares in Stabelo Net brokerage income Income from mutual funds Net interest income Other income Currency-related inco
Slide 34: Income split 2023
Income split 2023 SEK m % of income Net brokerage income 724 21 Fund commissions, net 594 17 Currency-related income, net 287 8 Net interest income 1,574 46 1) Other income, net 258 8 Total 3,437 100 1) Mainly income from Avanza Markets, compensation for distribution and stock lending, but also adve
Slide 35: Annual cost development
Annual cost development 1400 1200 1 148 864 1000 Operating expenses, SEK m 734 657 800 594 600 400 200 0 2019 2020 2021 2022 2023 Total expenses Non-recurring items Personnel Marketing Depreciation Other expenses 35
Slide 36: Cost increase for 2024 is estimated at 9.5 per cent
Cost increase for 2024 is estimated at 9.5 per cent Costs 2023 SEK m % of total costs Comments Personnel -704 61 o Regarding technology IT systems and licenses -130 11 investments, our philosophy is to expense as much as possible External services -82 7 through the income statement. Our aim is to ma
Slide 37: Operating margin at high levels
Operating margin at high levels 3 000 100 90 2 500 2 437 2 292 80 Operating profit, SEK m Operating margin, % 1 940 70 2 000 60 1 576 1 500 50 40 1 000 30 520 20 441 418 500 10 0 0 2017 2018 2019 2020 2021 2022 2023 Operating profit Operating margin 37
Slide 38: Balance sheet, 31 December 2023
Balance sheet, 31 December 2023 Assets SEK m Liabilities & equity SEK m Comments o Mainly self-financed through Lending to credit 15,928 Deposits 61,728 shareholders’ equity and institutions1) customer deposits Loans to the public 19,583 Liabilities in insurance 213,715 o Surplus-liquidity of SEK 47
Slide 39: Low-risk loan book
Low-risk loan book Loans to the public of o Funded through customer deposits spread across a very large SEK 19.6 bn number of households Private Banking o All lending is secured mortgage o Mortgage lending limited to 25 per cent of liquidity o Private Banking mortgage requires SEK 3 million of savin
Slide 40: Low cost of risk with marginal credit losses
Low cost of risk with marginal credit losses, SEK m - credit losses of 0.02% annually 2001 to 2023 25 000 50% 20 000 40% 15 000 30% 10 000 20% 5 000 10% 0 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Internally financed lending Total credit losses (~0)
Slide 41: Treasury portfolio composition
Treasury portfolio composition Municipal bonds, 8% Swedish Central Bank Certificates, 13% o Conservative credit profile o All interest-bearing securities have the highest bond rating o Balanced maturity structure o Exposure in SEK o All securities can be pledged to the Swedish Central Bank Covered b
Slide 42: Stable share of liquidity of total savings capital
42 o o 10% 15% 20% 25% 0% 5% Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18 Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-20 Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21 Sep-21 Nov-21 Jan-22 Mar-22 Deposits from the public are considered one of
Slide 43: Strong capital position
Strong capital position 31 December 31 December 2023 2022 Total capital requirement, %1) 18.2 15.1 Capital surplus, % 6.5 11.1 Total capital ratio, % 24.7 26.2 Leverage ratio,%2) 5.0 5.5 Capital surplus after LR-requirement and P2-guidance 1.5 1.5 1) Including external buffers and Pillar 2 requireme
Slide 44: Historical financial key data 2001–2023 is available in Excel
Updated 5 February 2024 Historical financial key data 2001–2023 is available in Excel at: avanza.se/keydata ir@avanza.se More contact details 44
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