Avarda Bank Ab · OMXSTO:AVARDA
Avarda Bank Ab — TF Bank — Q3 2024 Earnings Presentation
24 slides from Avarda Bank Ab's earnings presentation, Oct 14, 2024
Slide 1: Track Record Since IPO
TRACK RECORD SINCE IPO 180 25 000 160 20 000 140 120 15 000 SEK million 100 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 Q2 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
Slide 2: 3rd Quarter 2024 Result Presentation
3rd Quarter 2024 RESULT PRESENTATION
Slide 3: Highlights July – September 2024
HIGHLIGHTS JULY – SEPTEMBER 2024 • Controlled growth during the quarter Operating profit - 5 % in local currencies • Operating profit 191 MSEK, +47% vs Q3-2023 +47% 191 - Credit Cards and Ecommerce Solutions segment drives EPS 130* • Income growing faster than costs, the business is scaling well wit
Slide 4: Loan Book Growth
LOAN BOOK GROWTH 17% 4% • TF Bank: Growth in Q3 = 4% (5%*) 25 000 - Year-on-year 17% (20%*) 20 000 • Credit Cards: Q3 = 12% (13%*) 15 000 SEK million - Year-on-year 55% (58%*) 10 000 • Ecommerce Solutions: Q3 = -4% (-3%*) - Year-on-year -6% (-5%*) 5 000 • Consumer Lending: Q3 = 1% (2%*) 0 - Year-on-
Slide 5: Growth and Diversification
GROWTH AND DIVERSIFICATION Market update Loan book split by market2) Germany and Austria ▪ Credit card product in high demand. Competitive CAC1). Preparing the launch of credit offering in Ecommerce Solutions New markets Austria Sweden in Germany during Q4 2024. Norway 1% ▪ Focus on protecting margi
Slide 6: Credit Cards
CREDIT CARDS Highlights Share of TF Bank's loan book Share of TF Bank’s operating income • The loan portfolio has surpassed SEK 8 billion • Record level at 53,000 distributed cards in Germany, +44% YTD 41% 43% • Continued scalability in the business model • Soft launch in Spain and Italy during the
Slide 7: Ecommerce Solutions
ECOMMERCE SOLUTIONS Highlights Share of TF Bank’s operating income Share of TF Bank's loan book • Continuously improved profitability despite pressure in e- commerce sector in general • Strong sales pipeline and focus on future growth 13% 21% • Preparing to launch credit offering in Germany during Q
Slide 8: Consumer Lending
CONSUMER LENDING Highlights • Business as usual with best-in-class performance Share of TF Bank's loan book Share of TF Bank's operating income • Focus on protecting margins • Improved credit quality during the last quarters 46% 36% Segment description 9.4bn 1% 10 • Diversified portfolio with Nordic
Slide 9: Improved Risk-Adjusted Margin
IMPROVED RISK-ADJUSTED MARGIN 625 595 561 545 529 • Risk-adjusted income* - Improved risk-adjusted margin** SEK Million • Operating income 8,3% 8,1% 8,1% 8,2% 8,5% - Credit Cards the main driver • Net loan losses** - Stabilised net loan losses 186 188 202 205 172 Q3'23 Q4'24 Q1'24 Q2'24 Q3'24 Operat
Slide 10: Opex – Cost/Income Ratio by Segment
OPEX – COST/INCOME RATIO BY SEGMENT 70% 60% 62% 61% 59% 58% 55% • Operating expenses Q3-24 vs. Q3-23, +1% 50% - Restructuring costs of SEK 16 million in Q3 2023 43% 40% 40% 40% - Scalability in the business model 40% 37% 38% - Seasonal effects in Q3 37% 37% 36% 30% 32% 33% 34% Cost/income ratio per
Slide 11: Increased Profit Quarter-by-Quarter
INCREASED PROFIT QUARTER-BY-QUARTER Operating profit 47% • Operating profit Q3-24 vs. Q3-23, +47% 191 - Growing operating income 158 SEK million 139 148 - EPS driven by Credit Cards and Ecommerce Solutions 130 - Restructuring costs of SEK 16 million in Q3 2023 • Improved profitability in Q3-2024 - R
Slide 12: Credit Cards: Higher Operating Profit
CREDIT CARDS: HIGHER OPERATING PROFIT • Operating profit Q3-24 vs. Q3-23, +66% 70 - Growing operating income - Economies of scale 52 SEK million 42 45 46 - Diversified marketing strategy - Return on allocated equity*, 25.6% 6,5% 6,3% 5,9% 6,4% 6,1% • High investment pace - Issued cards on record lev
Slide 13: Ecommerce Solutions: Strong Profitability
ECOMMERCE SOLUTIONS: STRONG PROFITABILITY • Operating profit Q3-24 vs. Q3-23, +99% - Higher operating income margin 29 - Return on allocated equity*, 30.2% SEK million 23 22 - Decreasing loan book 17 15 - Underlying strong business model 3,6% 4,0% 4,0% 4,3% 3,9% • Stabilised loan losses during the q
Slide 14: Consumer Lending: Focus on Margins
CONSUMER LENDING: FOCUS ON MARGINS • Operating profit Q3-24 vs. Q3-23, +3% 92 - Stabilised risk-adjusted margin 90 83 76 79 - Return on allocated equity*, 26.9% SEK million Positive trend for loan loss ratio - General improvement in credit quality 2,8% 3,1% 3,0% 2,6% 2,6% Q3'23 Q4'23 Q1'24 Q2'24 Q3'
Slide 15: Funding and Liquidity
FUNDING AND LIQUIDITY 24 000 Deposits from the public 21,641 20 000 • Retail deposits in Europe 16 000 - Germany (SEK 18.1 billion) - New markets (SEK 2.8 billion) SEK million 12 000 Germany - Nordics (SEK 0.7 billion) - Fixed-term deposits: 63% 8 000 • Liquidity reserve: 21% of deposits Liquidity r
Slide 16: Capital Situation
CAPITAL SITUATION 15,7 % • NPL backstop regulations impacts T1+T2 15,7% 13,7 % Headroom 3,0% own funds (SEK -109 million) 13,7% 12,2 % T1 Headroom 3,3% - Further streamlining the use of capital T1+T2 12,7% through separation of Rediem Capital Headroom 3,5% T1 10,4% T1 10,4% • Reissuance of T2 instru
Slide 17: Looking Ahead
LOOKING AHEAD • Continue the transformation towards becoming more of a European credit and payment platform • Finalising the separation of Rediem Capital from TF Bank • New financial targets to be communicated • Launching credit offering in Ecommerce Solutions in Germany during Q4 2024 TF Bank TF Ba
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 the Netherlands and Italy. credit ca
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 member: Styrelseledamot: AI@scale: Boston Consulting G
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: Contact
Contact Investor relations Mikael Meomuttel +46 706 26 95 33 ir@tfbank.se www.tfbankgroup.com 24