Avarda Bank Ab · OMXSTO:AVARDA
Avarda Bank Ab — TF Bank — Q2 2022 Earnings Presentation
23 slides from Avarda Bank Ab's earnings presentation, 2022
Slide 1: 2nd Quarter 2022 Result Presentation
2nd Quarter 2022 RESULT PRESENTATION
Slide 2: Highlights April – June 2022
HIGHLIGHTS APRIL – JUNE 2022 • New lending 4,0 billion, record volume in all segments - Loan portfolio increased by 8%* • Operating profit, +28% compared to Q2-2021 • Increased marketing spend supported growth in Germany • Further expansion for Ecommerce Solutions Nordic * in local currencies TF Ban
Slide 3: Consumer Lending
CONSUMER LENDING • Diversified portfolio with Nordic base Share of TF Bank's loan book Share of TF Bank's operating income • Product offering tailored for each market 63% 54% - Average loan size on book of SEK – 67,000 - Tenor typically between 12 and 60 months • Marketed through direct channels, 8.
Slide 4: Ecommerce Solutions
ECOMMERCE SOLUTIONS • Digital payment solutions offered in the Share of TF Bank's loan book Share of TF Bank’s operating income Nordic region, the Baltics and Poland • Best-in-class white label Checkout+ 18% 24% maintain focus on our partners throughout the whole customer journey • Although many sec
Slide 5: Credit Cards
CREDIT CARDS • Target group is German and Norwegian consumers Share of TF Bank's loan book Share of TF Bank’s operating income • Simple and transparent offering – gold card with no fees • Different income profile compared to consumer loans 19% 22% - Starts low – gradual build-up of income • Addressa
Slide 6: Loan Book Growth
LOAN BOOK GROWTH 38% 9% 13,000 • TF Bank: Growth in Q2 = 9% (+1%*) 12,000 11,000 - Year-on-year 38% (+6%*) 10,000 9,000 • Consumer Lending: Q2 = 6% (0%*) SEK million 8,000 7,000 - Year-on-year 27% (+6%*) 6,000 5,000 • Ecommerce Solutions: Q2 = 9% (2%*) 4,000 - Year-on-year 30% (+4%*) 3,000 2,000 • C
Slide 7: Growth and Diversification
GROWTH AND DIVERSIFICATION Sweden ▪ Focus on profitability and e-commerce. Norway ▪ Continued positive long term outlook on the Norwegian economy. Focus on growth and margins. Credit card issuing at an all time high. Loan book Finland ▪ High competition in consumer lending. Low risk loan book. The B
Slide 8: Stable Margins – Higher Income
STABLE MARGINS – HIGHER INCOME Operating income* Net loan losses* Risk-adjusted income** 350 338 25.0% 90 8.0% 300 20.0% 319 81 296 78 257 80 300 241 270 70 250 20.0% 68 226 16.0% 250 70 6.0% 250 60 202 60 200 190 15.0% 12.0% SEK million SEK million SEK million 200 50 4.0% 150 150 40 11.3% 11.3% 11.
Slide 9: Opex – Cost/Income Ratio by Segment
OPEX – COST/INCOME RATIO BY SEGMENT 90% • Expenses Q2-22 vs. Q2-21, +41% 80% 72% ‒ Increased marketing costs for credit cards 70% 59% 58% 61% ‒ Record volume – sales related costs 64% 58% 60% 56% 54% ‒ Cost/income ratio 44% 50% 53% 51% 40% 42% 43% 43% 44% • Cost/income ratio per segment in Q2-22 41%
Slide 10: Growing Operating Profit
GROWING OPERATING PROFIT Operating profit 120 • Operating profit Q2-22 vs. Q2-21, +28% 28% 107 99 103 ‒ Increased profit quarter-to-quarter 100 92 ‒ Return on assets, 2.7% 84 80 • Growth combined with high profitability SEK million 60 ‒ Return on equity, 24.1% in Q2-2022 ‒ Earnings per share, 3,75 S
Slide 11: Consumer Lending: High Profitability
CONSUMER LENDING: HIGH PROFITABILITY Operating profit 100 6% • Operating profit Q2-22 vs. Q2-21, +6% 90 82 86 ‒ Higher risk adjusted income 81 80 80 74 ‒ Somewhat elevated costs 70 ‒ Return on assets, 3.5% SEK million 60 50 • Record low loan loss ratio in Q2-22 40 ‒ Improved credit quality 30 ‒ New
Slide 12: Ecommerce Solutions: Nordic Expansion
ECOMMERCE SOLUTIONS: NORDIC EXPANSION Operating profit 30 • Operating profit Q2-22 vs. Q2-21, +161% 161% 25 ‒ Strong development in the Nordics 22 ‒ Comparative figures impacted by Boozt 20 18 ‒ Return on assets, 2.4% SEK million 17 17 15 • Higher funding costs in Poland 10 ‒ Partially mitigated by
Slide 13: Credit Cards: High Growth
CREDIT CARDS: HIGH GROWTH Operating profit 6 • Operating profit Q2-22, 4 MSEK 4 4 ‒ Higher operating income 3 ‒ Provisions for expected credit losses (IFRS 9) 2 2 ‒ Return on assets, 0.5% SEK million 0 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 • Marketing costs in Q2-2022 ‒ Digital channels, impacts OPEX upfron
Slide 14: Low Risk Liquidity Reserve
LOW RISK LIQUIDITY RESERVE Deposits from the public 14,748 15,000 • Retail deposits in 4 markets 14,000 13,000 ‒ Germany (SEK 10.9 billion) 12,000 ‒ Norway (SEK 3.0 billion) 11,000 10,000 Germany ‒ Sweden (SEK 0.5 billion) SEK million 9,000 10,904 8,000 ‒ Finland (SEK 0.4 billion) 7,000 ‒ Fixed-term
Slide 15: Solid Capital Position
SOLID CAPITAL POSITION 15.5% T1+T2 15.5% 13.7% • Capital ratios impacted by loan T1 13.7% 12.0% Headroom 3.8% book growth in Q2 Headroom 4.2% Headroom 4.1% T1+T2 11.7% • Significant headroom to legal T1 9.5% T1 9.5% requirements CET1 12.0% • Higher countercyclical buffer CET1 7.9% CET1 7.9% CET1 7.9
Slide 16: Looking Ahead
LOOKING AHEAD • Further growth opportunities during 2H 2022 • Entering new markets, initially small volumes • Uncertainty due to the macroeconomic environment • Ecommerce Solutions Nordic: New license from FSA • Stable asset quality TF Bank 16
Slide 17: Q&A Session
Q&A Session 17
Slide 18: Appendix
Appendix 18
Slide 19: Corporate Profile
CORPORATE PROFILE Our Products Our Geographical footprint Operating with modern and scalable We serve customers in the Nordics and infrastructure offering our retail customers around the Baltic sea online consumer loans, deposits and credit cards. For retailers we offer leading ecommerce and brick-a
Slide 20: 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 12,000 1,200 consumer finance industry 10,000 1,000 • Highly profitable core markets with 8,000 800 SEK million proven model for
Slide 21: Board of Directors
Board of Directors John Brehmer Mari Thjømøe Sara Mindus Chairman of the Board since Board member since 2017 Board member since 2020 2020 Current commitments: Current commitments: Board member since 2010 Chairman: Seilsport Maritimt Forlag AS, Board member: K-Fast Holding AB, ThjømøeKranenAS Besqab
Slide 22: Executive management team
Executive management team Mattias Carlsson Mikael Meomuttel CEO CFO, Deputy CEO and Head of Investor Relations Education: MSc, Engineering Physics, Uppsala University. Education: MSc, Business/Economics and Finance, University of Borås/University of Gothenburg. At TF Bank since 2008 as CEO until 201
Slide 23: Contact
Contact Investor relations Mikael Meomuttel +46 706 26 95 33 ir@tfbank.se www.tfbankgroup.com 23