Avarda Bank Ab · OMXSTO:AVARDA
Avarda Bank Ab — TF Bank — Q4 2024 Earnings Presentation
24 slides from Avarda Bank Ab's earnings presentation, Jan 20, 2025
Slide 1: Track Record Since IPO
TRACK RECORD SINCE IPO 220 25,000 200 180 20,000 160 140 15,000 SEK million 120 100 10,000 80 60 5,000 40 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 Q3 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 2
Slide 2: 4th Quarter 2024 Result Presentation
4th Quarter 2024 RESULT PRESENTATION
Slide 3: Highlights October – December 2024
HIGHLIGHTS OCTOBER – DECEMBER 2024 • Divestment of the 80.1% in Rediem Capital completed Operating profit - Positive one-off effect on operating profit amounting to SEK 103 million and positive capital effect of SEK 345 million 291 - Extraordinary one-off dividend proposal of SEK 5.00 per share +36%
Slide 4: Loan Book Growth
LOAN BOOK GROWTH1) 25,000 • TF Bank: Growth in Q4 = 6% 17% 6% - Year-on-year 17% 20,000 • Credit Cards: Q4 = 8% 15,000 - Year-on-year 48% SEK million 10,000 • Ecommerce Solutions: Q4 = 12% - Year-on-year -7% 5,000 • Consumer Lending: Q4 = 2% 0 - Year-on-year 4% Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 TF Bank
Slide 5: Growth and Diversification
GROWTH AND DIVERSIFICATION Market update Loan book split by market2) Germany: Credit card product in high demand. Competitive CAC1). Soft launch of credit Germany 35% offering in Ecommerce Solutions in Germany during Q4 2024 Norway 21% Norway: Focus on protecting margins in Consumer Lending. The Cre
Slide 6: Credit Cards
CREDIT CARDS Highlights Share of TF Bank’s operating income • Loan portfolio up 48%4) amounting to SEK 8.5 bn Share of TF Bank's loan book • Record level at 183 k distributed cards in Germany, +31% YoY • Continued scalability in the business model 42% 44% • Soft launch in Spain and Italy during the
Slide 7: Ecommerce Solutions
ECOMMERCE SOLUTIONS Highlights Share of TF Bank's loan book Share of TF Bank’s operating income • Agreements signed with new major merchants • Expected annual credit volume SEK 1.9 bn 13% 20% • Strong profitability despite pressure in e-commerce sector in general • Geographical expansion through cre
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 • Stable credit quality during the last quarters 45% 36% • New lending in Sweden resumed on a small scale Segment description
Slide 9: Stable Risk-Adjusted Margin
STABLE RISK-ADJUSTED MARGIN 657 625 595 561 545 • Risk-adjusted income1) SEK Million - Stable risk-adjusted margin2) 8.5% 8.5% • Operating income 8.1% 8.1% 8.2% - Credit Cards the main driver • Net loan losses2) 224 186 188 202 205 - Credit Cards the main driver Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Operati
Slide 10: Opex – Cost/Income Ratio by Segment
OPEX – COST/INCOME RATIO BY SEGMENT 70% 60% 61% 59% 58% 58% • Operating expenses Q4-24 vs. Q4-23, +11% 55% 50% - Scalability in the business model - Seasonal effects in Q3 40% 40% 40% 40% 37% Cost/income ratio per segment in Q4-24 37% 38% 37% 36% 33% - Credit Cards 32% 34% 33% 30% 32% 31% 32% - Ecom
Slide 11: Increased Profit Year-on-Year
INCREASED PROFIT YEAR-ON-YEAR Operating profit 291 • Operating profit Q4-24 vs. Q4-23, +36% - Growing operating income 36% SEK million - EPS driven by Credit Cards and Ecommerce Solutions • Items affecting comparability +103 MSEK • Strong profitability in Q4-2024 - Adjusted return on equity, 22.3% 1
Slide 12: Credit Cards: Higher Operating Profit
CREDIT CARDS: HIGHER OPERATING PROFIT 75 70 • Operating profit Q4-24 vs. Q4-23, +66% 52 - Growing operating income 45 46 - Economies of scale SEK million - Return on loans to the public, 2.8% • High investment pace 9.0% - New markets: Spain and Italy 8.2% 8.2% 8.6% 8.5% Q4'23 Q1'24 Q2'24 Q3'24 Q4'24
Slide 13: Ecommerce Solutions: Strong Profitability
ECOMMERCE SOLUTIONS: STRONG PROFITABILITY 33 29 • Operating profit Q4-24 vs. Q4-23, +91% 23 22 - Higher operating income margin 17 - Return on loans to the public, 3.8% SEK million • Lower loan losses during the quarter - Loan loss ratio 2.7% 12.4% 13.6% 13.7% 14.5% 15.4% - Credit restrictions in th
Slide 14: Consumer Lending: Focus on Margins
CONSUMER LENDING: FOCUS ON MARGINS 92 83 79 80 76 • Operating profit Q4-24 vs. Q4-23, +5% - Seasonal effects impacted Q3-24 - Return on loans to the public, 2.6% SEK million • Stable risk-adjusted margin 6.3% 6.3% 6.6% 6.7% 6.6% Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Operating profit Risk-adjusted margin TF
Slide 15: Funding and Liquidity
FUNDING AND LIQUIDITY 24,000 Deposits from the public 21,198 20,000 • Retail deposits in Europe 16,000 - Germany (SEK 16.8 billion) - Netherlands (2.8 billion) SEK million 12,000 Germany - Nordics (SEK 0.7 billion) - Other (SEK 0.9 billion) 8,000 - Fixed-term deposits: 70 % Liquidity reserve • Liqui
Slide 16: Capital Situation
CAPITAL SITUATION 16,7% • Positive capital effect of 345 MSEK T1+T2 16,7% 14,7% due to Rediem transaction Headroom 3.8% T1 14,7% 13,3% Headroom • Foreseeable dividend of 107.5 4.1% T1+T2 12,9% MSEK lower own funds Headroom 4.4% T1 10,6% T1 10,6% • Significant headroom to legal CET1 13.3% requirement
Slide 17: Looking Ahead
LOOKING AHEAD • The transformation continues with a pan-European focus • An ambitious commercial plan set for Credit Cards and Ecommerce Solutions in 2025 • Follow Rediem Capital – now as a minority owner • New financial targets to be communicated during H1 2025 • Build competence in our newest mark
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 25,000 2,500 • Highly profitable core markets with 20,000 2,000 proven model for geographical SEK mill
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: Besqab AB (publ), K- AI@scale: Boston Consulti
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 previous
Slide 24: Contact
Contact Investor relations Mikael Meomuttel +46 706 26 95 33 ir@tfbank.se www.tfbankgroup.com 24