Avarda Bank AB · OMXSTO:AVARDA
Avarda Bank AB — TF Bank — Q3 2021 Earnings Presentation
24 slides from Avarda Bank AB's earnings presentation, 2021
Slide 1: 3rd Quarter 2021 Result Presentation
3rd Quarter 2021 RESULT PRESENTATION
Slide 2: Highlights July – September 2021
HIGHLIGHTS JULY – SEPTEMBER 2021 • TF Bank’s loan portfolio has reached SEK 10 billion - Loan book growth of 9%* during the quarter - Record sales volume, over SEK 1 billion/month • Operating profit 92 MSEK, +27% vs Q3-2020 • The Finnish covid rate cap expired at the end of September * Development o
Slide 3: New Financial Targets 2021
NEW FINANCAL TARGETS 2021 Growth TF Bank’s aim is to achieve a loan portfolio of SEK 20 billion by first half of 2025 Profitability TF Bank’s aim is to achieve a return on equity well above 20% Capital structure TF Bank’s aim is that all capital ratios should exceed the regulatory requirement (inclu
Slide 4: 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 - Average loan size on book of SEK – 60,000 68% 64% - Tenor typically between 12 and 60 months • Marketed through direct channels, ow
Slide 5: Ecommerce Solutions
ECOMMERCE SOLUTIONS • Digital payment solutions offered in the Nordic Share of TF Bank's loan book Share of TF Bank’s operating income region, the Baltics and Poland • Best-in-class white label Checkout+ maintain 18% 23% focus on our partners throughout the whole customer journey • Roll-out of our B
Slide 6: Credit Cards
CREDIT CARDS • Target group is German and Norwegian customers 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 14% 13% - Starts low – gradual build-up of income • Addressa
Slide 7: Loan Book Growth
LOAN BOOK GROWTH 32% 9% 10 000 • TF Bank: Growth in Q3 = 9% (0%*) 9 000 - Year-on-year 32% (0%*) 8 000 7 000 • Consumer Lending: Q3 = 7% (-1%*) SEK million 6 000 - Year-on-year 18% (+1%*) 5 000 4 000 • Ecommerce Solutions: Q3 = 4% (0%*) 3 000 - Year-on-year 44% (-4%*) 2 000 • Credit Cards: Q3 = 29%
Slide 8: Growth and Diversification
GROWTH AND DIVERSIFICATION Sweden ▪ Focus on profitability and e-commerce. Breakthrough deal with Boozt gives higher volumes and new market opportunities. Norway ▪ Continued positive long term outlook on the Norwegian economy. Focus on growth and margins. Positive signs in e-commerce. Loan book Finl
Slide 9: KPI – Stable Risk-Adjusted Margin
KPI – STABLE RISK-ADJUSTED MARGIN Operating income* Net loan losses* Risk-adjusted income** 300 25,0% 70 68 8,0% 210 202 20,0% 270 62 62 190 61 60 250 172 176 238 60 180 250 234 20,0% 157 16,0% 218 6,0% 50 150 200 15,0% 12,0% SEK million SEK million SEK million 40 120 150 4,0% 11,9% 12,1% 30 90 11,5
Slide 10: Opex – Record Volume Impact Costs
OPEX – RECORD VOLUME IMPACT COSTS 90% • Expenses Q3-21 vs. Q3-20, +31% 80% 80% ‒ Sales related costs 70% 72% 70% 69% 59% ‒ Ecommerce Solutions and Credit Cards 64% 60% 64% 61% 56% ‒ Cost/income ratio 41,1% (38,9) 50% 55% • Cost/income ratio per segment in Q3-21 40% 41% 41% 42% 41% 39% ‒ Consumer Len
Slide 11: Strong Operating Profit Growth
STRONG OPERATING PROFIT GROWTH Operating profit 100 27% 92 • Operating profit Q3-21 vs. Q3-20, +27% 90 79 84 ‒ Increasing profit from Q3-2020 80 77 72 ‒ Stabilised risk adjusted margin 70 60 ‒ Return on assets, 3,0% SEK million 50 • Growth combined with high profitability 40 ‒ Return on equity, 25%
Slide 12: Consumer Lending: Lower Loss Ratio
CONSUMER LENDING: LOWER LOSS RATIO Operating profit 90 81 • Operating profit Q3-21 vs. Q3-20, +22% 80 80 72 73 ‒ Loan loss ratio continues to decrease, 2,1% 70 66 ‒ High efficiency, C/I ratio 30% 60 • Strong profitability SEK million 50 ‒ Return on assets, 3,8% 40 ‒ Norway and Finland in focus 2021
Slide 13: Ecommerce Solutions: Strong Q3
ECOMMERCE SOLUTIONS: STRONG Q3 Operating profit 20 • Operating profit Q3-21 vs. Q3-20, +23% 18 17 ‒ Higher operating income 16 14 14 ‒ Seasonal effect lowers OPEX ‒ Return on assets, 2,9% SEK million 12 11 10 10 • Operating income increased by 41% 8 6 ‒ Loan portfolio growth 44% 6 ‒ Higher transacti
Slide 14: Credit Cards: Rapid Growth
CREDIT CARDS: RAPID GROWTH Operating profit 4 +4 • Operating profit Q3-21, -5 MSEK 2 ‒ Strong loan book growth in Q3 ‒ Upfront provisions (IFRS 9) approx. 9 MSEK 0 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q3’21 ‒ Return on assets, neg excl. IFRS 9 SEK million • effects -2 Business model with economies of scale
Slide 15: Solid Liquidity Position
SOLID LIQUIDITY POSITION Deposits from the public 12 000 11,015 • Retail deposits in 4 markets 11 000 ‒ Germany (SEK 7.0 billion) 10 000 9 000 ‒ Norway (SEK 3.0 billion) 8 000 Germany ‒ Sweden (SEK 0.7 billion) SEK million 6 963 7 000 ‒ Finland (SEK 0.3 billion) 6 000 ‒ Fixed-term deposits: 36% 5 00
Slide 16: Solid Capital Position
SOLID CAPITAL POSITION 15,6% 15,6% • Slightly lower capital ratios vs T1+T2 13,5% T1 13,5% 12,4% Headroom 3,9% Q2-2021 Headroom 4,0% T1+T2 11,7% • Higher legal capital requirements Headroom 4,6% 9,5% 9,5% ahead T1 T1 CET1 12,4% • Capital target: >2,5% legal requirements* CET1 7,8% CET1 7,8% CET1 7,8
Slide 17: Looking Ahead
LOOKING AHEAD • Further organic growth – entering new markets • Optimise the capital structure – intention to issue more Tier 1 capital • Continue the expansion in Germany – credit cards • Covid-19 - Back to lockdown in the Baltic region TF Bank 17
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 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 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 9 000 1 000 • 8 000 900 Highly profitable core markets with 7 000 800 proven model for geographical 6
Slide 22: Board of Directors
Board of Directors John Brehmer Charlotta Björnberg-Paul Michael Lindengren Chariman of the Board since Board member since 2017 Board member since 2021 2020 Current commitments: Current commitments: Board member since 2010 Chairman: Saxo Oy Chairman: Acrap AB Current commitments: Board member: Mekal
Slide 23: 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 24: Contact
Contact Investor relations Mikael Meomuttel +46 706 26 95 33 ir@tfbank.se www.tfbankgroup.com 24