Avarda Bank Ab · OMXSTO:AVARDA
Avarda Bank Ab — TF Bank — Q1 2024 Earnings Presentation
24 slides from Avarda Bank Ab's earnings presentation, Apr 16, 2024
Slide 1: Track Record Since IPO
TRACK RECORD SINCE IPO 160 25 000 140 20 000 120 100 15 000 MSEK 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 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 Loans to the public
Slide 2: 1st Quarter 2024 Result Presentation
1st Quarter 2024 RESULT PRESENTATION
Slide 3: Highlights January – March 2024
HIGHLIGHTS JANUARY – MARCH 2024 • Controlled growth during the quarter Operating profit - 3% in local currencies +25% • Operating profit 148 MSEK, +25% vs Q1-2023 - Credit Cards and Ecommerce Solutions segment drives EPS • Income growing faster than cost, the business is scaling well with improved C
Slide 4: Loan Book Growth
LOAN BOOK GROWTH 20 000 23% 5% • TF Bank: Growth in Q1 = 5% (3%*) 16 000 - Year-on-year 23% (21%*) • Consumer Lending: Q1 = 4% (2%*) SEK million 12 000 - Year-on-year 6% (5%*) 8 000 • Credit Cards: Q1 = 14% (10%*) - Year-on-year 75% (72%*) 4 000 • Ecommerce Solutions: Q1 = -7% (-10%*) 0 - Year-on-ye
Slide 5: Growth and Diversification
GROWTH AND DIVERSIFICATION Market update Loan book split by market Germany and Austria ▪ Credit card product in high demand. Competitive CAC*. Preparing for launching digital payment solutions in Germany. New markets Sweden Norway ▪ Focus on margins in Consumer Lending. The credit card business keep
Slide 6: Credit Cards
CREDIT CARDS Highlights Share of TF Bank's loan book Share of TF Bank’s operating income • The loan portfolio in Germany now exceeds 5 billion SEK • Continued scalability in the business model 35% 39% • Improved customer onboarding process increases security and reduce costs of acquisition of new cl
Slide 7: Ecommerce Solutions
ECOMMERCE SOLUTIONS Highlights Share of TF Bank’s operating income Share of TF Bank's loan book • Repricing to compensate for higher funding costs is bearing fruit • Continuously improved profitability despite pressure in 15% 23% e-commerce sector in general • Preparing to launch credit offering in
Slide 8: Consumer Lending
CONSUMER LENDING Highlights • Pick-up in sales and focus on protecting margins Share of TF Bank's loan book Share of TF Bank's operating income • Stable margins in several markets • Early indications of stabilised credit quality 50% 38% Segment description 9.4bn +6% 10 • Diversified portfolio with N
Slide 9: Stable Risk-Adjusted Margin
STABLE RISK-ADJUSTED MARGIN 561 545 529 • Risk-adjusted income* 479 - Stable risk-adjusted margin** 444 • Operating income SEK Million - Credit Cards and Ecommerce Solutions the main drivers 8,1% 8,0% 8,3% 8,1% 8,1% • Net loan losses - Stabilised loan loss ratio** in Q1 2024 172 186 188 140 158 Q1'2
Slide 10: Opex – Cost/Income Ratio by Segment
OPEX – COST/INCOME RATIO BY SEGMENT 70% 66% 60% 62% 62% 61% • Expenses Q1-24 vs. Q1-23, +21% 59% - Sales-related costs and more employees 50% - Expanding our team to cope with larger business 44% 43% volumes 41% 40% 40% 40% 42% 41% • Cost/income ratio per segment in Q1-24 37% 37% 38% - Consumer Lend
Slide 11: Increased Profit Quarter-by-Quarter
INCREASED PROFIT QUARTER-BY-QUARTER Operating profit 25% 148 • Operating profit Q1-24 vs. Q1-23, +25% 139 130 - Growing operating income 122 118 - EPS driven by the Credit Cards and Ecommerce Solutions segments SEK million • Stable profitability in Q1-2024 - Return on equity, 22% - Earnings per shar
Slide 12: Credit Cards: Higher Operating Profit
CREDIT CARDS: HIGHER OPERATING PROFIT 45 46 42 • Operating profit Q1-24 vs. Q1-23, +86% - Growing operating income - Economies of scale SEK million 24 25 - Return on allocated equity*, 21% • Lower income margin in Q1-2024 5,9% 6,4% 6,5% 6,3% 5,9% - Lagging funding costs - Cards primarily issued via
Slide 13: Ecommerce Solutions: Strong Quarter
ECOMMERCE SOLUTIONS: STRONG QUARTER 23 17 17 • Operating profit Q1-24 vs. Q1-23, +113% 15 - Higher operating income - Repricing to compensate for higher funding costs SEK million 11 - Return on allocated equity*, 22% 3,1% 3,1% 3,6% 4,0% 4,0% • Loan loss ratio unchanged in Q1-2024 - Credit quality in
Slide 14: Consumer Lending: Focus on Margins
CONSUMER LENDING: FOCUS ON MARGINS 90 83 80 79 76 • Operating profit Q1-24 vs. Q1-23, -5% - Lagging funding costs lowers margin SEK million Stabilised loan loss ratio in Q1-2024 - Focus on improving margins and credit quality 3,1% 3,0% 3,1% 3,0% 2,8% - Return on allocated equity*, 24% Q1'23 Q2'23 Q3
Slide 15: Funding and Liquidity
FUNDING AND LIQUIDITY Deposits from the public 22 000 20,835 20 000 • Retail deposits in Europe 18 000 - Germany (SEK 18.6 billion) 16 000 - New markets (SEK 1.4 billion) 14 000 - Nordics (SEK 0.8 billion) SEK million 12 000 Germany - Fixed-term deposits: 49% 10 000 8 000 • Liquidity reserve: 23% of
Slide 16: Capital Situation
CAPITAL SITUATION 15,8% T1+T2 15,8% 13,6% Headroom 3,2% T1 13,6% 12,1% Headroom 3,2% • Stable capital ratios in Q1-2024 T1+T2 12,6% Headroom 3,4% • NPL backstop regulations impacts T1 10,4% T1 10,4% own funds (SEK -65 million) 12,1% CET1 • Optimised capital situation and CET1 8,7% CET1 8,7% CET1 8,7
Slide 17: Looking Ahead
LOOKING AHEAD • Continue the transformation towards becoming more of a European credit and payment platform • Launching credit card product in Spain and digital payment solutions in Germany • Early indications of stabilised or even somewhat improved credit quality • Plan for higher organic growth du
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 and the Netherlands. credit cards. Fo
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 Management Team
Executive management team Joakim Jansson Mikael Meomuttel 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