Avarda Bank AB · OMXSTO:AVARDA
Avarda Bank AB — TF Bank — Q3 2022 Earnings Presentation
23 slides from Avarda Bank AB's earnings presentation, October 2022
Slide 1: 3rd Quarter 2022 Result Presentation
3rd Quarter 2022 RESULT PRESENTATION
Slide 2: Highlights July – September 2022
HIGHLIGHTS JULY – SEPTEMBER 2022 • Loan portfolio increased by 8% in the quarter - Whereof currency effects +2% • Operating profit +21% compared to Q3-2021 • Credit Cards: Take-off for operating profit • Ecommerce Solutions: Major Nordic retailer signed in October TF Bank 2
Slide 3: Consumer Lending
CONSUMER LENDING Share of TF Bank's loan book Share of TF Bank's operating income • Diversified portfolio with Nordic base • Product offering tailored for each market - Average loan size on book of SEK – 68,000 61% 53% - Tenor typically between 12 and 60 months • Marketed through direct channels, ow
Slide 4: Credit Cards
CREDIT CARDS • Record volumes during the third quarter Share of TF Bank's loan book Share of TF Bank’s operating income • Target group is German, Austrian and Norwegian consumers 21% 24% • Simple and transparent offering – gold card with no fees • Different income profile compared to consumer loans
Slide 5: 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% 23% maintain focus on our partners throughout the whole customer journey • Although many sec
Slide 6: Loan Book Growth
LOAN BOOK GROWTH 36% 8% 14 000 13 000 • TF Bank: Growth in Q3 = 8% (+2%*) 12 000 - Year-on-year 36% (+7%*) 11 000 10 000 • Consumer Lending: Q3 = 5% (2%*) SEK million 9 000 8 000 - Year-on-year 24% (+6%*) 7 000 6 000 • Credit Cards: Q3 = 22% (2%*) 5 000 4 000 - Year-on-year 100% 3 000 2 000 • Ecomme
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: Higher Operating Income
HIGHER OPERATING INCOME Operating income* Net loan losses* Risk-adjusted income** 400 25,0% 100 8,0% 300 20,0% 359 92 267 338 90 257 350 81 241 319 78 250 296 20,0% 80 226 16,0% 300 68 70 6,0% 270 202 70 200 250 15,0% 60 12,0% SEK million SEK million SEK million 200 50 4,0% 150 11,3% 11,4% 11,4% 11,
Slide 9: Opex – Cost/Income Ratio by Segment
OPEX – COST/INCOME RATIO BY SEGMENT 100% • Expenses Q3-22 vs. Q3-21, +41% 90% 80% ‒ Increased marketing costs for credit cards 70% ‒ Record volume – sales related costs 61% 61% 59% 58% 58% 60% ‒ Cost/income ratio 44% 50% 50% 56% 51% 54% 53% ‒ Direct marketing = 38% 40% 43% 43% 44% 44% 41% • Cost/inc
Slide 10: Growing Operating Profit
GROWING OPERATING PROFIT Operating profit 120 21% • Operating profit Q3-22 vs. Q3-21, +21% 110 107 99 103 ‒ Increased profit quarter-to-quarter 100 92 ‒ Return on assets, 2.5% 80 • Growth combined with high profitability SEK million 60 ‒ Return on equity, 24% in Q3-2022 ‒ Earnings per share, 3.86 SE
Slide 11: Consumer Lending: Stable Development
CONSUMER LENDING: STABLE DEVELOPMENT Operating profit 100 • Operating profit Q3-22 vs. Q3-21, +7% 90 82 86 86 ‒ Loan portfolio growth 80 80 74 ‒ Lower loan loss ratio 70 ‒ Return on assets, 3.3% SEK million 60 50 • Higher funding costs in Q3-22 40 ‒ Increased interest expenses in NOK and EUR 30 ‒ La
Slide 12: Credit Cards: Higher Operating Profit
CREDIT CARDS: HIGHER OPERATING PROFIT Operating profit 12 10 • Operating profit Q3-22, 10 MSEK ‒ Higher operating income 9 ‒ Return on assets, 1.2% 6 • Higher marketing costs from Q2-2022 SEK million 3 4 3 2 ‒ Digital channels, impacts OPEX upfront 0 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 -3 -6 -5 TF Bank 12
Slide 13: Ecommerce Solutions: Nordic Expansion
ECOMMERCE SOLUTIONS: NORDIC EXPANSION Operating profit 30 • Operating profit Q3-22 vs. Q3-21, -18% 25 ‒ Higher funding costs in Poland (+5 MSEK) 22 ‒ Return on assets, 1.8% 20 18 • SEK million 17 17 Positive development in the Nordic markets 15 14 ‒ Growing loan portfolio 10 ‒ New deals / strong pip
Slide 14: Funding and Liquidity
FUNDING AND LIQUIDITY Deposits from the public 15 000 14,308 • Retail deposits in 4 markets 14 000 13 000 ‒ Germany (SEK 10.5 billion) 12 000 ‒ Norway (SEK 3.1 billion) 11 000 10 000 ‒ Sweden (SEK 0.4 billion) Germany SEK million 9 000 8 000 ‒ Finland (SEK 0.3 billion) 7 000 ‒ Fixed-term deposits: 2
Slide 15: Capital Situation
CAPITAL SITUATION 15.0% T1+T2 15,0% 13.4% Headroom • Capital ratios impacted by loan 3,2% T1 13,4% 11.7% book growth Headroom 3,8% Headroom 3,7% T1+T2 11,8% • Significant headroom to legal T1 9,6% T1 9,6% requirements • CET1 11,7% Higher countercyclical buffer requirements ahead CET1 8,0% CET1 8,0%
Slide 16: Looking Ahead
LOOKING AHEAD • Continued positive development in Germany • Positive first underwriting indicators means a slightly higher pace in Denmark and Spain • Interesting pipeline for Ecommerce Solutions • Uncertainty is high. The impact of inflation and energy costs on demand, competition, and consumers ab
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