Avarda Bank AB · OMXSTO:AVARDA
Avarda Bank AB — TF Bank — Q1 2022 Earnings Presentation
24 slides from Avarda Bank AB's earnings presentation, April 2022
Slide 1: 1st Quarter 2022 Result Presentation
1st Quarter 2022 RESULT PRESENTATION
Slide 2: Highlights January – March 2022
HIGHLIGHTS JANUARY – MARCH 2022 • Loan portfolio in local currencies increased by 4% - Loan portfolio growth in SEK: 6% • Operating profit, +31% compared to Q1-2021 • Credit Cards in Austria launched • New forward flow contracts in Germany and Finland • No impact from the war in Ukraine during Q1-20
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 65% 55% - Average loan size on book of SEK – 65,000 - Tenor typically between 12 and 60 months • Marketed through direct channels, 7.
Slide 4: The Baltics and Poland
THE BALTICS AND POLAND • TF Banks operations in Q1 not Share of TF Bank’s total loans to the public impacted by the war in Ukraine 35.0% • No deposits from the public in CEE 30.0% • Reduced share of the portfolio since 28.6% 27.1% the start of the pandemic 25.0% 23.9% • Short duration, approx. 50% c
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% 25% maintain 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 17% 20% - Starts low – gradual build-up of income • Addressa
Slide 7: Loan Book Growth
LOAN BOOK GROWTH 33% 6% 12,000 • TF Bank: Growth in Q1 = 6% (+2%*) 11,000 10,000 - Year-on-year 33% (+3%*) 9,000 8,000 • Consumer Lending: Q1 = 6% (+3%*) SEK million 7,000 - Year-on-year 21% (+3%*) 6,000 5,000 • Ecommerce Solutions: Q1 = 1% (1%*) 4,000 - Year-on-year 45% (+2%*) 3,000 2,000 • Credit
Slide 8: Growth and Diversification
GROWTH AND DIVERSIFICATION Sweden ▪ Focus on profitability and e-commerce. Weak shopping quarter. 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. Lo
Slide 9: KPI Reflects Growing Business
KPI REFLECTS GROWING BUSINESS Operating income* Net loan losses* Risk-adjusted income** 350 25.0% 90 8.0% 250 241 20.0% 319 226 296 78 80 300 202 270 68 70 190 20.0% 70 200 16.0% 250 6.0% 176 250 238 62 60 60 15.0% 150 12.0% SEK million SEK million SEK million 200 50 4.0% 150 40 11.5% 11.3% 11.3% 11
Slide 10: Opex – Cost/Income Ratio by Segment
OPEX – COST/INCOME RATIO BY SEGMENT 90% • Expenses Q1-22 vs. Q1-21, +41% 80% ‒ Ecommerce Solutions and Credit Cards 70% 70% 72% 59% 58% ‒ Staff costs and sales related costs 64% 58% 60% 64% 56% 54% ‒ Cost/income ratio 43.3% (40,9) 50% 51% 40% 42% 43% 43% • Cost/income ratio per segment in Q1-22 41%
Slide 11: Positive Trend for Operating Profit
POSITIVE TREND FOR OPERATING PROFIT Operating profit 120 • Operating profit Q1-22 vs. Q1-21, +31% 31% 99 103 ‒ Increased profit quarter-to-quarter 100 92 ‒ Return on assets, 2.8% 84 79 80 • Growth combined with high profitability SEK million 60 ‒ Return on equity, 24.5% in Q1-2022 ‒ Earnings per sha
Slide 12: Consumer Lending: High Profitability
CONSUMER LENDING: HIGH PROFITABILITY Operating profit 100 13% • Operating profit Q1-22 vs. Q1-21, +13% 90 82 ‒ Higher operating income 81 80 80 73 74 ‒ Lower loan loss ratio 70 • High profitability for consumer loans SEK million 60 50 ‒ Stable risk-adjusted margin 40 ‒ Return on assets, 3.5% 30 20 1
Slide 13: Ecommerce Solutions: Strong Profit
ECOMMERCE SOLUTIONS: STRONG PROFIT Operating profit 30 • Operating profit Q1-22 vs. Q1-21, +61% 25 ‒ Higher operating income 61% 22 ‒ Lower cost/income ratio vs Q1-21 20 18 • SEK million 17 Higher profitability vs Q1-21 15 ‒ Strong margins in the Nordics 11 10 ‒ Return on assets, 2.6% 6 5 0 Q1'21 Q2
Slide 14: Credit Cards: Positive Trend
CREDIT CARDS: POSITIVE TREND Operating profit 4 • Operating profit Q1-22, 3 MSEK 3 2 ‒ Higher operating income 2 ‒ Lower cost/income ratio vs Q1-21 0 • Marketing costs in Q1-2022 SEK million Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 ‒ Digital channels, impacts OPEX -2 ‒ Return on assets, 0.5% -4 -4 -5 -5 -6 TF
Slide 15: Higher Liquidity Reserve
HIGHER LIQUIDITY RESERVE Deposits from the public 13,943 14,000 • Retail deposits in 4 markets 13,000 12,000 ‒ Germany (SEK 9.8 billion) 11,000 ‒ Norway (SEK 3.2 billion) 10,000 9,000 Germany ‒ Sweden (SEK 0.6 billion) 9,816 SEK million 8,000 ‒ Finland (SEK 0.3 billion) 7,000 6,000 ‒ Fixed-term depo
Slide 16: Solid Capital Position
SOLID CAPITAL POSITION 16.0% T1+T2 16.0% 14.1% • Stable capital ratios during the 4.4% T1 14.1% 12.2% Headroom quarter Headroom 4.7% Headroom 4.4% T1+T2 11.6% • Phase-in of IFRS 9-effects in the T1 9.4% T1 9.4% first quarter CET1 12.2% • Higher legal capital requirements CET1 7.8% CET1 7.8% CET1 7.8
Slide 17: Looking Ahead
LOOKING AHEAD • Entering new markets, initially small volumes, DK in April • End of central bank QE and inflation may increase funding costs • Increased uncertainty due to the war in Ukraine • Covid-19, easing of restrictions supports growth 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 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 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 [email protected] www.tfbankgroup.com 24