Avarda Bank Ab · OMXSTO:AVARDA

Avarda Bank Ab — TF Bank — Q2 2017 Earnings Presentation

24 slides from Avarda Bank Ab's earnings presentation, July 2017

  1. Slide 1: 2nd Quarter 2017 Result Presentation

    2nd Quarter 2017 RESULT PRESENTATION

  2. Slide 2: January – June 2017, in summary

    January – June 2017, in summary LOAN BOOK GROWTH +14% Continued organic loan book growth Q2 2017 vs Q4 2016 Strong EPS growth EPS GROWTH +20% 1) H1 2017 vs H1 2016 Cost efficiency C/I RATIO 38% H1 2017 TOTAL CAPITAL Strong capital base 17% RATIO 30 June 2017 1) Attributable to the shareholders of th

  3. Slide 3: Worth noting

    Worth noting January – June 2017 Strong loan book growth in both segments New agreement for Avarda One-off sale of NPLs & forward flow agreement in Estonia Changes in the organisation Continued geographic diversification: Germany 3

  4. Slide 4: This is TF Bank

    This is TF Bank DIVERSIFIED GEOGRAPHICALLY GRANULATED DIVERSIFIED PORTFOLIO NEW OPPORTUNITIES FLEXIBLE IN SALES FINANCE IT- PLATFORM WITH AVARDA LEAN AND COST CLEAN BALANCE FOCUSED SHEET SALE OF NPL ORGANISATION 4

  5. Slide 5: Long track record of profitable growth

    Long track record of profitable growth Long experience and proven business model Strong track record on growth and profitability SEK million More than 25 years experience from 2,500 LOAN PORTFOLIO 500 2,250 2,000 400 consumer finance industry 1,750 1,500 300 1,250 1,000 200 Business model combining

  6. Slide 6: Direct to Consumer - Diversified Granulated Portfolio

    Direct to Consumer - Diversified Granulated Portfolio Product overview and use of proceeds Loan sizes and customer profile Average size (SEK) (as at 30 Jun ’17) Unsecured consumer loans ~25,000 Marketed through internal channels and external partners ~85,000 Tenor of loans are typically between 12 a

  7. Slide 7: Sales Finance – Drives new lending and builds database

    Sales Finance – Drives new lending and builds database Product overview Key financials % OF TOTAL LOAN PORTFOLIO KEY FACTS (Q2’17) The Sales Finance segment enables merchants to offer financing solutions to their customers 19% TF Bank offers reliable and attractive white-label Amount 540 SEKm outsta

  8. Slide 8: Strong loan book growth driven primarily by Direct to Consumer

    Strong loan book growth driven primarily by Direct to Consumer TF Bank Group Direct to Consumer segment SEK million SEK million 12M growth +30.0% 2,296 2,300 2,239 2,900 2,076 2,836 2,000 1,940 12M growth 2,755 1,766 +29.8% 2,700 1,700 1,400 2,489 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 2,500 2,357 Sales Fina

  9. Slide 9: Summary: growth and diversification according to plan

    Summary: growth and diversification according to plan Loan book growth in SEK million Country Comments (share of group) Growth 31 Dec 2016 30 Jun 2017 during 2017 847 912 Steady growth and profitability +8% 34% 32% Growth 31 Dec 2016 30 Jun 2017 during 2017 663 662 +0% Focus on profitability 27% 24%

  10. Slide 10: Core markets Finland and Sweden

    Core markets Finland and Sweden Finland Sweden Outstanding balance Outstanding consumer Outstanding balance loans (SEK million) (SEK million) (SEK million) STABLE GROWTH 700 900 900 912 900 688 900 847 830 811 847 830 675 800 811 663 662 726 800 700 650 646 640 700 600 625 Q1'16 Q2'16 Q3'16 Q4'16 Q1

  11. Slide 11: Core/growth market Norway

    Core/growth market Norway Developments Strong momentum continues New lending (NOK million) CONTINUED GROWTH SINCE ACQUISITION >9x 150 Maintaining growth and credit quality 100 50 Product development (SF) 0 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Credit card business growing Highe

  12. Slide 12: Growth markets Poland and the Baltics

    Growth markets Poland and the Baltics Poland The Baltics Outstanding balance Outstanding Outstandingbalance consumer loans (SEK million) (SEK (SEKmillion) million) STABLE GROWTH 282 280 285 285 900 900 260 260 249 847 830 230 811 227 235 235 204 800 210 210 199 726 185 164 185 700 160 145 160 135 11

  13. Slide 13: Loan book growth in Sales Finance Segment

    Loan book growth in Sales Finance Segment Sales Finance segment Sales Finance segment SEK million SEK million Norway – Credit Cards 6M growth: +30% 100 6M growth: 91 including one off Credit Cards movement in Q1 + 160% 540 68 550 516 50 35 450 413 0 Q4'16 Q1'17 Q2'17 100 Poland 350 6M growth: + 115%

  14. Slide 14: Increased operating income and strong margins

    Increased operating income and strong margins Operating income Operating income margins Comments SEK SEK million million Q2’17/Q2’16 growth +19% 128 30% Operating income Q2 2017 vs. 125 119 Operating margin Q2 2016 +19% 118 114 108 25% Growth quarter to quarter 21.3% +7% 100 20.5% 20.2% 19.4% 20% 18

  15. Slide 15: Extensive focus on OPEX

    Extensive focus on OPEX Operating expenses C/I ratio Comments SEK million 44% Operating expenses Q2 2017 vs. 50 47 48 46 42% Q2 2016 +14% 42 43 40 40.0% Number of employees 106 (98) 40% 38.8% 38.8% Increased IT costs/investments 38% 37.2% Sales costs related to lending 30 37.2% volumes 36% 20 Cost/I

  16. Slide 16: Net loan loss ratio continues to decrease

    Net loan loss ratio continues to decrease Net loan losses Net loan loss ratio Comments SEK SEK million million Clean balance sheet policy 10% 40 NPLs generally sold on 9% forward flow basis after 35 approx. 72 days 32 8% 30 30 Transactions in Estonia 28 28 27 7% Forward flow contract 25 6% 5.7% 5.4%

  17. Slide 17: Operating profit growth

    Operating profit growth Operating profit 1) Comments SEK million Quarterly Half-year Full year Operating profit Q2 2017 vs. Q2 2016 +20% 180 +20% 170 Loan book growth 160 Decreasing C/I ratio 141 140 Stable net loan losses 120 +22% 100 94 Earnings per share Q2 2017 vs. Q2 2016 +22% 77 80 +20% Impact

  18. Slide 18: Strong growth for deposits

    Strong growth for deposits Strong balance sheet and capital position Comments SEK million BALANCE SHEET, 30 JUNE 2017 3,745 3,745 Cost-efficient funding from Other assets Shares 80.3 20.7 88 Other liabilities retail deposits Loans to credit institution • [Comment] 717 Sweden Liquidity reserve Finlan

  19. Slide 19: Capital ratios maintained in Q2

    Capital ratios maintained in Q2 Historical and current capital structure 1) Comments CET1 ratio of 13.6% and total capital ratio 17.0% 17% 17% Significant headroom to legal requirements 3.4% 3.4% T2 CET1 capital requirement: 8.6 % T1 capital requirement: 10.3 % Total capital requirement: 12.4 % Obje

  20. Slide 20: Outcome financial targets Q2 2017

    Outcome financial targets Q2 2017 Item Target Outcome Over the medium-term, the Company aims to achieve an Growth 22.1% 1) EPS growth of at least 20 percent Over the medium-term, the Company aims to achieve a Efficiency 37.2% cost-to-income ratio of below 35 percent The Company aims to maintain a to

  21. Slide 21: Q&A Session

    O&A Session “I TFBank

  22. Slide 22: Strong Governance through experienced Board

    Strong Governance through experienced Board Board of Directors Mattias Carlsson Charlotta Björnberg-Paul Tone Bjørnov Chairman of the Board since Board member since 2017 Board member since 2015 2015, Board member since Current commitments: Saco Oy, Board Current commitments: Filmparken AS, 2008 memb

  23. Slide 23: TF Bank team

    TF Bank team Executive management team Declan Mac Guinness Mikael Meomuttel CEO CFO and Deputy CEO With TF Bank since 2012 With TF Bank since 2009 Previous experience: CEO of Carlson Fonder Previous experience: Financial Controller at AB and Compliance Officer for DNB Asset Consortio Fashion Group A

  24. Slide 24: Contacts Investor Relations

    CONTACTS Investor Relations Mårten Svanberg +46 703 627 005 [email protected] [email protected] www.tfbankgroup.com 24

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