Avarda Bank AB · OMXSTO:AVARDA
Avarda Bank AB — TF Bank — Q1 2018 Earnings Presentation
26 slides from Avarda Bank AB's earnings presentation, April 2018
Slide 1: 1st Quarter 2018 Result Presentation
1st Quarter 2018 RESULT PRESENTATION
Slide 2: Corporate Profile
CORPORATE PROFILE Our Products Our Geographical footprint Operating with modern and scalable We serve customers in the Nordics and around infrastructure offering our retail customers the Baltic sea online consumer loans, deposits and credit cards. For retailers we offer leading ecommerce and brick-a
Slide 3: January – March 2018 in Summary
JANUARY – MARCH 2018 IN SUMMARY Continued organic loan book growth LOAN BOOK +28 % GROWTH SEK 3.519 million OPERATING Strong operating profit growth PROFIT +12 % GROWTH SEK 49 million Cost efficiency C/I RATIO 40 % Capital position TOTAL CAPITAL 15.1 % RATIO 31 Mar 2018 3
Slide 4: Worth Noting January – March 2018
WORTH NOTING JANUARY – MARCH 2018 In January, the subsidiary Avarda launched the Checkout+ payment solution in Finland, together with several major retailers A new forward flow agreement of sales of non- performing loans in Finland was implemented in February In March, TF Bank started a servic
Slide 5: Long Track Record of Profitable Growth
LONG TRACK RECORD OF PROFITABLE GROWTH Long experience and proven Strong track record on growth and business model profitability 30 years experience from consumer 3,500 600 finance industry 3,000 500 2,500 Highly profitable core markets with 400 SEK million 2,000 proven model for geographical 30
Slide 6: Consumer Lending Diversified Granulated Portfolio
CONSUMER LENDING DIVERSIFIED GRANULATED PORTFOLIO Product overview and use of proceeds Loan sizes (average) and customer profile 80 % of the loan portfolio Unsecured consumer loans Low-to-middle income Marketed trough internal channels and external partners SEK 91,000 Employed Tenor of loans
Slide 7: Ecommerce Solutions Drives New Lending and Builds Database
ECOMMERCE SOLUTIONS DRIVES NEW LENDING AND BUILDS DATABASE Product overview Key financials Full check-out solution offered as one- Share of the Amount outstanding Group’s loan portfolio SEK 714 million stop-shop with several payment (31 Mar 2018) methods such as: invoice, instalment payment, credi
Slide 8: Strong Loan Book Growth
STRONG LOAN BOOK GROWTH TF Bank Group Consumer Lending +25.3 % 4,000 3,000 2,805 +27.7 % 2,561 2,239 2,296 2,392 2,500 3,519 SEK million 3,500 2,000 3,156 1,500 2,950 1,000 3,000 2,836 2,755 500 0 2,500 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 SEK million 2,000 Ecommerce Solutions +38.5 % 1,500 800 714 558 595
Slide 9: Growth and Diversification According to Plan
GROWTH AND DIVERSIFICATION ACCORDING TO PLAN Norway Loan book SEK 1,076m (31 %) Change Q1’18: +20 % Finland Strong growth Loan book SEK 1,012m (29 %) Change Q1’18: +11 % Profitability and steady growth Sweden Loan book SEK 603m (17 %) Change Q1’18: -4 % Focus on profitability Baltics Loan book SEK 4
Slide 10: Norway 2018
NORWAY 2018 Development Strong momentum continues Maintaining growth and credit quality 1,013 1,000 900 In compliance with new guidelines on 774 800 NOK million 672 579 lending practices 600 400 Increase in the Group’s business mix 200 0 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 More to come – strategic
Slide 11: Growth Markets Poland and the Baltics 2018
GROWTH MARKETS POLAND AND THE BALTICS 2018 Poland Baltics 140 50 47 119 125 111 41 120 101 40 34 100 90 EUR million 30 PLN million 29 80 30 60 20 40 10 20 0 0 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Continuous progress Portfolio size affected by sale of NPLs in Q2 Strong sa
Slide 12: Core Markets Finland and Sweden 2018
CORE MARKETS FINLAND AND SWEDEN 2018 Finland Sweden 120 800 688 662 94 94 98 700 644 626 100 92 92 603 600 EUR million SEK million 80 500 60 400 40 300 200 20 100 0 0 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Strong sales in ecommerce Focus on credit quality and better use of
Slide 13: Increased Operating Income and High Margins
INCREASED OPERATING INCOME AND HIGH MARGINS Operating income Operating income margin 160 25% Operating income Q1 2018 vs. 141 Operating income Q1 2017 +18 % 140 134 margin 128 130 19.4% ‒ Momentum in Norway, the 20% 18.8% 120 119 18.4% 17.9% 17.6% Baltics and Avarda 14.6% ‒ Strong growth in loan b
Slide 14: Operating Expenses in Line with Plan
OPERATING EXPENSES IN LINE WITH PLAN Operating expenses Cost/income ratio 60 57 45% 40% 38.8% 40.3% Operating expenses Q1 2018 vs. Q1 2017 +23 % 37.2% 36.9% 48 49 50 35.2% 46 46 35% ‒ Higher staff and IT costs 40 30% (Avarda) ‒ Credit volume increased SEK million 25% 30 +24 % 20% 20 15% Cost/Inc
Slide 15: Stable Net Loan Loss Ratio
STABLE NET LOAN LOSS RATIO Net loan losses Net loan loss ratio 40 6% Clean balance sheet policy 34 36 ‒ NPLs are generally sold on forward 35 32 33 5% 4.8% 4.6% 4.6% flow basis after approx. 72 days 30 4.5% 4.5% Net loan losses Q1 2018 vs. 30 Q1 2017 +20 % 4% 25 SEK million ‒ First quarter with
Slide 16: Continued Growth for Operating Profit
CONTINUED GROWTH FOR OPERATING PROFIT Operating profit +21.3 % 200 193 159 Operating profit Q1 2018 vs. Q1 2017 +12 % 150 ‒ Main driver: Loan book growth Bridge between operating profit and EPS SEK million 100 ‒ Operating profit +12 % +11.9 % ‒ Minority interests – 3 % 49 ‒ Earnings per share 9
Slide 17: KPIs per Segment
KPIs PER SEGMENT Operating profit Risk-adjusted margin 1) Operating expenses C/I: 40 % 60 20% 60 57 + 52 -3 50 + 49 50 16% C/I: 31 % 40 13.0% 13.0% 13.0% 40 35 SEK million 12% C/I: 76 % SEK million 30 30 22 8% 20 20 10 4% 10 0 0 0% Consumer Ecommerce Total Group Consumer Ecommerce Total Group Consum
Slide 18: Further Diversification of Deposits and Strong Liquidity Position
FURTHER DIVERSIFICATION OF DEPOSITS AND STRONG LIQUIDITY POSITION Assets and liabilities Cost-efficient funding from 5,000 101 22 Other assets Shares 101 Other liabilities diversified retail deposits 4,500 719 Deposits Germany ‒ Sweden (SEK 1.6 billion) Liquidity 1,081 Loans to credit institutions
Slide 19: Capital Ratios Reduced in Q1 2018
CAPITAL RATIOS REDUCED IN Q1 2018 Capital ratios CET1 ratio of 12.5 % and total capital +1.0% -0.5% ratio 15.1 % 1) 16.2% -1.6% 15.1% ‒ Incl. the proposed dividend of SEK 48 million for 3.0% 2017 2.6% T2 ‒ Incl. dividend 50 % of net profit (policy) Q1-2018 ‒ IFRS 9 effects phased in 2018-2023 He
Slide 20: Outcome Financial Targets Q1 2018
OUTCOME FINANCIAL TARGETS Q1 2018 Over the medium-term, the Company aims to achieve Growth 9% an EPS growth of at least 20 percent Over the medium-term, the Company aims to achieve Efficiency 40% a cost-to-income ratio of below 35 percent The Company aims to maintain a total capital ratio of Capital
Slide 21: Looking Ahead into 2018
LOOKING AHEAD INTO 2018 Continued expansion in ecommerce solutions in Finland; Sweden and Norway next Leverage on the platform in consumer lending Lithuania launch Continued strong competition especially in the Nordics Gradually improving financial performance in ecommerce segment as incom
Slide 22: Q&A Session
Q&A Session 22
Slide 23: Board of Directors
Board of Directors Bertil Larsson Charlotta Björnberg- Tone Bjørnov Acting Chairman of the Paul Board member since Board since 2017 Board member since 2015 Board member since 2017 2007 John Brehmer Mari Thjømøe Mattias Carlsson Board member since Board member since Board member since 2010 2017 200
Slide 24: Executive Management Team
EXECUTIVE MANAGEMENT TEAM Mattias Carlsson Mikael Meomuttel CEO CFO, Deputy CEO and Head of Investor Education: MEng., engineering physics, Uppsala University. Relations Current commitments: BB Bank ASA (board member), Avarda Education: MSc, Business/Economics and Finance, University AB (board membe
Slide 25: Head of Countries and Functions
Head of countries and functions 1) Vilma Sool Head of Estonia Juho Maanpää Head of Finland Juris Pūce Head of Latvia Björn Skytt CIO 10 years of experience Extensive consumer Before joining TF Bank Before joining TF Bank in the consumer finance experience in in 2016, worked for in 2010 worked as f
Slide 26: Contact
Contact Investor relations Mikael Meomuttel +46 706 26 95 33 [email protected] www.tfbankgroup.com 26