Avarda Bank Ab · OMXSTO:AVARDA
Avarda Bank Ab — TF Bank — Q3 2016 Earnings Presentation
25 slides from Avarda Bank Ab's earnings presentation, 2016
Slide 1: 3rd Quarter 2016 Result Presentation
3rd QUARTER 2016 RESULT PRESENTATION
Slide 2: This is TF Bank
This is TF Bank DIVERSIFIED GEOGRAPHICALLY GRANULATED DIVERSIFIED PORTFOLIO NEW OPPORTUNITIES FLEXIBLE IT IN SALES FINANCE PLATFORM WITH AVARDA JV LEAN AND COST CLEAN BALANCE FOCUSED SHEET SALE OF NPL ORGANIZATION 2
Slide 3: TF Bank facilitates financial transactions for consumers
TF Bank facilitates financial transactions for consumers Long experience and proven business model Strong track record on growth and profitability SEK million • More than 25 years experience from 2 250 LOAN PORTFOLIO 500 consumer finance industry 2 000 1 750 400 1 500 300 1 250 • Business model comb
Slide 4: Direct to Consumer - Diversified Granulated Portfolio
Direct to Consumer - Diversified Granulated Portfolio Product overview and use of proceeds Loan sizes and customer profile • Consumer loans up to SEK 45,000-300,000 depending SEK Average size Max size (per Sep ’16) on market ~24,000 50,000 • Marketed through internal channels and external partners ~
Slide 5: Sales Finance – Drives new lending and builds database
Sales Finance – Drives new lending and builds database Product overview Key financials • The Sales Finance segment enables merchants to offer % OF TOTAL LOAN PORTFOLIO (Q3’16) KEY FACTS financing solutions to their customers 18% • TF Bank offers reliable and attractive white-label Amount 416 SEKm so
Slide 6: On track to deliver on long term targets
On track to deliver on long term targets 9M 2016 ON TRACK • Record high organic loan book growth LOAN BOOK +28% GROWTH (30 Sep vs. 31 Dec) • Strong net profit growth NET PROFIT +16.11) GROWTH (9M’16 vs 9M ’15) • Maintained cost efficiency (C/I ratio) C/I RATIO 38.1% • Strong capital base TOTAL CAPIT
Slide 7: Strong loan book growth driven by Direct to Consumer
Strong loan book growth driven by Direct to Consumer TF Bank Group Direct to Consumer segment SEK million SEK million 9M growth 2 500 9M growth +30% +28% 2 000 1 940 2 357 1 766 1 750 1 629 2 250 1 487 2 185 1 500 1 250 2015 Q1'16 Q2'16 Q3'16 2 012 2 000 Sales Finance segment SEK million 9M growth 1
Slide 8: Strong growth outside of Sweden
Strong growth outside of Sweden Country Loan book growth in MSEK (share of group) Comments Growth Q4’15 Q3’16 during 9M • Continued strong growth in both segments 660 830 +26% (35%) Growth Q4’15 Q3’16 during 9M • Maintained position 655 640 -2% • Focus on profitability (27%) Q4’15 Q3’16 Growth durin
Slide 9: Finland: The pillar of our geographic community
Finland: The pillar of our geographic community Product development Continued strong business development STABLE GROWTH IN DIRECT TO CONSUMER • Efficient and innovative online presence Outstanding consumer loans (EURm) 80 73 71 68 70 64 64 • Enhanced cross-sell activities 60 50 • Better segmentation
Slide 10: Norway: Converting experience into growth and success
Norway: Converting experience into growth and success Recent activities Strong momentum – with more to come CONTINUED GROWTH SINCE ACQUISITION New lending consumer loans (NOKm) • Increased new lending leading to continued loan >6x book growth 0 Jan/15 Feb/15 Mar/15 Apr/15 May/15 Jun/15 Jul/15 Aug/15
Slide 11: Poland: Careful growth in a potentially huge market
Poland: Careful growth in a potentially huge market Credit risk managed and quality assured Loan portfolio growth following validation of model PLN million Decreasing Accelerated new collection rate lending • Continual improvement of internally developed scorecards with improved performance 0 0% Jan
Slide 12: Increased operating income and strong margins
Increased operating income and strong margins Operating income Operating income margins Comments SEK million Q/Q growth • Operating income +6% +6% compared to previous quarter 125 30% 114 108 Operating margin • Operating income Q3 2016 vs. 99 99 101 25% Q3 2015 + 15.6% 100 21,9% 22,4% 21,5% 21,3% 20
Slide 13: Lean and cost focused organization
Lean and cost focused organization C/I-ratio Comments • Operational expenses (OPEX) stabilized in Q3’16 45% 42.7% and Cost/Income (C/I) ratio decreased 37.3% 40% 38.3% 38.8% • Positive seasonal effect in Q3’16 37.2% • C/I-ratio peaked in Q4’15 35% • ”Investments” affecting Q4’15 • IT investments in
Slide 14: Net loan loss ratio continues to decrease
Net loan loss ratio continues to decrease Net loan loss ratio Comments • Clean balance sheet policy 8% • Non Performing Loans are generally sold on forward flow basis after approx.72 days 6,4% 6,2% • Net loan loss ratio continue to decrease, driven 6% 5,8% 5,7% by; 5,4% • Strong growth in Norway • I
Slide 15: Increased operating profit
Increased operating profit Operating profit1) Comments SEK million • Operating profit +23.4% Q3’16 vs Q3’15 Y/Y Growth • Strong Q3´16 60 +23.4% 47,5 • High growth in operating income 50 41.0 • Stable operating expenses 38,5 40 36,0 31,5 • Decreasing net loan loss ratio 30 • Positive seasonal effects
Slide 16: Strong capital position to support further growth
Strong capital position to support further growth Required and current capital structure Comments 14.3% 18.5% 18.6% • Strong CET1 ratio of 14.6% and total 18.2% capital ratio of 18.6% T2 4.3% 4.2% 4.0% • Significant headroom to legal requirements 12.2% T2 2.0% AT1 1.5% • Objective is to maintain a t
Slide 17: On track to deliver on financial targets
On track to deliver on financial targets Item Target Outcome 16.11 percent Over the medium term, the Company aims to achieve an EPS Growth ((9M’16 vs 9M ’15) growth of at least 20 percent Over the medium term, the Company aims to achieve a cost to 38.11 percent Efficiency income ratio of below 35 pe
Slide 18: On track to deliver
Summary January-September 2016 1 STRONG GROWTH 2 INCREASED OPERATING INCOME 3 CAPITAL POSITION TO SUPPORT GROWTH 4 CONTINUED LOW C/I RATIO 5 REDUCED CREDIT LOSSES 6 STRONG MOMENTUM GOING FORWARD On track to deliver 18
Slide 19: Q&A Session
Q&A Session “I TEBank
Slide 20: Appendix
Appendix 20
Slide 21: Direct to consumer overview
Direct to consumer overview Loans to the public • Consumer loans % OF TOTAL LOAN PORTFOLIO KEY FACTS • Focus on highly profitable small- to mid-sized consumer loans Amount 1,940 SEKm outstanding (30 Sep 2016) • Distribution through own database, websites and credit Loan portfolio +30.5% growth (9M)
Slide 22: Sales Finance overview
Sales Finance overview Loans to the public • Enables retailers to offer an attractive financing % OF TOTAL LOAN PORTFOLIO KEY FACTS solution to their customers 18% Amount outstanding 416 SEKm • Payment solution based on invoices that customer (30 Sep 2016) can choose to convert into a credit (instal
Slide 23: Executive management team
TF Bank team Declan Mac Guinness Johannes Rintaniemi Björn Skytt CEO Head of Finland and Head of CIO Direct to Consumer Executive management team With TF Bank since 2012 With TF Bank since 2010 Previous experience: CEO of Carlson Fonder AB With TF Bank since 2011 Previous experience: Worked as integ
Slide 24: Strong Governance through experienced Board
Strong Governance through experienced Board Mattias Carlsson Thomas Grahn Tone Bjørnov Chairman of the Board since Board member since 2010 Board member since 2015 2015, Board member since 2008 Current commitments: Filmparken AS, chairman, Previous appointments include the Swedish BB Finans AS, Board
Slide 25: Contacts
CONTACTS TF Bank Investor Relations Sture Stölen, IR +46723686507 [email protected] www.tfbankgroup.com 25