Avarda Bank AB · OMXSTO:AVARDA
Avarda Bank AB — TF Bank — Q4 2017 Earnings Presentation
26 slides from Avarda Bank AB's earnings presentation, February 2018
Slide 1: 4th Quarter 2017 Result Presentation
4th Quarter 2017 RESULT PRESENTATION
Slide 2: January – December 2017 in Summary
JANUARY – DECEMBER 2017 IN SUMMARY § Continued organic loan book growth LOAN BOOK +27 % GROWTH OPERATING § Strong operating profit growth PROFIT 1) +21 % GROWTH § Cost efficiency C/I RATIO 37 % § Strong capital base TOTAL CAPITAL 16.2 % RATIO 31 Dec 2017 1) Excluding items affecting comparability. 2
Slide 3: Worth Noting January – December 2017
WORTH NOTING JANUARY – DECEMBER 2017 § Continued loan book growth in both segments § Acquisition of Intrum Justitia’s shares in Avarda § Full e-commerce check-out solution launched § BB Finans received a banking license and became BB Bank § Deposits launched in Norway and Germany § Branch establishe
Slide 4: This is TF Bank
THIS IS TF BANK DIVERSIFIED FLEXIBLE GRANULATED IT-PLATFORM PORTFOLIO Risk Operations CLEAN BALANCE management LEAN AND COST SHEET SALE OF CUSTOMERS FOCUSED NPL ORGANISATION Growth PAYMENTS CONSUMER LOANS GEOGRAPHICAL FOOTPRINT 4
Slide 5: Long Track Record of Profitable Growth
LONG TRACK RECORD OF PROFITABLE GROWTH Long experience and proven business Strong track record on growth and 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: Direct to Consumer Diversified Granulated Portfolio
DIRECT TO CONSUMER DIVERSIFIED GRANULATED PORTFOLIO Product overview and use of proceeds Loan sizes (average) and customer profile § 81 % of the loan portfolio § Unsecured consumer loans Low-to-middle income § Marketed trough internal channels and external partners SEK 85,000 Employed § Tenor of loa
Slide 7: Sales Finance Drives New Lending and Builds Database
SALES FINANCE 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 595 million stop-shop with several payment (31 Dec 2017) methods such as; invoice, instalment payment, credit/debi
Slide 8: Strong Loan Book Growth
STRONG LOAN BOOK GROWTH TF Bank Group Direct to Consumer +23.4 % 3,500 3,000 2,561 +26.8 % 2,239 2,296 2,392 3,156 2,500 2,076 SEK million 2,950 2,000 3,000 2,836 2,755 1,500 2,489 1,000 2,500 500 0 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 SEK million 2,000 Sales Finance 1,500 3,000 1,000 2,500 SEK million 2,0
Slide 9: Growth and Diversification According to Plan
GROWTH AND DIVERSIFICATION ACCORDING TO PLAN Norway Loan book SEK 900m (28 %) Change 2017: +70 % Finland Strong growth in both segments Loan book SEK 911m (29 %) Change 2017: +7 % Profitability and steady growth Sweden Loan book SEK 626m (20 %) Change 2017: -6 % Focus on profitability Baltics Loan b
Slide 10: Norway 2017
NORWAY 2017 Development Strong momentum continues § Maintaining growth and credit quality 1000 900 802 800 707 § In compliance with new guidelines on NOK million 618 600 504 lending practices 400 § Product development (SF) 200 0 ‒ Credit card business growing Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 ‒ Higher m
Slide 11: Growth Markets Poland and the Baltics 2017
GROWTH MARKETS POLAND AND THE BALTICS 2017 Poland Baltics 250 50 41 200 40 34 EUR million 30 PLN million 29 150 30 26 111 119 90 101 100 76 20 50 10 0 0 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 § Continuous progress § Portfolio size affected by sale of NPLs in Q2 § Strong sales in
Slide 12: Core Markets Finland and Sweden 2017
CORE MARKETS FINLAND AND SWEDEN 2017 Finland Sweden 100 94 94 92 92 1,000 89 80 800 688 663 662 644 626 EUR million SEK million 60 600 40 400 20 200 0 0 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 § Increased competition affecting Q3 and Q4 § 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 Q4 2017 vs. Q4 Operating income 2016 +14 % 140 134 margin 20.2% 128 130 19.4% ‒ Strong momentum in Norway and 119 20% 18.8% 18.4% 120 118 17.9% the Baltics 15.1% 14.6% ‒ Higher interest ex
Slide 14: Positive Trend for Cost/Income Ratio
POSITIVE TREND FOR COST/INCOME RATIO Operating expenses Cost/income ratio 60 45% § Operating expenses Q4 2017 40.0% 38.8% vs. Q4 2016 +5 % 40% 37.2% 49 36.9% 50 47 46 48 46 35.2% ‒ Loan book growth YoY: 27 % 35% ‒ Lean and cost efficient 40 30% organization SEK million 25% § Cost/Income ratio Q4 201
Slide 15: Net Loan Loss Ratio Continues to Decrease
NET LOAN LOSS RATIO CONTINUES TO DECREASE Net loan losses Net loan loss ratio 40 6% § Clean balance sheet policy 34 5.1% ‒ NPLs are generally sold on forward 35 33 32 5% 4.8% 4.6% 4.6% flow basis after approx. 72 days 30 4.5% § 30 28 Net loan losses Q4 2017 vs. Q4 4% 25 2016 +21 % SEK million ‒ Grow
Slide 16: Continued Growth for Operating Profit
CONTINUED GROWTH FOR OPERATING PROFIT 1) Operating profit +21.3 % 200 193 § Operating profit 1) Q4 2017 vs. Q4 2016 +18 % § Operating profit 1) 2017 vs. 2016 +21 % 159 ‒ Loan book growth 150 ‒ Improving C/I ratio (37.0 % vs 38.6 %) § Medium-term financial EPS target of 20 % SEK million 100 ‒ Operati
Slide 17: Further Diversification of Deposits and Strong Liquidity Position
FURTHER DIVERSIFICATION OF DEPOSITS AND STRONG LIQUIDITY POSITION Strong balance sheet and capital position § Cost-efficient funding from diversified 4,500 75 76 Other assets Shares 101 Other liabilities retail deposits 489 Deposits Germany 4,000 ‒ Sweden (SEK 1.7 billion) Liquidity 1,062 Loans to c
Slide 18: Capital Ratios Reduced in Q4
CAPITAL RATIOS REDUCED IN Q4 Capital ratios 16.7% +0.7% -0.8% § CET1 ratio of 13.2 % and total capital ratio -0.4% 16.2% -0.0% 16.2 % 1) 3.1% 3.0% T2 § Significant headroom to legal requirements ‒ CET1 capital requirement: 8.7 % ‒ T1 capital requirement: 10.3 % 13.6% ‒ Total capital requirement: 12.
Slide 19: New Regulation – IFRS 9
NEW REGULATION – IFRS 9 Impact on equity SEK 541 million - SEK 55 million SEK 486 million § Expected loss model ‒ Previous model based on loss event Equity ‒ Implementation 1st of January 2018 Equity § Impact on financial statements Dec '17 IFRS 9 Dec '17 (pro-forma incl. IFRS 9) ‒ Increased provisi
Slide 20: Outcome Financial Targets 2017
OUTCOME FINANCIAL TARGETS 2017 Over the medium-term, the Company aims to achieve 14.3 % 1) Growth an EPS growth of at least 20 percent Over the medium-term, the Company aims to achieve a 37.0 % Efficiency cost-to-income ratio of below 35 percent The Company aims to maintain a total capital ratio of
Slide 21: New Executive Management Team
NEW EXECUTIVE MANAGEMENT TEAM Mattias Carlsson Mikael Meomuttel Acting CEO CFO, Deputy CEO and Head of Investor Relations Espen Johannesen Mikael Johansson Head of Direct to Head of Sales Finance Consumer 21
Slide 22: Looking Ahead into 2018
LOOKING AHEAD INTO 2018 § Avarda scale-up § Continued growth in consumer lending § Expansion into new pockets of the European consumer finance market where good risk adjusted return levels can be sustained over time § Continued strong competition especially in the Nordics § Increased regulatory burd
Slide 23: Q&A Session
Q&A Session 23
Slide 24: Board of Directors
Board of Directors Charlotta Björnberg- Tone Bjørnov § Bertil Larsson 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 25: Head of Countries and Functions
Head of countries and functions 1) § Vilma Sool Juho Maanpää Juris Pūce Björn Skytt Head of Estonia Head of Finland Head of Latvia CIO Olga Bliumenzon Wojciech Drozd Karin Zandrén Krzysztof Blach Head of Lithuania Head of Poland Head of Sweden Credit Manager 1) Excluding Espen Johannesen, Head of No
Slide 26: Contact
Contact Investor relations Mikael Meomuttel +46 706 26 95 33 [email protected] www.tfbankgroup.com 26