Avarda Bank AB · OMXSTO:AVARDA
Avarda Bank AB — TF Bank — Q4 2021 Earnings Presentation
23 slides from Avarda Bank AB's earnings presentation, 2022
Slide 1: 4th Quarter 2021 Result Presentation
4th Quarter 2021 RESULT PRESENTATION
Slide 2: Highlights October – December 2021
HIGHLIGHTS OCTOBER – DECEMBER 2021 • Loan portfolio in local currencies increased by 8% • Operating profit, +28% compared to Q4-2020 • Bottom-line profitability for Credit Cards • Record volumes for Ecommerce Solutions • Dividend proposal of SEK 1.00 per share TF Bank 2
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% 61% - Average loan size on book of SEK – 62,000 - Tenor typically between 12 and 60 months • Marketed through direct channels, 7.
Slide 4: 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+ 19% 24% maintain focus on our partners throughout the whole customer journey • Roll-out of our B
Slide 5: 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 16% 15% - Starts low – gradual build-up of income • Addressa
Slide 6: Loan Book Growth
LOAN BOOK GROWTH 37% 9% 11,000 • TF Bank: Growth in Q4 = 9% (+1%*) 10,000 - Year-on-year 37% (+4%*) 9,000 8,000 • Consumer Lending: Q4 = 6% (+1%*) SEK million 7,000 6,000 - Year-on-year 23% (+5%*) 5,000 • Ecommerce Solutions: Q4 = 14% (0%*) 4,000 3,000 - Year-on-year 53% (+2%*) • Credit Cards: Q4 =
Slide 7: Growth and Diversification
GROWTH AND DIVERSIFICATION Sweden ▪ Focus on profitability and e-commerce. Black week saw exceptional growth in transaction volumes. Norway ▪ Continued positive long term outlook on the Norwegian economy. Focus on growth and margins. Important deals signed waiting for implementation. Loan book Finla
Slide 8: KPI – Higher Operating Income
KPI – HIGHER OPERATING INCOME Operating income* Net loan losses* Risk-adjusted income** 296 300 25.0% 80 8.0% 240 226 20.0% 270 70 250 68 202 70 250 234 238 62 62 200 190 20.0% 60 176 16.0% 60 6.0% 172 200 160 50 15.0% 12.0% SEK million SEK million SEK million 150 40 4.0% 120 12.1% 11.5% 11.3% 11.3%
Slide 9: Opex – Increased Cost/Income Ratio
OPEX – INCREASED COST/INCOME RATIO 90% • Expenses Q4-21 vs. Q4-20, +34% 80% ‒ Ecommerce Solutions and Credit Cards 70% 70% 72% 69% 59% 58% ‒ Staff costs and sales related costs 60% 64% 64% 61% 56% ‒ Cost/income ratio 43.0% (40,6) 50% • 51% Cost/income ratio per segment in Q4-21 40% 43% 41% 41% 42% 4
Slide 10: Positive Trend for Operating Profit
POSITIVE TREND FOR OPERATING PROFIT Operating profit 100 28% 99 • Operating profit Q4-21 vs. Q4-20, +28% 92 90 84 ‒ Increased profit quarter-to-quarter 79 80 77 • Higher risk-adjusted income 70 ‒ Return on assets, 2.9% (FY 2021) 60 SEK million • Growth combined with high profitability 50 40 ‒ Return
Slide 11: Consumer Lending: High Profitability
CONSUMER LENDING: HIGH PROFITABILITY Operating profit 90 81 • Operating profit Q4-21 vs. Q4-20, +3% 80 80 72 73 74 ‒ Growth in Norway and Finland 70 ‒ Higher interest expenses in Q4-21 60 ‒ Return on assets, 3.6% (FY 2021) SEK million 50 • Improved credit quality during 2021 40 ‒ Loan loss ratio dec
Slide 12: Ecommerce Solutions: Higher Income
ECOMMERCE SOLUTIONS: HIGHER INCOME Operating profit 24 22 • Operating profit Q4-21 vs. Q4-20, +116% 20 ‒ Positive one-timer in Q4-21 17 ‒ Higher operating expenses 16 ‒ Return on assets, 2.5% (FY 2021) SEK million 12 11 • Operating income increased by 55% 10 ‒ Higher transaction volumes 8 6 4 0 Q4'2
Slide 13: Credit Cards: Bottom-Line Profitability
CREDIT CARDS: BOTTOM-LINE PROFITABILITY Operating profit 4 • Operating profit Q4-21, 2 MSEK 2 ‒ Higher operating income in Q4-21 2 ‒ Loan loss ratio decreased to 6.4% ‒ Return on assets, 0.5% (Q4-21) 0 SEK million Q4'20 Q1'21 Q2,21 Q3'21 Q4'21 • Business model with economies of scale -2 ‒ Income gro
Slide 14: Solid Liquidity Position
SOLID LIQUIDITY POSITION Deposits from the public 12,000 11,505 • Retail deposits in 4 markets 11,000 ‒ Germany (SEK 7.3 billion) 10,000 9,000 ‒ Norway (SEK 3.2 billion) 8,000 Germany 7,332 ‒ Sweden (SEK 0.7 billion) SEK million 7,000 ‒ Finland (SEK 0.3 billion) 6,000 ‒ Fixed-term deposits: 36% 5,00
Slide 15: Solid Capital Position
SOLID CAPITAL POSITION 16.2% T1+T2 16.2% 14.3% • Slightly lower capital ratios during T1 14.3% 12.3% Headroom 4.6% the year • Headroom 4.9% T1+T2 11.6% Tier 1 capital (100 MSEK) issued Headroom 4.5% in Q4-2021 T1 9.4% T1 9.4% CET1 12.3% • Capital ratios includes dividend proposal 1,00 SEK per share
Slide 16: Looking Ahead
LOOKING AHEAD • Further organic growth – business as usual • Entering new markets, initially small volumes - Card issuing started in Austria • Covid-19, effects on society and the economy? TF Bank 16
Slide 17: Q&A Session
Q&A Session 17
Slide 18: Appendix
Appendix 18
Slide 19: 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 20: 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 21: 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 22: 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 23: Contact
Contact Investor relations Mikael Meomuttel +46 706 26 95 33 [email protected] www.tfbankgroup.com 23