Avarda Bank Ab · OMXSTO:AVARDA
Avarda Bank Ab — TF Bank — Q1 2017 Earnings Presentation
26 slides from Avarda Bank Ab's earnings presentation, 2017
Slide 1: 1st Quarter 2017 Result Presentation
1st Quarter 2017 RESULT PRESENTATION
Slide 2: Q1 2017 in summary
Q1 2017 in summary Q1 2017 vs Q4 2016 LOAN BOOK GROWTH +11% o Continued organic loan book growth o Strong EPS growth EPS growth +18%1) o Cost efficiency C/I RATIO 38.8% o Strong capital base TOTAL CAPITAL 17% RATIO (Mar ’17) 1) Attributable to shareholders of the parent company excluding items affec
Slide 3: Strong start to 2017
Strong start to 2017 > Continued profitable growth in all countries ü Strong finish to the Quarter led to a strong start to the year ü Increased focus on OPEX within the Group ü Increased product mix in deposits and lending ü Continued geographic diversification of loan book and financing 3
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 ORGANIZATION 4
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 o More than 25 years experience from 2 500 LOAN PORTFOLIO 500 consumer finance industry 2 250 2 000 400 1 750 1 500 300 o Business model combining growth with
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 o Unsecured consumer loans Average size (SEK) (per Mar ’17) o Marketed through internal channels and external partners ~24,000 o Tenor of loans are typically between 12 and 60 m
Slide 7: Sales Finance – Drives new lending and builds database
Sales Finance – Drives new lending and builds database Product overview Key financials o The Sales Finance segment enables merchants to offer % OF TOTAL LOAN PORTFOLIO (Q1’17) KEY FACTS financing solutions to their customers 19% o TF Bank offers reliable and attractive white-label Amount 516 SEKm so
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 +37.5% 2 400 2 239 2 200 2 076 2 000 1 940 12M growth 2 800 2 755 1 766 +37.0% 1 800 1 629 1 600 2 600 2 489 1 400 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 2 400 2 357 Sale
Slide 9: Summary: growth and diversification according to plan
Summary: growth and diversification according to plan Country Loan book growth in SEK million (share of group) Comments Growth Q4’16 Q1’17 during Q1 2017 847 900 o Strong growth in new product +6% (34%) (33%) Growth Q4’16 Q1’17 during Q1 2017 663 688 +4% o Focus on profitability (27%) (25%) Growth Q
Slide 10: Core market Finland: strong growth in new product
Core market Finland: strong growth in new product Developments Continued strong business development Outstanding consumer loans (SEK million) STABLE GROWTH 900 900 847 830 811 • Strong growth in Direct to Consumer in 800 March 726 700 • Increased co-operation with brokers (access 600 Q1'16 Q2'16 Q3'
Slide 11: Core market Sweden: continued focus on profitability
Core market Sweden: continued focus on profitability Developments Continued strong business development Outstanding consumer loans (SEK million) 700 688 675 659 663 646 640 650 • Focus on protecting margins (“not willing 625 600 to trade margins for volume”) 575 550 525 • Focus on cross-selling 500
Slide 12: Core / growth market Norway: growth in both segments
Core / growth market Norway: growth in both segments Developments Strong momentum continues CONTINUED GROWTH SINCE ACQUISITION New lending consumer loans (NOK million) >6x • Maintaining growth and credit quality 150 100 50 • Product development (SF) 0 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16
Slide 13: Growth market Poland: growth in both segments
Growth market Poland: growth in both segments 2017 Plans and first tangible results Stable new lending improved by risk management Accelerated new PLN million lending Decreasing default rate • Increased volume in Sales Finance segment • Continued focus on credit quality 0 0% Q1'15 Q2'15 Q3'15 Q4'15
Slide 14: Growth market the Baltics: strong in Estonia, start-up in Latvia
Growth market the Baltics: strong in Estonia, start-up in Latvia 2017 Plans and first tangible results Loan portfolio growth Outstanding consumer loans (SEK million) 300 282 275 248 249 250 • Estonia going from strength to strength 225 227 199 200 180 175 • Application to establish a branch in Eston
Slide 15: Increased operating income and strong margins
Increased operating income and strong margins Operating income Operating income margins Comments SEK million Q1’17/Q1’16 growth o Operating income Q1 2017 +19% vs. Q1 2016 +19% 125 119 30% 118 114 108 Operating margin • Strong growth in Norway, 101 25% Finland and Estonia 100 21,5% 21,3% 20,5% 20,2%
Slide 16: Extensive focus on OPEX
Extensive focus on OPEX Operating expenses C/I ratio Comments SEK million o Operating expenses Q1 2017 vs. 50 47 46 44% Q1 2016 +20% 42 43 39 42% • Number of employees 105 (94) 40 40,0% • Increased IT costs/investments 40% 38,8% 38,8% • Sales costs related to lending 38,3% 30 volumes 38% 37,2% o Ope
Slide 17: Net loan loss ratio continues to decrease
Net loan loss ratio continues to decrease Net loan losses Net loan loss ratio Comments SEK million o Clean balance sheet policy 30 30 28 28 28 10% • NPLs generally sold on 27 forward flow basis after 9% approx. 72 days 25 8% o Net loan losses Q1 2017 vs. 7% 20 Q1 2016 +6% 5,8% 5,7% 6% 5,4% 5,1% 4,8%
Slide 18: Operating profit growth
Operating profit growth Operating profit1) Comments SEK million Quarterly Full year o Operating profit Q1 2017 vs. Q1 2016 +24% 2016 vs 2015 Growth 180 +20% 170 • Loan book growth 160 141 140 • Extended focus on OPEX 120 • Stable net loan losses 100 Q1 2017 vs Q1 2016 Growth +24% 80 o Earnings per s
Slide 19: Strong growth for deposits
Strong growth for deposits Strong balance sheet and capital position Comments SEK million BALANCE SHEET, 31 MARCH 2017 o Cost-efficient funding from 3,448 Other assets 89 3,448 99 Other liabilities retail deposits Loans to credit institution Liquidity reserve • • Sweden [Comment] 514 • Finland Cash
Slide 20: Capital ratios decreased in Q1
Capital ratios decreased in Q1 Historical and current capital structure 1) Comments o CET1 ratio of 13.6% and total capital ratio 19.3% 18.5% 18.6% 18.2% 17.0% 17.0% 4,4% 4,0% o Significant headroom to legal requirements 4,2% 3,7% 3,4% T2 • CET1 capital requirement: 8.5% • T1 capital requirement: 10
Slide 21: Outcome financial targets Q1 2017
Outcome financial targets Q1 2017 Note: Medium-term defined as 3-5 years Item Target Outcome Over the medium-term, the Company aims to achieve an EPS Growth 18 percent 1) growth of at least 20 percent Over the medium-term, the Company aims to achieve a Efficiency 38.8 percent cost-to-income ratio of
Slide 22: Q&A Session
Q&A Session “IF TFBank
Slide 23: Appendix
Appendix 23
Slide 24: 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 25: 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 Previous appointments include the Swedish Current commitments: Filmparken AS, chairman, Financial Superviso
Slide 26: Contacts
CONTACTS TF Bank Investor Relations Sture Stölen, IR +46723686507 [email protected] www.tfbankgroup.com 26