Avarda Bank AB · OMXSTO:AVARDA
Avarda Bank AB — TF Bank — Q2 2021 Earnings Presentation
26 slides from Avarda Bank AB's earnings presentation, July 2021
Slide 1: 2nd Quarter 2021 Result Presentation
2nd Quarter 2021 RESULT PRESENTATION
Slide 2: Highlights April – June 2021
HIGHLIGHTS APRIL – JUNE 2021 • Loan book growth 31%* LTM • Operating profit +19% vs Q2-2020 • Ecommerce Solutions transaction volumes +97% vs Q2-2020 • Expansion for credit cards in Germany, 292% LTM • New forward flow contracts in Germany and the Baltics * Development of the loan portfolio in local
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 - Average loan size on book of SEK – 58,000 69% 66% - Tenor typically between 12 and 60 months • Marketed through direct channels, ow
Slide 4: Ecommerce Solutions
ECOMMERCE SOLUTIONS • Digital payment solutions offered in the Nordic Share of TF Bank's loan book Share of TF Bank’s operating income region, the Baltics and Poland • Successful launch of our BNPL-services for Boozt.com across all their web shops 19% 22% • Best-in-class white label Checkout+ delive
Slide 5: Ecommerce Solutions – Rapid Growth in Q2
ECOMMERCE SOLUTIONS – RAPID GROWTH IN Q2 • Major increase in active customers is Strong growth over past 12 months important to further deepen our Transaction Active merchants knowledge on customer behaviour volume +78% +26% • Three main offerings to merchants: SEK 4,7bn 230 - APO: Tailormade paymen
Slide 6: 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 12% 12% - Starts low – gradual build-up of income • Addressa
Slide 7: Loan Book Growth
LOAN BOOK GROWTH 30% 10 000 6% • TF Bank: Growth in Q2 = 6% (-1%*) 9 000 - Year-on-year 30% (-1%*) 8 000 7 000 • Consumer Lending: Q2 = 1% (-2%*) SEK million 6 000 - Year-on-year 16% (0%*) 5 000 4 000 • Ecommerce Solutions: Q2 = 21% (0%*) 3 000 - Year-on-year 45% (-4%*) 2 000 • Credit Cards: Q2 = 15
Slide 8: Growth and Diversification
GROWTH AND DIVERSIFICATION Sweden ▪ Focus on profitability and e-commerce. Breakthrough deal with Boozt.com gives higher volumes and new market opportunities. Norway ▪ Continued positive long term outlook on the Norwegian economy. Focus on growth and margins. Positive signs in e-commerce. Loan book
Slide 9: KPI – Stabilized Risk Adjusted Margin
KPI – STABILIZED RISK ADJUSTED MARGIN Operating income* Net loan losses* Risk-adjusted income** 250 250 234 238 25,0% 70 8,0% 200 190 20,0% 218 61 62 62 176 210 60 60 172 60 157 200 20,0% 160 150 16,0% 6,0% 50 150 15,0% 120 12,0% SEK million SEK million SEK million 40 4,0% 12,0% 11,9% 12,1% 30 100 1
Slide 10: OPEX – Investments in Growth
OPEX – INVESTMENTS IN GROWTH 110% • Expenses Q2-21 vs. Q2-20, +33% 100% 90% 101% ‒ Higher volumes for Ecommerce Solutions 80% 80% ‒ Expansion for credit cards in Germany 70% 60% 69% 70% 72% ‒ Cost/income ratio 42,4% (38,1) 64% 64% 64% 61% 50% 55% • Cost/income ratio per segment in Q2-21 40% 42% 30%
Slide 11: Positive Trend for Operating Profit
POSITIVE TREND FOR OPERATING PROFIT Operating profit 90 84 • Operating profit Q2-21 vs. Q2-20, +19% 77 79 80 72 ‒ Increasing profit from Q2-2020 70 70 ‒ Stabilized risk adjusted margin 60 ‒ Return on assets, 2,8% SEK million 50 • Return on equity Q2-21, 23,5% 40 ‒ High profitability for Consumer Len
Slide 12: Consumer Lending: Strong Quarter
CONSUMER LENDING: STRONG QUARTER Operating profit 90 81 • Operating profit Q2-21, 81 MSEK 80 74 72 73 ‒ Net loan losses, -14% vs Q2-20 70 66 ‒ High efficiency, C/I ratio 28% 60 ‒ Return on assets, 4,0% SEK million 50 • Lower net loan loss ratio, 2,3% 40 ‒ Improved credit quality in Finland 30 ‒ New
Slide 13: Ecommerce Solutions: Higher Volumes
ECOMMERCE SOLUTIONS: HIGHER VOLUMES Operating profit 16,0 • Operating profit Q2-21, 6,4 MSEK 13,8 14,0 ‒ Higher OPEX ahead of new volumes 12,0 10,9 ‒ Improved credit quality 10,2 10,0 ‒ Return on assets, 1,2% SEK million 8,0 • Payment solution delivered to Boozt 6,4 5,6 6,0 ‒ Investments in Q1-21 (I
Slide 14: Credit Cards: High Growth in Germany
CREDIT CARDS: HIGH GROWTH IN GERMANY Operating profit 0,0 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 • Operating profit Q2-21, -4,0 MSEK ‒ Upfront costs and provisions in Germany - 2,0 ‒ New forward flow contract in Q2 ‒ Return on assets, neg - 4,0 SEK million - 4,0 • Pandemic restrictions lowers income margin -
Slide 15: Solid Liquidity Position
SOLID LIQUIDITY POSITION Deposits from the public 11 000 10,498 • Retail deposits in 4 markets 10 000 ‒ Germany (SEK 6.6 billion) 9 000 ‒ Norway (SEK 2.8 billion) 8 000 7 000 Germany 6 571 ‒ Sweden (SEK 0.8 billion) SEK million 6 000 ‒ Finland (SEK 0.3 billion) 5 000 ‒ Fixed-term deposits: 35% Liqui
Slide 16: Capital Position in Q2
CAPITAL POSITION IN Q2 16,0% T1+T2 16,0% • Stable capital ratios vs Q1-2021 13,7% Headroom 4,3% T1 13,7% 12,6% • Higher legal capital requirements Headroom 4,2% T1+T2 11,7% ahead Headroom 4,8% T1 9,5% T1 9,5% • Internal capital target: >2,5% CET1 12,6% legal requirements* CET1 7,8% CET1 7,8% CET1 7,
Slide 17: Looking Ahead
LOOKING AHEAD • Intention to announce new financial targets – H2 2021 • Card spending picking up and continues to improve as issued cards in H1-2021 is coming into use • The outlook for credit quality remains positive • Indications that the temporary rate cap in Finland will expire at the end of Q3
Slide 18: Q&A Session
Q&A Session 18
Slide 19: Appendix
Appendix 19
Slide 20: 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 21: 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 consumer finance industry 9 000 1 000 • 8 000 900 Highly profitable core markets with 7 000 800 proven model for geographical 6
Slide 22: Financial Targets and Dividend Policy
FINANCIAL TARGETS AND DIVIDEND POLICY If the macroeconomic situation continues to stabilise the Board of Directors intends to resolve on new financial targets during the second half of 2021. Currently TF Bank has the following target: Capital structure All capital ratios shall exceed the legal requi
Slide 23: Board of Directors
Board of Directors John Brehmer Charlotta Björnberg-Paul Michael Lindengren Chariman of the Board Board member since 2017 Board member since 2021 since 2020 Current commitments: Current commitments: Board member since 2010 Chairman: Saxo Oy Chairman: Acrap AB Current commitments: Board member: Mekal
Slide 24: Executive management team
Executive management team Mattias Carlsson Mikael Meomuttel CEO CFO, Deputy CEO and Head of Investor Education: MSc, Engineering Physics, Uppsala University. Relations At TF Bank since 2008 as CEO until 2015, Chairman of the Education: MSc, Business/Economics and Finance, University board between 20
Slide 25: Head of countries and functions
Head of countries and functions 1) Vilma Sool Juho Maanpää Juris Pūce Björn Skytt Regional manager Head of Finland Head of Latvia CIO Baltics Extensive consumer Before joining TF Bank Before joining TF Bank Head of Estonia finance experience in in 2016, worked for in 2010 worked as Finland within se
Slide 26: Contact
Contact Investor relations Mikael Meomuttel +46 706 26 95 33 [email protected] www.tfbankgroup.com 26