· Growth in number of customers remained strong in the second quarter. During
the first six months the number of new customers was 49,300 and we surpassed our
annual target of 46,760 new customers
· Net inflow in the second quarter was SEK 9,430 million, an increase by 116
per cent compared to the previous year. Compared to the first quarter, net
inflow increased by 90 per cent
· Operating income in the second quarter amounted to SEK 225 million, a
decrease by 1 per cent both Y/Y and compared to the first quarter 2016
· Operating expenses in the second quarter increased by 7 per cent compared to
the previous year, primarily due to increased personnel costs. Compared to the
first quarter, the expenses increased by 1 per cent to SEK 113 million
· Net profit for the second quarter was SEK 94 million, a decrease by 9 per
cent compared to the previous year. Compared to the first quarter, net profit
decreased by 4 per cent, mainly due to lower brokerage income and decreased net
interest income
· After the end of the reporting period, Johan Prom was announced as new CEO
of Avanza. He will take over the position by 1 January 2017, at the latest.
Henrik Källén remains as Acting CEO until then
Q2 2016 Q1 2016 Change% Q2 2015 Change% Jan–Jun Jan–Jun
Change%
2016 2015
Operating 225 226 –1 227 –1 451 449
0
income,
SEK
m
Operating –113 –112 1 –106 7 –225 –213
6
expenses,
SEK
m
Operating 111 115 –3 121 –8 226 236
–4
profit,
SEK
m
Net 94 98 –4 104 –9 192 203
–6
profit,
SEK m
Earnings 3.18 3.35 –5 3.57 –11 6.53 7.00
–7
per
share,
SEK
Operating 49 51 –2 53 –4 50 53
–3
margin, %
Net 9,430 4,960 90 4,370 116 14,400 14,400
0
inflow,
SEK m
No. new 23,100 26,200 –12 20,500 13 49,300 52,300
–6
customers
(net)
Savings 199,200 188,900 5 170,000 17 199,200 170,000
17
capital
at
the
end of
the
period,
SEK
m
Quarterly highlights
· Launched, as first institute in Sweden, free stock trading on the Stockholm
Stock Exchange for customers with a savings capital of less than SEK 50,000
· Welcomed Tobii, which chose Avanza’s occupational pensions for their
employees
· Served as principal advisor in the largest IPO in Avanza’s history – Paradox
Interactive
· Cut mortgage rate for Private Banking customers to 0.79 per cent from 0.99
per cent
· Consolidated top ranking in consumer trust among banks in Sweden in the
annual Reputational Survey 2016
· Won “Life Insurance Company of the Year” and “Marketing Achievement of the
Year” for 2015 at the Insurance Awards, arranged by Risk & Försäkring magazine
· Won the award for Best Service in the Financial Service Industry from
ServiceScore, for the second consecutive year
· Avanza’s savings economist Claes Hemberg was named “Personal Finance
Commentator of the Year” in the Financial Awards 2016
Comments of the CEO
Strong customer growth and high trading activity despite market turmoil
Growth prospects were challenging during the first-half-year. The Stockholm
Stock Exchange continued downward in the second quarter due to uncertainty
before and after the Brexit referendum. Volatility generally decreased, though
not in the second half of June in connection with the referendum. Market
fluctuations and negative interest rates have made it tough to generate a return
on savings. Normally, in these conditions savers will stay on the sidelines. And
yet 49,300 new customers chose Avanza in the first half-year, which means we
have already surpassed our annual target and that our efforts are attracting
more customers – especially younger ones. The net inflow of SEK 14,400 million
is strong considering the turbulent savings market. In such times, the net
inflow from existing customers tends to decline, as evidenced in the first
quarter. During the second quarter, with lower volatility, the net inflow
increased from existing customers. Over a half million savers have now chosen
Avanza and our total savings capital amounts to SEK 199 billion, which we are
proud of.
High trading activity but smaller transactions affected brokerage income
Operating income for the second quarter amounted to SEK 111 million, a decrease
from both the first quarter of 2016 and the second quarter of 2015. The number
of commission notes remained high but decreased from the first quarter’s record
number. At the same time the average commission per note fell as more customers
trade smaller amounts. The market for corporate transactions received a boost in
the early summer and Avanza was involved in a number of public offerings,
including as principal advisor in the IPO of the gaming company Paradox
Interactive. It is our largest IPO so far, proving that Avanza is a good
alternative also for larger transactions. The occupational pension business
continues to grow at a solid pace and we welcomed Tobii as a new occupational
partner during the quarter. The repo rate cut in February, coupled with a lower
mortgage rate, kept pressure on net interest income.
Our business model is based on scalability and being better, easier and less
expensive than the competition. This is driving the customer inflow and inflow
of new capital, which in turn is driving income. Our cost position is thus
critical. During the second quarter, the costs to savings capital ratio fell
from 24 to 23 basis points. This gives us a competitive edge and provides a good
starting point for further growth.
Price leadership strengthens Avanza’s position
Avanza Zero – our fund with no fees – is now 10 years old and has nearly SEK 13
billion under management and over 280,000 fund savers. Compared with the average
fees charged by other Swedish index funds, Avanza Zero has saved customers
nearly SEK 200 million in fees so far. The Portfolio Generator tool, which was
launched a year ago, has already helped over 25,000 customers to invest over SEK
1 billion in various funds based on their risk tolerance. Another sign that our
efforts to create a better, easier and less expensive alternative for Swedish
savers are working is the annual Reputational Survey. The results were announced
during the quarter and Avanza reinforced its first-place position as the Swedish
bank with the highest consumer trust. In addition, Avanza was included on the
list of Sweden’s most purposeful digital brands in the Purpose Brands survey for
2016.
We continue to improve our offering. In April, we launched our new stock list,
which makes it easier to choose stocks based on each individual’s investment
strategy. In May, we introduced brokerage class “Start”, commission-free trading
on the Stockholm Stock Exchange, to get more people interested in stocks and
starting saving. The reception has been positive, as demonstrated by the
increased customer inflow. We have also improved our mobile services for app
users, who can now make direct deposits from other banks through the app.
Full speed ahead!
To maintain strong growth and attract broader customer groups, with younger
savers as well as those who need more support, we continue to improve our
digital support tools and mobile services. We continue to operate more
efficiently in order to improve scalability and quality. The rate of innovation
going forward will be critical as digitisation and new regulations in the
financial industry create exciting opportunities for Avanza at the same time
that the competition from established players and niche Fintech companies grows.
On 8 July, Avanza announced its new CEO, Johan Prom. Johan joins Avanza with
extensive experience in consumer products and to meet customers’ growing and
varying demands. Johan will begin at the latest on 1 January 2017. We warmly
welcome him!
Stockholm, 13 July 2016
Henrik Källén, Acting CEO Avanza
This information is information that Avanza Bank Holding AB (publ) is obliged to
make public pursuant to the EU Market Abuse Regulation and the Securities
Markets Act. The information was submitted for publication, through the agency
of the contact person set out above, at 08.15 (CEST) on 13 July 2016.
This Interim Report is published in Swedish and English. In the event of any
difference between the English version and the Swedish original, the Swedish
version shall prevail.
For further information please contact:
Henrik Källén, Acting CEO
Telephone: +46 (0) 70 861 80 25
Birgitta Hagenfeldt, CFO
Telephone: +46 (0)73 661 80 04
Sofia Svavar, Head of IR
Telephone: +46 (0)8 409 420 17
Avanza is an Internet bank founded in 1999. The Parent Company, Avanza Bank
Holding AB (publ), is listed on the Stockholm Stock Exchange. Avanza’s customer
promise is a better return on your savings than with any other bank or insurance
company in Sweden – due to low fees. Services include saving in shares, funds,
savings accounts and a strong pension offering. Avanza has more than 500,000
customers and nearly SEK 200 billion in total savings capital. This is
equivalent to just over 2.9 percent of the Swedish savings market. Avanza is the
leader in terms of number of transactions and turnover for Swedish banks on the
Stockholm Stock Exchange including First North. During the last six years Avanza
has won SKI’s (Swedish Quality Index) award, “Year’s Most Satisfied Savings
Customers”. For more information visit: http://www.avanza.com
Interim Report January–June 2016
| Source: Avanza Bank Holding AB
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