Avanza Bank Interim report January – June 2013

• Net inflow totaled SEK 6,150 million (SEK 2,990 m), corresponding to 7 (4 %) per cent of the total savings capital at the beginning of the year
• The number of accounts increased by 8 (7 %) per cent to 507,200 (471,600 as of 31 December 2012)
• The total savings capital increased by 10 (6 %) per cent to SEK 94,600 million (SEK 85,800 m as of 31 December 2012)
• Operating income decreased by 6 (–14 %) per cent to SEK 287 million (SEK 305 m)
• Operating margin was 31 (40 %) per cent
• The profit after tax decreased by 21 (–33 %) per cent to SEK 77 million (SEK 98 m)
• Earnings per share decreased by 22 (–34 %) per cent to SEK 2.67 (SEK 3.44)

Second Quarter

• Operating income decreased by 3 percent (–18 %) to SEK 137 million (SEK 141 m)
• The profit after tax decreased by 16 percent (–33 %) to SEK 32 million (SEK 38 m)
• Earnings per share decreased by 17 percent (–33 %) to SEK 1.11 (1.34)

Comments from the Managing Director

Successful launch of our new website and IT platform
“In the middle of June we achieved an important milestone in Avanza’s development when we launched our new bank website and underlying platform, a project, which has lasted for more than two years and had the goal of being completed by the end of the second quarter 2013. I am incredibly proud of the team spirit and the focus which have been clear prerequisite in implementing this project according to the established time schedule, and the customers’ reactions have been, to a major degree, very positive. Already on the day after the launch, a third of the customer traffic was taking place via the new website. This implies, among other things, that we are the first bank in Sweden to provide real-time push notified share prices as a standard service, something that many customers have been waiting for. The new underlying platform and technology affords us with both the competitive advantage of strengthened scalability, as well as cost efficiencies which will be evidenced in a decreasing per-unit costs in forthcoming years, in pace with the continuous growth in customers and, thus, in savings capital. This also provides us with the premises for developing new services for our customers at a lower cost, as well as more quickly than before, and in this manner we will be able to offer our customers with the market’s lowest fees, in combination with the best service.

High costs due to the upgrading of the IT system
The project has absorbed a large amount of resources during the first half of 2013 and this has negatively impacted results for the period in terms of increased costs for both personnel and externally contracted services, which expenses are now expected to revert to normal levels. It has also been of major importance to complete our new bank website and the underlying platform before the summer to be able to shift the focus towards the development of new products and services, something that has been put aside during recent quarters due to the website project.

Increased saving in funds
The level of trading activity in the stock market has continued to be low and customers have, instead, increased their savings in funds and interest rate products. This situation has implied a decrease in net commission during the first six months, which has been compensated by increased income from fund commissions. However, the low interest rate level continues to press net interest by 19 per cent to SEK 100 million (SEK 124 m) in comparison with the same period last year. Given continued low interest rates during this year, it will be even more important to ensure a further decline in per-unit costs, in combination with a strong growth in savings capital.

An expanding customer base with a strong net inflow
After weak growth at the end of 2012, the growth of the Swedish savings market improved during the first quarter of 2013. At the same time, we expanded our communication to existing customers regarding new forms of saving and investment alternatives as they have been reluctant to invest in shares, and this enhanced customer communication resulted in a positive effect. This is evidenced in the strong net inflow of over SEK 6 billion during the first six months, an increase of 106 per cent in comparison with the same period last year. During the first quarter we out-performed our long-term target of achieving a 5 per cent share of the total net inflow to the Swedish savings market as our share was 6.7 per cent. Our total market share increased to 1.9 per cent. Savings capital increased by 10 per cent during the first six months.
The inflow of 6,100 new customers during the second quarter implies an increase of 31 per cent in relation to the same period last year. After the first six months of 2013, the number of new customers is 15,000 (11,700) which is in line with our long-term target of gaining 20,000-30,000 customers per year.”

Stockholm, 10 July 2013
Martin Tivéus, Managing Director Avanza Bank

For additional information:

The information contained in this report comprises information that Avanza Bank Holding AB (publ.) is obliged to provide as well as that which it has chosen to provide in accordance with the provisions of the Swedish Securities Market Act and the Swedish Financial Instruments Trading Act. The information has been released to the market for publication at 08.15 (CET) on 10 July 2013.

Tags: