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Avanza Bank Holding |
  SEK |  %   SEK
Avanza Bank Holding |
  SEK |  %   SEK

Interim Report January – June 2014

· Net inflow totaled SEK 9,560 million (SEK 6,150 m), corresponding to 8 (7 %) per cent of the total savings capital at the beginning of the year · The number of customers increased by 8 (5 %) per cent to 342,500 (316,500 as of 31 December 2013) · The total savings capital increased by 16 (10 %) per cent to SEK 130,100 million (SEK 112,600 m as of 31 December 2013) · Operating income increased by 17 (-6 %) per cent to SEK 337 million (SEK 287 m) · Operating margin was 42 (31 %) per cent · The profit after tax increased by 57 (-21 %) per cent to SEK 121 million (SEK 77 m) · Earnings per share increased by 57 (-22 %) per cent to SEK 4.18 (SEK 2.67) Second Quarter · Operating income increased by 20 percent (-3 %) to SEK 164 million (SEK 137 m) · The profit after tax increased by 75 percent (-16 %) to SEK 56 million (SEK 32 m) · Earnings per share increased by 73 percent (-17 %) to SEK 1.92 (1.11)

Comments from the CEO

”Our brand promise, more money for you, less for the bank, continues to attract new customers to Avanza. With a new website, a new office in Gothenburg and a broader customer offering, it is with pride that we can look back over a first half year characterised by the highest growth ever in terms of the number of customers and net inflow of capital. During June, we launched, as the first bank in Sweden, foreign exchange trading, and we also launched a new website for our corporate customers within our Occupational Pension offering.

That our efforts in occupational pensions bear fruit can be seen on the amount of pension capital transferred to Avanza which increased by 45 percent during the first half of the year. After the first quarter we were the fourth largest pension company in the country in terms of net transferred capital.

Raising our growth ambitions

After having welcomed 11,500 new active customers during the second quarter, we can summarise growth after the first half year at 26,000 net new customers, an increase of 73 percent compared with the first half year 2013. Thereby, we have by the end of June already reached our long-term annual growth target of 20,000–30,000 customers. Our customer growth is usually positively impacted by a strong stock market and low interest rates. At the same time, we believe that the higher growth rate during the first half year is to a large part structural. We see this as a result of our new website and a more competitive customer offering as well as a higher brand awareness and increased market presence. Consequently, we have decided to increase our long-term growth target to 30,000–40,000 new customers per year. We will also increase our annual long-term target to attract at least 5 percent of the total net inflow to the Swedish savings market to at least 7 percent, which is in line with the 7.5 percent that we have attracted during the last 12 months. The total net inflow during the first half year amounted to 9.6 billion, 55 percent higher than in the same period 2013.

An increased growth rate places high demands on both the organisation and its processes and systems. In order to ensure the highest possible quality of service to our customers while raising our growth ambitions, we intend, during the forthcoming year, to expand our IT development capacity to more quickly undertake possible improvements of efficiency and quality, as well as continue to further develop our customer offering and customer interface. As a result, we foresee cost increases of 6 percent for 2014 compared with the previously communicated 3–5 percent, with an increase in costs of 6–8 percent in 2015.

Decrease in the repo interest rate presses net interest income

The Swedish Central Bank’s decrease of the repo rate at the beginning of July will impact net interest negatively during the remainder of the year and, most likely, during all of 2015. At the same time, this can have a positive effect on the stock market as the yield on interest will be less attractive. The repo rate decrease also implies that we lower interest rates on the Super Mortgage, our mortgage products aimed at Private Banking customers, to a record low level of 1.24 percent. At the same time, we raised the ceiling on the lending volume by SEK 1 billion to be able to meet the demand and, thereby, further improve our value proposition to an important customer segment.”

Stockholm, 11 July 2014

Martin Tivéus, CEO Avanza