Comments from the Managing Director
”In terms of profit, we have not matched last year’s record quarter, despite an improvement of 7 percent over the previous quarter. This is, primarily, due to the fact that savings capital was 10 percent lower at the beginning of the year, compared with savings capital at the beginning of the previous year, as a result of the fall in the stock exchange in 2011, a lower level of activity on the market and also due to the fact that we started the year with higher costs. During the first quarter of 2012, trading activity on the market was 13 percent lower than in the corresponding period during the previous year, as a result of continued uncertainty on the market, but was 18 percent higher than during the last quarter of 2011. Lending has also declined, as a result of the uncertainty regarding the stock exchange, and is 30 percent lower than in the same period during the previous year. This decrease has negatively impacted net interest items, which were further affected during the quarter by the reduction in the repo rate. We can, however, see a positive trend in lending, which has increased by 27 percent compared with the previous quarter, and is a sign that the appetite for risk is slowly returning”, says Martin Tivéus, Managing Director of Avanza Bank.
”As a consequence of the new tax regulations on endowment insurance which came into force on 1 January 2012, the net inflow into investment savings accounts (ISA) and endowment insurance is expected to be significantly more evenly spread throughout the year than in previous years. We can already see the effects in the first quarter. It is encouraging that the net inflow is, again, beginning to increase after the low figures of the previous quarter. Total savings capital increased during the quarter by 10 percent, thanks to the net inflow and the positive development of the stock exchange. Interest in the new investment savings account has been strong, with 7,220 accounts opened and SEK 1,820 million in net inflow in ISA since the launch at the beginning of the year. We have also strengthened our long-term growth potential during the quarter through the launch of the new exchange-traded credit-linked note, which has been very positively received by our customers.”
”A proposal regarding the statutory right to transfer pension savings is expected in June, which expects it possible for Avanza Bank to achieve the long-term goal of 15-20 percent profit growth ahead. We will, therefore, continue to invest in Avanza Pension during the year in preparation for a deregulated pension market, as well as investing in our new internet presence and our IT systems. The work with building our new internet presence and modernising our underlying systems is expected to continue until spring 2013. Despite a high rate of investment in these projects, we can see in this quarter the result of the cost control measures we presented in the year-end report. We have also arrested the rate of the previous year’s increase in costs by 20 percent, through a reduction in costs of 3 percent compared with the previous quarter. The goal to maintain an essentially unchanged level of expenses in 2012 compared with the previous year remains.”
For additional information:
Martin Tivéus, Managing Director of Avanza Bank, tel: +46(0)70 861 80 04
Birgitta Hagenfeldt, CFO of Avanza Bank, tel: +46(0)73 661 80 04
The information contained in this report comprises information both that Avanza Bank Holding AB (publ.) is obliged to provide and that 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 19 April 2012.
Avanza Bank also publishes an Excel document containing its financial history. The information is provided in English and is updated quarterly. The document can be accessed at avanzabank.se/keydata.
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.