| Q2 2016 | Q1 2016 | Change% | Q2 2015 | Change% | Jan–Jun 2016 | Jan–Jun 2015 | Change% | |
| Operating income, SEK m | 225 | 226 | –1 | 227 | –1 | 451 | 449 | 0 |
| Operating expenses, SEK m | –113 | –112 | 1 | –106 | 7 | –225 | –213 | 6 |
| Operating profit, SEK m | 111 | 115 | –3 | 121 | –8 | 226 | 236 | –4 |
| Net profit, SEK m | 94 | 98 | –4 | 104 | –9 | 192 | 203 | –6 |
| Earnings per share, SEK | 3.18 | 3.35 | –5 | 3.57 | –11 | 6.53 | 7.00 | –7 |
| Operating margin, % | 49 | 51 | –2 | 53 | –4 | 50 | 53 | –3 |
| Net inflow, SEK m | 9,430 | 4,960 | 90 | 4,370 | 116 | 14,400 | 14,400 | 0 |
| No. new customers (net) | 23,100 | 26,200 | –12 | 20,500 | 13 | 49,300 | 52,300 | –6 |
| Savings capital at the end of the period, SEK m | 199,200 | 188,900 | 5 | 170,000 | 17 | 199,200 | 170,000 | 17 |
Quarterly highlights
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.
