Second quarter
Half-time comments from the Managing Director
Stable growth despite uncertainty in the stock market
The macroeconomic uncertainty is still hovering over the Eurozone like a dark cloud, and the markets display a large amount of nervousness at the slightest hint of any signal which can be seen to be negative. This uncertainty has directly affected savings, with a reduction in trading activity of 16 percent compared with the same period during the previous year, while our savers have shown a clear shift from trading in shares towards interest saving. In order to meet the growing demand for interest saving, we launched the exchange-traded credit-linked note during the spring, which quickly grew in popularity, evinced by the more than SEK 250 million made by savers in these products. We are the only bank that offers brokerage-free trading in exchange-traded credit-linked notes, which is a result of our stated ambition to ensure that our customers will always have more funds available for themselves than they would have with any other bank on the Swedish market. We will continue to develop our offering within interest saving during the year and intend to present several new products after the summer period.
Another silver lining to the cloud is that Avanza Bank continues to display stable growth in terms of both customers and savings capital. The net inflow during the second quarter was 48 percent higher than in the same period during the previous year.
We are investing to meet future customer requirements
Despite the reduction in income resulting from the uncertainty on the stock exchange, we have chosen to keep expenses more or less unchanged compared with the previous year. The reason behind the unchanged level of expenses is that we consider it an absolute necessity to continue investments in our new internet bank, a project which we initiated in 2011. We believe that the modernization of our internet bank and its underlying systems is critical to our operations, in that it will allow us to properly appeal to a broader target market, while simultaneously satisfying the future demands of our savers. New IT systems will also facilitate, from a broader perspective, a higher level of cost efficiency. This is an important aspect of our long-term ambition to combine the industry’s lowest charges with Sweden’s most satisfied savings customers, and continued growth while we provide a good return for our shareholders. The work is expected to be completed during the second quarter of 2013.
Pension issues hotter than ever
On 30 September after several suspensions, the results of the investigation, regarding life insurance are expected, whereby a proposal will be presented as to whether it should be possible for savers to transfer their pension savings freely between companies. This is an issue we have actively driven and which we assess as having a positive impact on our growth. Regardless of the outcome of the investigation, we will focus on gaining further market shares by providing the market’s best offering within pension savings. Evidence of this can be seen in our occupational pension savings, in which new savings increased by 34 percent during the first half of the year compared with the same period in the previous year.
Avanza Bank has also digitalised and thereby simplified its new customer process through implementing electronic identification (e-legitimation) during the month of June, which we believe will have a positive impact on the inflow of new customers during the second half of the year, as new customers are now able to sign agreements directly via the site. This development is consistent with our strategy to have a fully Internet-based business model.
We eagerly look forward to the autumn, and will continue to focus on maintaining Sweden’s most satisfied savings customers.
Martin Tivéus, Managing Director of Avanza Bank
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 11 July 2012.
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.
