Interim Report January – September 2014

  · Net inflow totalled SEK 14,100 million (SEK 8,410 m), corresponding to 13
(10 %) per cent of the total savings capital at the beginning of the year
  · The number of customers increased by 12 (8 %) per cent to 355,300 (316,500
as of 31 December 2013)
  · The total savings capital increased by 18 (22 %) per cent to SEK 133,400
million (SEK 112,600 m as of 31 December 2013)
  · Operating income increased by 16 (1 %) per cent to SEK 503 million (SEK 435
m)
  · Operating margin was 43 (37 %) per cent
  · The profit after tax increased by 30 (7 %) per cent to SEK 181 million (SEK
139 m)
  · Earnings per share increased by 30 (6 %) per cent to SEK 6.28 (SEK 4.82)

Third Quarter

  · Avanza Pension will continue its expansion and open an office in Malmö in
early 2015
  · Operating income increased by 12 percent (18 %) to SEK 166 million (SEK 148
m)
  · The profit after tax decreased by 3 percent (+94 %) to SEK 60 million (SEK
62 m)
  · Earnings per share decreased by 2 percent (+94 %) to SEK 2.10 (SEK 2.15)
  · Pre-tax profit was burdened by provisions of SEK 8 million concerning VAT
referring to the years 2010–2012. The effect on profit after tax was SEK –6
million
Comments from the CEO

Net inflow doubled

”Net inflow continued to be strong in this quarter with SEK 4.6 billion, a
doubling compared with the same period last year, and implying a total inflow of
SEK 14.1 billion since the beginning of the year. Behind this strong net inflow
each quarter compared with the previous year, is found a number of activities
and initiatives which are beginning to bear fruit. These include our new
website, the investment in CRM and a more customer-driven communication, a new
trading room and successful product launches. For example, the Super Mortgage is
not only generating many new customers but also new savings capital from
existing customers. Everything taken together, these activities resulted in
12,800 new active customers during the quarter, an increase of 49 percent
compared with last year, and we acquired 38,800 new customers since the
beginning of 2014.

At the end of June, we could calculate our share of the total growth in the
savings market at 8.0 percent during the past 12 months. This exceeds our long
-term goal to achieve at least 7 percent.

Repo rate decreases press net interest items – scalability produces positive
results

The dramatic repo rate decrease at the beginning of the quarter negatively
impacted our quarterly results by SEK 8 million, something which our increased
volumes cannot compensate for in just one quarter. With that in mind, we are
satisfied that our focus on cost efficiency now begins to give results, which is
of major importance if we are going to be able to deliver high margins
regardless of the interest rate situation. We have decreased the cost to savings
capital ratio by 18 percent to 31 basis points during the last twelve months,
which is clear evidence of the scalability of the operations.

The earlier than planned investment in mobile services and VAT impact results

During the summer months, we experienced explosive growth in the demand for our
mobile services. In July more than 50 percent of all logins were from mobile
units. Consequently, we have determined to move forward development of our
mobile platform to have it in place no later than next summer.

We have also reported a one-off item of SEK 8 million concerning VAT referring
to the period 2010 to 2012, as we indicated in our second quarter report.

The investment in mobile services, together with the one-off cost for the VAT,
is the reason that cost increases are estimated at 7 percent for 2014, slightly
higher than the 6 percent forecasted in our second quarter report. However, the
planned cost increase rate of 6–8 percent for 2015 remains, as does the growth
target I mentioned in the interim report for the second quarter of 30,000–40,000
new customers per year and a minimum share of 7 percent of the net inflow to the
Swedish savings market.

Continued expansion within pensions

Our pension operations continue to be successful. Since the beginning of the
year, we have doubled our sales personnel through new recruitment in Stockholm
and through the opening of an office in Gothenburg, which has seen a flying
start with a strong inflow of occupational pension customers. As a result of
this success, we will also open an office in Malmö, a strategically important
location for us, in early 2015. We thus continue, as planned, to successively
build the pension area as one of our stable revenue streams to counteract our
sensitivity towards market volatility. Within the private pension and insurance
savings area we have during the past 12 months achieved a 4.5 percent share of
the total premium inflow in the market.

Focus in the near future

In forthcoming quarters we will strengthen our leadership within savings and
investments. In addition to improved functions on the website and further
improvements of efficiency in various back office and administrative functions,
we will start managing our surplus liquidity more actively to improve capital
efficiency and create capacity to expand the Super Mortgage.

The focus will also be placed on recruitment for and the completion of our new
office in Malmö, while at the same time we will continue to work with our user
-friendly and mobile solutions.”

Stockholm, 16 October 2014

Martin Tivéus, CEO Avanza
For further information please contact:

Martin Tivéus, CEO
tel: +46(0)70 861 80 04
martin.tiveus@avanza.se

Birgitta Hagenfeldt, CFO
tel: +46(0)73 661 80 04
birgitta.hagenfeldt@avanza.se

Caroline King, IR & CSR Manager
tel: +46(0)70 918 95 05
caroline.king@avanza.se
Avanza is an Internet bank founded in 1999. The Parent Company, Avanza Bank
Holding AB (publ), is listed on the Stockholm Stock Exchange. Avanza’s vision is
that as a customer you will have more money in your pocket than if you banked
with other banks or institutions. The services include, amongst other things,
saving in shares, funds, savings accounts and a strong pension offering. Avanza
has more than 355,000 customers and more than SEK 130 billion in savings
capital. This is equivalent to just over 2 percent of the Swedish savings
market. Avanza is the largest in terms of the number of transactions of Swedish
banks on the Stockholm Stock Exchange. During the last four years Avanza has won
SKI’s (Swedish Quality Index) award, “Year’s Most Satisfied Savings Customers”.
For more information visit: www.avanza.se