Avanza Bank Interim report January – June 2013

  · Net inflow totaled SEK 6,150 million (SEK 2,990 m), corresponding to 7 (4 %)
per cent of the total savings capital at the beginning of the year
  · The number of accounts increased by 8 (7 %) per cent to 507,200 (471,600 as
of 31 December 2012)
  · The total savings capital increased by 10 (6 %) per cent to SEK 94,600
million (SEK 85,800 m as of 31 December 2012)
  · Operating income decreased by 6 (–14 %) per cent to SEK 287 million (SEK 305
m)
  · Operating margin was 31 (40 %) per cent
  · The profit after tax decreased by 21 (–33 %) per cent to SEK 77 million (SEK
98 m)
  · Earnings per share decreased by 22 (–34 %) per cent to SEK 2.67 (SEK 3.44)

Second Quarter

  · Operating income decreased by 3 percent (–18 %) to SEK 137 million (SEK 141
m)
  · The profit after tax decreased by 16 percent (–33 %) to SEK 32 million (SEK
38 m)
  · Earnings per share decreased by 17 percent (–33 %) to SEK 1.11 (1.34)

Comments from the Managing Director

Successful launch of our new website and IT platform
“In the middle of June we achieved an important milestone in Avanza’s
development when we launched our new bank website and underlying platform, a
project, which has lasted for more than two years and had the goal of being
completed by the end of the second quarter 2013. I am incredibly proud of the
team spirit and the focus which have been clear prerequisite in implementing
this project according to the established time schedule, and the customers’
reactions have been, to a major degree, very positive. Already on the day after
the launch, a third of the customer traffic was taking place via the new
website. This implies, among other things, that we are the first bank in Sweden
to provide real-time push notified share prices as a standard service, something
that many customers have been waiting for. The new underlying platform and
technology affords us with both the competitive advantage of strengthened
scalability, as well as cost efficiencies which will be evidenced in a
decreasing per-unit costs in forthcoming years, in pace with the continuous
growth in customers and, thus, in savings capital. This also provides us with
the premises for developing new services for our customers at a lower cost, as
well as more quickly than before, and in this manner we will be able to offer
our customers with the market’s lowest fees, in combination with the best
service.

High costs due to the upgrading of the IT system
The project has absorbed a large amount of resources during the first half of
2013 and this has negatively impacted results for the period in terms of
increased costs for both personnel and externally contracted services, which
expenses are now expected to revert to normal levels. It has also been of major
importance to complete our new bank website and the underlying platform before
the summer to be able to shift the focus towards the development of new products
and services, something that has been put aside during recent quarters due to
the website project.

Increased saving in funds
The level of trading activity in the stock market has continued to be low and
customers have, instead, increased their savings in funds and interest rate
products. This situation has implied a decrease in net commission during the
first six months, which has been compensated by increased income from fund
commissions. However, the low interest rate level continues to press net
interest by 19 per cent to SEK 100 million (SEK 124 m) in comparison with the
same period last year. Given continued low interest rates during this year, it
will be even more important to ensure a further decline in per-unit costs, in
combination with a strong growth in savings capital.

An expanding customer base with a strong net inflow
After weak growth at the end of 2012, the growth of the Swedish savings market
improved during the first quarter of 2013. At the same time, we expanded our
communication to existing customers regarding new forms of saving and investment
alternatives as they have been reluctant to invest in shares, and this enhanced
customer communication resulted in a positive effect. This is evidenced in the
strong net inflow of over SEK 6 billion during the first six months, an increase
of 106 per cent in comparison with the same period last year. During the first
quarter we out-performed our long-term target of achieving a 5 per cent share of
the total net inflow to the Swedish savings market as our share was 6.7 per
cent. Our total market share increased to 1.9 per cent. Savings capital
increased by 10 per cent during the first six months.
The inflow of 6,100 new customers during the second quarter implies an increase
of 31 per cent in relation to the same period last year. After the first six
months of 2013, the number of new customers is 15,000 (11,700) which is in line
with our long-term target of gaining 20,000-30,000 customers per year.”

Stockholm, 10 July 2013
Martin Tivéus, Managing Director Avanza Bank

For additional information:

Martin Tivéus, Managing Director of   Birgitta Hagenfeldt, CFO of Avanza Bank,
Avanza Bank, tel: +46(0)70 861 80 04  tel: +46(0)73 661 80 04

The information contained in this report comprises information that Avanza Bank
Holding AB (publ.) is obliged to provide as well as that which 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 10 July 2013.