Avanza Bank Interim report January – June 2012

  · Operating income decreased by 14 percent (+13 %) to SEK 305 million (SEK 356
m)
  · The profit after tax decreased by 33 percent (+4 %) to SEK 98 million (SEK
147 m)
  · Earnings per share decreased by 34 percent (+2 %) to SEK 3.44 (5.24)
  · Net inflow totalled SEK 2,990 million (SEK 4,790 m), corresponding to 4
percent (6 %) of the total savings capital at the beginning of the year
  · The number of accounts increased by 7 percent (10 %) to 447,900 (417,200 as
of 31st December 2011), and the total savings capital increased by 6 percent (3
%) to SEK 78,700 million (SEK 74,200 m as of 31st December 2011)

Second quarter

  · Operating income decreased by 18 percent (+7 %) to SEK 141 million (SEK 172
m)
  · The profit after tax decreased by 33 percent (16 %) to SEK 38 million (SEK
57 m)
  · Earnings per share decreased by 33 percent (19 %) to SEK 1.34 (2.01)



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.