Avanza Bank Interim report January – September 2012

  · Operating income decreased by 20 percent (+19 %) to SEK 430 million (SEK 538
m)
  · The profit after tax decreased by 45 percent (+16 %) to SEK 130 million (SEK
236 m)
  · Earnings per share decreased by 46 percent (+14 %) to SEK 4.54 (8.34)
  · Net inflow totalled SEK 3,960 million (SEK 6,340 m), corresponding to 5
percent (8 %) of the total savings capital at the beginning of the year
  · The number of accounts increased by 10 percent (+15 %) to 458,800 (417,200
as of 31st December 2011), and the total savings capital increased by 11 percent
(–14 %) to SEK 82,200 million (SEK 74,200 m as of 31st December 2011)

Third quarter

  · Operating income decreased by 31 percent (+32 %) to SEK 125 million (SEK 182
m)
  · The profit after tax decreased by 64 percent (+44 %) to SEK 32 million (SEK
88 m)
  · Earnings per share decreased by 64 percent (+42 %) to SEK 1.11 (3.10)
  · Income and profit after tax was charged with SEK 9 million in respect of
value adjustment of the holding in the Exchange Burgundy and non-recurring costs
related to rationalization through personnel changes of SEK 3.5 million



Interim Report January – September 2012
Comments from the Managing Director
Interest savings ever more popular in an uncertain market
”The third quarter continues to be characterised by uncertainty on the market,
leading to investors in stocks and other listed products to adopt a cautious
approach, despite an upturn of 8 percent on the Stockholm Stock Exchange so far
this year. A clear sign of this is the reduced level of trading activity among
our customers, down 35 percent compared with the same period during the previous
year, which together with reduced prime ledning rate has pushed revenues for the
year. This trend applies to the entire market, although we have been able to
defend our market share for trading in securities.

In a market where forecasted returns are declining, savers focus to an even
greater degree on fees and high interest. Above all, we have noted a continued
shift towards interest-based products, which has remained strong during the
third quarter.
Savings in Sparkonto+, for example, have increased by 64 percent compared with
the same period during the previous year. In order to meet the growing demand in
interest savings, we are continuing to develop our offering. During the last
quarter we have expanded the Sparkonto+ family with corporate accounts, as well
as accounts for children and young adults, as a response to the increased
demand. During the quarter, we have also raised the number of exchange-traded
credit-linked notes, which have quickly become popular among savers since being
launched in the spring. Exchange-traded credit-linked notes, which we trade free
from brokerage fees, offer a higher interest rate than a savings account and
have, thus far, attracted over SEK 460 million in savings with Avanza Bank.

We continue to display good growth in terms of both customers and capital,
despite the turbulent market. Net savings during the third quarter amounted to
SEK 970 million, customers opened 10,900 new accounts during the quarter and
savings capital has increased by 17 percent compared with the same period during
the previous year. This creates the conditions for long-term growth in income,
as there exists a clear, long-term connection between growth in savings capital
and growth in operating income. The prevailing low interest rates and low levels
of interest in the Stock Exchange are, however, hampering growth in the short
-term.

Balancing our focus on cost efficiency with investments for the future
During the year we have implemented a number of cost efficiencies, balanced by
continued investments in our new internetbank, an investment that we will
expense immediately. We estimate that a modernization of our internetbank and
underlying systems is critical to seriously meet a wider target group, while
satisfying our savers future needs. New IT systems will also eventually allow
for an even greater cost efficiency and scalability as continued growth in
customers and accounts, but also a prerequisite for an effective broadening of
the range. This is an important part of Avanza Bank’s long-term ambition to
combine the industry’s lowest fees with Sweden’s most satisfied savers for
continued growth while leaving a good return to our shareholders. The project
started in 2011 and is expected to close during the second quarter of 2013. The
third quarter also was charged by non-recurring costs related to rationalization
through personnel changes, with SEK 3.5 million and an impairment of the holding
in Burgundy with SEK 9 million.

Strong growth within pension savings
At the end of September, the results of the investigation regarding life
insurance were presented, proposing that it should be possible for savers to
transfer their pension savings freely between insurance companies. We asses that
the proposal, implying that just over half of Swedish pension capital is
entitled to transfer rights, will have a positive impact on our longterm growth.
Unrestricted transfer rights mean that our customers can transfer previously
-earned pension savings to Avanza Bank and, thereby, reduce the fees they are
charged, subsequently increasing the amount of money they have left for their
pension. In anticipation of the implementation of the proposal, we continue to
gain customers within pension savings. Evidence of this can be seen in our
occupational pension savings offering to companies and employees, in which new
savings increased by 40 percent during the third quarter compared with the same
period in the previous year.

We look forward to further product launches during the fourth quarter which will
further strengthen Avanza Bank’s offering and competitiveness.”

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 October 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.