Avanza Bank Holding AB (AVVZF) Q3 2024 Earnings Call Highlights: Record Revenue and Strategic ...

GuruFocus News
3 min read

In This Article:

  • Revenue: Best ever for the quarter.

  • Customer Inflow: Inflow during the first nine months is already in line with the full year 2023.

  • Other Income: Negatively affected by customer compensations of SEK10.5 million.

  • Personnel Expenses: Increased by SEK10.6 million due to changes in media company Placera.

  • Cost Increase: 9% for the nine-month period, in line with 9.5% cost guidance for the year.

  • EPS Growth: 9% for the nine-month period.

  • Net Brokerage Income: Positively affected by seven more trading days in the quarter.

  • Fund Commissions: Increased by 23% year-on-year for the nine-month period.

  • NII (Net Interest Income): Decreased by 3% compared to Q2.

  • Lending Portfolio: Increased by 4% in the quarter.

  • Interest Income from Internal Lending: SEK233 million.

  • Interest Expenses on Deposits: Decreased by SEK271 million.

  • Cost to Savings Capital Ratio: Decreased to 15 bps for the nine-month period.

  • Return on Equity (ROE): Above target.

Release Date: October 18, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Avanza Bank Holding AB (AVVZF) reported record-high revenues for the quarter, marking the best performance ever.

  • The company experienced strong growth in customer acquisition and fund inflows, capturing roughly 20% of the market flow.

  • Avanza Bank Holding AB (AVVZF) was ranked as one of Sweden's most attractive employers, which is beneficial for attracting top talent.

  • The company has set ambitious strategic priorities, including expanding into at least one additional European market by 2030.

  • Avanza Bank Holding AB (AVVZF) aims to grow its savings capital in Sweden by 15% annually, leveraging its strong market position and customer base.

Negative Points

  • The company faced two items affecting comparability, including customer compensations related to IT issues and personnel expenses due to changes in its media company Placera.

  • Net interest income (NII) decreased by 3% compared to the previous quarter due to lower market interest rates.

  • The Swedish FSA's new requirements on credit institutions could impact the attractiveness of Avanza Bank Holding AB (AVVZF)'s external savings accounts.

  • The company anticipates further pressure on NII due to expected rate cuts by the Riksbank.

  • Avanza Bank Holding AB (AVVZF) faces increased competition, particularly in the private banking segment, which may require strategic adjustments.

Q & A Highlights

Q: Can you specify how you arrived at the SEK300 million cost for cloud migration? A: We have looked into the cloud migration for the whole year, and this is our best estimate. It will be front-loaded, with an estimated 3.5% increase in costs for 2025. However, we will provide more detailed cost guidance for 2024 later. - Gustaf Unger, CEO

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