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, Financial) 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
Q: Does the cloud migration need to be completed before considering geographical expansion?
A: No, the cloud migration does not need to be completed before geographical expansion, but it facilitates the process. - Gustaf Unger, CEO
Q: Why not capitalize the cloud migration costs like other companies?
A: We prefer to show transparency by reflecting the majority of our costs directly over the P&L, making it easier for evaluation. Although capitalizing is an option, we choose this method for clarity. - Gustaf Unger, CEO
Q: How do you plan to address the competition in the private banking segment?
A: We aim to strengthen our private banking offering by improving investment decision tools and increasing market visibility. We believe our competitive pricing and strong digital experience will help us capture more market share. - Gustaf Unger, CEO
Q: What are the strategic priorities for Avanza Bank towards 2030?
A: Our strategic priorities include strengthening our core business in savings and investments, achieving market leadership in private banking and occupational pension, increasing operational efficiency through cloud migration, and expanding into at least one additional European market. - Gustaf Unger, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
