Avanza Bank (AZA) Q2 2024 earnings summary

Executive summary

• Strong growth in Q2 2024, with high innovation, new features, and top reputation rankings driving customer engagement and satisfaction.

• Net inflow reached SEK 17.2 billion and 34,000 new customers in Q2, with H1 inflows up 18% year-over-year.

• Fund business achieved all-time high net inflow of SEK 22 billion in H1 and SEK 300 billion in fund capital, now one-third of total savings capital.

• Customer acquisition costs remain low, driven by brand strength and word of mouth.

• Customer base expanded by 8% to 1,984,500, with savings capital up 21% to SEK 894 billion.

Financial highlights

• Operating profit for Q2 2024 was SEK 588 million, down 9% sequentially but up 8% year-over-year; adjusted profit was SEK 618 million, excluding one-off items.

• Net profit for H1 2024 increased by 9% year-over-year, despite negative one-off effects.

• Net interest income decreased by 3% from Q1 but rose 2% year-over-year to SEK 398 million.

• Gross brokerage income per turnover rose to 11.2 bps, with foreign trading at 21% of turnover, highest since Q1 2021.

• Operating margin for Q2 2024 was 63%, and ROE was 35%.

Outlook and guidance

• Estimated full-year cost increase of 9.5% (excluding IMY fine) is maintained.

• Further policy rate cuts expected to impact NII, but a return to negative or zero rates is unlikely.

• Strategic review ongoing; any changes to financial targets will be communicated once finalized.

• Internal efficiency and maintaining a low-risk balance sheet are strategic priorities.

• Government proposal for tax-exempt savings up to SEK 300,000 in ISK and endowment insurance expected to boost savings from 2025.