TF Bank (TFBANK) Q2 2024 earnings summary

Executive summary

• Loan portfolio grew 18% year-over-year in local currencies to SEK 19.4 billion, driven by strong growth in the German credit card business and expansion into Spain.

• Operating profit increased 29% year-over-year to 158 MSEK in Q2 2024 and 27% to 305.6 million for H1 2024, with EPS up 26% and return on equity reaching 22.5%.

• Credit Cards and Ecommerce Solutions segments were key drivers of EPS and profitability, with Credit Cards showing organic loan book growth of 63% and operating profit up 96%.

• Cost/income ratio improved to 39.8% for H1 2024, reflecting economies of scale, especially in Credit Cards.

• Continued expansion in Europe, including launch of credit card in Spain and preparations for Italy and digital payments in Germany.

Financial highlights

• Operating profit for Q2 2024 was 158 MSEK, a 29% increase compared to Q2 2023; H1 2024 operating income rose 25% to SEK 1,156 million.

• Return on equity reached 22.5% in Q2 and 22.3% in H1 2024; EPS was 5.43 SEK in Q2 and 10.47 SEK in H1.

• Income grew faster than costs, improving the cost/income ratio to 39.8%.

• Loan loss ratio stabilized at 8.1% in Q2, with H1 loan loss ratio at 4.2% (vs. 3.8%).

• Deposits from the public totaled SEK 20.7bn, with a liquidity reserve of SEK 4.1–4.4bn.

Outlook and guidance

• Plans to launch credit card in Italy and digital payment solutions in Germany in H2 2024.

• Credit Card volumes expected to surpass SEK 20 billion loan portfolio target ahead of H1 2025.

• New financial targets to be communicated in H2 2024.

• Macroeconomic trends and expected lower central bank rates anticipated to benefit net interest income.

• Avarda (Ecommerce Solutions) to launch in Germany in H2 2024.