Avanza Bank Holding AB (publ)

Good day and thank you for standing by. Welcome to the conference call events of interim report January-June 2026. At this time all participants are in a listen-only mode. After the speaker's presentation there will be a question and answer session. To ask a question during the session you will need to press star 1 and 1 on your telephone keypad. You will then hear an automated message advising your hand is raised. To withdraw your question please press star 1 and 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Gustaf Unger, CEO. Please go ahead.

Good morning, everyone, and welcome to the presentation of Avanza's Q2 report. Here in Stockholm, apart from me, we have Jonas Verling, our CFO, and Carolina Johansson, Head of Investor Relations. But to start, I think it's fantastic that we are once again reporting a record quarter with an operating profit at 928 million Swedish and we're putting a historically strong first half year to the books. We also saw robust underlying growth during the quarter, welcoming over 40,000 new customers to Avanza. Strong market depreciation combined with net inflows of 19 billion made our savings capital reach a new all-time high, now exceeding 1.2 trillion. A major strategic milestone during the quarter was completing the phase-out of our external savings accounts, which has created a self-inflicted drag on our net flows for about a year. However, I'm glad to say that 60% of the volume has or was retained at Avanza, which truly is a testament to the value our customers find in consolidating their savings with us. During the one and a half years that have passed since the phase-out was communicated, we can note that the number of customers with Avanza's savings account has gone from 390,000 to 700,000 and that the savings account volume has grown from 33 to over 65 billion. Despite the ongoing significant uncertainty, we saw a clear shift in sentiment among our customers who showed a risk on behavior and a strong appetite for foreign trading. The net inflow to the Swedish fund market increased significantly and so did fund flows at Avanza where our customers net purchased funds at records amounts at almost 17 billion. We've kept a high pace of product development throughout the quarter, rolling out several key launches across all our customer segments. And I will walk you through some of these exciting product updates in more detail later on. Avanza Corporate Finance has had an active quarter in which we broke new ground and enabled participation for non-institutional customers in three new issues through ABV. An accelerated bookbuilding is a fast way for companies to raise capital, often in just one evening, where the price is determined based on investor demand. Historically, this short time window has meant that private investors have been excluded from the process. Through this, Avanza continues to democratize savings in Sweden. Also, I'm proud to say that Avanza was once again ranked as one of Sweden's most reputable companies and Sweden's most reputable bank in Variant's annual reputation index. The index is compiled based on questions regarding general reputation, personal impressions, trust, success, and quality. Avanza's reputation index score for 2026 was 67, where a reputation index score above 60 is considered high, and Avanza is one of 12 companies in total with a high reputation according to the survey. Among the other companies at the top are major international corporations such as IKEA and Volvo. Lastly, we have an exciting organizational update to share. Last quarter, I mentioned that we had begun searching for a new CEO to lead Avanza Fonder. Today, I'm thrilled to announce that Maria Wern has officially taken over as the new CEO since May 1st. Maria brings an incredible strong background to the role and I'm highly confident that she's the right person to drive our fund business forward and challenge the market even further. Despite ongoing and significant geopolitical uncertainty, risk appetite in the market has strengthened resulting in record levels on many stock exchanges around the world and also for the savings capital at Avanza which exceeds 1.2 trillion. Also, the Swedish economy is finally beginning to pick up speed, albeit somewhat later and less powerful than I had previously hoped for. Consumers have started to spend, and Sweden's economy now stands stronger than most other countries around us. In June, the Riksbank left the policy rate unchanged for the sixth consecutive meeting. This bodes well for increased savings going forward. and Avanza is well positioned to capture a good share of this growth. The fact that we, with a market penetration exceeding 20% of the Swedish population, have acquired close to 100,000 new customers in H1 is truly a testament to our continued growth capacity. Looking a bit deeper into who these new customers are, we can conclude that the 2026 cohort remains consistent with new customers in previous years. Their median age is 31. They hold on average around 30% funds and 45% shares. And their share of foreign equities is at around 20%. The average recurring monthly saving among these customers is around 2,300 per month. We are seeing a clear risk on sentiment among our customers in the quarter. Although volatility has decreased compared to the very high levels in Q2, Q2 has also been characterized by numerous political statements which created market reactions and major movements in individual sectors and securities. This is a market climate that suits our stock market enthusiasts well, and we can see that they have been active during the quarter, while trading was also broad-based across the customer base, and we're seeing an increasing number of brokers generating customers. The risk on sentiment is also evident when looking at the share of deposits of the total savings capital, which declined as a result of customers net buying risky assets. Since January 2025, the liquidity share has been more difficult to use as an indicator for customers sentiment as we have been in the process of internalizing the external deposits. The strong appetite for foreign trading continues to stand out in the quarter and reach new record levels both in absolute and relative terms as a 31% share of the total brokerage generating turnover. The listing of SpaceX, which took place in June, was a contributing but not decisive factor. Instead, we are seeing a more widespread trend where the desire to increase exposure to the AI and semiconductor sectors is the common thread. However, looking at the allocation mix within customers' equities portfolios, the trend should also be structural and is expected to continue as home bias is still strong with 75% of customers' portfolios exposed to Swedish equities. Stock trading is what we have historically been associated with. and customers interested in the stock market are naturally drawn to Avanza. For years, we have been working actively to broaden the associations of the Avanza brand also to fund savings, and we have been very successful. A higher share of fund income means a higher quality income mix with more recurring revenue. Our fund business is growing strong with record net inflow, resulting in all-time high fund capital volumes as well as fund commission income in the quarter. The shift from active to passive funds has been ongoing for years, and Avanza has taken an active part in fueling this by constantly reminding of how fees affect performance and savings capital development over time. This has resulted in high trust from our customers and thereby volume growth, which is key to also increase fund income. Looking at the levels we are at now when it comes to the mix shift, we're also seeing that fund categories within the index funds have an effect on the margin, where a high interest to gain exposure to global, US and emerging markets acted as a cushion to the continued increased share of index funds. I'm very pleased that we are consistently maintaining a high pace of product development and during Q2 we have made several launches that strengthen our overall offering. On the theme of funds, during the quarter we expanded our fund offering with the launch of Avanza Sweden. This is a broad market-weighted index fund covering 99% of the Stockholm Stock Exchange. With a competitive fee of 17 basis points, it serves as a perfect building block for broad savings and a great complement to our existing house funds. where Avanza Zero is only tracking the 30 most traded companies on the Stockholm Stock Exchange, and in Avanza Sweden all cap, no single company is allowed to have a weight of more than 2%. Furthermore, we launched our new pension portal for corporate customers, which is an important milestone in our aim to become the number one occupational pension company. The new portal simplifies administration for employers, By reducing manual work, we make Avanza an even more obvious choice for occupational pensions, which in turn helps us to secure more long-term sticky capital on the platform. For our most active traders and private banking customers, we integrated Kepler-Chevreau's analysis directly into the platform. This means real-time access to institutional-grade research for both Nordic and international stocks, which significantly enhances the value of our offering and has been sought after for long. Lastly, we took social investing to the next level on Placera Forum, which is already Sweden's largest investor community by far. By enabling customers to link their Avanza portfolio to the forum and thereby sharing their asset allocation and transactions, forum members get increased opportunities for decision support, learning and engagement as well as contributing to transparency among the members. At the end of the quarter, just two weeks after launch, 7,600 of Placeras Forum's users had activated portfolio sharing. All in all, it's safe to say it's been an active quarter with lots of new value created for our customers. While the Swedish initiatives are moving on at a high pace in parallel the preparations for our Denmark launch is also progressing according to plan. On the organizational side, we are in the process of establishing our branch, recruiting a branch manager and other key positions, while also detailing our go-to-market plan. On the development side, the work is progressing at full speed. It's actually truly fascinating how far the team has come in just this quarter. and we have already been down to Copenhagen to test an early prototype with potential customers. Our success in Sweden has been achieved through close cooperation with our customers. We will take the same approach in Denmark to ensure that we solve concrete Danish customer needs and to build engagement even before the launch. I also wanted to take the opportunity to speak a bit about the strategic choice to build a new platform, which was made possible thanks to AI and the speed with which we can now develop software. Looking back a bit in time, the plan from the start was to adapt our Swedish platform, which is completely doable. However, it has been coded to suit Sweden for 27 years and thereby automatically assumes Swedish krona as the base currency and Swedish as the language. This can be changed and it's Not particularly complicated, but it would involve many of our Swedish development teams, thereby risking disrupting the progress of the Swedish business. Therefore, our initial plan was to hold off on the international adaption until later in the planning period. In parallel, our tech organization has embraced AI-driven development from the start. Initially, we didn't see major positive effects from it, but last autumn we started seeing substantial progress in one of our development teams that had been testing an AI-first approach while building our new occupational pension portal. That's when Fredrik, our CTO, came to me with the idea of using AI to build a completely new international platform at a low cost. This would allow us to drive the international expansion in parallel with the Swedish business without disrupting our Swedish teams. I understand that this might raise some questions. Throughout my career, experience has taught me that consolidating technology is a top priority during an acquisition, for example. However, the technological landscape looks drastically different today. and we need to adapt and think differently to emerge as winners in this. We're now deliberately introducing some complexity which goes against what we have previously learned but I'm convinced that this is the right decision. With that I will hand over to you Jonas to take you through the financials.

Thank you Gustav and good morning to all. Repeating a little bit what Gustav said, it's a true privilege to once again be reporting record results summarizing a historically strong first half of the year. Once again, we see strong contributions from all the income streams where income is up 6% versus last quarter and almost 30% compared to Q2 last year. Our costs are developing according to plan and all in all this results in an operating profit of 928 million EPS of 4.97. Return equity was at 43% for the quarter, well exceeding our target of at least 35%. If you take a closer look at the revenues, we can see that the income mix has greatly benefited from the market environment we saw in Q2 with positive stock market development, sustained high trading activity with a strong appetite for foreign exposure, somewhat high interest rates, and on average higher deposit levels compared to Q1. There were three fewer trading days compared to last quarter, which had a slight negative effect on the brokerage income compared to Q1. However, it was still 26% higher than Q2 last year. Looking at the brokerage margin, it increased to 11 basis points in Q2 compared to 10.6 in Q1, driven by the higher share of trading in foreign markets, which reached, as you said, Gustav, a new record level of 31%. Also, turnover per trade in the fixed brokerage fee class declined, which also contributed to the higher margin. And as mentioned before, we saw an increase in the number of brokerage-generated clients. the share of brokerage generated by Pride Banking & Pro was stable at 26% in the quarter. Brokerage generating tournament foreign securities reached a new all-time high and as a result FX income continued to increase and was up 11% compared to last quarter. The positive stock market development and combined them with historically high net inflow to funds as you saw in the previous chart result in a fund capital increase of 19% in the quarter. global US and tech funds, which have higher margins, increase as a share of total fund capital, whereas the share of index funds continue to increase with 1.4 percentage points to 53.8% at quarter end. The combined effect on margins from this was that quarter end fund margin amounted to 22.7 basis points compared to 22.8 basis points at the end of Q1, i.e. an in total relatively stable fund margin. That coupled with volume increases resulted in a new record level for fund commission income. Other income decreased primarily as a result of lower income from Avanza Markets. The trading ETPs is even more driven by volatility than trading in general and trading Avanza Markets was therefore boosted by this extremely volatile environment especially that we saw in the Q1. Also, the phase-out of external savings accounts was completed during the quarter, and these consequently no longer generate income within the other income line. And as usual, there are many small both other commission income lines and other commission expense lines, which are a little bit small to disclose separately, that all contribute to the full picture. Finally, when it comes to NII, let's look at some more details on the next page. NII, as many other income lines, reached a new all-time high in this quarter, mainly thanks to increased volumes on average, although the market rate uptick that we saw for a few weeks in March and April also contributed. Our income from surplus liquidity increased to 534 million, mainly as a result of higher average deposit volumes, although the deposits were lower at quarter end due to customers' increased risk appetite. On the deposit cost side, we have made no changes to our interest rates in the quarter, and the increased average interest rate for deposits was therefore a result of a higher share of deposits on interest-bearing accounts, which amounted to 60% up from 57% in Q1. On the lending side, also lending rates were kept stable. However, the average interest rate for internal finance lending decreased to 2.7% compared to 2.8%. the different margin lending rate levels. However, this was, as before, more than mitigated by high lending volumes that continued to increase. Our private banking mortgage remains very attractive and the margin lending volume increases with higher risk appetite. Going forward, NI development will, as always, reflect the market rate environment in terms of both the risk-time policy rate and then mainly decide the three-month rates, but also, and as well, the behavior of our customers and their allocation where deposit savings will always constitute the share. With the external savings account now being phased out, deposit growth going forward will be linked to our overall growth in savings capital but with some variations of the deposit to the savings capital ratio depending then on customer risk appetite. Although we have received positive macro signals in Sweden so far, the situation in the Middle East does still cloud the future and how the policy rate and market rates will develop is still uncertain. When it comes to interest rates, our strategy is to make the which gives us flexibility to take customer behavior and competition into account when adjusting rates. Moving over to costs, they are developing according to our plan and came in higher than in Q1 as a result of higher personnel costs and other costs, both connected our work with strategic initiatives. Marketing costs were seasonally lower. And when it comes to our international expansion, three million of the Establishment costs will build up over time and the estimate remains that the cost base for 2026 will be affected by a total of 50 million Swedish kronor linked to the international expansion. Our full year 2026 guidance of 9% cost increase for the Swedish business also stands. As evident by the numbers related to the capital position, it is very solid. We also audited the Q2 figures, which has further strengthened the capital base by including accumulated earnings net of expected dividends. Keeping a strong capital position has proven good, not least in the rapidly shifting market environment we've seen for over a year now. And with our current capitalization, deposits on our balance sheet would be able to grow by 43 billion Swedish krona without breaching leverage ratio requirements. Finally, looking at leverage ratio and capital ratios, we see that the non-risk based leverage ratio requirement remains the main capital constraint for Avanza, and it's the most sensitive one as it's highly dependent on customer behavior. At the end of the period, it was at 4.7%, further improved not only then by accumulated profits, but also by customers' increased risk appetite leading to lower deposits and thereby lower leverage ratio volumes by around 8 billion compared to the end of Q1. All in all, we are well positioned both when it comes to both the risk-based and the non-risk-based requirements. Having said that, I will hand back to Gustav for some concluding remarks.