Avanza Bank (AZA) Q2 2024 earnings summary

Executive summary

• Positive momentum continued in Q2 2024, with strong innovation, new features, and customer engagement driving growth and satisfaction.

• Net inflow reached SEK 17.2 billion in Q2, with 33,700 new customers added; H1 inflows were 18% higher year-over-year.

• Brand strength and customer-centric innovation remain key competitive advantages, with 14 consecutive years of industry-leading customer satisfaction.

• Customer acquisition costs remain low due to strong brand and word-of-mouth referrals.

• 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 effects in Q2.

• Net brokerage income increased 23% year-over-year; fund commissions up 26%; currency-related income up 54%.

• Net interest income (NII) decreased by 3% from Q1 due to lower market rates and a 25 bps policy rate cut in May, but rose 2% year-over-year to SEK 398 million.

• Surplus liquidity at quarter-end was SEK 43.6 billion; margin lending volumes grew by 9%.

Outlook and guidance

• Cost increase guidance for 2024 remains at 9.5% excluding the IMY fine.

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

• Strategic review ongoing, with a focus on strengthening the savings offering; any changes to financial targets will be communicated once finalized.

• Growth in customers and savings capital remains a key driver, with recurring revenues prioritized to manage market fluctuations.

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