Can You Truly Love a Bank? Well, Our Customers Think So in Any Case
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Can you truly love a bank? Well, our customers think so in any case. For the 11th (!) year in a row we have Sweden’s most satisfied customers. 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 Annual and Sustainability Report 2020 Avanza Bank Holding AB (publ) Contents Avanza – an overview 2 The year in brief 4 CEO's statement 5 About Avanza 8 Market conditions 9 Stakeholder dialogue 14 Vision, business model and strategy 16 Targets and outcomes - an overview 18 Our customers 22 Our employees 26 Our shareholders and share information 32 Our risk profile 36 Chairman's comment 40 Corporate governance report 42 Board of Directors and Auditors 50 Group Management 52 Administration report 55 Five-year overview 58 Consolidated income statements 64 Consolidated balance sheets 65 Changes in the Group's shareholders' equity 65 Consolidated cash flow statements 66 Parent Company income statements 67 Parent Company balance sheets 68 Changes in the Parent Company's shareholder 69 equity Parent Company cash flow statements 69 Notes 70 Audit report 108 Sustainability reporting 112 Customers and benefit levels 116 Brokerage fee classes 117 Products range 118 Definitions 120 This Annual Report is published in Swedish and Annual General Meeting 122 English. In the event of any differences between the Financial calendar 123 English version and the Swedish original, the Swedish version shall prevail. Avanza 2020 1 Sweden’s leading platform for savings and investments Avanza was founded in 1999 to offer online stock trading for individual investors at low prices. Low fees, a broad range of savings products, and education and support for investment decisions have since then been the basis of Avanza’s offer. We also offer competitive occupational pension solutions and mortgages. As a customer at Avanza, you will have One of the more money left to market’s widest yourself range of savings products We inspire, educate and create tools to support investment decisions Read about our range of products and services on pages 118–119. 2 Avanza 2020 Key figures for 2020 Sweden’s most satisfied savings customers Number of customers for 11 years 1,280,300 Source: Swedish Quality Index (976,400) Savings capital Share of the Swedish savings market SEK 571bn 5.4% (SEK 408bn) (4.3%) Market capitalisation Income SEK 36bn SEK 2,349m (SEK 15bn) (SEK 1,193m) Average number of employees Cost per savings capital 478 0.17% (429) (0.19%) Operating margin Return on equity 67% 57% (44%) (27%) Figures in parentheses refer to previous year. Avanza 2020 3 The year in brief The year in brief by quarter 1 3 The goal of 1 million customers by 2020 Improvements to monthly savings in the apps was reached already in January New pages launched for certificates The range of low-fee index funds was The customer onboarding process was broadened with Avanza Europe updated with better guidance to make it The fund pages on the website were im- easier for new customers to start saving proved with a focus on sustainability and it also became possible to exclude industries Covid-19 spread and the majority of our employees began working from home The need for information from customers due to Covid-19’s impact on the stock market was addressed with more blog entries and podcasts than normal 2 4 “My sustainability label” was launched for Endowment insurance customers were given funds to facilitate sustainable savings the opportunity for extra return through stock Avanza 75 received a Lipper Fund Award for lending best fund in the category Mixed Asset SEK Avanza reduced its holding in Stabelo Aggressive for the second consecutive year Avanza launched the small-cap fund Avanza Avanza ranked highest among banks and Småbolag by Skoglund in collaboration with number six overall in Sweden in Kantar the successful fund manager Fredrik Sifo’s reputation index for 2020 Skoglund In a unique collaboration with TIN Fonder, Avanza won the Swedish Quality Index (SKI) Avanza launched its first actively managed award for Sweden’s most satisfied custom- fund, Avanza World Tech by TIN, with a focus ers in the savings category for an unprece- on technology, health and sustainability dented eleventh year in a row Avanza was named Bank of the Year by the business magazine Privata Affärer for the third year in a row Avanza Private Banking ranked fifth in a Prospera survey for the fourth year in a row, in competition with firms that offer both investment advice and portfolio management 4 Avanza 2020 CEO's statement CEO's statement A challenging year that resulted in record profit and growth like we have never seen before. With a 5.4 per cent share of the Swedish savings market, and nearly one of every five kronor of savings going to Avanza’s platform, growth potential remains very high. 2020 was a trying year … A sample of the year’s improvements The past year was certainly the most challenging we have expe- We also made great progress in terms of development during the rienced in modern times. The pandemic has affected every- year. For example, we launched three new funds, two of which thing and everyone, but when society is challenged we also see are actively managed: Avanza World Tech by TIN and Avanza heroes step up. This year the heroes are in healthcare, who have Småbolag by Skoglund. Our new actively managed funds are endured tremendous stress and been there for so many people. a sought-after complement to the large range we offer and should be seen as an exception to the rule rather than a totally new direction for Avanza. The third fund is Avanza Europe, a low- “ Activity among customers cost index fund. Our new funds have been very well received by customers. As of 31 December assets under management in at times during the Avanza’s own funds amounted to just over SEK 40 billion, and 27 per cent of the savings capital in funds is now invested in Avanza year was twice as high funds. We have also made progress in the sustainability area. Among other things, we introduced a sustainability lable to help as previous peaks” customers, based on their personal preferences, choose funds that suit them. The fund pages have been improved, as have Avanza has also been affected by the pandemic. Since the the stock pages, and at the end of the year we launched stock beginning of March, the majority of our employees have worked lending for endowment insurance customers to offer them the from home. We have still kept to our agenda in respect of devel- potential of an additional return. One of the great things about opment and improvement. In March, we faced some chal- working at Avanza is that my colleagues are never satisfied. lenges with the stability of the website during peak times, but It does not matter what they have done and how appreciated you have to keep in mind that activity at some points during the something is among our customers, the attitude is always that year was almost twice as high as previous peaks. We also had everything can be even better. a great deal of pressure on customer service and Private Bank- ing with customers who needed support in the volatile market. Through quick decision-making and dedicated employees, we were able to handle this by moving forward a number of invest- “ We will never be satisfied. ments in additional capacity, as we announced in March. We also increased the number of podcasts and blog entries and There is always some had more guests than normal to support customers. We saw a major increase in listeners and readers during the year, which thing that can be better” shows that customers want to constantly learn. Number of daily active users on the website and in our apps amounted to almost Continued strong growth potential as the 400,000 in 2020, which is 180 per cent more than in 2019. Many importance of personal savings grows say that 2020 has sped up digitisation by three to five years, and If we look at our targets for 2020, we also performed well, and I have to agree. are well on our way to those we set for 2025. When we set these targets, they fell challenging, but the year’s strong growth … but it was still a record year for Avanza has provided a jumpstart and may give us reason to reassess Despite the difficult times, Avanza in many ways still had a fan- whether we should raise our ambitions even further. While it tastic year. We passed our target of 1 million customers as early is difficult to draw any far-reaching conclusions from the pan- as January and finished the year with 303,900 new customers. demic year 2020, the underlying structural reasons for Avanza’s This also added 60 per cent more stock-trading customers and strong growth are still there. The importance of personal sav- a net inflow for 2020 of just over SEK 76 billion. This is more than ings has been laid bare during the year. More and more people double the net inflow as well as new customers as the previous are becoming aware of the deterioration of the public welfare record year of 2019. Thank you to all our fantastic customers for systems, such as collective pensions and unemployment insur- the confidence you have shown in us! ance. This, together with the need for a significant cash down payment to buy a home, is a big reason why individuals are tak- ing greater responsibility for their personal finances.