Avanza shares climb as Q2 earnings top estimates on trading, inflow strength

Avanza shares climb as Q2 earnings top estimates on trading, inflow strength

US concludes third round of strikes against Iran after Trump reinstates blockade Investing.com -- Shares of Avanza Bank Holding AB (ST:AVANZ) rose more than 3% on Tuesday after the Swedish online lender reported second-quarter results that topped market expectations, helped by stronger net interest income, trading activity and record customer inflows. The stock climbed as much as 3.1% to SEK 390.4, its highest level in about a week, sharply outperforming Stockholm’s benchmark OMX Stockholm 30 index, which fell about 1% in afternoon trade. Jefferies said first-half operating income and operating profit both came in around 2% ahead of consensus, aided by stronger net interest income as well as transaction- and currency-related income.

The results come as Sweden’s retail banking sector adjusts to a prolonged pause in monetary easing. The Riksbank kept its policy rate unchanged for a sixth straight meeting in June while signalling inflation remained subdued despite growing risks from Middle East-related supply disruptions, creating a supportive backdrop for savings and investment activity. Avanza said it is seeing early signs of the Swedish economy regaining momentum, with stronger fund flows and increased investor risk appetite.

"We deliver yet another record quarter... Despite ongoing and significant geopolitical uncertainty, risk appetite has strengthened considerably," Chief Executive Gustaf Unger said, adding that the bank was "well positioned as sentiment improves." Avanza reported second-quarter operating profit of SEK 928 million, up from SEK 709 million a year earlier, while net profit rose to SEK 795 million from SEK 600 million.

Operating income rose to SEK1.33 billion from SEK1.06 billion a year earlier, driven by higher net interest income, brokerage income, fund commissions and currency-related income. Operating expenses increased to SEK406 million from SEK353 million, mainly reflecting higher personnel costs and investments linked to the bank’s planned expansion into Denmark. Net credit losses amounted to SEK1 million during the quarter, while the bank reiterated that it has recorded no realised credit losses attributable to events after 2011.