Nordnet interim report January–March 2016

January-March 2016

  • Operating income decreased by 9 percent to SEK 301.5 million (329.8)
  • Profit after tax for the period fell by 34 percent to SEK 72.0 million (108.5)
  • Earnings per share before and after dilution were down 33 percent to SEK 0.41 (0.62)

Highlights

  • Large fluctuations in the market and high trading activity
  • Steady growth of the personal loan business
  • Launch of the mobile app for the Shareville service

The first quarter according to CEO Håkan

The 2016 trading year had a tough start and all Nordic exchanges declined in the first quarter. The beginning of the period was particularly turbulent and at most, the Nordic markets were down 15-20 percent, making it the worst beginning to a year since the 2008 financial crisis. Low oil prices, falling stock prices in China and negative key interest rates are events that influenced the stock market in the first quarter.

The high level of activity that concluded last year continued in the first three months of this year even if some slowing occurred in March. In total, this many trades have never before passed through Nordnet’s system in a single quarter. This is due to a number of causes. Firstly, more and more private individuals are choosing Nordnet as their savings partner. During the quarter, we surpassed half a million customers in the four countries in which we are active, and our customer base has increased by 13 percent in the past 12 months. Secondly, low interest rates mean that money continues to be invested in the stock market. However, the tensions on the stock market have led to a larger share of our transactions being made by the more active customers. The challenging market climate has simply attracted event-driven traders more than long-term private savers.

Lending is becoming an increasingly prioritized area for Nordnet. In one year, our total loan volume increased by 20 percent, including both margin lending and personal loans. Our latest new product is mortgage with Sweden’s lowest interest rate, which was launched just after the end of the quarter. The loan targets private banking customers and is offered at several different interest rates. The customers who have savings of SEK 5 million with Nordnet can borrow for their home at an interest rate as low as 0.79 percent. The mortgage complements our already strong offering in lending, and Nordnet can now offer Sweden’s most competitive family of loan products.

Although both lending and the number of trades increased compared with the same period last year, our revenues for both commissions and net interest income decreased by 8-9 percent. The lower net commission income may be due in part to the effect of the changed price model introduced in 2015 in the Swedish market now having had a greater impact, and in part to the customers that made the most trades during the quarter trading at a lower price. The lower net interest income is attributable to the falling market rates, which had an effect in the form of lower interest rates to customers and lower return on our deposit surplus.

On the cost side, we are sticking to the plan we previously announced, and are continuing to invest in IT, product development and skills development. We want to create a company that is suited to the high rate of change in our surroundings. A short distance between idea and finished product and rapid response to consumers’ changing preferences or competitors’ initiatives are essential to success in the digital financial world.

But we do not need to do everything on our own. Nordnet Ventures is one of our new initiatives where we will make investments in the fintech area. The ambition is to contribute capital, knowledge and customers to relatively newly established Nordic companies with innovative savings products that can strengthen our offering. Shareville is an example of an earlier successful investment we made in this area. The service was launched one and a half years ago and is today the Nordic region’s largest social investment network with more than 80,000 users. During the quarter, we launched a mobile app for Shareville that has been very much in demand.

Thank you for following Nordnet. If you have any comments or questions that you would like to share, you can find me on Twitter.

Håkan Nyberg
@CEONordnet

Presentation to analysts, shareholders and the media

CEO Håkan Nyberg and CFO Jacob Kaplan will be presenting the report and answering any questions on 21 April 2016 at 10:00 a.m. CET at a telephone conference. The presentation will be made in English and can also be followed online.

Telephone number for participation by telephone: +46 8 5664 2662 (Sweden) or +44 20 3008 9819 (UK).

Follow the presentation at http://financialhearings.nu/?160421/nordnet/

For further information, please contact:

CEO Håkan Nyberg, + 46 703 97 09 04, hakan.nyberg@nordnet.se

CFO Jacob Kaplan, +46 708 62 33 94, jacob.kaplan@nordnet.se

The information in this report is that which Nordnet AB (publ) is required to publish in accordance with the Swedish Financial Instruments Trading Act and/or the Swedish Securities Act. This information has been submitted to the market for publication on 21 April 2016 at 08:30 (CET).

Nordnet is a bank for investments and savings with business in Sweden, Denmark, Finland and Norway. The idea behind Nordnet is to give customers control of their money, and the goal is to become the no. 1 choice for investments and savings in the Nordics. Nordnet AB (publ) is listed in Nasdaq Stockholm. Visit us at www.nordnetab.com, www.nordnet.se, www.nordnet.no, www.nordnet.dk or www.nordnet.fi.