July – September 2016
Operating income decreased by 0.3 percent to SEK 289.6 million (290.4)
Profit after tax for the period fell by 9 percent to SEK 69.2 million (75.7)
Earnings per share before and after dilution were down 8 percent to SEK 0.40 (0.43)
January – September 2016
Operating income decreased by 4 percent to SEK 882.0 million (915.7)
Profit after tax for the period fell by 22 percent to SEK 209.6 million (269.6)
Earnings per share before and after dilution decreased 22 percent to SEK 1.20 (SEK 1.55 before dilution and SEK 1.54 after dilution)
Highlights from the third quarter
A strong influx of customers with 22,400 new customers during the quarter and growth of the customer base by 15 percent in one year
Continued success for loan products with the amount lent growing by 11 percent in the third quarter
The social investment network Shareville surpassed 100,000 members, an increase of more than 70 percent in 12 months
Håkan comments on the third quarter
The third quarter began right after the news about Brexit, and the savers had a tough start to the period with challenging conditions. The stock markets soon regained confidence, and the quarter as a whole was a positive period in the Nordic stock markets with increases of 9 percent in Sweden and Finland. In Denmark, the savings climate was somewhat less optimistic, and the market was encumbered by a price collapse of the market giant Novo Nordisk.
From Nordnet’s perspective, what I am most pleased by this quarter is that so many Nordic residents choose our bank when beginning to save. In the past 12 months, our customer base has grown by 15 percent, which is a historic high. I think this growth is a result of our constantly improved customer offering, and of course external factors like a positive stock market and continued low interest rates. A number of high-profile Nordic IPO’s has also recently attracted extensive interest among the savers.
The financial development for Nordnet across the quarters is stable, on both the revenue and expense side. Compared with the same period last year, we have somewhat lower revenues, mainly related to lower market interest rates and lower commissions per trade. Our expenses amount to just over SEK 205 million, which is on a par with what we previously communicated. Our earlier forecast of a cost increase from 2015 by 6-8 percent remains for the full year, which means a retained cost level for the fourth quarter. Continuous investments in IT, product development, compliance and sales mean that the cost increase for 2017 will not be less than the increase during 2016.
In August, Nordnet turned 20. We have developed from a Swedish online broker to a Nordic bank with a broad offering in savings, pensions and loans. In recent years, we launched a number of financial innovations for the Nordic savers. Our free index super funds now have SEK 2.5 billion in savings capital and our social investment network Shareville surpassed 100,000 members during the quarter. Our mortgage have had a flying start since May, with SEK 600 million in capital loaned. We have made good progress, but will never stand still. Much of our focus in product development is now on an updated website. The coding is in full swing and new prototypes are constantly being tested on small groups of customers and other users. In the fourth quarter, we will launch a beta version where part of our new site will be presented to a broader group of users, and it will be very exciting to hear your response. But IT development is not just about prospective activities and exciting new services. Like other banks, we are constantly making major investments to adapt our operations to new regulations. The intention of the legislators is good – it is a matter of greater customer protection at a European level. At the same time that the number of new rules is claiming a great deal of resources, future regulations, such as Mifid2 and PSD2, open up fantastic business opportunities for us as an independent distributor of financial services. It is a matter of working intelligently, challenging business models and old truths, and translating the new regulations into something positive for both us and the savers.
We are also continuously looking at ways to digitize processes to benefit both us and our customers. In the past quarter, we began a collaboration with Kivra, which means that our customers in the Swedish market will receive post from us in digital postboxes. Since July, our Swedish users can deposit money using Trustly, which combined with a mobile bank ID allows you as a new customer to get started with savings in two minutes.
Thank you for following Nordnet. If you have any comments or questions about our business that you would like to share, you can find me on Twitter.
Håkan Nyberg
@CEONordnet
PS. In August, we launched our new business site, www.nordnetbankab.wpengine.com. Here, there is information for those who are shareholders, journalists, interested in working with us or just generally interested in Nordnet as a company.
Presentation to analysts, shareholders and the media
CEO Håkan Nyberg and CFO Jacob Kaplan will be presenting the report and answering any questions on Tuesday 25 October 2016 at 10.00 a.m. CET via 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 2030 089 819 (UK).
Follow the presentation on https://wonderland.videosync.fi/2016-10-25-nordnet-q3-report