ANNUAL REPORT

2022

2 • Annual Report 2022 • TF Bank AB (publ)2 • Annual Report 2022 • TF Bank AB (publ)

ANNUAL REPORT FOR THE FINANCIAL YEAR 2022

The Board of Directors and the CEO hereby submit the

Annual report for TF Bank AB (publ), corporate identity

number 556158-1041.

TABLE OF CONTENTS

TF Bank in brief 3

Year in brief 4

Ceo’s comments 5

TF Bank as an investment 7

The share 9

Geographical presence 10

Loan portfolio performance 11

Directors’ report 12

Financial information 25

Notes 30

Five-year overview 71

Definitions 72

Reconciliation tables 73

Regulatory key metrics 74

Assurance by the Board of Directors

and the CEO 75

Auditor’s Report 76

Corporate Governance Report 81

Sustainability Report 93

Board of Directors 107

Executive Management 108

Auditor 108

Unless otherwise stated, all amounts are shown in thousands

ofSwedishkronor.Thefiguresinbracketsareforthe

previous year.

TF Bank AB (publ) • Annual Report 2022 • 3

TF Bank is an internet-based niche bank offering

consumer banking services and e-commerce

solutions through a proprietary IT platform with a

high degree of automation. The platform is designed

for scalability and adaptability to different products,

countries, currencies and digital banking solutions.

TF Bank prioritises organic growth under controlled

forms and expansion is taking place in carefully

selected segments and markets. The business is

conducted in Sweden, Finland, Norway, Denmark,

Estonia, Latvia, Lithuania, Poland, Germany, Austria

and Spain through branch or cross-border banking

with the support of the Swedish banking license.

The business is divided into three segments:

Consumer Lending with focus on unsecured con-

sumer loans, Credit Cards with focus on offering

credit cards and Ecommerce Solutions with digital

payment solutions primarily to online retailers. The

target group for all services is creditworthy individuals

and the loan amounts are relatively small with short

repayment terms. TF Bank also offers deposit prod-

ucts in several markets.

TF BANK IN BRIEF

FINANCIAL CALENDAR

Interim report January-March 2023 17 April 2023

Annual General Meeting 2023 3 May 2023

Interim report January-June 2023 13 July 2023

Interim report January-September 2023 18 October 2023

For further information, see www.tfbankgroup.com

or contact Investor Relations at ir@tfbank.se.

The Annual General Meeting 2023 will be held on Wednesday

3 May 2023. Notice of the Annual General Meeting will be pub-

lished no later than Wednesday 5 April 2023.

KEY FIGURES

SEK million 2022 2021

Operating income 1,413 1,055

Operating profit 434 353

Earnings per share, SEK 15.18 12.55

Loans to the public 14,654 10,872

New lending 16,318 11,187

Cost/Income ratio, % 43.3 41.9

Return on equity, % 23.6 24.4

Total capital ratio, % 15.6 16.2

Employees (FTE) 290 236

See separate section with definitions and reconciliation tables, page 72-73.

4 • Annual Report 2022 • TF Bank AB (publ)

FINANCIAL PERFORMANCE 2022

• The loan portfolio amounted to SEK 14,654 million,

compared to December 2021 the increase in local

currencies was 27 %

• Operating profit increased by 23 % to SEK 434.0

million

• Earnings per share increased by 21 % to SEK 15.18

• Cost/income ratio amounted to 43.3 % (41.9)

• Return on equity amounted to 23.6 % (24.4)

• Total capital ratio has decreased to 15.6 % (16.2)

SIGNIFICANT EVENTS 2022

• During the year, the credit card business had a loan

book growth of 93 % and economies of scale in the

business model contributed to the operating profit

improving by SEK 51 million.

• Within the Ecommerce Solutions segment, the

Bank has launched cooperations with the major

Nordic retailers Jollyroom and Haypp Group, which

are collectively expected to generate an annual

transaction volume of approximately SEK 3 billion.

”

Credit Cards is by far our fastest growing segment and

the loan portfolio increased by 79 % in local currencies

during 2022. We have seen a positive trend in the

segments profitability during the year.

ADJUSTED RETURN ON EQUITY (%)

TOTAL CAPITAL RATIO (%)

ADJUSTED OPERATING PROFIT

(SEK million)

LOANS TO THE PUBLIC (SEK million)

Adjusted for items affecting comparability in 2018 that comprises reclassification of customer balances with inactive status that arose before 2018.

See separate section with definitions and reconciliation tables, page 72-73.

YEAR IN BRIEF

2018 2019 2020 2021 2022

4,000

8,000

12,000

16,000

2018 2019 2020 2021 2022

125

250

375

500

2018 2019 2020 2021 2022

TF Bank AB (publ) • Annual Report 2022 • 5

Diversified loan portfolio within Consumer Lending

Our largest segment, Consumer Lending, has been

affected by the changing macroeconomic environ-

ment. This primarily applies to our Baltic business,

which had higher credit losses during the fourth

quarter. However, the credit quality of the Nordic loan

portfolio, which makes up 73 % of the segment, has

been favourable throughout the year. We also estab-

lished business in Denmark and Spain during 2022,

which means that the segment now is operational in

ten countries.

During 2023, we plan for continued growth in a

selected number of countries within the segment.

Due to our flat organisational structure, the company

management has the opportunity to influence where

capital should be allocated. Nonetheless, the seg-

ment’s credit loss level will most likely continue to

increase in 2023 due to households’ payment capacity

being negatively affected by high inflation. At the

same time, rising lending rates also mean that we

expect an improved revenue margin going forward.

Summary of the year 2022

The year 2022 has largely come to be marked by

Russia’s invasion of Ukraine, which was initiated in

February. The war has primarily led to great human

suffering for the population of Ukraine, but the rest

of Europe has also been affected in different ways.

During the summer there was great concern about

the coming winter’s energy scarcity and skyrocketing

gas prices in Europe contributed to increasing an

already high inflation rate. When summarising the

year, we can determine that the scenario of a full-

scale energy crisis in Europe has not yet been realised.

With joint efforts, states and citizens have dealt with

the challenges.

For TF Bank, 2022 has been characterised by

continued growth with high profitability. The loan

portfolio increased by 27 % in local currencies and

the operating profit amounted to SEK 434 million –

an increase of 23 % compared to 2021. During the

second half of the year, profitability was slightly

affected by higher financing costs that have not yet

been fully passed on to lending customers, and in

the fourth quarter we also had slightly higher credit

losses. Overall, we still delivered a strong result with

a return on equity that amounted to 24 %.

Changed macroeconomic environment

The macroeconomic environment has changed in

2022. At the beginning of the year, central banks in

Europe stimulated the economy with extremely low

interest rates and quantitative easing. In line with the

increasing inflation, the monetary policy has been

tightened with radical interest rate increases and

quantitative easing tapering. However, the purchasing

power of wage earners and the real value of deposits

have already weakened due to the high rate of inflation.

The transition from a long period of extremely low

interest rates is likely to be painful for many house-

holds and businesses. However, the economy changes

in cycles and the current macroeconomic environment

will eventually improve. A lower inflation rate is already

in the cards as energy prices have decreased sharply

from peak levels. As inflation dynamics change, opti-

mism may return and negative media headlines may

be replaced by more positive tones.

CEO’S COMMENTS

6 • Annual Report 2022 • TF Bank AB (publ)

Growth and improved profitability for Credit Cards

Credit Cards is by far our fastest growing segment

and the loan portfolio increased by 79 % in local

currencies during 2022. We have seen a positive

trend in the segments profitability during the year

and the operating profit for the fourth quarter was

SEK 22 million. Higher income from the growing loan

portfolio in Germany and a lower C/I ratio have contrib-

uted to the improved profit in 2022.

We plan for continued profitable growth in the Credit

Cards segment during 2023. In Germany, we had

approx. 116,000 active credit cards at the end of the

year and we continue to see great opportunities in

the German market. At the same time, economies

of scale in the business are expected to result in the

segment’s C/I ratio decreasing further going forward.

The credit quality is developing according to our

expectations and overall we assess that the segment

has favourable conditions to deliver an attractive

risk-adjusted return in the coming years.

Ecommerce Solutions takes market shares in the

Nordics

TF Bank’s digital payment solutions within the

Ecommerce Solutions segment continue to gain

market share. The loan portfolio increased by 24 % in

local currencies while transaction volumes

increased by 40 %. At the same time, statistics from

Swedish Trade Federation show that turnover in

e-commerce decreased by 9 % in Sweden during

2022. Our brand Avarda thus continues to strengthen

its position in the Nordic e-commerce market.

In 2022, new cooperations were launched with,

among others, Haypp Group and Jollyroom, which

are expected to contribute to the segment’s growth

in 2023. The fourth quarter’s record volumes are

also expected to generate increasing income going

forward. At the same time, there are challenges with

passing on rapidly increasing financing costs to lend-

ing customers, especially in the Polish business.

Sustainability and social responsibility

Finally, a few words about sustainability and social

responsibility. In a well-functioning social economy,

access to a loan is a fundamental prerequisite for

citizens to be able to balance cash flows over a life-

time. However, for the economic system to be sus-

tainable over time, the real value of deposits needs

to be stable, which affects the cost of loans. The

central banks’ bitter medicine of sharply increased

interest rates, which are expected to dampen the

rate of inflation, is therefore necessary for long-term

sustainable economic development.

TF Bank primarily contributes to the economy by

transferring money from deposit customers to loans.

Through responsible lending, we provide our

customers with the opportunity to access products

and services they are in need of. In 2022, we have

also signed the UN’s Global Compact and thus

officially stand behind their ten principles for human

rights, labour, the environment and anti-corruption.

Among our other sustainability and social responsi-

bility activities, it is worth mentioning that we finance

the education of 47 school students in Kenya. Our

sustainability report contains more information about

this activity. It is my and the Bank’s conviction that

with a joint effort we can overcome future challenges

in sustainability and social responsibility.

Mattias Carlsson

CEO

TF Bank AB (publ) • Annual Report 2022 • 7

Stable business model with 35 years of high yields

TF Bank started offering consumer loans and retail

finance already in 1987 and during its 35 years of

operations in the consumer credit sector it has always

been profitable – even during major crises.

TF Bank operates in three complementary segments:

Consumer Lending, Credit Cards and Ecommerce

Solutions, all of which benefit from the Bank’s IT platform

and models for credit scoring.

The yield is driven by high growth and cost efficiency.

High yields facilitate significant reinvestment in the

business and attractive risk-adjusted returns for share-

holders.

Responsible organic growth with a diversified

portfolio

TF Bank prioritises organic growth under controlled

conditions. A combination of well-developed lending

processes and relatively small loan amounts enable

us to take calculated risks that can quickly be adjusted

to changing conditions at macro level. TF Bank’s

expansion is taking place within carefully selected

segments and markets. Our lending activities have

successfully expanded from the operations in Sweden

to new markets in Europe.

Diversification also characterises TF Bank’s deposit

products. Deposit-taking in multiple markets offers

alternatives to finance growth in lending, facilitates

geographic diversification to reduce risks and reduces

financing costs.

Controlled cost basis results in high efficiency

Efficiency and cost control have been TF Bank’s

mantra from start. To be able to take the step from

decision to action without high costs and long lead

times is one of the business’ biggest strengths. The

high degree of automation in the company’s IT plat-

form is designed for scalability and adaptability to

different products, countries, currencies and digital

banking solutions. Thanks to our flat organisational

structure, the scalable IT platform and cost control

throughout the business, we are able to achieve a

high level of efficiency.

Credit cards and e-commerce offers new

opportunities for growth

In the Credit Cards segment, TF Bank offers credit

cards to creditworthy individuals in Germany, Norway

and Austria. The number of issued cards has increased

significantly over the past years and the utilisation rate

has improved which is important for future growth.

In the Ecommerce Solutions segment, TF Bank

offers digital payment solutions primarily with-

in e-commerce to creditworthy individuals in the

Nordics, the Baltics and Poland. During the past

year, the products have experienced a commercial

breakthrough with many new retailers and increased

transaction volumes.

TF Bank’s credit card and ecommerce products

collectively constitute new growth opportunities in line

with the focus on organic growth. The Bank will con-

tinue to invest in the segments in the coming year.

TF BANK AS AN INVESTMENT

HIGH YIELD

ESTABLISHED

LENDING

PROCESS

SCALABLE

IT-PLATTFORM

DIVERSIFIED

PORTFOLIO

COST CONTROL

RESPONSIBLE

GROWTH

LONG AND

STABLE HISTORY

8 • Annual Report 2022 • TF Bank AB (publ)

We have found a business model that

works well for our type of business, and

we are well on our way to achieving our

financial targets.

John Brehmer has been a Board member of TF Bank

since 2010 and Chairman of the Board since 2020.

He has been involved in establishing what is now

TF Bank. John came in contact with TF Bank when

Consortio Invest, which he founded in collaboration

with a number of other investors, acquired the Haléns

Group in 2007. The intention was to transform a tradi-

tional mail-order business into a modern online retailer.

The embryo of what is now TF Bank was Haléns

Finans, which was part of the Haléns Group at the

time. After the acquisition, a journey began to take the

Bank to where it is today.

- There is often talk about the advantages of mana-

gement owning shares in the company they run, and

I personally think that is a very good principle.

All members of the Senior Management team and

the majority of the Board members are shareholders

in TF Bank. Hence, there is a strong incentive for both

the Senior Management team and the Board to lead

the company in a growth-oriented, but responsible

manner.

- I see no difference in my own ownership in the Bank

compared to any other shareholder. We are all in the

same boat and it is the responsibility of the Board and

Management to deliver the best risk-adjusted return

possible for all shareholders. Therefore, I believe

that TF Bank can be considered a good example of

a company that benefits from its senior executives

investing in the company.

- Making decisions based on our own business

principles and not be governed by the actions of our

competitors has been one of the cornerstones of

TF Bank’s business model since its establishment.

Our focus has never been on achieving a certain

market share, instead we have always directed our

operations to where we can get the best return on

the capital we allocate at any given point in time.

TF BANK AS AN INVESTMENT

TF Bank is characterised, among other things, by

a diversified geographical presence. It is a clear

advantage to be able to quickly adapt our opera-

tions to changing conditions at macro level. In turbu-

lent times, with both a pandemic and a war in the

geographic vicinity, the Bank therefore has greater

opportunity to reallocate resources to markets where

the risk-adjusted return is deemed to be best.

- TF Bank’s business is built on a combination of a

well-functioning business model, a growing market

demand for our services, as well as a strong and

clear customer focus and thus I see an incredibly

exciting future ahead for the Bank. These factors will

enable us to make more and more deals and to gain

renewed trust from existing customers.

TF Bank AB (publ) • Annual Report 2022 • 9

The share

TF Bank was listed at Nasdaq Stockholm in the Mid

Cap segment on 14 June 2016. The opening price

was SEK 77.00. On the last trading day of 2022, the

closing price of the share was SEK 176.60. Since the

listing TF Bank has paid out a total of SEK 8.75 per

share in dividend to shareholders. The market capi-

talisation at the end of the year was SEK 3,797 million.

Turnover and volume

The share trades under the ticker name TFBANK

and the ISIN code is SE0007331608. At the end of

December 2022, the share closed at SEK 176.60, an

decrease of 23 % during the year. In total, 3.3 million

shares worth approximately SEK 587 million were

traded on Nasdaq Stockholm during 2022.

Share capital and number of shares

TF Bank’s share capital is SEK 107,500,000. The

Company has 21,500,000 ordinary shares. According to

the Articles of Association, the share capital must not

be less than SEK 107,500,000 and must not exceed

SEK 430,000,000. TF Bank has one class of share and

each share carries one vote at the Annual General

Meeting (AGM).

Dividend policy

TF Bank’s dividend policy is to distribute surplus capital

in relation to capital targets and the Bank’s capital

planning.

Institutions following TF Bank

ABG Sundal Collier, Carnegie and Nordea are following

the company. At the end of 2022, two institutions had

issued a buy recommendation for the TF Bank share

and one institution had issued a hold recommendation.

Ownership of TF Bank AB as at 31 December 2022

Shareholder %

TFB Holding AB 30.31

Tiberon AB 15.07

Erik Selin Fastigheter AB 12.55

Proventus Aktiebolag 5.16

Nordnet Pensionsförsäkring AB 4.34

Jack Weil 4.25

Merizole Holding LTD 2.47

Carnegie fonder 1.80

Skandia fonder 1.31

Avanza pension 1.26

Other shareholders 21.48

Total 100.00

Source: Euroclear

(for more information see page 82 Corporate governance report)

THE SHARE

3,727

Number of shareholders

31 December 2022

23.6 %

Return on

equity

SEK 243,00

Highest closing price

during 2022

20,000

40,000

60,000

80,000

100,000

120,000

140,000

100

120

140

160

180

200

220

240

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Number of shares

SEK

10 • Annual Report 2022 • TF Bank AB (publ)

GEOGRAPHICAL PRESENCE

The Nordics

The Nordic business accounts for 60 % of TF Bank’s

total loan portfolio. At the end of the year, the Bank’s

largest exposures in the Nordics were towards

Norway at 29 % and Finland at 22 %.

During the year, lending operations have been esta-

blished in Denmark within the Consumer Lending

segment. The loan portfolio in Denmark amounted to

46 million DKK at the end of the year.

Within the Ecommerce Solutions segment, the Bank

launched cooperations with the major Nordic retailers

Jollyroom and Haypp Group, which are collectively

expected to generate an annual transaction volume

of approximately SEK 3 billion.

The Baltics and Poland

The Baltic and Polish businesses account for 21 % of

TF Bank’s total loan portfolio. The Baltic countries

have fast-growing credit markets with several

established Nordic companies operating locally.

Lending operations in Latvia and Lithuania have

been established within the Ecommerce Solutions

segment after an agreement was made with one of

the countries’ largest online retailers, Pigu Hobby

Hall Group.

In Poland, the Bank’s new lending within the

Consumer Lending segment ceased during the

fourth quarter of 2020.

West and central Europe

TF Bank has strengthened its position on the German

market through deposit and credit card products. The

German credit card business accounts for 18 % of the

Bank’s total loan portfolio, and the German deposit

products account for 79 % of the Bank’s total deposit

from the public.

Lending operations have been established in Austria

within the Credit Cards segment with a similar offer

as in the German market.

Lending operations have also been established in

Spain within the Consumer Lending segment. The

loan portfolio in Spain amounted to 3.6 million EUR

at the end of the year.

TF Bank AB (publ) • Annual Report 2022 • 11

LOAN PORTFOLIO PERFORMANCE IN

2020-2022 (SEK MILLION)

TF Bank AB (publ) • Annual Report 2022 • 11

7,922

8,643

9,130

9,970

10,872

11,518

12,570

13,598

14,654

7,000

8,000

9,000

10,000

11,000

12,000

13,000

14,000

15,000

16,000

Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022

12 • Annual Report 2022 • TF Bank AB (publ)

TF Bank AB (publ), corporate identity number 556158-

1041, is a bank domiciled in Borås, Sweden. The com-

pany has a license to provide banking services.

About the business

TF Bank was founded 1987 and is an internet-based

niche bank offering consumer banking services and

e-commerce solutions through a proprietary IT plat-

form with a high degree of automation. Deposit and

lending activities are conducted in Sweden, Finland,

Norway, Denmark, Estonia, Latvia, Lithuania, Poland,

Germany, Austria and Spain through branch or

cross-border banking with the support of the Swedish

banking license. The operations are divided into three

segments: Consumer Lending, Credit Cards and

Ecommerce Solutions. TF Bank is listed at Nasdaq

Stockholm.

In the Consumer Lending segment, TF Bank offers

unsecured consumer loans to creditworthy individu-

als, the product offering can differ between the vari-

ous markets and is adjusted according to the spe-

cific conditions in each country. In the Credit Cards

segment TF Bank offers credit cards to creditworthy

individuals. In the Ecommerce Solutions segment

TF Bank offers digital payment solutions, primarily to

online retailers. Customers are mainly the end-

consumers who use the Bank’s payment solutions.

Significant events during the year

New agreements for continuing the sale of past due

receivables have been signed in several markets

within all segments.

Lending operations in Austria have been established

in the Credit Cards segment with a similar offer as

the German market.

At the Annual General Meeting 3 May, it was resolved

to pay a dividend of SEK 1.00 per share. John Brehmer

was re-elected as Chairman of the Board while Fredrik

Oweson and Niklas Johansson were newly elected

members of the Board. Bertil Larsson and Charlotta

Björnberg-Paul had declined re-election. The other

members of the Board were re-elected at the

Meeting.

In June, TF Bank began a cooperation with Haypp

Group in the Norwegian market through the brand

Avarda, which is expected to generate close to

NOK 1 billion in yearly transaction volumes.

Lending operations in Latvia and Lithuania have

been established in the Ecommerce Solutions seg-

ment, this after an agreement was reached with one

of the countries’ largest online retailers Pigu Hobby

Hall Group.

Lending operations in Denmark and Spain have been

established in the Consumer Lending segment and a

service subsidiary has been established in Spain.

TF Bank’s Swedish subsidiary TFB Service AB has

been granted a licence to operate as a deposit

taking financial institution by the Swedish Financial

Supervisory Authority. The intention is to transfer

the Nordic operations of Ecommerce Solutions to a

separate entity.

During the year, the credit card business had a loan

book growth of 93 % and economies of scale in the

business model contributed to the operating profit

improving by SEK 51 million.

Within the Ecommerce Solutions segment, the Bank

signed an agreement and, at the end of December,

launched a cooperation with the major Nordic retailer

Jollyroom, which is expected to generate an annual

transaction volume of roughly SEK 2 billion.

Significant events after the end of the financial

year

The Board has appointed Joakim Jansson as the new

CEO, starting no later than August 2023. The current

CEO Mattias Carlsson will remain with the company

as a Senior Business Advisor.

The Swedish Financial Supervisory Authority has

given TF Bank permission to use the Alternative

Standardised Approach to calculate the capital

requirement for operational risk. The change results

in the capital requirement for operational risk being

significantly closer to the business’ own perception of

its operational risks. The approval has strengthened

TF Bank’s capital situation as of 31 December 2022.

DIRECTORS’ REPORT

TF Bank AB (publ) • Annual Report 2022 • 13

Parent company Group

SEK thousand 2022 2021 2020 2019 2018

Income statement

Operating income 1,412,801 1,055,287 876,070 768,864 627,641

Operating expenses -611,229 -442,165 -340,755 -290,875 -247,536

Net loan losses -367,569 -260,564 -272,676 -188,634 -150,272

Operating profit 434,003 352,558 262,639 289,355 250,128

Profit for the year 340,805 277,206 202,719 221,926 191,826

Earnings per share, SEK 15.18 12.55 9.11 10.01 8.75

Balance sheet

Loans to the public 14,654,373 10,872,285 7,922,448 6,495,780 4,449,225

Deposits from the public 16,108,130 11,504,749 8,714,032 7,197,075 5,096,463

New lending 16,318,310 11,186,800 7,304,603 6,037,302 4,518,697

Key figures

Operating income margin, % 11.1 11.2 12.2 14.0 16.5

Net loan loss ratio, % 2.9 2.8 3.8 3.4 4.0

Cost/Income ratio, % 43.3 41.9 38.9 37.8 39.4

Return on equity, % 23.6 24.4 22.0 30.3 33.8

Return on loans to the public, % 2.6 2.9 2.7 3.9 4.9

Return on assets, % 2.1 2.3 2.1 3.0 3.6

CET1 capital ratio, %

12.3 12.3 12.8 12.7 13.0

Tier 1 capital ratio, %

13.9 14.3 14.2 14.3 15.2

Total capital ratio, %

15.6 16.2 17.4 17.4 17.4

Employees (FTE) 290 236 187 174 140

Adjusted key figures

Operating profit 434,003 352,558 262,639 289,355 250,128

Items affecting comparability

- - - - -20,295

Adjusted operating profit 434,003 352,558 262,639 289,355 229,833

Adjusted tax on profit for the year -93,198 -75,352 -59,920 -67,429 -53,837

Adjusted profit for the year 340,805 277,206 202,719 221,926 175,996

Adjusted earnings per share, SEK 15.18 12.55 9.11 10.01 8.01

Adjusted return on equity, % 23.6 24.4 22.0 30.3 31.0

Adjusted return on loans to the public, % 2.6 2.9 2.7 3.9 4.5

Adjusted return on assets, % 2.1 2.3 2.1 3.0 3.3

In order for the five-year overview to reflect a true and fair view, comparative figures for 2018-2019 relates to the Group with TF Bank AB as Parent Company. Compara-

tive figures 2018-2019 for the Parent Company is presented on page 71.

The figures for operational risk as of December 2022 are calculated according to the Alternative Standardised Approach. The figures as of December 2018 to 2021 are

calculated according to the Standardised Approach, for further information see Note 31.

Adjusted for items affecting comparability in 2018 that comprises reclassification of customer balances with inactive status that arose before 2018.

See separate section with definitions and reconciliation tables, page 72-73.

EXCHANGE RATES

SEK 2022 2021 2020 2019 2018

EUR Income statement (average) 10.63 10.14 10.49 10.59 10.25

EUR Balance sheet (end of reporting period) 11.13 10.23 10.04 10.43 10.28

NOK Income statement (average) 1.05 1.00 0.98 1.07 1.07

NOK Balance sheet (end of reporting period) 1.06 1.03 0.95 1.06 1.02

PLN Income statement (average) 2.27 2.22 2.36 2.46 2.41

PLN Balance sheet (end of reporting period) 2.37 2.23 2.22 2.44 2.39

FIVE-YEAR OVERVIEW

14 • Annual Report 2022 • TF Bank AB (publ)

Operating profit

Operating profit increased by 23 % to SEK 434,0 million

(352.6). Higher operating income from the growing loan

portfolio contributes to the increasing operating profit.

Earnings per share increased by 21 % to SEK 15,18

(12.55). Return on equity amounted to 23,6 % (24.4).

Operating income

TF Bank’s operating income has increased by 34 %

to SEK 1,413 million (1,055). The operating income

comprises 89 % net interest income and 11 % net fee

and commission income in the interim period. The

operating income margin has been stable compared

to 2021 and amounted to 11.1 % (11.2).

Interest income

Interest income increased by 37 % to SEK 1,473 million

(1,074). The increase is attributable to the growing loan

portfolio and geographically it was primarily Germany

that had higher interest income. The weakened SEK

has also had a positive impact on the interest income

compared to 2021.

Interest expense

TF Bank’s interest expenses increased by 75 % to

SEK 210.3 million (120.4). Growing deposit balances

in Germany is the main reason behind this increase.

Higher costs for the deposit guarantee and increasing

financing costs from the third quarter has also contri-

buted to the higher interest expenses.

Net fee and commission income

Net fee and commission income increased by 41 %

to SEK 149.5 million (106.2). The increase is mainly

attributable to higher fee and commission income

within the Ecommerce Solutions segment as well as

increasing insurance income within the Consumer

Lending segment. During the year, 44 % of TF Bank’s

fee and commission income derived from charges

and 56 % from insurance premiums and other income.

Operating expenses

TF Bank’s operating expenses increased by 38 % to SEK

611.2 million (442.2). The increase is mainly explained by

more employees and higher sales-related expenses as

a result of an increase in new lending. TF Bank’s C/I ratio

amounted to 43.3 % (41.9) and is negatively affected by

increasing direct marketing costs in the Credit Cards

segment.

Net loan losses

The loan losses increased by 41 % to SEK 367.6 million

(260.6). The growing loan portfolios in the Credit Cards

and Ecommerce Solutions segments contribute to an

increase in the net loan losses in absolute terms and

the loan loss ratio amounted to 2.9 % (2.8).

Tax expense

TF Bank’s tax expenses increased to SEK 93.2 million

(75.4). The increase in the tax expenses is related to a

higher operating profit.

OPERATING INCOME (SEK million) OPERATING PROFIT (SEK million)

RESULTS AND FINANCIAL POSITION

300

600

900

1,200

1,500

2021 2022

100

200

300

400

500

2021 2022

TF Bank AB (publ) • Annual Report 2022 • 15

Loans to the public

The loan portfolio amounted to SEK 14,654 million

(10,872), an increase in local currencies of 27 % com

pared to December 2021. Positive currency effects

impacted the loan portfolio growth by another 8 %.

New lending increased by 46 % to SEK 16,318 million

(11,187) compared to 2021. The increase is affected by

record volumes in all segments.

TF Bank’s loan portfolio is well-diversified with rela

tively small exposures in several different geographic

markets. At the end of the year, the exposure towards

the three largest countries was Norway at 29 %,

Finland at 22 % and Germany at 18 %. The main driver

of the past year’s loan book growth has been the

German credit card business.

Deposits from the public

Deposits from the public amounted to SEK 16,108

million (11,505), an increase in local currencies of 30 %

compared to December 2021. Positive currency effects

have affected the deposit balance by another 10 %.

At the end of the year, deposits were geographically

distributed between Germany at 79 %, Norway at 17 %,

Sweden at 2 % and Finland at 2 %.

Over the past year, the increased deposit balance is

attributable to Germany and mainly relates to savings

accounts with variable interest rate. During the second

half of the year, deposit interest rates with both variable

and fixed rates have been raised in Germany and

Norway. At the end of the year, accounts with a fixed

term comprises of 32 % of TF Bank’s total deposits.

Cash and cash equivalents

Cash and cash equivalents increased to SEK 3,526

million (2,366) during the year. The increase is pri

marily attributable to the cash flow from operating

activities, which amounted to SEK 1,048 million. Posi

tive currency effects have had an impact on cash and

cash equivalents by SEK 197 million (36).

At the end of 2022, the available liquidity reserve

amounted to 20 % (19)

of deposits from the public.

To optimise the risk-adjusted return on the liquidity

reserve, funds were moved from central banks and

placed in treasury bills eligible for refinancing during

the second half of the year.

Capital adequacy

At the end of the year, the CET1 capital ratio

amounted to 12.3 % (12.3)

, the tier 1 capital ratio

was 13.9 % (14,3)

, and the total capital ratio was

15.6 % (16.2)

. All capital ratios have been negatively

affected by the growth of the loan portfolio and by an

increased phase-in of loan loss provisions according

to the transitional rules for IFRS 9.

The Swedish Financial Supervisory Authority has

given TF Bank permission to use the Alternative

Standardised Approach to calculate the capital

requirement for operational risk. The change results

in the capital requirement for operational risk is

significantly closer to the business’ own perception

of its operational risks. The approval has strengthened

all TF Bank’s capital ratios with approximately

1 percentage point as of 31 December 2022.

TF Bank’s regulatory CET 1 capital requirement

amounted to 8.5 % by the end of the year, the tier 1

capital requirement to 10.2 % and the total capital

requirement to 12.6 %. Announced increases of counter

cyclical buffer requirements in several countries are

expected to increase the regulatory capital require

ment with 0.5 percentage points over the coming 12

months

LOANS TO THE PUBLIC (SEK million) TOTAL CAPITAL RATIO (%)

RESULTS AND FINANCIAL POSITION

Excluding restricted cash and cash equivalents that are not available the next day.

The figures for operational risk as of December 2022 are calculated according to the Alternative Standardised Approach. The figures as of December 2021 are calculated

according to the Standardised Approach, for further information see Note 31.

3,000

6,000

9,000

12,000

15,000

2021 2022

16 • Annual Report 2022 • TF Bank AB (publ)

In the Consumer Lending segment, TF Bank offers

unsecured consumer loans to creditworthy individu-

als. The product offering differs between the various

markets and is adjusted according to the specific

conditions in each country. As of 31 December 2022,

the average loan amount per customer was approxi-

mately SEK 69 thousand. During the year, operations

were established in Denmark and Spain.

The Nordic loan portfolio comprises 73 % of the

segment. The Nordic markets for consumer loans

are characterised by credit information that is easy

to access, a high share of credit intermediaries, and

a well-functioning system for collection of unpaid

debts.

The loan portfolio outside of the Nordics comprises

27 % of the segment, the majority of which is in the

Baltics. The Baltic countries have fast-growing credit

markets with several established Nordic companies

operating locally. In Poland, new lending was discon-

tinued during the fourth quarter of 2020.

TF Bank has been a safe and secure lender since

1987.

The cornerstone of our product is responsible len-

ding. We ensure a thorough credit assessment in

each individual case through our established credit

granting process. We offer our customers personal

service in their local language across all markets and

always try to design our product according to the

conditions in each respective market.

Despite cultural similarities between Denmark and

Sweden, there are local solutions, regulations, and

adaptations that we need to consider when introdu-

cing a new product on the market. A major difference

between the Nordic markets is the availability of data

used to build models for credit assessment and risk

management. During the year, we have established

lending operations in Denmark. In this market, we

have launched our product on a small scale in order

to be able to evaluate the market. When we have

expanded our knowledge of the market and built

a more reliable credit assessment process, we will

make a decision about a possible escalation of our

operations in the market.

Johan Flodén,

Country Manager for Consumer Lending

Sweden and Denmark

CONSUMER LENDING

TF Bank AB (publ) • Annual Report 2022 • 17

SHARE OF THE BANK’S LOANS TO THE PUBLIC

SHARE OF THE BANK’S OPERATING INCOME

The loan portfolio

The loan portfolio amounted to SEK 8,681 million

(7,114), an increase in local currencies of 15 % com-

pared to December 2021. Positive currency effects

have had an impact on the loan portfolio’s growth of

another 7 %. New lending has increased by 25 % to

SEK 5,913 million (4,721) compared to 2021.

The Nordic loan portfolio amounted to SEK 6,301

million (5,411), compared to December 2021 this is an

increase in local currencies of 11 %. The loan portfolio

in Norway has increased by 8 % to NOK 3,243 million

(2,998) over the past year. The growth in Norway is

characterised by stable margins and favourable credit

quality. The loan portfolio in Finland has increased

by 13 % to EUR 202 million (179). The Swedish loan

portfolio amounted to SEK 567 million (506) at the

end of the year and the new loan portfolio in Denmark

amounted to DKK 36 million (-).

The loan portfolio in the Baltics has increased by

31 % to EUR 202 million (154) over the past year. The

growth has mainly been generated in Lithuania. The

Polish loan portfolio decreased to PLN 37.3 million

(54.2). At the end of the year, the new loan portfolio in

Spain amounted to EUR 3.6 million (-).

CONSUMER LENDING

Results

The operating profit increased by 11 % to SEK 342.9

million (308.3). The loan portfolio has continued to

grow with good credit quality which has had a posi-

tive effect on operating profit.

The operating income increased by 16 % to SEK 746.5

million (645.0). The operating income margin has,

however, decreased to 9.5 % (10.0), which is partly

due to a certain time lag before rising financing costs

can be passed on to lending customers.

The operating expenses increased by 28 % to

SEK 245.3 million (192.1). The increase is, among other

things, attributable to volume-related costs and

expenses for the Bank’s central functions. The C/I

ratio increased to 32.9 % (29.8) during the year.

The loan losses increased by 9 % to SEK 158.2 million

(144.5). The loan portfolio has increased with good

credit quality during the year and the loan loss ratio

has decreased to 2.0 % (2.2).

For further information about the loan portfolio and

results of this segment, see Note 4 Segment reporting.

59 %

53 %

LOAN PORTFOLIO (SEK million)

2,500

5,000

7,500

10,000

2019 2020 2021 2022

18 • Annual Report 2022 • TF Bank AB (publ)

In the Credit Cards segment, TF Bank offers credit

cards to creditworthy individuals in Germany, Norway

and Austria. The business in Germany started in the

end of 2018. At the offices in Berlin and Szczecin,

employees are working with marketing and customer

service. Services like risk analysis, finance and IT

are provided by central functions within the Bank.

In September 2020, a proprietary smartphone app

was launched for German credit card customers and

since the first quarter of 2022, the credit card is com-

patible with both Google and Apple Pay. By the end

of the year, the number of active German credit cards

amounted to approximately 116,000.

The offering in Norway has been part of the Bank

since 2015. By the end of the year, the number of

active Norwegian credit cards amounted to approx-

imately 19,000. During 2022, the Norwegian credit

cards have been transferred from VISA to Mastercard,

which has contributed to a streamlining of TF Bank’s

credit card business. During the first quarter of 2022

credit cards in Austria was launched with a similar

offer as in Germany. By the end of the year, the

number of active credit cards In Austria amounted to

approximately 6,000.

CREDIT CARDS

Maximum

SEK 150,000

in credit limit

No fees

Up to 30 %

discount via

loyalty program

TF Bank AB (publ) • Annual Report 2022 • 19

The loan portfolio

The loan portfolio amounted to SEK 3,264 million

(1,688), an increase in local currencies of 79 % com-

pared to December 2021. Positive currency effects

impacted the loan portfolio growth by another 14 %.

The new lending has increased by 117 % to SEK 5,306

million (2,447). The increase is mainly related to the

operations in Germany.

The loan portfolio in Germany has increased by 72 %

to EUR 240 million (139) over the past year. The growth

is primarily attributable to an increased number of

issued credit cards. Increased direct marketing in

digital channels and a modified credit strategy have

had a positive effect on growth during the year.

The loan portfolio in Norway has increased by 81 % to

NOK 470 million (259) over the past year. The volumes

have increased significantly due to a changed credit

strategy which has resulted in a significant increase in

the utilisation rate on the credit cards. The loan portfo-

lio in Austria amounted to EUR 9.1 million (-) at the end

of the year.

SHARE OF THE BANK’S LOANS TO THE PUBLIC

SHARE OF THE BANK’S OPERATING INCOME

CREDIT CARDS

Results

The operating profit amounted to SEK 38.9 million

(-12.0). Higher income from the growing loan portfo-

lio in Germany and a lower C/I ratio contributed to

the improvement.

The operating income increased by 127 % to SEK 355.1

million (156.6). The increase is mainly related to the

high growth in Germany. The operating income margin

increased to 14.3 % (12.8) since a lower proportion of

new credit card customers were generated via loan

intermediaries.

The operating expenses increased by 90 % to

SEK 173.2 million (91.1). During the year, the expenses

were affected by an increased direct marketing effort.

However, the C/I ratio still decreased to 48.8 % (58.2)

due to economies of scale in the business model.

The loan losses increased by 84 % to SEK 142.9 million

(77.5). The increase was affected by the growing loan

portfolio in Germany. The loan loss ratio has

decreased to 5.8 % (6.3).

For further information about the loan portfolio and

results of this segment, see Note 4 Segment reporting.

22 %

25 %

LOAN PORTFOLIO (SEK million)

1,000

2,000

3,000

4,000

2019 2020 2021 2022

20 • Annual Report 2022 • TF Bank AB (publ)

In the Ecommerce Solutions segment, TF Bank offers

digital payment solutions primarily within e-commerce

to creditworthy individuals. The customers are mainly

end-consumers who use the Bank’s payment solutions

when they make online purchases. The digital payment

solutions are available in the Nordic region under the

Avarda brand and in the Baltics as well as Poland under

the TF Bank brand. The Nordic loan portfolio comprises

74 % of the segment. The Bank had 341 active commer-

cial partners by the end of the year.

ECOMMERCE SOLUTIONS

The Avarda brand continues to grow strongly in

the Nordic markets. In 2022, the position has been

strengthened considerably owing to new coopera-

tions with Haypp Group and Jollyroom that have been

launched, which are collectively expected to generate

an increase of approximately SEK 3 billion in yearly

transaction volumes. Through an attractive white label

solution, the customer offer has a focus on supporting

the retailers in their growth and ambition to build their

own brands.

TF Bank AB (publ) • Annual Report 2022 • 21

ECOMMERCE SOLUTIONS

The loan portfolio

The loan portfolio amounted to SEK 2,710 million

(2,070) an increase in local currencies of 24 % com-

pared to December 2021. Positive currency effects

impacted the loan portfolio growth by another 7 %.

New lending increased by 27 % to SEK 5,099 million

(4,018). The increase is mainly related to an increased

number of partners and expanded cooperation with

existing retailers.

The loan portfolio in the Nordics increased by 28 % in

local currencies compared to December 2021 and

amounts to SEK 1,995 million (1,486). In Finland, the

portfolio increased by 17 % to EUR 89.5 million (76.4)

over the past year. The increase is explained by a

continued growth for e-commerce and an inflow

of several new partners. The Swedish loan portfolio

increased by 39 % to SEK 724 million (522) following

strong sales development during the year. In Norway

the loan portfolio increased by 61 % to NOK 246 million

(153). In Denmark, the loan portfolio decreased to

DKK 10.2 million (19.1).

The loan portfolio in the Baltics increased by 34 % to

EUR 33.3 million (24.9) over the year. The increase is

mainly explained by operations being established in

Latvia and Lithuania, but also from a continued strong

inflow of new partners in Estonia. In Poland, the loan

portfolio decreased by 2 % to PLN 145 million (148).

SHARE OF THE BANK’S LOANS TO THE PUBLIC

SHARE OF THE BANK’S OPERATING INCOME

Results

The operating profit decreased by 7 % to SEK 52.1 mil-

lion (56.2). The decrease is mainly related to increasing

financing costs and investments in new collaborations.

The operating income increased by 23 % to SEK 311.3

million (253.7). High growth of the loan portfolio and a

significant increase in transaction volumes in several

geographic markets have resulted in both higher

interest income and increasing fee and commission

income. The operating income margin decreased to

13.0 % (14.8) as a result of increased financing costs

that have not yet been fully passed on to the

customer.

The operating expenses increased by 21 % to

SEK 192.7 million (159.0). This is explained by increased

sales-related costs, more employees and an increased

investment pace in product development. The C/I ratio

decreased to 61.9 % (62.7) during the year.

The loan losses increased by 72 % to SEK 66.4 million

(38.5), partly explained by the growth of the segment

over the year. The loan loss ratio increased to 2.8 %

(2.3), which, among other things, is due to slightly

higher loan loss provisions for expected credit losses.

For further information about the loan portfolio and

results of this segment, see Note 4 Segment reporting.

19 %

22 %

LOAN PORTFOLIO (SEK million)

750

1,500

2,250

3,000

2019 2020 2021 2022

22 • Annual Report 2022 • TF Bank AB (publ)

Annual General Meeting 2023

The Annual General Meeting 2023 will be held on

Wednesday 3 May 2023. Notice of the Annual General

Meeting will be published no later than Wednesday

5 April 2023.

Proposed dividend

The board proposes the Annual General Meeting that

no dividend will be paid for 2022.

Financial targets

The 17 October 2021 the Board of TF Bank has

adopted the following financial targets:

Growth

TF Bank’s aim is to achieve a loan portfolio of SEK 20

billion by first half of 2025.

Profitability

TF Bank’s aim is to achieve a return on equity well

above 20 %.

Capital structure

TF Bank’s aim is that all capital ratios should exceed the

regulatory requirement (including pillar 2 and buffer

requirements) by at least 2.5 percentage points.

Remuneration of senior executives

In accordance with the requirements regarding dis-

closure of information in FFFS 2011:1, information on

e.g. remuneration framework is provided on the Bank’s

website www.tfbankgroup.com. The guidelines for

remuneration of senior executives comprises the CEO,

CFO and other members of the executive manage-

ment. The guidelines shall be applied on remunerations

which have been agreed upon, and changes made

to already agreed remunerations, after the guidelines

have been adopted by the AGM. At the 2021 AGM, the

following guidelines were adopted regarding renume-

ration of TF Bank’s senior executives:

Guidelines for promoting the Bank’s business

strategy, long-term interests and sustainability

TF Bank was founded 1987 and is an internet-based

niche bank offering consumer banking services

and e-commerce solutions through a proprietary IT

platform with a high degree of automation. Deposit

and lending activities are conducted in Sweden,

Finland, Norway, Denmark, Estonia, Latvia, Lithuania,

Poland, Germany, Austria and Spain through branch or

cross-border banking with the support of the Swedish

banking license. The operations are divided into three

segments: Consumer Lending, Credit Cards and

Ecommerce Solutions.

A successful implementation of the Bank’s business

strategy and the safeguarding of the Bank’s long-

term interests, including its sustainability, requires

the Bank to be able to recruit and retain qualified

members of staff. This means that the Bank must be

able to offer a competitive remuneration package.

The guidelines enable the Bank to offer a competitive

remuneration package to its executive management.

Variable cash remuneration which are compromised

by these guidelines should aim to promote the

Company’s business strategy and long-term interests,

including its sustainability.

The forms of remuneration etc.

The remuneration shall be competitive and may

comprise the following components: fixed salary,

variable cash remuneration, pensions and other

economic benefits. In addition, the AGM may decide

upon, for example, share- and share price-related

remuneration.

The fulfilment of criterions for variable cash remu-

neration must be measurable over a time period of

one or several years. The variable cash remuneration

may amount to a maximum of 100 per cent of the

total fixed salary during the measurement period.

Furthermore, the following applies in accordance with

the regulations in place with regards to remuneration

in banks:

Variable remuneration can be emanated in the form

of shares, and there shall be a limit to the maximum

result. Payment of variable remuneration shall be

postponed and be conditional on the fulfilment

of the criteria on which the remuneration is based

being sustainable in the long-term and on the Bank’s

position not declining substantially. If the conditions

for payment are not met, the remuneration shall be

cancelled in its entirety or in part.

Pension benefits, including health insurance, shall be

premium-determined, insofar as the executive is not

covered by a collective bargaining agreement and/

or premium based benefit. Pension premiums for

defined contribution schemes may amount to a maxi-

mum of 25 per cent of pension-based income.

Regarding employment conditions that are governed by

rules that are not Swedish, insofar as pension benefits

and other benefits are concerned, appropriate adjust-

ments are made to comply with such mandatory rules

or fixed local practices, whereby the general purpose of

these guidelines should be met as far as possible.

OTHER FINANCIAL INFORMATION

TF Bank AB (publ) • Annual Report 2022 • 23

Termination of employment

In the event of termination of employment by the Bank,

the notice period may not exceed twelve months. Fixed

salary during the notice period and severance pay may

not, in total, exceed an amount corresponding to the

fixed salary for six to twelve months. In the event of

termination by the executive, the notice period may not

exceed six months, and there will be no right to receive

severance pay.

Furthermore, compensation for any commitment to

restrict competition may be received. Such remunera-

tion shall compensate for any loss of income and shall

only be paid to the extent that the former executive

has no right to severance pay. The remuneration shall

be based on the fixed salary at the time of termination

and shall be paid during the period subject to the

restriction of competition, which shall not exceed six

to twelve month after termination of employment.

Criteria for distributing variable remuneration

The variable remuneration shall be linked to pre-de-

termined and measurable criteria that may be

financial or non-financial. The criteria may also be

comprised of individualised quantitative or qualita-

tive goals. The criteria must be designed to promote

the Bank’s business strategy and long-term interests

including its sustainability, for example by having a

clear link to the business strategy or promoting the

long-term development of the executive.

When the measurement period for fulfilment of the

criteria for payment of variable cash remuneration

has been completed, the extent to which the criteria

have been met shall be assessed and determined,

respectively. The Board of Directors are responsible

for such an assessment in respect of variable cash

remuneration to senior executives. The fulfilment of

financial criteria must be determined based on the

latest financial information published by the Bank.

Salary and terms of employment for the employees

In preparing the Boards proposal for these remunera-

tion guidelines, salaries and terms of employment for

the Bank’s employees have been considered in that

information about employees’ total remuneration, the

components of the remuneration and the increase

and rate of remuneration over time have been part of

the Boards decision when evaluating the reasonable-

ness of the guidelines and the limitations that follow.

The decision-making process to establish, review and

implement the guidelines

The Board of Directors shall establish proposals for

new guidelines when there is a need for significant

changes, at least every four years. The proposals

OTHER FINANCIAL INFORMATION

shall be submitted for the resolution at the AGM. The

guidelines shall apply until new guidelines have been

adopted by the AGM. The Board shall also follow and

evaluate programs for variable remuneration for the

executives, the application of guidelines for remuner-

ation of senior executives, as well as current remuner-

ation structures and remuneration levels in the Bank.

The CEO and other members of executive manage-

ment shall not attend board meetings when decisions

are being made about remuneration-related issues,

insofar as they are affected by the issuess.

Deviations from the guidelines

The Board of Directors may decide to temporarily

deviate from the guidelines, in whole or in part, if there

are special reasons that motivate such action in an

individual case and deviation is necessary to meet the

Bank’s long-term interests, including its sustainability,

or to ensure the Bank’s financial viability.

Commission-based compensation

The size of the commission-based compensation is

paid on the basis of the individual accomplishment of

financial targets established for the year. TF Bank has

ensured that all targets related to commission-based

compensation for the fiscal year can be measured in

a reliable way. The commission-based compensation

is paid to senior executives within the Bank and is not

pensionable.

Pensions

The Company’s pension obligations are covered

through payments to an ITP occupational pension

plan. The retirement age for the CEO is 65 and annual

supplementary payments are made to a defined

contribution plan. The retirement age for other

senior executives is between 65 and 67 depending

on country of residence and annual supplementary

payments are made to a defined contribution plan.

Period of notice and severance pay

According to an agreement between TF Bank AB and

the CEO, the period of notice is six months (12 months

in the case of termination by the Company). If termina-

tion is initiated by the Company, basic salary is payable

during the period of notice, however variable remu-

neration, if agreed before the notice was issued, is not

payable. Severance pay is adjusted according to the

salary that the CEO receives from a new employer.

24 • Annual Report 2022 • TF Bank AB (publ)

Risks and uncertainties

Different types of risks arise in the Bank’s business

operations. The risks can be actualised in different

ways within the business. The following main risk

categories have been identified:

• Credit risks (including those attributable to the credit

portfolio, credit-related concentration risks and

counterparty risks)

• Market risks (interest rate, currency and other

exchange risks)

• Liquidity risks

• Operational risks (including process risks, IT and

systemic risks and external risks)

• Other business risks (including business risks, cyclical

risks and reputational risks)

The Bank estimates credit risks, liquidity risks and

operational risks as the most significant risks. In order

to limit and control risk-taking in the business, the

Board, which is ultimately responsible for internal

controls, has established policies and instructions

for lending and other activities. For a more detailed

description of financial risks and the use of financial

instruments, as well as capital adequacy, see Notes

3 and 31.

The banking operations are subject to extensive reg-

ulations concerning capital adequacy and liquidity

requirements, which are primarily governed by the

regulatory package that comprises Capital Require-

ments Directive (CRD) and Capital Requirements

Regulation (CRR), which jointly implement the Basel

agreement within the European Union (collectively

known as the “Basel regulatory framework”). The

Basel regulatory framework includes certain capital

requirements that are intended to be adjustable over

time and that are dependent on such factors as the

presence of cyclical and structural systemic risks.

The Bank must fulfil the specified capital and liquidity

requirements and have capital and access to liquid-

ity at all times. TF Bank monitors changes related to

capital and liquidity requirements and takes these

into consideration regarding the financial targets.

The war in Ukraine

The Russian invasion of Ukraine has led to a sharp

increase in geopolitical unrest and uncertainty in both

the European and the global economy. The financial

market has shown great volatility with higher interest

rates, a weakened Swedish krona and increased infla-

tion during 2022. TF Bank has no exposures to neither

Ukraine, Russia nor Belarus. It cannot be ruled out

that TF Bank’s operations, new lending or credit losses

may be negatively affected by the consequences of

the war in the future.

Environment

TF Bank works actively to conduct a responsible

business where the intention is to have as limited

negative impact on the environment and people as

possible. Environmental resources are used respon-

sibly and carefully throughout the Bank’s operations.

TF Bank conducts operations in an environmentally

sustainable manner by, for example, improving

efficiency and investing in sustainable products

and services. The business model is as digital and

automated as possible, making us accessible while

limiting our environmental impact.

Sustainability report

TF Bank’s sustainability reporting is prepared in

accordance with the Annual Accounts Act’s require-

ments (6th chapter 12§) on sustainability reporting.

TF Bank has chosen to prepare the statutory sustain-

ability report as a separate report from the annual

report’s management report. This has been submitted

to the auditor at the same time as the annual report.

The sustainability report appears on pages 93-105.

The results and financial position of the Bank are

shown in the below income statement and statements

of financial position, statements of equity and cash

flow statements, as well as accompanying notes.

OTHER FINANCIAL INFORMATION

TF Bank AB (publ) • Annual Report 2022 • 25TF Bank AB (publ) • Annual Report 2022 • 25

FINANCIAL INFORMATION

26 • Annual Report 2022 • TF Bank AB (publ)

INCOME STATEMENT

SEK thousand Note 2022 2021

2,3,4

Operating income

Interest income 5 1,472,979 1,074,113

Interest expense 6 -210,318 -120,439

Net interest income 1,262,661 953,674

Fee and commission income 204,316 140,478

Fee and commission expense -54,859 -34,265

Net fee and commission income 7 149,457 106,213

Net results from financial transactions 8 683 -4,600

Total operating income 1,412,801 1,055,287

Operating expenses

General administrative expenses 9,10,11,30 -513,377 -380,224

Depreciation and amortisation of tangible and intangible assets 12,13,14 -30,256 -28,638

Other operating expenses 15 -67,596 -33,303

Total operating expenses -611,229 -442,165

Profit before loan losses 801,572 613,122

Net loan losses 16 -367,569 -260,564

Operating profit 434,003 352,558

Tax on profit for the year 17 -93,198 -75,352

Profit for the year 340,805 277,206

Profit for the year attributable to:

Shareholders of the Parent Company

326,445 269,875

Additional tier 1 capital holders

14,360 7,331

Basic earnings per share (SEK)

15.18 12.55

Diluted earnings per share (SEK)

15.18 12.55

STATEMENT OF OTHER COMPREHENSIVE INCOME

SEK thousand 2022 2021

Profit for the year 340,805 277,206

Other comprehensive income

Items that may subsequently be reclassified to the income statement

Gross exchange rate differences -464 -

Tax on exchange rate differences in the period 100 -

Other comprehensive income for the year -364 -

Total comprehensive income for the year 340,441 277,206

Comprehensive income for the year attributable to:

Shareholders of the Parent Company

326,081 269,875

Additional tier 1 capital holders

14,360 7,331

TF Bank AB (publ) • Annual Report 2022 • 27

BALANCE SHEET

SEK thousand Note 31 Dec 2022 31 Dec 2021

2,3,18,19

ASSETS

Cash and balances with central banks 57,686 1,270,092

Treasury bills eligible for refinancing, etc. 20 1,837,025 316,411

Loans to credit institutions 21 1,631,653 779,636

Loans to the public 4,22 14,654,373 10,872,285

Shares 154 257

Shares in subsidiaries 23 371 341

Goodwill 14 8,927 10,202

Intangible assets 12 86,780 71,365

Tangible assets 13 3,955 2,699

Other assets 24,30 27,707 21,842

Deferred tax assets 25 2,943 4,781

Prepaid expenses and accrued income 35,716 40,905

TOTAL ASSETS 18,347,290 13,390,816

LIABILITIES AND EQUITY

Liabilities

Deposits and borrowings from the public 26 16,108,130 11,504,749

Other liabilities 27,30 125,131 94,020

Current tax liabilities 35,955 36,089

Deferred tax liabilities 25 15 5,641

Accrued expenses and prepaid income 28 144,621 121,584

Subordinated liabilities 29 198,660 198,042

Total liabilities 16,612,512 11,960,125

Equity

Restricted equity

Share capital 107,500 107,500

Statutory reserve 1,000 1,000

Development costs fund 86,780 71,365

Total restricted equity 195,280 179,865

Non-restricted equity

Tier 1 capital instrument 200,000 200,000

Fair value fund -364 -

Retained earnings 999,057 773,620

Profit for the year 340,805 277,206

Total non-restricted equity 1,539,498 1,250,826

Total equity 1,734,778 1,430,691

TOTAL LIABILITIES AND EQUITY 18,347,290 13,390,816

28 • Annual Report 2022 • TF Bank AB (publ)

STATEMENT OF CHANGES IN EQUITY

SEK thousand

Restricted equity Non-restricted equity

capital

Statutory

reserve

Develop-

ment costs

fund

Tier 1

capital

instru-

ment

Fair value

fund

Retained

earnings

Profit for

the year Total equity

Equity as at 1 Jan 2021 107,500 1,000 61,762 100,000 - 610,724 202,719 1,083,705

Profit for the year - - - - - - 277,206 277,206

Other comprehensive income for

the year - - - - - - - -

Transfer of previous year's profit - - - - - 202,719 -202,719 -

Dividend to shareholders - - - - - -21,500 - -21,500

Capitalisation of development costs - - 36,194 - - -36,194 - -

Amortisation of capitalised devel-

opment costs - - -26,591 - - 26,591 - -

Interest Tier 1 capital - - - - - -7,331 - -7,331

Issue of Tier 1 capital - - - 100,000 - - - 100,000

Transaction costs, issue of Tier 1

capital - - - - - -1,750 - -1,750

Tax effect, transaction costs issue

of Tier 1 capital - - - - - 361 - 361

Equity as at 31 Dec 2021 107,500 1,000 71,365 200,000 - 773,620 277,206 1,430,691

Equity as at 1 Jan 2022 107,500 1,000 71,365 200,000 - 773,620 277,206 1,430,691

Profit for the year - - - - - - 340,805 340,805

Other comprehensive income for

the year - - - - -364 - - -364

Transfer of previous year's profit - - - - - 277,206 -277,206 -

Dividend to shareholders - - - - - -21,500 - -21,500

Capitalisation of development costs - - 45,004 - - -45,004 - -

Amortisation of capitalised devel-

opment costs

- - -29,589 - - 29,589 - -

Interest Tier 1 capital - - - - - -14,360 - -14,360

Transaction costs, issue of Tier 1

capital - - - - - -622 - -622

Tax effect, transaction costs issue

of Tier 1 capital - - - - - 128 - 128

Equity as at 31 Dec 2022 107,500 1,000 86,780 200,000 -364 999,057 340,805 1,734,778

Share capital comprises of 21 500 000 shares of SEK 5 each.

Perpetual bonds, SEK 100 million with interest terms STIBOR 3 months +6.75% and first possible redemption 7 June 2023, and SEK 100 million with interest terms

STIBOR +6.25% and first possible redemption 1 December 2026.

TF Bank AB (publ) • Annual Report 2022 • 29

CASH FLOW STATEMENT

SEK thousand 2022 2021

Operating activities

Operating profit 434,003 352,558

Adjustment for items not included in cash flow

Depreciation and amortisation of tangible and intangible assets 30,256 28,638

Accrued interest income and expense 5,083 6,681

Other non-cash items 254 -12

Paid income tax -93,332 -41,095

376,264 346,770

Increase/decrease in loans to the public -3,782,088 -2,949,837

Increase/decrease in other short-term receivables -196,757 -29,573

Increase/decrease in deposits and borrowings from the public 4,603,381 2,790,717

Increase/decrease in other short-term liabilities 46,871 67,152

Cash flow from operating activities 1,047,671 225,229

Investing activities

Investments in tangible assets -2,818 -1,452

Investments in intangible assets -45,004 -35,554

Investments in subsidiaries -30 -25

Cash flow from investing activities -47,852 -37,031

Financing activities

Issue of Tier 1 capital -494 98,611

Redemption of Tier 2 capital - -47,000

Interest on Tier 1 capital -14,360 -7,331

Dividend to shareholders -21,500 -21,500

Cash flow from financing activities -36,354 22,780

Cash flow for the year 963,465 210,978

Cash and cash equivalents at the beginning of the year 2,366,139 2,119,002

Exchange rate difference in cash and cash equivalents 196,760 36,159

Cash and cash equivalents at the end of the year 3,526,364 2,366,139

Cash flow from operating activities includes interest expenses paid and interest payments received

Interest expenses paid 208,667 125,170

Interest payments received 1,281,280 923,990

Components of cash and cash equivalents

Cash and balances with central banks 57,686 1,270,092

Treasury bills eligible for refinancing 1,837,025 316,411

Loans to credit institutions 1,631,653 779,636

Total cash and cash equivalents 3,526,364 2,366,139

30 • Annual Report 2022 • TF Bank AB (publ)

NOTE 1 General information

TF Bank AB, corporate identity number 556158-1041, is a bank limited

company with its registered office in Borås, Sweden, which has a

license to conduct banking operations. The Bank conducts deposit

and/or lending activities to private individuals in Sweden, Finland,

Norway, Denmark, Estonia, Latvia, Lithuania, Poland, Germany, Austria

and Spain via a branch or cross-border with the support of the Swedish

banking license.

The address of the head office is PO Box 947, SE-501 10 Borås.

The Bank has chosen to apply the exception in Ch. 7 Section 6a in the

Swedish Annual Accounts Act for Credit Institutions and Securities

Companies (1995:1559) and not present consolidated financial state-

ments due to the fact that the subsidiaries below, both individually

and together, are without substantial significance:

Branches

•

TF Bank AB, Finland branch (2594352-3)

•

TF Bank AB, Poland branch (PL9571076774)

•

TF Bank AB, Estonia branch (14304235)

•

TF Bank AB, Norway branch (923 194 592)

•

TF Bank AB, Latvia branch (50203334311)

Subsidiaries

•

TFB Service SIA (40203015782) 100%

•

TFB Service UAB (304785170) 100%

•

TFB Service GmbH (HRB 208869 B) 100%

•

TFB Service AB (559310-4697) 100 %

•

TFBN Services S.L. (B10781789) 100 %

The term “Bank/Company” refers to TF Bank AB together with its

branches.

On 17 March 2023, the Board of Directors approved this Annual Report

for publication, for adoption by the AGM in 2023.

NOTE 2 Accounting Policies

The most significant accounting policies applied in the prepara-

tion of these consolidated financial statements are set out below.

These accounting policies have been applied consistently to all

reporting periods presented in these financial statements, unless

otherwise stated.

TF Bank’s financial statements have been prepared in accord-

ance with the Swedish Annual Accounts Act for Credit Institutions

and Securities Companies (1995:1559) and the Swedish Financial

Supervisory Authority’s regulations FFFS 2008:25. So-called

legally restricted IFRS means that IFRS, as adopted by the EU, are

applied in the preparation of the financial statements, subject to

the restrictions and additions that follow from RFR 2 Accounting

for Legal Entities, issued by the Swedish Financial Reporting

Board, and FFFS 2008:25.

Estimates and Judgements

Preparation of the consolidated financial statements in compliance

with IFRS requires the use of some critical estimates for accounting

purposes. Estimates and judgements are reviewed on an ongoing

basis and are based on historical experience and other factors,

including expectations of future events that are believed to be

reasonable under the circumstances. The Bank makes estimates

and assumptions about the future. The resulting estimates for

accounting purposes by definition rarely correspond to the actual

results.

The areas that involve a high degree of judgement, are complex, or

where assumptions and estimates have a material impact on the

financial statements primarily comprise provisions for expected

loan losses and goodwill impairment testing.

Provisions for expected loan losses

TF Bank has a forward-looking model for impairments in accor-

dance with IFRS 9, where expected loan losses on financial assets

are calculated at initial recognition. A loan loss reserve is recog-

nised for all financial assets that are valued at amortised cost. The

calculation of the expected loan losses is done through methods

and models developed by the Bank, all of which are character-

ised by assumptions about the future, such as how historical ex-

periences will develop in the future given assumptions about the

development of various macro scenarios. Making provisions for

expected loan losses requires careful analysis of available data to

make reliable assessments about the future.

The most important inputs used to assess expected loan losses are:

• Probability of default (PD)

• Loss given default (LGD)

• Exposures at default (EAD)

• Expected maturity

Calculations are derived from developed statistical models.

PD for 12 months and PD for the remaining maturity are based on

the conditions on the balance sheet date. PD models are based

on homogeneous groups of the total loan portfolio, i.e. geograph-

ic market and segment. Future economic conditions are consid-

ered through expert assessments for each homogeneous group.

The Bank’s method for estimating the probability of default also

takes into account unused limits for revolving credits. LGD corre-

sponds to the expected loss in the event of default and takes into

account assumptions about future discounted cash flows or the

contractual terms that apply in the event of sale to debt collec-

tion agencies. The Company’s issued credits that have matured

without being settled by the debtor are continuously sold to debt

collection agencies in markets where the Board considers the

price level to be favourable for the Bank’s performance and risk

profile. EAD represents an estimated credit exposure at a future

point in time in the event of default, taking into account expected

changes in credit exposure on the balance sheet date. The Bank’s

method for calculating EAD corresponds to current contractual

terms for repayment of capital, interest, and maturity date. For the

calculation of future maturity, the Bank starts from the original

contract period and then takes into account behaviour patterns

for the Bank’s various segments and markets to determine the

expected maturity.

For more detailed information on impairment tests and credit

risks, see the section Impairment of financial assets in this note,

the section on Credit risks in note 3 and note 22.

Impairment testing of Goodwill

Impairment testing of Goodwill is subject to many different

estimates and assessments of the future. TF Bank annually

examines whether there is a need for impairment of goodwill

for the cash-generating unit. The calculations are based on es-

timated future cash flows after tax, which are based on financial

forecasts approved by the Company’s management. Important

assumptions regarding forecasts made include the average

loan portfolio, new lending, margins and assessments of future

developments. For more information, see section Goodwill in this

note and note 14.

New standards and amendments and interpretations of existing

standards that have been adopted by the Bank

From January 1, 2022, a number of amendments and improve-

ments to IFRS standards have come into effect, and new IFRS IS

Agenda Decisions have been published. None of these or other

changes to Swedish regulations have had any significant impact

on TF Bank’s financial reports.

NOTES

TF Bank AB (publ) • Annual Report 2022 • 31

New standards and amendments and interpretations of existing

standards that have not yet come into force and have not been

adopted by the Bank in advance

The International Accounting Standard Board (IASB) and the IFRS

Interpretations Committee have issued the following standards,

amendments to standards and interpretations to be applied for

2023 or later. The IASB allows early adoption of these. TF Bank

has not applied the following changes in the 2022 annual report.

Insurance contracts (IFRS 17)

IFRS 17 was issued in May 2017 and is to be applied from January

1, 2023. The new standard establishes principles for accounting,

presentation, valuation and disclosure of insurance contracts. The

standard will have no impact on the Bank’s financial reports.

Other changes in IFRS and Swedish regulations

Other new or amended IFRS standards or interpretations or

changes in Swedish regulations issued but not yet applied are

not expected to have any significant effect on the Bank’s financial

position, results, cash flow or note disclosures.

Foreign currency translation

Functional and presentation currency

Items included in the financial statements of each of the Bank’s

entities are measured using the currency of the primary economic

environment in which the branch operates (functional currency).

The currency used in the financial statements is Swedish kronor

(SEK), which is TF Bank AB’s functional currency and the presenta-

tion currency.

Transactions and balances

Transactions in foreign currencies are translated into the func-

tional currency at the exchanges rates that prevailed at the date

of the transaction. Foreign exchange gains and losses resulting

from the settlement of such transactions and from the transla-

tion of monetary assets and liabilities denominated in foreign

currencies at the exchange rate prevailing at the reporting date

are recognised in the income statement. An exception to this are

hedging transactions which qualify as cash flow or net invest-

ment hedges, in which case gains/losses are recognised in other

comprehensive income.

Foreign branches

The results and financial position of all branches whose functional

currency is different from the presentation currency are translated

into the Bank’s presentation currency by translating the assets and

liabilities from each of the balance sheets at the exchange rates

prevailing at the balance sheet date. The income and expenses of

each of the income statements are translated at average exchange

rates for the year, unless these average rates are not a reasonable

approximation of the cumulative effect of the rates prevailing

at the transaction date, in which case income and expenses are

translated at the rates prevailing at the transaction date. Since the

items are seen as balances with the foreign branches, all recalcu-

lations are reported over the net result of financial transactions.

Goodwill and fair value adjustments arising on the acquisition of

a foreign operation are recognised as assets and liabilities of the

foreign entity and translated at the exchange rate at the balance

sheet date. Foreign exchange differences arising on the acquisi-

tion are recognised in other comprehensive income.

Segment reporting

Operating segments are accounted for in a way that is compatible

with the internal reports submitted to the function responsible for

the allocation of resources and the evaluation of the results of the

operating segments. In the Bank, this function has been identified

as the CEO.

Tangible assets

Tangible assets are recognised at cost less depreciation. Expend-

iture to improve the performance of assets, compared with their

original level, increases the carrying value of the asset. Expendi-

ture on repair and maintenance are reported as expenses.

Tangible assets are systematically depreciated over the estimated

useful life of the asset. The depreciable amount is determined

taking into account the residual value of the asset, if applicable.

The straight-line method of depreciation is used for all types of

tangible assets. The following depreciation periods are used:

IT equipment 36 months

Other equipment 60 months

The assets’ residual values and useful lives are reviewed at each

balance sheet date and adjusted, if appropriate. The carrying

amount of an asset is immediately written down to its recoverable

amount if the carrying amount of the asset exceeds its estimated

recoverable amount.

Intangible assets

Developments costs which are directly attributable to the devel-

opment and testing of identifiable and unique software products

that are controlled by the Bank are recognised as intangible

assets when the following criteria are met:

• It is technically feasible to complete the software to make it

available for use.

• The Company’s intention is to complete the software and

use or sell it.

• It is possible to use or sell the software.

• It can be demonstrated how the software will generate

probable future economic benefits.

• Adequate, technical, financial and other resources to com-

plete the development and to use or sell the software are

available.

• The expenditure attributable to the software during its de-

velopment can be reliably measured.

Intangible assets are recognised at cost less amortisation. Intangi-

ble assets are amortised on a straight-line basis over their useful

lives, up to a maximum of 60 months, from the date the asset is

ready for use.

Intangible assets are tested for impairment on an annual basis

or when there is an indication of impairment. The assets’ useful

lives are reviewed at each balance sheet date and adjusted, if

appropriate. The carrying amount of an asset is immediately written

down to its recoverable amount if the carrying amount of the

asset exceeds its estimated recoverable amount.

Goodwill

The goodwill presented in the Bank’s balance sheet is attributa-

ble to the merger that was implemented at the beginning of 2020

between TF Bank AB and the former subsidiary BB Bank ASA.

The item is based on the acquisition of the subsidiary in 2015.

Goodwill is tested for impairment on an annual basis or more

frequently if events or changes in circumstances suggest that the

asset might be impaired. The carrying amount of the cash-gener-

ating unit to which the goodwill is allocated is compared with the

recoverable amount, which is the greater of the value in use and

the fair value less costs to sell. Any impairment is immediately

recognised as an expense and is not reversed.

Goodwill has an indefinite useful life and according to RFR 2, such

intangible assets should be depreciated according to Chapter 4,

Section 4 of the Swedish Annual Accounts Act in legal entities. If

the useful life cannot be determined with a reasonable degree

of certainty, it should be considered as five years. It is the Bank’s

assessment that, based on the impairment test carried out in

connection with the merger, a significantly longer useful life than

five years can be demonstrated. Based on this, TF Bank applies a

depreciation period of ten years.

Financial instruments – classification, recognition and

measurement

The classification and valuation of financial assets is based on an

Note 2 cont.

32 • Annual Report 2022 • TF Bank AB (publ)

assessment of both the Bank’s business model for the manage-

ment of financial assets, and whether the instruments’ contractual

cash flows only include payments of principal and interest. As a

general rule, financial liabilities are reported at amortised cost. The

exception is financial liabilities, which must be valued at fair value

through the profit and loss.

Financial assets are classified, in accordance with IFRS 9, into one

of the following categories:

1. amortised cost

2. fair value through other comprehensive income

3. fair value through profit and loss

Financial liabilities are classified, in accordance with IFRS 9, into

one of the following categories:

1. amortised cost

2. fair value through other comprehensive income

3. fair value through profit and loss

At the initial recognition, all financial assets and liabilities are

reported at fair value. For assets and liabilities that are classified at

fair value through profit and loss, transaction costs are recognised

directly through profit and loss at the time of acquisition. For other

financial instruments, transaction costs are included in the acquisi-

tion value. The classification of financial instruments into different

categories forms the basis for how each financial instrument is

subsequently valued in the balance sheet and how changes in

its value are reported. Note 18 “Classification of financial assets

and liabilities” shows how TF Bank has categorised its financial

instruments.

Amortised cost

This category includes financial assets that are valued at amor-

tised cost since the assets are included in a business model with

the purpose to hold the financial assets to collect the contractual

cash flows and that the agreed terms for the assets contributes

to cash flows, that only consist of principal and interest on the

remaining principal at certain times. This category includes the

Bank’s loan receivables and accounts receivable.

Financial assets and liabilities valued at amortised cost are initially

reported in the balance sheet at fair value, including transaction

costs. After the initial recognition, the instrument in this category

is valued at amortised cost using the effective interest method

minus the provisions for financial assets.

Fair value through other comprehensive income

Financial assets classified as fair value through other compre-

hensive income are held according to a business model whose

objectives can be achieved both by collecting contractual cash

flows and selling financial assets, and the terms at certain times

give rise to cash flows consisting only of principal amounts and

interest on the outstanding principal amount. Changes in fair

value, apart from interest rates, are reported in other comprehen-

sive income. Interest is reported in the income statement in either

“Interest income” or “Interest expenses”.

Fair value through profit and loss

Financial assets and liabilities valued at fair value through profit

and loss if they are not to be valued in any of the other catego-

ries. These assets and liabilities are valued at fair value excluding

transaction costs. All changes in value of these items are reported

directly in the income statement in “Net results from financial

transactions”. The financial instruments that are valued at fair value

through TF Bank’s profit and loss comprise derivative instruments

held for trading purposes and shares whose cash flows do not

meet the cash flow criteria.

Recognition and derecognition

Financial assets and financial liabilities are reported in the balance

sheet on the business day, which is the day on which the agree-

ment is entered into, in addition to financial assets classified as

amortised cost which are reported on the settlement date. Finan-

cial assets are removed from the balance sheet when the right to

receive cash flows from the instrument has expired or has been

transferred and the Bank has transferred virtually all risks and

benefits associated with ownership to another party. A financial

asset and a financial liability are netting off and reported at the

netting amount in the balance sheet, only when there is a legal

right to net off the amounts, and the intention is there to settle

the posts with a net amount or to simultaneously realise the asset

and settle the liability. When a loan is modified, the Bank makes

an assessment of whether the modification results in removal

from the balance sheet.

A loan is considered to be modified when the terms and con-

ditions governing cash flows change compared to the original

agreement, for example due to easing of loan terms, changes in

market conditions, measures to retain the customer and other

factors unrelated to a borrower’s deteriorating creditworthiness.

Modified loans are removed from the balance sheet and a new

loan is reported either when the existing loan is terminated and a

new agreement is entered into with significantly different terms

or if the terms of an existing agreement are significantly modified.

Modifications solely due to the borrower’s financial difficulties,

including the provision of relief in loan terms, are not considered

significant on their own. If a loan has been modified and moved

from Stage 1 to either Stage 2 or 3, it will not be moved back dur-

ing the term of the loan. Financial liabilities are removed from the

balance sheet when the debt is extinguished by the agreement

being fulfilled, cancelled or terminated. Loan receivables classi-

fied as impaired are written off from the balance sheet when the

Bank has no reasonable expectation of recovering a claim in its

entirety or in part. The Bank has no reasonable expectation of re-

covering the claim and considers the loss to be determined when

a customer has passed, completed a debt restructuring program,

or when it has been sold to a third party.

After write-off, loan receivables are no longer reported on the

balance sheet. Recovery of previously written-off amounts is

reported as a reduction of loan losses in the net loan losses line

of the income statement.

Impairment of financial assets

TF Bank has a portfolio-based model for calculating loan loss

provisions based on the valuation of expected loan losses.

Expected loan losses are calculated for each individual credit

exposure as the discounted product of the probability of default

(PD), exposure at default (EAD) and loss given default (LGD). The

PD represents the probability that a borrower will default on

its obligation. The EAD is an expected exposure at the time of

default and the LGD represents the expected loss on a default-

ed exposure, taking into account such factors as counterparty

characteristics and product type. Expected loan losses are deter-

mined by calculating PD, LGD and EAD for each future month up

to and including the end of the expected term of a credit expo-

sure. These three parameters are multiplied and in this way the

monthly expected loan losses are calculated, which are then dis-

counted back to the reporting date with the original loan interest

rate and summed up. A summary of the monthly expected loan

losses up to and including the end of the expected term gives the

expected loan losses for the asset’s remaining term and the sum

of the loan losses that are expected to occur within 12 months

gives the expected credit losses for the next 12 months. Further-

more, this is supplemented with risk parameters that are used to

calculate expected loan losses. Risk parameters are updated at

each individual reporting date to take into account forward-look-

ing information. The Bank segments the issued loans each month

to analyse current behaviours relative to historical behaviours

and calibrate models to calculate expected loan losses. In cases

where the effect of relevant factors is not captured by risk mod-

els, the Bank uses expert adjustments. The Bank conducts regu-

lar quantitative analysis of macroeconomic parameters to identify

correlations with the Bank’s loan losses. Currently, no significant

correlations have been identified to incorporate into the loan loss

Note 2 cont.

TF Bank AB (publ) • Annual Report 2022 • 33

reserve model. Therefore, the Bank manages the potential impact

of macroeconomic parameters outside the model by making

assumptions based on the macroeconomic conditions for each

segment and market, and the expected effects on the Bank’s

future loan losses at any given point in time as determined by the

Bank’s management.

The financial assets that are subject to impairments are further

divided into three categories based on the risk of default. The first

category includes assets where no significant increase in credit

risk has occurred at the time of reporting, in the second where a

significant increase in credit risk has occurred, i.e. when the asset

is due 30 days or more, and in the third where a loss event has

occurred, i.e. that the credit is due 90 days or more. The Bank

primarily uses quantitative data to determine whether a signifi-

cant increase in credit risk has occurred, but also qualitative data

in cases where the Bank receives external or internal information

that a customer is experiencing payment difficulties. For assets in

the first category, impairments are reported based on expected

losses over the next twelve months, while for categories two and

three, expected losses are reported over the entire term of the

asset.

Provisions for loans in category 3 are made with the difference

between the asset’s carrying amount and the present value of fu-

ture cash flows, discounted at the original effective interest rate.

The expected future cash flow is based on calculations that take

into account historical repayment levels that are applied to each

generation of loan receivables.

The calculation of the lifetime for credit cards and other revolving

credits as well as provisioning of unused credit limits is based

on predictive models about the future limit use and statistical

repayment plans. The models are based on internal historical data

where different models are used for homogeneous groups of

credits with similar explanatory variables.

Definition of default and credit impaired assets

Default is an input to the PD, which affects both the identification

of a significant increase in credit risk and the measurement of

the expected credit losses. Financial assets that are classified as

credit impaired are included in category 3. The Bank’s definitions of

default and credit impaired assets in accordance with IFRS 9 cor-

respond in all material respects to the Bank’s regulatory definition

of default as it is used in credit risk management purposes. Default

and credit impairment are triggered when one of the following

occurs: a borrower has unpaid obligations more than 90 days past

due, is deceased, is declared in bankruptcy or similar, or the loan

has ben sold to external parties. In assessing whether it is unlikely

that a borrower will pay its loan obligations, the Bank takes into

account both qualitative and quantitative factors including, but not

limited to, the status of maturities, non-payments, expected relief

in loan terms, expected bankruptcy or breach of loan terms.

Determining a significant increase in credit risk since initial recognition

The Bank assesses changes in credit risk using a combination

of individual and collective information and reflects significant

increases in credit risk at the individual financial instrument level.

The forward-looking lifetime probability of default over the

remaining term will incorporate the effects of past and current

forecasted economic conditions. Quantitative indicators are the

most important part in determining an increase in credit risk since

initial recognition, and an increase in credit risk occurs when the

loan has been overdue for 30 days or more, which results in the

asset being moved from stage 1 to stage 2. If the loan is overdue

for 90 days or more, the asset is moved to stage 3. This process

is done at the portfolio level. Qualitative indicators at the contract

level are also taken into account when placing in the different

stages, such as if the borrower is monitored on a watchlist or has

been granted relief in loan terms, or if the Bank receives external

information that the customer is experiencing payment difficulties,

such as debt restructuring cases and payment arrangements.

The Bank assesses that financial assets with low credit risk on

the reporting date are not considered to have been significantly

exposed to an increased credit risk, which refers to financial assets

classified as cash and balances with central banks, securities

issued or guaranteed by the government that are eligible for

repurchase agreements, and lending to other financial institutions.

A financial instrument is no longer considered to have experienced

a significant increase in credit risk when all indicators are no longer

breached.

Derivative instruments

Derivative instruments are reported on the balance sheet on the

contract date and measured at fair value through the income

statement, both on initial recognition and at subsequent remeas-

urements. The method of accounting for the gain or loss arising

from the remeasurements depends on whether the derivative

has been designated as a hedging instrument and, if so, the

nature of the item being hedged.

At the time of entering into the transaction, the Bank documents

the relationship between the hedging instrument and the hedged

item, as well as the Bank’s risk management objective and risk

management strategy with respect to the hedge. TF Bank also

documents its assessment, both at the time of entering into the

hedge and ongoing, of whether the derivative instruments used

in hedging transactions are effective in offsetting changes in fair

value or cash flows attributable to the hedged items.

The entire fair value of a derivative that serves as a hedging

instrument is classified as a current asset or liability when the

remaining term of the hedged item is less than 12 months. Deriv-

ative instruments held for trading are always classified as current

assets or liabilities.

The effective portion of changes in the fair value of a derivative

instrument that is identified as the hedge of the net investment

in foreign operations and that meets the conditions for hedge

accounting is otherwise reported in other comprehensive in-

come. The portion of gain or loss on a hedging instrument that is

determined to be an effective hedge is reported in other compre-

hensive income. The gain or loss related to the ineffective portion

is reported in income statement. Accumulated gains and losses

in equity are reported in the income statement when the foreign

operation is fully or partially disposed of. Gains and losses arising

from changes in the fair value of derivatives not used for hedge

accounting are reported in the income statement in net results

from financial transactions.

Issued debt and equity instruments

A financial instrument issued by TF Bank are classified either as

a financial liability or as equity. Issued financial instruments are

classified as a financial liability if the contract terms and condi-

tions mean that TF Bank has an obligation to pay using either

cash or another financial asset. If this is not the case, the instru-

ment is usually an equity instrument and classified as equity, less

transaction costs.

The issued financial instruments classified as financial liabilities

are bonds over ten years with possible voluntary redemption af-

ter five years. The interest terms are Stibor plus margin and inter-

est is paid quarterly. The financial instruments classified as equity

are perpetual bonds with possible voluntary redemption after five

years from the date of issue. The interest terms are Stibor plus

margin and interest is paid quarterly. For more detailed terms,

see the prospectus on the Bank’s website www.tfbankgroup.com,

footnote on page 28 and note 29.

Interest attributable to financial instruments that are classified as

financial liabilities is reported as interest expense and interest for

financial instruments that are classified as equity is reported in

equity.

Note 2 cont.

34 • Annual Report 2022 • TF Bank AB (publ)

Income taxes

Current tax expense is calculated based on tax rates enacted

or substantively enacted at the reporting date in the country in

which the Company operates and generates taxable income.

Management regularly assesses the statements made in tax re-

turns regarding situations where applicable tax rate are subject to

interpretation and, when deemed appropriate, makes provisions

for amounts that will probably have to be paid to the taxation

authorities.

Recognised income tax expense comprises tax payable or

receivable for the financial year and any adjustment to the tax

payable or receivable in respect of previous years. For items rec-

ognised in profit and loss, the corresponding tax effects are also

recognised in profit and loss. The tax effects of items recognised

directly in equity are recognised in equity.

Deferred income tax is calculated using tax rates and laws that

were enacted or announced at the balance sheet date and which

are expected to be applied when the related deferred tax asset is

realised or the deferred tax liability is settled.

Deferred tax assets are recognised to the extent that it is probable

that future taxable profits will be available against which the tem-

porary differences can be used.

Employee benefits

Pension plans are funded through payments to insurance com-

panies. The Bank only has defined contribution plans. A defined

contribution pension plan is a pension plan under which the Bank

pays fixed contributions to a separate legal entity. The Bank has

no legal or constructive obligation to pay further contributions if

this legal entity does not hold sufficient assets to pay all benefits

to employees in respect of their service in the current or previous

years.

Share-based payments

When the Bank receives services from employees and incurs

obligations to settle transactions with employees with its own

equity instruments, they are reported as share-based payments.

The fair value of the service that entitles the employees to the

allocation of equity instruments is reported as an expense within

equity at the time the services are received. For share-based

payments to employees that are settled with own equity instru-

ments, the services received are valued by reference to the fair

value of the allocated equity instruments.

Provisions

Provisions are recognised when the Bank has a legal or construc-

tive obligation as a result of past events, it is more probable than

not that an outflow of resources is required to settle the obliga-

tion, and the amount can be reliably estimated. Provisions for

restructuring are recognised when a detailed and formal restruc-

turing plan has been approved and a valid expectation has been

raised in those affected. Provisions for future warranty claims

refer to the near future and are based on historical information

about warranty claims and current trends that may suggest future

claims could differ from historical claims. No provisions are made

for future operating losses.

Where there are a number of similar obligations, the probability

that an outflow of resources will be required for settlement is

assessed for this entire class of obligations as a whole. A provi-

sion is recognised even if the probability of an outflow in respect

of any one item in this class of obligations is small.

Interest income

Interest income is recognised in the income statement over the ex-

pected life using the effective interest method. Transaction costs

related to loans payable and loans receivable are therefore recog-

nised as part of the loan. Transaction costs refer to commission.

Transaction costs, arrangement fees and notification charges are

recognised over the expected term of the loan. Invoicing charges

are also included in interest income.

Note 2 cont.

The Bank regularly makes amortisation of assets and unappropri-

ated funds for which the Bank has not been able to repay or locate

counterparties. They are recognised as interest income as they are

directly linked to the Bank’s loans to the public.

Commission income and expense

TF Bank recognises reminder fees, insurance premium fees and

other fees and in commission income. Commission income is rec-

ognised in profit and loss in the period it is earned. Commission

expense are expenses attributable to services and charges that

relate to fees earned from insurance premiums.

Net results from financial transactions

This item relates to foreign currency translation of assets and

liabilities in foreign currencies and changes in the fair value of

derivatives in foreign currency.

Cash flow statement

The cash flow statement is prepared according to the indirect

method. Recognised cash flow comprises only transactions that

involve cash receipts or disbursements. Cash and cash equiva-

lents include Cash and balances with central banks, Treasury bills

eligible for refinancing, etc. and Loans to credit institutions.

Shares in subsidiaries

Shares and participations in subsidiaries are recognised at cost

plus transaction costs after deduction of any impairment losses.

Where there is an indication that shares have become impaired,

an estimate is made of the recoverable amount. If this is lower

than the carrying amount, an impairment loss is recognised.

Impairment losses are recognised under the items Gains/losses

on participations in subsidiaries.

Dividend

Dividends to TF Bank’s shareholders are recognised as a liability

in the Bank’s financial statements in the period the dividend is

approved by TF Bank’s shareholders.

TF Bank AB (publ) • Annual Report 2022 • 35

NOTE 3 Financial risks and financial risk management

Financial risks

TF Bank’s activities are exposed to a variety of financial risks: credit risk, market risk (extensive currency risk and interest rate risk) and

liquidity risk. TF Bank has designed an operating structure to ensure good risk management. The overall risk policy constitutes the

Board of Directors and the management’s fundamental policy documents regarding risk management which aims to minimise any

potential adverse effects on the Bank’s financial results. The Board establishes written policies with regards to both the overall risk

management and for the specific areas.

Credit risk

Credit risk is the risk that a counterparty causes the Bank a financial loss by not fulfilling its contractual obligations. The area includes

credit risks attributable to the loan portfolio, credit-related concentration risks and counterparty risks.

Credit risk arises primarily through lending to the public and is the most significant risk in the Bank. Credit risks may even arise through

placement of liquidity and derivative instruments. Credit risk is monitored closely by the relevant functions and by the Board of Directors,

which has the ultimate responsibility for managing credit risk. The Board of Directors has issued a credit policy which establishes the

framework for the Bank’s lending activities. A credit committee monitors the development of the level of credit risk in the loan portfolios

on a continuous basis. It makes decisions on, and implements, changes to the Bank’s lending within the framework of the established

credit policy and also proposes amendments to the policy to the Board of Directors. A report on performance is provided at every

ordinary board meeting. The credit risk exposure also includes concentration risks related to the loan portfolio. Concentration risks are

measured based on the size of exposures to individual counterparties, industries or regions. Concentration risks are also captured in the

Bank’s calculation of capital requirements for credit risks and in the stress tests carried out in the internal capital evaluation and as part

of the monitoring of the Bank’s risk tolerance.

Before a loan is issued, a risk assessment is done for the customer’s creditworthiness, taking into account the customer’s financial position,

such as external information, scoring, repayment capacity as well as past history with the Bank and other factors. Individual risk limits are

defined based on internal and/or external credit assessments in accordance with the limits set by the Board of Directors. The Bank’s use

of credit limits for loans to the public is strictly limited and is regularly monitored. TF Bank cannot enter into credit agreements with legal

entities in which related parties have significant economic interest without the approval of the Board of Directors.

The Bank’s credit approval process maintains high standards regarding ethics, quality and control. Despite credit risk being the largest

risk exposure for the Bank, the provision for loan losses is small in proportion to the outstanding loan volume (see Note 22). This is due

to that the Bank regularly sells past due receivables to debt collection agencies in markets where the Board of Directors considers

the price level to be favourable for the Bank’s performance and risk profile. Sales of overdue receivables take place monthly to various

counterparties in the respective geographic markets where the Bank is operational. As a result, TF Bank continuously realises expected

loan losses through the sale of past due receivables. The current portfolio has a limited number of non-performing loans in stage 3 and

consequently a relatively low level of provisions. The Bank’s average loan amount per customer is relatively low and the loan portfolio

is well diversified with a number of different products in several different geographic markets, resulting in the concentration risk for the

Bank being relatively low.

The Bank has claims and collections unit which deals with existing customers in financial difficulties. The Bank also has a credit division

which assesses potential customers and reviews collateral and credit limits established by the Board on an ongoing basis. The objective

of the Bank’s process for monitoring past due receivables and unsettled receivables is to minimise loan losses by detecting payment

issues early and implementing rapid intervention where needed. The monitoring is supported by a separate “pre-collection” system for

past due receivables involving automatic monitoring and reminders when payments are past due.

The Bank’s loans to the public consist primarily of unsecured consumer loans. As a result, TF Bank does not list credit risk exposures in a

separate table as there are limited assets pledged as security. The Bank strives for a well-diversified loan portfolio with pricing based on

risk exposure through a broad base of customers with relatively low exposure amounts per customer. In order to maintain a well-diversified

loan portfolio with a balanced risk profile and to have a favourable balance between risk and return, the Bank works actively to understand

the borrowers’ circumstances and macroeconomic changes that may affect the risk profile.

Credit quality of gross receivables in stage 1 and stage 2 (see note 22) that are neither past due nor impaired have been assessed on the

basis of a model that classifies loans as low, moderate or high risk. The classification is primarily based on the number of reminders, if

any, sent to individual customers, the number of months a customer has had an active loan with the Bank and the borrower’s individual

credit status at the time of taking out the loan, calculated on the basis of both internal and external sources. The risk assessment also

takes into account various parameters such as product type (segment) and country, including historical information retrieved from the

Bank’s own database.

SEK thousand 31 Dec 2022 31 Dec 2021

Household sector

Low risk 10,059,302 7,323,382

Moderate risk 2,617,032 2,212,003

High risk 1,680,908 1,125,238

Total 14,357,242 10,660,623

36 • Annual Report 2022 • TF Bank AB (publ)

Credit risk may even arise through placement of liquidity and derivative instruments with a positive value. By setting limits for the maxi-

mum exposure to each counterparty, the credit risk of liquidity placement becomes limited. According to the Bank’s financial policy, the

maximum amount of Tier 1 capital that may be placed with the Bank’s permitted counterparties is 25 %, with the exception of institutions

for which the permitted amount is 100 % of Tier 1 capital. 1 Treasury bills, government bonds and balances with central banks, as well as

exposure to subsidiaries, are exempted from both limits.

The credit quality of other fully performing (neither past due nor impaired) financial assets in accordance with Standard & Poor’s local

short-term ratings is shown below:

SEK thousand 31 Dec 2022 31 Dec 2021

Cash and balances with central banks

AA+ 28,186 1,190,663

AA- 7,182 36,299

A+ 7,354 37,850

A- 14,965 5,280

Total 57,687 1,270,092

Treasury bills eligible for refinancing

AAA 786,738 316,411

AA+ 1,050,287 -

Total 1,837,025 316,411

Loans to credit institutions

A-1+ 1,109,583 408,396

A-1 239,270 210,747

A-2 42,270 60,195

Unrated 240,531 100,298

Total 1,631,653 779,636

Credit risk exposures in financial instruments are referred to as counterparty risks and refer to the risk that a counterparty cannot fulfil its

obligations according to an agreement, or that it chooses not to fulfil its obligations in the future on the same or similar terms. TF Bank

includes currency derivatives in the form of swaps and futures as a result of lending in currencies other than SEK. Counterparty risks

constitute the credit risk towards other banks that arises as a result of transactions. This counterparty risk is reduced by the exchange of

collateral between the parties.

Market risk

Market risk refers to the risk that earnings, equity or the value of assets decrease due to changes in risk factors on the financial market.

TF Bank’s market risks are primarily currency risk and interest rate risk

(i) Currency risk

TF Bank is exposed to currency risk partly through the monetary assets and liabilities in foreign currencies held in the Swedish operations

and partly in the form of the conversion effect that occurs when the net investments in the foreign branches are converted to Swedish kro-

nor. Currency risk involves the following currencies: EUR, NOK, DKK, PLN and USD and TF Bank’s overall objective with the management of

currency risk is to keep the currency exposure as low as possible with the objective of holding as much assets as liabilities in each currency.

The Board has decided that the Bank should strive to ensure that the total liabilities, including any derivatives, in each currency should not

deviate by more than +/- 2% of the total assets in the currency. The Bank exchanges the earnings in other currencies than the accounting

currency to SEK on an ongoing basis and uses forward contracts for EUR, NOK, DKK, PLN and USD to balance the assets and liabilities in

each currency. Forward contracts generally have a maturity of between 1-5 months.

TF Bank assesses its future capital requirements under Pillar 2 for currency risk through stress tests involving the impact on net positions in

foreign currencies on the closing date. As of 31 December 2022, TF Bank has chosen an exchange rate movement of 10 %. The results of the

stress tests as of 31 December 2022 means an additional capital requirement for currency risk in Pillar 2 of SEK 1 million excl. tax effect:

Note 3 cont.

TF Bank AB (publ) • Annual Report 2022 • 37

CURRENCY EXPOSURES AGAINST THE BANK’S TRANSACTION CURRENCIES

SEK thousand 31 Dec 2022 31 Dec 2021

Assets in EUR:

Cash and balances with central banks 42,721 1,264,811

Treasury bills eligible for refinancing, etc. 1,547,791 -

Loans to credit institutions 1,102,224 404,550

Loans to the public 8,462,050 5,743,390

Other assets 39,318 28,702

Total assets 11,194,104 7,441,453

Liabilities in EUR:

Deposits and borrowings from the public -13,027,353 -7,667,158

Other liabilities -108,013 -87,825

Total liabilities -13,135,366 -7,754,983

Currency forward contracts 1,936,053 305,775

Total -5,209 -7,755

Exchange-rate fluctuation, 10 % on operating profit -521 -776

SEK thousand 31 Dec 2022 31 Dec 2021

Assets in NOK:

Treasury bills eligible for refinancing, etc. 264,326 256,376

Loans to credit institutions 262,529 150,632

Loans to the public 4,181,079 3,495,110

Other assets 8,899 8,307

Total assets 4,716,833 3,910,425

Liabilities in NOK:

Deposits and borrowings from the public -2,736,078 -3,174,844

Other liabilities -76,735 -64,144

Total liabilities -2,812,813 -3,238,988

Currency forward contracts -1,897,674 -666,510

Total 6,346 4,928

Exchange-rate fluctuation, 10 % on operating profit 635 493

Note 3 cont.

38 • Annual Report 2022 • TF Bank AB (publ)

Note 3 cont.

SEK thousand 31 Dec 2022 31 Dec 2021

Assets in PLN:

Cash and balances with central banks 14,965 5,280

Loans to credit institutions 20,528 13,518

Loans to the public 432,077 449,484

Other assets 2,383 2,431

Total assets 469,953 470,713

Liabilities in PLN:

Other liabilities -4,800 -5,366

Total liabilities -4,800 -5,366

Currency forward contracts -465,324 -467,859

Total -171 -2,511

Exchange-rate fluctuation, 10 % on operating profit -17 -251

SEK thousand 31 Dec 2022 31 Dec 2021

Assets in DKK:

Loans to credit institutions 31,847 3,652

Loans to the public 67,822 26,166

Other assets 65 445

Total assets 99,734 30,263

Liabilities in DKK:

Other liabilities -4,004 -1,274

Total liabilities -4,004 -1,274

Currency forward contracts -95,776 -28,881

Total -46 108

Exchange-rate fluctuation, 10 % on operating profit -5 11

SEK thousand 31 Dec 2022 31 Dec 2021

Assets in USD:

Other assets 20,368 12,186

Total assets 20,368 12,186

Currency forward contracts -20,321 -12,182

Total 47 4

Exchange-rate fluctuation, 10 % on operating profit 5 0

TF Bank AB (publ) • Annual Report 2022 • 39

With regards to the currency risks arising from the conversion of net investments in foreign branches, it is TF Bank’s strategy that the entire

existing equity when the hedging relationship is established, and that is expected to remain at the end of the hedging period, is to be hed-

ged in its entirety. This means that when a loss is expected for the upcoming hedging period, a deduction is made from the equity for the

expected loss at this time so that the hedged item becomes a slightly smaller part of the equity at the start of the period. Conversely, in cases

where the foreign operation is expected to have a positive result during the hedging period, this result is not included in the equity until the

beginning of the next hedging period. As of May 2022, TF Bank applies hedge accounting and has the following hedged net investments in

foreign operations and hedging instruments as of the closing date:

SEK thousand 31 Dec 2022 31 Dec 2021

Hedge net assets

Net investments in branches in EUR 908,971 -

Net investments in branch in NOK 291,872 -

Net investments in branch in PLN -85,780 -

Total 1,115,063 -

Hedging instruments

Deposit from the public in EUR as hedge investments -886,958 -

Currency forward contract as hedging instrument (nominal amount) -281,015 -

Other asset in PLN as hedge investments 95,841 -

Total -1,072,132 -

FAIR VALUE FUND

SEK thousand

1 January 2021 -

Closing balance 31 December 2021 -

Opening balance 1 January 2022 -

Foreign currency reserve 57,552

Change in fair value on hedging instruments reported in other comprehensive income -58,016

Current tax 100

Closing balance 31 December 2022 -364

The effects of hedge accounting for the impact of currency risks on the Group’s financial position and results are shown below:

SEK thousand 31 Dec 2022 31 Dec 2021

Hedging instrument deposit EUR

Carrying amount -886,958 -

Nominal amount -79,703 -

Hedge ratio 1:1 -

Derivative instrument NOK

Carrying amount -3,684 -

Nominal amount 265,811 -

Maturity date 19/01/2023 -

Hedge ratio SEK 1,0474 : 1 NOK -

Forward rate 1:1 -

Hedging instrument other asset PLN

Carrying amount 95,841 -

Carrying amount PLN thousand 40,369 -

Hedge ratio 1:1 -

Note 3 cont.

40 • Annual Report 2022 • TF Bank AB (publ)

(ii) Interest rate risk

Interest rate risk arises when TF Bank has different maturities or different fixed interest terms for assets and liabilities. According to the

Bank’s financial policy, the interest rate risk should be low, and the majority of TF Bank’s assets and liabilities therefore have a short fixed

interest term. A smaller portion of the Bank’s lending has a longer fixed interest term, which is partly matched by TF Bank offering longer

fixed interest term deposits. A change in the market interest rate by 1 percentage point increases/decreases the Bank’s interest expenses

for the coming 12 months by SEK 38 million (30), calculated based on interest-bearing liabilities on the balance sheet date.

TF Bank assesses additional capital requirements in Pillar 2 for interest rate risk by calculating the economic value at a parallel shift

of the yield curve by 200 basis points (2 %). As of 31 December 2022, the additional capital requirement for interest rate risk in Pillar 2

amounted to SEK 34 million (0) excl. tax effect.

SEK thousand 2022-12-31 2021-12-31

Fixed interest less than 1 month 57,686 1,270,092

Cash and balances with central banks 57,686 1,270,092

Remaining term to maturity of up to 3 months 522,412 60,035

Remaining term to maturity of more than 3 months but less than 1 year 1,050,287 -

More than 1 year but less than 5 years 264,326 256,376

Treasury bills eligible for refinancing 1,837,025 316,411

Fixed interest less than 1 month 1,631,653 779,636

Loans to credit institutions 1,631,653 779,636

Fixed interest less than 1 month 6,863,756 4,521,620

Remaining term to maturity of up to 3 months 3,406,068 3,019,474

Remaining term to maturity of more than 3 months but less than 1 year 2,812,142 2,211,929

Remaining term to maturity of more than 1 year but less than 5 years 1,465,404 1,035,923

Remaining term to maturity of more than 5 years 107,003 83,339

Loans to the public 14,654,373 10,872,285

Fixed interest less than 1 month 2,574 241

Remaining term to maturity of up to 3 months 6,114 -

Remaining term to maturity of more than 3 months but less than 1 year 2,699 -

Other assets 11,387 241

Fixed interest less than 1 month 11,779,312 8,038,772

Remaining term to maturity of up to 3 months 315,517 109,003

Remaining term to maturity of more than 3 months but less than 1 year 2,528,335 2,195,684

Remaining term to maturity of more than 1 year but less than 5 years 1,484,965 1,161,290

Deposits and borrowings from the public 16,108,130 11,504,749

Remaining term to maturity of up to 3 months 198,660 198,042

Subordinated liabilities 198,660 198,042

Fixed interest less than 1 month 9,593 17,005

Remaining term to maturity of up to 3 months 11,214 3,269

Remaining term to maturity of more than 3 months but less than 1 year 4,868 3,178

Other liabilities 25,675 23,452

Note 3 cont.

TF Bank AB (publ) • Annual Report 2022 • 41

Liquidity risk

The main liquidity risk comprises the Bank’s ability to meet its obligations to repay customer deposits from households; the ability to pay

out new credits is regarded as a business risk. To ensure that TF Bank does not end up in a liquidity crises, the financial policy regulates

the minimum level of available liquidity reserve to be maintained. Management carefully monitors the Bank’s liquidity reserve, which

comprises cash and cash equivalents and other liquidity generating measures, and also follows rolling forecasts concerning the liquidity

situation on the basis of expected cash flows. According to the Bank’s financial policy, the liquidity and funding risks should be low. All

funding other than deposits from the public comprises securities issues and equity.

TF Bank’s loan portfolio mainly consists of loans with relatively short maturities, while the Bank’s public deposits are, in practice, a long-

term and relatively stable source of financing. TF Bank also has a significant liquidity reserve to manage uneven liquidity flows. As of the

closing date, the Bank’s liquidity reserve amounted to SEK 3,210 million (2,217), which corresponds to 20 % (19) of the Bank’s deposits

from the public. The Bank’s liquidity coverage ratio was 290 % (353) and the stable net financing ratio amounted to 138 % (128).

SEK thousand 31 Dec 2022 31 Dec 2021

Payable on demand 57,686 1,270,092

Cash and balances with central banks 57,686 1,270,092

Remaining term to maturity of up to 3 months 525,774 60,000

Remaining term to maturity of more than 3 months but less than 1 year 1,057,189 -

More than 1 year but less than 5 years 276,948 272,647

Treasury bills eligible for refinancing 1,859,911 332,647

Payable on demand 1,405,542 679,338

Remaining term to maturity of more than 3 months but less than 1 year 75,370 -

Remaining term to maturity of more than 1 year but less than 5 years 150,741 100,298

Loans to credit institutions 1,631,653 779,636

Remaining term to maturity of up to 3 months 3,922,991 1,172,014

Remaining term to maturity of more than 3 months but less than 1 year 568,901 2,749,971

Remaining term to maturity of more than 1 year but less than 5 years 8,377,064 8,855,718

Remaining term to maturity of more than 5 years 5,315,117 -

Loans to the public 18,184,073 12,777,703

Remaining term to maturity of up to 3 months

8,688 241

Remaining term to maturity of more than 3 months but less than 1 year

2,699 -

Other assets 11,387 241

Payable on demand 11,598,680 8,038,772

Remaining term to maturity of up to 3 months 496,336 -

Remaining term to maturity of more than 3 months but less than 1 year 2,551,090 2,304,686

More than 1 year but less than 5 years 1,577,775 1,161,290

Deposits and borrowings from the public 16,223,882 11,504,750

Remaining term to maturity of more than 5 years 320,921 292,528

Subordinated liabilities 320,921 292,528

Remaining term to maturity of up to 3 months

20,808 20,274

Remaining term to maturity of more than 3 months but less than 1 year

4,868 3,178

Other liabilities 25,676 23,452

Payable on demand 3,265,256 1,974,365

Commitments 3,265,256 1,974,365

The amounts stated in the table are contractual, undiscounted cash flows and include both interest and amortisations and therefore the

amounts cannot be directly linked to the balance sheet.

Relates to market value on derivatives. The Bank’s derivatives are covered by framework agreements on netting, which would have an effect of SEK -14 millions (-23).

Note 3 cont.

42 • Annual Report 2022 • TF Bank AB (publ)

Operational risk

Operational risk is the risk of loss resulting from inadequate or failed internal processes, procedures and systems, human error, or external

events. Operational risk includes information, communication, and security risks, legal risks, as well as compliance risks, and may result in a

negative impact on the Bank’s assets and reputation and/or result in sanctions.

Operational risks are found in all activities, and it is neither possible nor cost-effective to try to eliminate all operational risks. TF Bank

works to minimise operational risks by creating effective processes, systems, and routines, as well as maintaining good internal control.

The Bank regularly evaluates its operational risks and quantifies them based on a model of probability and consequences. To reduce

the consequences of operational risks, TF Bank uses control points in business and support processes, incident reporting, as well as a

process for approving new products, services, markets, IT systems, etc. TF Bank also has contingency, continuity, and recovery plans.

Other operating risks

Other operating risks identified by TF Bank are business risks, economic risks, and reputational risks. Business risk can arise from factors

in the external business environment, such as changes in competitive situations or customer behavior. Economic risk can arise when there

are changes in the economic conditions in the market that affect customer demand for the Bank’s products. TF Bank continuously makes

economic forecasts and follows up on any deviations to reduce the risks that may arise, and the Bank’s operations are well-diversified.

Reputation risk is defined as losses that may be caused by customers, counterparties, shareholders, and authorities’ negative perception

of TF Bank, and negative rumors can significantly damage a company’s brand and operations. All of the Bank’s lending takes place under

controlled conditions where customers’ interests are taken into account. TF Bank also has high internal capital targets, in addition to legal

ones, to ensure a strong capital situation and stable financing.

TF Bank AB (publ) • Annual Report 2022 • 43

NOTE 4 Segment reporting

The CEO has ultimate responsibility for the decisions taken by the Bank. Management has defined the operating segments based on the

information determined by the CEO and used as a basis for decisions on the allocation of resources and evaluation of results. Manage-

ment evaluates the operating segments’ performance based on operating profit.

CONSUMER LENDING

Income statement, SEK thousand 2022 2021

Net interest income 682,329 604,695

Net fee and commission income 63,684 43,471

Net results from financial transactions 437 -3,128

Total operating income 746,450 645,038

General administrative expenses -221,623 -170,908

Depreciation and amortisation of tangible and intangible assets -5,040 -5,639

Other operating expenses -18,649 -15,596

Total operating expenses -245,312 -192,143

Profit before loan losses 501,138 452,895

Net loan losses -158,211 -144,546

Operating profit 342,927 308,349

Balance sheet, SEK thousand

31 Dec 2022 31 Dec 2021

Loans to the public

Household sector 8,600,475 7,076,557

Corporate sector

80,073 37,597

Total loans to the public 8,680,548 7,114,154

Household sector

Stage 1, net 8,042,970 6,620,083

Stage 2, net 225,175 164,451

Stage 3, net

332,330 292,023

Total household sector 8,600,475 7,076,557

Key figures

2022 2021

Operating income margin, % 9.5 10.0

Net loan loss ratio, % 2.0 2.2

Cost/Income ratio, % 32.9 29.8

Return on loans to the public, % 3.3 3.6

New lending, SEK thousand 5,913,007 4,720,963

Lending to the corporate sector consists of loans in category 1 to counterparties in the sale of overdue receivables.

The Bank continuously sells overdue receivables in markets where the price level is such that the Board deems it favorable for the Bank’s development and risk profile.

See separate section with definitions and reconciliation tables, page 72-73.

44 • Annual Report 2022 • TF Bank AB (publ)

CREDIT CARDS

Income statement, SEK thousand 2022 2021

Net interest income 354,617 164,111

Net fee and commission income 358 -6,907

Net results from financial transactions 123 -644

Total operating income 355,098 156,560

General administrative expenses -120,031 -70,069

Depreciation and amortisation of tangible and intangible assets -5,942 -4,809

Other operating expenses -47,270 -16,189

Total operating expenses -173,243 -91,067

Profit before loan losses 181,855 65,493

Net loan losses -142,910 -77,485

Operating profit 38,945 -11,992

Balance sheet, SEK thousand

31 Dec 2022 31 Dec 2021

Loans to the public

Household sector 3,236,360 1,652,293

Corporate sector

27,643 36,158

Total loans to the public 3,264,003 1,688,451

Household sector

Stage 1, net 3,114,211 1,584,192

Stage 2, net 87,819 40,222

Stage 3, net

34,330 27,879

Total household sector 3,236,360 1,652,293

Key figures

2022 2021

Operating income margin, % 14.3 12.8

Net loan loss ratio, % 5.8 6.3

Cost/Income ratio, % 48.8 58.2

Return on loans to the public, % 1.1 neg

New lending, SEK thousand 5,306,304 2,447,372

Number of active credit cards 140,687 79,952

Lending to the corporate sector consists of loans in category 1 to counterparties in the sale of overdue receivables.

The Bank continuously sells overdue receivables in markets where the price level is such that the Board deems it favorable for the Bank’s development and risk profile.

See separate section with definitions and reconciliation tables, page 72-73.

Note 4 cont.

TF Bank AB (publ) • Annual Report 2022 • 45

ECOMMERCE SOLUTIONS

Income statement, SEK thousand 2022 2021

Net interest income 225,715 184,868

Net fee and commission income 85,415 69,649

Net results from financial transactions 123 -828

Total operating income 311,253 253,689

General administrative expenses -171,723 -139,247

Depreciation and amortisation of tangible and intangible assets -19,274 -18,190

Other operating expenses -1,677 -1,518

Total operating expenses -192,674 -158,955

Profit before loan losses 118,579 94,734

Net loan losses -66,448 -38,533

Operating profit 52,131 56,201

Balance sheet, SEK thousand

31 Dec 2022 31 Dec 2021

Loans to the public

Household sector 2,676,437 2,069,680

Corporate sector

33,385 -

Total loans to the public 2,709,822 2,069,680

Household sector

Stage 1, net 2,510,298 1,972,671

Stage 2, net 104,789 83,557

Stage 3, net

61,350 13,452

Total household sector 2,676,437 2,069,680

Key figures

2022 2021

Operating income margin, % 13.0 14.8

Net loan loss ratio, % 2.8 2.3

Cost/Income ratio, % 61.9 62.7

Return on loans to the public, % 1.6 2.5

New lending, SEK thousand 5,098,999 4,018,465

Transaction volume, SEK thousand 9,279,475 6,612,133

Lending to the corporate sector consists of loans in category 1 to a foreign partner within the segment.

The Bank continuously sells overdue receivables in markets where the price level is such that the Board deems it favorable for the Bank’s development and risk profile.

See separate section with definitions and reconciliation tables, page 72-73.

Note 4 cont.

46 • Annual Report 2022 • TF Bank AB (publ)

RECONCILIATION AGAINST FINANCIAL INFORMATION

Income statement, SEK thousand 2022 2021

Operating income

Consumer Lending 746,450 645,038

Credit Cards 355,098 156,560

Ecommerce Solutions 311,253 253,689

Total operating income 1,412,801 1,055,287

Operating profit

Consumer Lending 342,927 308,349

Credit Cards 38,945 -11,992

Ecommerce Solutions 52,131 56,201

Total operating profit 434,003 352,558

Balance sheet, SEK thousand 31 Dec 2022 31 Dec 2021

Loans to the public

Consumer Lending 8,680,548 7,114,154

Credit Cards 3,264,003 1,688,451

Ecommerce Solutions 2,709,822 2,069,680

Total loans to the public 14,654,373 10,872,285

Note 4 cont.

TF Bank AB (publ) • Annual Report 2022 • 47

NOTE 5 Interest income

SEK thousand 2022 2021

Interest income from loans to the public 1,460,982 1,073,215

Interest income, treasury bills eligible for refinancing 8,333 507

Other interest income 3,664 391

Total interest income 1,472,979 1,074,113

- of which interest income according to effective interest rate method

1,425,122 1,042,406

- of which interest income from non-performing loans

25,409 23,402

Geographical breakdown of interest income:

Norway 354,843 277,693

Germany 320,546 139,513

Finland 294,263 251,265

Sweden 142,680 116,479

Estonia 127,168 119,954

Latvia 122,015 96,451

Lithuania 62,516 27,288

Poland 37,048 38,343

Denmark 6,128 6,531

Austria 4,997 596

Spain 775 -

Total interest income 1,472,979 1,074,113

NOTE 6 Interest expense

SEK thousand 2022 2021

Interest expense, deposits from the public -117,003 -75,927

Interest expense, subordinated liabilities -11,595 -11,248

Deposit fees to credit institutions -8,399 -7,404

Interest expense, treasury bills eligible for refinancing - -154

Other financial expenses -73,321 -25,706

Total interest expense -210,318 -120,439

- of which interest expenses according to effective interest rate method -185,495 -102,634

- of which costs for deposit guarantee and resolution fee -24,823 -17,805

48 • Annual Report 2022 • TF Bank AB (publ)

NOTE 7 Net fee and commission income

SEK thousand 2022 2021

Fee and commission income

Reminder fees 90,087 72,896

Insurance premiums 81,023 50,865

Other fee and commission income 33,206 16,717

Total fee and commission income 204,316 140,478

Fee and commission expense

Insurance expense -22,884 -17,009

Other fee and commission expense -31,975 -17,256

Total fee and commission expense -54,859 -34,265

Net fee and commission income 149,457 106,213

Geographical breakdown of fee and commission income:

Norway 94,907 56,231

Sweden 46,318 38,840

Finland 35,730 29,908

Germany 14,382 5,665

Estonia 5,441 4,348

Denmark 3,604 3,509

Latvia 2,362 1,340

Poland 1,194 528

Lithuania 209 90

Austria 149 19

Spain 20 -

Total fee and commission income 204,316 140,478

NOTE 8 Net results from financial transactions

SEK thousand 2022 2021

Exchange rate fluctuations 639 -4,601

Gains/losses on investments in funds and other securities 44 1

Total net results from financial transactions 683 -4,600

TF Bank AB (publ) • Annual Report 2022 • 49

NOTE 9 General administrative expenses

SEK thousand 2022 2021

Staff costs

Salaries and fees -157,673 -120,459

Social security costs -41,150 -32,638

Pension costs -9,968 -8,468

Other staff costs -6,418 -4,567

Total s t af f costs -215,209 -166,132

Other general administrative expenses

Information services and customer communication expenses -96,146 -61,461

IT expenses -60,929 -45,413

Postage and telephone expenses -22,939 -17,791

Bank fees -22,041 -14,729

Rent and property expenses -14,200 -10,901

Debt collection expenses -13,349 -12,687

Recruitment expenses -4,410 -1,803

Auditors’ remuneration -3,612 -3,980

Lawyer fees -3,043 -1,946

Other expenses -57,499 -43,381

Total other general administrative expenses -298,168 -214,092

Total general administrative expenses -513,377 -380,224

NOTE 10 Auditors’ remuneration

SEK thousand 2022 2021

KPMG

Audit assignment 2,978 3,702

Audit services in addition to the audit assignment 380 278

Tax advices 75 -

Other services 179 -

Total auditors’ remuneration 3,612 3,980

The amounts include auditors’ remuneration for KPMG AB of SEK 3,134 thousand, divided between the audit assignment SEK 2,500

thousand and other audit services besides the audit assignment SEK 380 thousand, tax advisory services SEK 75 thousand and other

services SEK 179 thousand.

50 • Annual Report 2022 • TF Bank AB (publ)

NOTE 11 Average number of employees, salaries, other remuneration and social security costs

AVERAGE NUMBER OF EMPLOYEES, DISTRIBUTED BETWEEN WOMEN AND MEN:

2022 2021

Women 154 123

Men 136 113

Total 290 236

AVERAGE NUMBER OF EMPLOYEES, DISTRIBUTED BETWEEN WOMEN AND MEN, BY COUNTRY:

2022 2021

Sweden

Women 45 38

Men 51 41

Total 96 79

Finland

Women 16 14

Men 15 13

Total 31 27

Poland

Women 36 25

Men 38 34

Total 74 59

Estonia

Women 23 22

Men 7 3

Total 30 25

Norway

Women 25 22

Men 19 20

Total 44 42

Latvia

Women 9 2

Men 6 2

Total 15 4

SALARIES AND REMUNERATION:

SEK thousand 2022 2021

Board of Directors and CEO 9,301 7,935

Other staff 148,372 112,524

Total salaries and remuneration 157,673 120,459

Social costs pursual to legislation and agreements 41,150 32,638

Pension costs 9,968 8,468

Total salaries, remuneration, social security costs and pension costs 208,791 161,565

TF Bank AB (publ) • Annual Report 2022 • 51

SALARIES AND REMUNERATION FOR BOARD MEMBERS AND SENIOR EXECUTIVES:

SEK thousand 2022 2021

Chairman of the Board: John Brehmer

Board fees

1,395 830

Total Chairman of the Board 1,395 830

SEK thousand 2022 2021

Fees

other Board members:

Bertil Larsson - 400

Charlotta Björnberg-Paul - 380

Fredrik Oweson 575 -

Mari Thjømøe 475 400

Michael Lindengren 625 450

Niklas Johansson 620 -

Sara Mindus 475 450

Total 2,770 2,080

SEK thousand 2022 2021

CEO: Mattias Carlsson

Basic salary

4,608 4,501

Variable remuneration - -

Other benefits 150 146

Pension costs 1,091 1,100

Total 5,849 5,747

SEK thousand 2022 2021

Deputy CEO: Mikael Meomuttel

Basic salary

2,982 3,001

Variable remuneration 300 -

Other benefits 172 185

Pension costs 733 699

Total 4,187 3,885

Other senior executives

Basic salary 3,246 3,340

Variable remuneration - 1,136

Other benefits 206 529

Pension costs 114 363

Total 3,566 5,368

Renumeration in accordance with the resolution at the AGM’s in 2022 and 2021, and include renumeration that will be paid until the AGM during the subsequent year.

In addition to the basic salary in 2021, the CEO and Deputy CEO have received retroactive salary adjustments from 2020 amounting to SEK 378 thousand and SEK 302

thousand respectively. In addition to the basic salary for 2022, the COO received retroactive salary adjustments from 2021 amounting to SEK 350 thousand.

During the first half of 2021, other senior executives consisted of Head of Consumer Lending and Head of Ecommerce Solutions. From July 2021, the executive manage-

ment team changed and consists of CEO, Deputy CEO and former Head of Consumer Lending who was appointed a new role as COO.

Note 11 cont.

52 • Annual Report 2022 • TF Bank AB (publ)

Remuneration of senior executives

In accordance with the requirements regarding disclosure of information in FFFS 2011:1, information on e.g. remuneration framework

is provided on the Bank’s website www.tfbankgroup.com. Salaries and other remuneration for the CEO and other senior executives

comprise fixed salary, variable remuneration, commission-based compensation, other benefits and pension. External Board members

receive fees determined by the Annual General Meeting.

Commission-based compensation

In 2020, commission-based compensation amounted to SEK 300 thousand (1,136). The size of the commission-based compensation

is paid on the basis of the individual accomplishment of financial targets established for the year. TF Bank has ensured that all targets

related to commission-based compensation for the fiscal year can be measured in a reliable way. The commission-based compensation

is paid to senior executives within the Bank and is not pensionable.

Pensions

The Company’s pension obligations are covered through payments to an ITP occupational pension plan. The retirement age for the CEO

is 65 and annual supplementary payments are made to a defined contribution plan. The retirement age for other senior executives is

between 65 and 67 depending on country of residence and annual supplementary payments are made to a defined contribution plan.

Period of notice and severance pay

According to an agreement between TF Bank AB and the CEO, the period of notice is six months (12 months in the case of termination by

the Company). If termination is initiated by the Company, basic salary is payable during the period of notice, however variable remunera-

tion, if agreed before the notice was issued, is not payable. Severance pay is adjusted according to the salary that the CEO receives from a

new employer.

Compensation to the Board of Directors

Compensation to the members of the Board of Directors, as indicated above, is determined by the Annual General Meetings and refers

to annual fees from Annual General Meeting to Annual General Meeting for the years respectively. Board compensation consists of fixed

compensation for board work as well as fixed compensation for any committee work. The Board of Directors have established three

committees: the Audit Committee, the Remuneration Committee, and the Risk and Compliance Committee. The Bank does not have any

pension entitlements for Board members.

GENDER DISTRIBUTION BOARD MEMBERS AND SENIOR EXECUTIVES

SEK thousand

2022 2021

Number on

reporting date

Of which

women (%)

Number on

reporting date

Of which

women (%)

Board members 6 33 6 50

CEO and other senior executives 3 0 3 0

Note 11 cont.

TF Bank AB (publ) • Annual Report 2022 • 53

NOTE 12 Intangible assets

SEK thousand

Internally

developed

software

Ongoing

development Total

2022

Cost, opening balance 128,066 22,807 150,873

Additions - 45,004 45,004

Reclassification 27,505 -27,505 -

Sales and disposals - - -

Exchange rate differences 4,780 -2,392 2,388

Cost, closing balance 160,351 37,914 198,265

Amortisations, opening balance -79,508 - -79,508

Amortisations for the year -28,827 - -28,827

Sales and disposals - - -

Exchange rate differences -3,150 - -3,150

Amortisations, closing balance -111,485 - -111,485

Carrying amount 48,866 37,914 86,780

2021

Cost, opening balance 104,225 10,253 114,478

Additions - 34,903 34,903

Reclassification 22,487 -22,487 -

Sales and disposals - - -

Exchange rate differences 1,354 138 1,492

Cost, closing balance 128,066 22,807 150,873

Amortisations, opening balance -52,716 - -52,716

Amortisations for the year -25,952 - -25,952

Sales and disposals - - -

Exchange rate differences -840 - -840

Amortisations, closing balance -79,508 - -79,508

Carrying amount 48,558 22,807 71,365

54 • Annual Report 2022 • TF Bank AB (publ)

NOTE 13 Tangible assets

SEK thousand Equipment Total

2022

Cost, opening balance 12,771 12,771

Additions 2,818 2,818

Sales and disposals -2,321 -2,321

Exchange rate differences 335 335

Cost, closing balance 13,603 13,603

Amortisations, opening balance -10,072 -10,072

Amortisations for the year -1,626 -1,626

Sales and disposals 2,321 2,321

Exchange rate differences -271 -271

Amortisations, closing balance -9,648 -9,648

Carrying amount 3,955 3,955

2021

Cost, opening balance 11,115 11,115

Additions during the year 1,413 1,413

Sales and disposals - -

Exchange rate differences 243 243

Cost, closing balance 12,771 12,771

Amortisations, opening balance -8,457 -8,457

Amortisations for the year -1,411 -1,411

Sales and disposals - -

Exchange rate differences -204 -204

Amortisations, closing balance -10,072 -10,072

Carrying amount 2,699 2,699

TF Bank AB (publ) • Annual Report 2022 • 55

NOTE 14 Goodwill

SEK thousand 31 Dec 2022 31 Dec 2021

Cost, opening balance 12,753 12,753

Change during the year

Cost, closing balance 12,753 12,753

Amortisations, opening balance -2,551 -1,276

Change during the year

Amortisations according to plan -1,275 -1,275

Amortisations, closing balance -3,826 -2,551

Carrying amount 8,927 10,202

The goodwill arose as a result of the acquisition of the Norwegian subsidiary BB Bank ASA which was merged with TF Bank in the begin-

ning of 2020.

The goodwill impairment testing of the cash generating unit was conducted ahead of the balance sheet date. Calculations are based

on estimated future cash flows after tax based on financial forecasts approved by the Executive Management and covering a three-

year period, which is in line with the Bank’s business plan. Important assumptions made in respect of the approved forecasts comprise

average loan portfolio, new lending and margins. The average growth rate used is based on the Company’s own plans and estimates

of future performance. Beyond the period covered by the forecast, estimated growth corresponds to Riksbanken’s inflation targets.

Estimated cash flows have been discounted using an interest rate based on risk-free interest and risk adjustment corresponding to the

average required rate of return. The calculation of recoverable amount is based on value in use.

A change in the assumptions concerning growth rate and discount rate of +/- 1 percentage point would not result in a need to recog-

nise impairment Losses. TF Bank’s judgement is that there is room for a reasonable change in both the growth rate assumption and the

discount factor.

NOTE 15 Other operating expenses

SEK thousand 2022 2021

Marketing expenses -67,596 -33,303

Total -67,596 -33,303

NOTE 16 Net loan losses

SEK thousand 2022 2021

Change in provision for sold non-performing loans -250,930 -146,696

Realised loan losses -37,477 -37,960

Recovered from previous write-offs 239 565

Change in provision for expected loan losses, stage 1-3 -79,401 -76,473

Net loan losses -367,569 -260,564

Loan losses are attributable to Loans to the public and classified as amortised cost.

56 • Annual Report 2022 • TF Bank AB (publ)

NOTE 17 Tax on profit for the year

SEK thousand 2022 2021

Current tax on profit for the year -91,022 -85,277

Tax due to changes in tax relating to prior years -5 -191

Other taxes -280 -199

Deferred tax -1,891 10,315

Tax on profit for the year

-93,198 -75,352

Reconciliation of tax on profit for the year

Profit before tax 434,003 352,558

Tax according to applicable tax rate -89,405 -72,627

Tax effect of non-deductible expenses -5,359 -13,408

Tax effect of non-taxable income 1,851 11,073

Tax due to changes in tax relating to prior years -5 -191

Other taxes -280 -199

Tax on profit for the year recognised in the income statement -93,198 -75,352

NOTE 18 Classification of financial assets and liabilities

31 Dec 2022

SEK thousand

Financial instru-

ments at fair value

through profit or loss

Fair value

through

other com-

prehensive

income

Amortised

cost

Derivatives

used for

hedge

accounting

Non-

financial

assets and

liabilities Total

Compulsory

Assets

Cash and balances with central banks - - 57,686 - - 57,686

Treasury bills eligible for refinancing, etc. - - 1,837,025 - - 1,837,025

Loans to credit institutions - - 1,631,653 - - 1,631,653

Loans to the public - - 14,654,373 - - 14,654,373

Shares 154 - - - - 154

Derivatives 11,387 - - - - 11,387

Other assets - - - - 155,012 155,012

Total assets 11,541 - 18,180,737 - 155,012 18,347,290

Liabilities

Deposits and borrowings from the public - - 16,108,130 - - 16,108,130

Subordinated liabilities - - 198,660 - - 198,660

Derivatives 21,991 - - 3,684 - 25,675

Other liabilities - - - - 280,047 280,047

Total liabilities 21,991 - 16,306,790 3,684 280,047 16,612,512

Weighted average tax rate for the Bank was 21.5 % (21.4).

TF Bank AB (publ) • Annual Report 2022 • 57

31 Dec 2021

SEK thousand

Financial instru-

ments at fair value

through profit or loss

Fair value

through

other com-

prehensive

income

Amortised

cost

Non-

financial

assets and

liabilities Total

Compulsory

Assets

Cash and balances with central banks - - 1,270,092 - 1,270,092

Treasury bills eligible for refinancing, etc. 60,035 - 256,376 - 316,411

Loans to credit institutions - - 779,636 - 779,636

Loans to the public - - 10,872,285 - 10,872,285

Shares 257 - - - 257

Derivatives 241 - - - 241

Other assets - - - 151,894 151,894

Total assets 60,533 - 13,178,389 151,894 13,390,816

Liabilities

Deposits and borrowings from the public - - 11,504,749 - 11,504,749

Subordinated liabilities - - 198,042 - 198,042

Derivatives 23,452 - - - 23,452

Other liabilities - - - 233,882 233,882

Total liabilities 23,452 - 11,702,791 233,882 11,960,125

NOTE 19 Financial assets and liabilities at fair value

For financial instruments measured at fair value in the balance sheet, disclosures are required on fair value measurement by level

according to the fair value hierarchy below:

• Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).

• Other observable inputs for assets or liabilities are quoted market prices included in Level 1, either directly, i.e. in the form of quoted

prices, or indirectly, i.e. derived from quoted prices (Level 2).

• Data for assets or liabilities which are not based on observable market data (non-observable inputs) (Level 3).

The Bank also provides information regarding the fair value of certain assets for information purposes.

31 Dec 2022

SEK thousand Level 1 Level 2 Level 3 Total

Assets

Cash and balances with central banks - - 57,686 57,686

Treasury bills eligible for refinancing 1,837,025 - - 1,837,025

Loans to credit institutions - - 1,631,653 1,631,653

Loans to the public - - 14,654,373 14,654,373

Shares - 154 - 154

Derivatives - 11,387 - 11,387

Total assets 1,837,025 11,541 16,286,026 18,134,592

Liabilities

Deposits and borrowings from the public - - 16,108,130 16,108,130

Subordinated liabilities - - 198,660 198,660

Derivatives - 25,675 - 25,675

Total liabilities - 25,675 16,306,790 16,332,465

Note 18 cont.

58 • Annual Report 2022 • TF Bank AB (publ)

31 Dec 2021

SEK thousand Level 1 Level 2 Level 3 Total

Assets

Cash and balances with central banks - - 1,270,092 1,270,092

Treasury bills eligible for refinancing 316,411 - - 316,411

Loans to credit institutions - - 779,636 779,636

Loans to the public - - 10,872,285 10,872,285

Shares - 257 - 257

Derivatives - 241 - 241

Total assets

316,411 498 12,922,013 13,238,922

Liabilities

Deposits and borrowings from the public - - 11,504,749 11,504,749

Subordinated liabilities - - 198,042 198,042

Derivatives - 23,452 - 23,452

Total liabilities - 23,452 11,702,791 11,726,243

Financial instruments in Level 2

The fair value of financial instruments not traded in an active market (e.g. OTC derivatives) is determined using various valuation tech-

niques. These valuation techniques use observable market data where available and rely as little as possible on entity-specific informa-

tion. An instrument is classified as Level 2 if all significant inputs required for fair value measurement of an instrument are observable.

Specific valuation techniques used to measure financial instruments include:

• Quoted market prices or dealer quotes for similar instruments.

• Fair value of currency swap contracts is determined using forward rates at the balance sheet date.

An instrument is classified as Level 3 in cases where one or more of the significant inputs are not based on observable market data

The maturities for lending to the public are relatively short, and therefore the book value is considered a reasonable estimate of the fair

value. The differences are marginal for the Credit Cards segment where the maturities are slightly longer.

31 Dec 2022

SEK thousand Carrying amount Fair value

Fair value gain (+)/

Fair value loss (-)

Assets

Cash and balances with central banks 57,686 57,686 -

Treasury bills eligible for refinancing, etc. 1,837,025 1,826,973 -10,052

Loans to credit institutions 1,631,653 1,631,653 -

Loans to the public 14,654,373 14,654,373 -

Shares 154 154 -

Derivatives 11,387 11,387 -

Total assets 18,192,278 18,182,226 -10,052

Liabilities

Deposits and borrowings from the public 16,108,130 16,108,130 -

Subordinated liabilities 198,660 198,660 -

Derivatives 25,675 25,675 -

Total liabilities 16,332,465 16,332,465 -

Note 19 cont.

TF Bank AB (publ) • Annual Report 2022 • 59

31 Dec 2021

SEK thousand Carrying amount Fair value

Fair value gain (+)/

Fair value loss (-)

Assets

Cash and balances with central banks 1,270,092 1,270,092 -

Treasury bills eligible for refinancing, etc. 316,411 316,411 -

Loans to credit institutions 779,636 779,636 -

Loans to the public 10,872,285 10,872,285 -

Shares 257 257 -

Derivatives 241 241 -

Total assets 13,238,922 13,238,922 -

Liabilities

Deposits and borrowings from the public 11,504,749 11,504,749 -

Subordinated liabilities 198,042 198,042 -

Derivatives 23,452 23,452 -

Total liabilities 11,726,243 11,726,243 -

NOTE 20 Treasury bills eligible for refinancing

SEK thousand 31 Dec 2022 31 Dec 2021

Treasury bills eligible for refinancing (EU) 551,188 -

Treasury bills eligible for refinancing (Netherlands) 499,306 -

Treasury bills eligible for refinancing (Finland) 497,297 -

Government securities eligible for refinancing (Norway) 264,326 256,376

Treasury bills eligible for refinancing (Sweden) 24,908 60,035

Total treasury bills eligible for refinancing, etc. 1,837,025 316,411

NOTE 21 Loans to credit institutions

SEK thousand 31 Dec 2022 31 Dec 2021

Accounts receivable Swedish currency 1,093,110 289,444

Accounts receivable foreign currency 538,543 490,192

Total loans to credit institutions 1,631,653 779,636

Note 19 cont.

60 • Annual Report 2022 • TF Bank AB (publ)

NOTE 22 Loans to the public

SEK thousand 31 Dec 2022 31 Dec 2021

Loans to the household sector 14,513,272 10,798,530

Loans to the corporate sector

141,101 73,755

Total loans to the public 14,654,373 10,872,285

Loans to the household sector

Stage 1, gross 13,861,985 10,330,411

Stage 2, gross 495,257 330,212

Stage 3, gross

763,649 623,294

Total loans to the household sector, gross 15,120,891 11,283,917

Provisions for expected loan losses, household sector

Stage 1 -194,506 -153,465

Stage 2 -77,474 -41,982

Stage 3

-335,639 -289,940

Total provisions for expected loan losses, household sector -607,619 -485,387

Loans to the household sector

Stage 1, net 13,667,479 10,176,946

Stage 2, net 417,783 288,230

Stage 3, net

428,010 333,354

Total loans to the household sector, net 14,513,272 10,798,530

Geographical distribution of net loans:

Norway 4,182,683 3,497,344

Finland 3,246,939 2,612,182

Germany 2,665,839 1,422,692

Sweden 1,291,765 1,027,610

Estonia 1,035,596 821,748

Latvia 894,692 675,810

Lithuania 688,702 331,482

Poland 432,097 449,519

Austria 106,752 7,658

Denmark 69,090 26,240

Spain 40,218 -

Total loans, net book value 14,654,373 10,872,285

Lending to the corporate sector consists of loans in stage 1 to counterparties regarding sale of overdue receivables and loans in stage 1 to a foreign partner within

Ecommerce Solutions.

The Bank regularly sells overdue receivables in markets where the Board of Directors considers the price level to be favourable for the Bank’s performance and risk

profile.

TF Bank AB (publ) • Annual Report 2022 • 61

LOANS TO THE CORPORATE SECTOR

SEK thousand 31 Dec 2022 31 Dec 2021

Loans, gross 141,101 73,755

Total loans, net book value 141,101 73,755

Provision of credit losses during the period were impacted by several different factors, as described below:

- Transfers between Stage 1 and Stage 2 or Stage 3 depending on whether the loan has significantly increased (or decreased) in risk or if

it has defaulted during the period and thus transferred between 12 month and full lifetime ECL.

- New loans during the period and also loans removed from the portfolio in the same period. (Increases due to issue and purchase and

decline due to derecognition from the statement of financial position).

- Changes in risk factors as Probability of default (PD), Exposure at default (EAD) and Loss given default (LGD), arising because the model

has been updated with new amounts.

- Changes in macroeconomic scenarios based on macroeconomic factors.

- Exchange rate differences.

Non doubtful

receivables

Doubtful

receivables

Stage 1 Stage 2 Stage 3

SEK thousand

12 month

expected loan

losses

Lifetime

expected loan

losses

Lifetime

expected loan

losses Total

Loans to the public, gross, opening balance 1 January 2022 10,404,166 330,212 623,294 11,357,672

Financial assets added during the year 16,318,310 - - 16,318,310

Repayments -11,689,672 -394,014 -356,750 -12,440,436

Financial assets sold during the year - -854,228 -10,812 -865,040

Stage transfers -1,846,029 1,384,614 461,415 -

- from 1 to 2 -1,588,951 1,588,951 - -

- from 1 to 3 -385,317 - 385,317 -

- from 2 to 1 128,239 -128,239 - -

- from 2 to 3 - -76,098 76,098 -

- from 3 to 2 - - - -

Exchange rate differences 816,311 28,673 46,502 891,486

Loans to the public, gross, closing balance 31 December 2022 14,003,086 495,257 763,649 15,261,992

Provision for expected loan losses, opening balance 1 January 2022 -153,465 -41,982 -289,940 -485,387

Changes reported as net loan losses

Financial assets added during the year -134,263 - - -134,263

Repayments 91,724 38,818 105,148 235,690

Financial assets sold during the year - 24,058 8,570 32,628

Stage transfers 14,076 -87,774 -138,035 -211,733

- from 1 to 2 11,252 -113,511 - -102,259

- from 1 to 3 4,567 - -111,401 -106,834

- from 2 to 1 -1,743 14,237 - 12,494

- from 2 to 3 - 11,500 -26,634 -15,134

- from 3 to 2 - - - -

Exchange rate differences -12,578 -10,594 -21,382 -44,554

Provision for expected loan losses, closing balance 31 December 2022 -194,506 -77,474 -335,639 -607,619

Note 22 cont.

62 • Annual Report 2022 • TF Bank AB (publ)

Non doubtful

receivables

Doubtful

receivables

Stage 1 Stage 2 Stage 3

SEK thousand

12 month

expected loan

losses

Lifetime

expected loan

losses

Lifetime

expected loan

losses Total

Loans to the public, gross, opening balance 1 January 2021 7,474,995 327,956 512,298 8,315,249

Financial assets added during the year 11,186,800 - - 11,186,800

Repayments -7,713,743 -223,422 -102,856 -8,040,021

Financial assets sold during the year - -419,238 -46,117 -465,355

Stage transfers -877,525 633,771 243,754 -

- from 1 to 2 -763,301 763,301 - -

- from 1 to 3 -204,300 - 204,300 -

- from 2 to 1 90,076 -90,076 - -

- from 2 to 3 - -39,454 39,454 -

- from 3 to 2 - - - -

Exchange rate differences 333,639 11,145 16,215 360,999

Loans to the public, gross, closing balance 31 December 2021 10,404,166 330,212 623,294 11,357,672

Provision for expected loan losses, opening balance 1 January 2021 -127,918 -36,650 -228,232 -392,800

Changes reported as net loan losses

Financial assets added during the year -118,860 - - -118,860

Repayments 86,524 16,139 7,490 110,153

Financial assets sold during the year - 32,428 19,838 52,266

Stage transfers 9,951 -53,116 -83,709 -126,874

- from 1 to 2 8,255 -66,652 - -58,397

- from 1 to 3 2,294 - -73,649 -71,355

- from 2 to 1 -598 10,481 - 9,883

- from 2 to 3 - 3,055 -10,060 -7,005

- from 3 to 2 - - - -

Exchange rate differences -3,162 -783 -5,327 -9,272

Provision for expected loan losses, closing balance 31 December 2021 -153,465 -41,982 -289,940 -485,387

Note 22 cont.

TF Bank AB (publ) • Annual Report 2022 • 63

NOTE 23 Shares and participations in Group companies

TFB Service UAB TFB Service SIA TFB Service GmbH TFB Service AB TFBN Services S.L.

Country of registration and

operation Lithuania Latvia Germany Sweden Spain

Operation Administration Administration Administration Administration Administration

Number of shares 1 1 25,000 25,000 3,000

Percentage of shares owned

by TF Bank, % 100 100 100 100 100

Carrying amount as at

31 December 2022 25 26 264 25 31

Operating income 2022 7,591 - 9,798 - 1,887

Profit before tax 2022 429 -20 165 0 50

Tax on profit 2022 - - -59 - -13

Average number of employees

2022 16 0 10 - 2

TFB Service UAB TFB Service SIA TFB Service GmbH TFB Service AB TFBN Services S.L.

Carrying amount as at

1 January 2021 25 26 264 - -

Shares issuance - - - 25 -

Carrying amount as

at 31 December 2021 25 26 264 25 -

Carrying amount as

at 1 January 2022 25 26 264 25 -

Shares issuance - - - - 31

Carrying amount as

at 31 December 2022 25 26 264 25 31

NOTE 24 Other assets

SEK thousand 31 Dec 2022 31 Dec 2021

Derivatives 11,387 241

Accounts receivable 3,989 12,186

Other assets 12,331 9,415

Total other assets 27,707 21,842

64 • Annual Report 2022 • TF Bank AB (publ)

NOTE 25 Deferred tax

SEK thousand 31 Dec 2022 31 Dec 2021

Deferred tax assets

Accrued taxes attributable to unrealised derivatives 2,943 4,781

Deferred tax assets 2,943 4,781

Deferred tax liabilities

The difference between the income tax recognised in the income statement and income tax on

operations comprises:

Accrued taxes attributable to taxes abroad 15 5,641

Deferred tax on temporary differences 15 5,641

The deferred tax liabilities are expected to be settled as follows:

Within 12 months 15 5,641

Later than within 12 months - -

15 5,641

The gross change in deferred tax is as follows:

Opening balance -860 -5,595

Effect of changed branch taxation 5,679 -5,581

Recognised in the income statement -1,891 10,316

Closing balance 2,928 -860

NOTE 26 Deposits and borrowings from the public

SEK thousand 31 Dec 2022 31 Dec 2021

Germany 12,742,158 7,332,430

Norway 2,736,078 3,174,844

Sweden 344,698 662,747

Finland 285,196 334,728

Total deposits and borrowings from the public 16,108,130 11,504,749

Deposits and borrowings from the public only occur in the household sector and 98 % (99) is covered by a deposit guarantee scheme.

Deposits in Sweden, Norway and Germany are payable on demand and on maturity. Deposits in Finland are payable on demand.

Deposits with maturity amounts to 32 % (36) of total deposits from the public. Maturities are shown in Note 3.

CHANGES IN DEPOSITS AND BORROWINGS FROM THE PUBLIC

SEK thousand 31 Dec 2022 31 Dec 2021

Opening balance 11,504,749 8,714,032

Change for the year 3,465,856 2,429,388

Exchange rate differences 1,137,525 361,329

Closing balance 16,108,130 11,504,749

TF Bank AB (publ) • Annual Report 2022 • 65

NOTE 27 Other liabilities

SEK thousand 31 Dec 2022 31 Dec 2021

Debts to ecommerce partners 74,804 53,573

Accounts payable 8,357 6,783

Derivatives 25,675 23,452

Other liabilities 16,295 10,212

Total other liabilities 125,131 94,020

NOTE 28 Accrued expenses and prepaid income

SEK thousand 31 Dec 2022 31 Dec 2021

Accrued broker fees 48,255 43,112

Accrued salaries and holiday pay liability 25,554 20,790

Accrued interest on deposits from the public 22,507 21,323

Accrued social security costs 16,145 11,216

Accrued interest on loans to the public 4,542 3,456

Other accrued expenses and prepaid income 27,618 21,687

Total accrued expenses and prepaid income 144,621 121,584

NOTE 29 Subordinated liabilities

SEK thousand 31 Dec 2022 31 Dec 2021

Time-bound subordinated liabilities 198,660 198,042

Total 198,660 198,042

Subordinated loans are subordinated to other liabilities.

Issuing date Nominal amount (SEK thousand) Interest rate terms Maturity date

2019-09-27 100 000 STIBOR 3 months +4,65% 2029-09-27

2020-12-14 100 000 STIBOR 3 months +5,50% 2030-12-14

66 • Annual Report 2022 • TF Bank AB (publ)

NOTE 30 Transactions with related parties

Transactions between Group companies refer to invoicing of services provided by subsidiaries. Transactions with other related parties in

the table below refer to transactions between TF Bank and companies that largely have the same owner as TF Bank’s largest owner

TFB Holding AB, corporate identity number 556705-2997. All transactions are priced according to the market.

SEK thousand 31 Dec 2022 31 Dec 2021

The following transactions took place between companies within the Group:

General administrative expenses -23,973 -18,341

Total -23,973 -18,341

SEK thousand 31 Dec 2022 31 Dec 2021

The following transactions have been made with other related parties:

Interest income (transaction costs) -46,869 -47,957

3,294 890

General administrative expenses -2,049 -3,109

Total -45,624 -50,176

Acquisition of assets and liabilities from other related parties:

Ecommerce Solutions 550,025 596,687

Total 550,025 596,687

SEK thousand 31 Dec 2022 31 Dec 2021

Assets and liabilities at the end of the period as a result of transactions with other related parties:

Other assets 917 1461

Other liabilities 282 14

TF Bank AB (publ) • Annual Report 2022 • 67

NOTE 31 Capital adequacy analysis

Background

Information about the Bank’s capital adequacy includes information in accordance with Chapter 6, Sections 3-4 of the Swedish FSA’s

regulations and general guidelines (FFFS 2008:25) on annual accounts of credit institutions and investment firms and related information

contained in article 447 of Regulation (EU) No 575/2013 and Chapter 8, Section 1 of the Swedish FSA’s regulations and general guidelines

on regulatory requirements and capital buffers (FFFS 2014:12). Other information required pursuant to FFFS 2014:12 and Regulation (EU) No

575/2013 is provided on the Bank’s website www.tfbankgroup.com.

TF Bank AB is the responsible institution and is under the supervision of the Swedish FSA. As a result, the Bank is subject to the rules

governing credit institutions in Sweden. TF Bank AB is a listed company which means that the stock exchange rules are also applicable.

TF Bank is classified as a small and non-complex institute in accordance to article 433 of supervisory regulation (EU) No 2019/876.

Information about own funds and capital requirements

The Bank’s statutory capital requirements are governed by the Swedish Special Supervision of Credit Institutions and Investment Firms

Act (2014:968), Regulation (EU) No 575/2013, the Act on Capital Buffers (2014:966) and the Swedish Financial Supervisory Authority’s

regulations and general recommendations on regulatory requirements and capital buffers (FFFS 2014:12) and the Swedish Financial

Supervisory Authority’s memorandum (FI dnr 20-20990) on the new capital requirements for Swedish banks.

The purpose of the regulations is to ensure that the Bank can manage risks and protect customers. The regulations state that own funds

must cover the capital requirements including the minimum capital requirements according to Pillar 1, Pillar 2 and the applicable buffer

requirements.

On 2 February 2022 the Swedish FSA approved TF Bank’s application to include the interim profit in own funds for TF Bank AB subject

to the auditor’s review of the surplus, and that the surplus has been calculated in accordance with applicable accounting rules, that

the predictable costs and dividends have been deducted in accordance with Regulation (EU) No 575/2013 and that the calculation has

been made in accordance with Regulation (EU) No 241/2014. The CET1 capital complies with the requirements of Regulation (EU) No

575/2013.

IFRS 9 Transitional arrangements

The Bank has notified the Swedish Financial Supervisory Authority that the Bank applies the transitional arrangements according to

Article 473a of 2017/2395/EU pursuant to paragraphs 2 and 4. Table according to “Final Report on the guidelines on uniform disclosure

of IFRS 9 transitional arrangements”, EBA, 2018-01-12, is included in the information published under Part 8 of 575/2013/EU and can be

found on the Bank’s website www.tfbankgroup.com.

Operational risk – Alternative Standardised Approach

The Swedish Financial Supervisory Authority has given TF Bank permission to use the Alternative Standardised Approach to calculate the

capital requirement for operational risk. TF Bank is therefore changing its method for calculating operational risk from the Standardised

Approach to the Alternative Standardised Approach as of 31 December 2022. The change results in the capital requirement for operational

risk is significantly closer to the business’ own perception of its operational risks. The approval has strengthened all TF Bank’s capital ratios

with approximately 1 percentage point as of 31 December 2022.

Capital planning

The strategies and methods used by TF Bank to measure and maintain capital requirements according to Regulation (EU) No 575/2013

are based on the Bank’s risk management. Risk management seeks to identify and analyse the risks inherent in TF Bank’s operations

and to set appropriate limits for these risks and ensure that controls are in place. Risks are monitored and controls are performed on an

ongoing basis to ensure limits are not exceeded. TF Bank has a centralised function for independent risk control which reports directly

to the CEO and whose task it is to analyse development of risks and, where required, suggest changes to governing documents and

processes, both for overarching risk management and specific areas.

TF Bank has its own internal capital and liquidity adequacy assessment process (ICAAP/ILAAP) to assess whether the internal capital is ade-

quate to serve as the basis for current and future operations and to ensure that the amount and composition of own funds is appropriate. The

process is a tool that ensures that the Bank clearly and correctly identifies, measures and manages all the risks to which TF Bank is exposed

and makes an assessment of the Bank’s internal capital adequacy requirements on the basis of this. As part of the process, TF Bank must have

appropriate governing and control functions and risk management systems in place. TF Bank’s ICAAP/ILAAP is performed at least once a

year.

In TF Bank, the starting point for ICAAP/ILAAP is risk identification and self-assessment workshops with senior executives. Against the

background of this risk analysis, each individual risk is analysed and management of the risk is document. Reference is made to applicable

governing documents and policies. The risks are then quantified on the basis of the method that The Bank deems to be appropriate for

each type of risk. Each risk type is then assessed to establish if additional capital is required to cover the specific risk type according to

Pillar 2. The assessment is based on Pillar 1 capital requirements according to Regulation (EU) No 575/2013 and additional capital is added

where necessary for other risks. The ICAAP/ILAAP is then subjected to stress testing to ensure that bank’s capital adequacy and liquidity

level can be maintained in stressed market conditions. TF Bank uses forward-looking scenarios based on the Company’s three-year

business plan.

68 • Annual Report 2022 • TF Bank AB (publ)

CAPITAL SITUATION

SEK thousand 31 Dec 2022 31 Dec 2021

Common Equity Tier 1 capital (CET1) 1,522,686 1,237,589

Additional Tier 1 capital (AT1) 200,000 200,000

Tier 2 capital 198,660 198,042

Own funds 1,921,346 1,635,631

Risk exposure amount 12,349,623 10,079,383

- of which: credit risk 11,692,361 8,726,933

- of which: credit valuation adjustment 7,166 2,339

- of which: market risk - -

- of which: operational risk 650,096 1,350,111

Capital ratios

CET1 capital ratio, % 12.3 12.3

Tier 1 capital ratio, % 13.9 14.3

Total capital ratio, % 15.6 16.2

REGULATORY CAPITAL REQUIREMENTS

31 Dec 2022 31 Dec 2021

SEK thousand Amount Percent

Amount Percent

Capital requirement under pillar 1

CET1 capital requirement 555,733 4.5 453,572 4.5

Tier 1 capital requirement 740,977 6.0 604,763 6.0

Total capital requirement 987,970 8.0 806,351 8.0

Capital requirement under pillar 2

CET1 capital requirement 90,516 0.7 46,834 0.5

Tier 1 capital requirement 120,689 1.0 62,445 0.6

Total capital requirement 160,918 1.3 83,260 0.8

- of which, concentration risk 126,072 1.0 81,944 0.8

- of which, currency risk 1,016 0.0 1,316 0.0

- of which, interest rate risk 33,830 0.3 - -

Total capital requirement under pillar 1 and pillar 2

CET1 capital requirement 646,249 5.2 500,406 5.0

Tier 1 capital requirement 861,666 7.0 667,208 6.6

Total capital requirement 1,148,888 9.3 889,611 8.8

Institution-specific buffer requirement

Total buffer requirement 401,364 3.3 282,444 2.8

- of which, capital conservation buffer requirement 308,741 2.5 251,985 2.5

- of which, countercyclical buffer requirement 92,623 0.8 30,460 0.3

Total capital requirement including buffer requirement

CET1 capital 1,047,613 8.5 782,850 7.8

Tier 1 capital 1,263,029 10.2 949,652 9.4

Total capital 1,550,251 12.6 1,172,055 11.6

In accordance with (EU) 2021/637 TF Bank AB discloses the information about capital adequacy and other information as per the template “EU KM1” on page 74.

Capital requirements expressed as a percentage of the risk exposure amount.

Note 31 cont.

TF Bank AB (publ) • Annual Report 2022 • 69

OWN FUNDS

SEK thousand 31 Dec 2022 31 Dec 2021

CET1 capital

Share capital

107,500 107,500

Other reserves 87,416 72,365

Retained earnings including net profit for the period reviewed by the auditor

1,339,862 1,050,826

Adjustments to CET1 capital:

- Deduction of foreseeable costs and dividends

- -21,500

- IFRS 9 transitional arrangements

47,391 71,257

- Intangible assets

-50,556 -32,657

- Goodwill

-8,927 -10,202

Total CET1 capital 1,522,686 1,237,589

Additional Tier 1 capital

Perpetual subordinated loan 200,000 200,000

Tier 2 capital

Fixed term subordinated loan 198,660 198,042

Own funds 1,921,346 1,635,631

SPECIFICATION OF RISK EXPOSURE AMOUNT AND CAPITAL REQUIREMENT

31 Dec 2022 31 Dec 2021

SEK thousand

Risk

exposure

amount

Capital

requirement

8 %

Risk

exposure

amount

Capital

requirement

8 %

Credit risk under the standardised approach

Corporate exposures 89,182 7,135 38,346 3,068

Household exposures 10,727,797 858,224 8,012,089 640,967

Secured by collateral 19,817 1,585 14,945 1,196

Exposures in default 428,269 34,262 390,444 31,236

Exposures to institutions with a short-term credit assessment 349,714 27,977 176,588 14,127

Equity exposures 525 42 597 48

Other items 77,057 6,165 93,924 7,514

Total

11,692,361 935,390 8,726,933 698,156

Credit valuation adjustment

Standardised method 7,166 573 2,339 187

Total

7,166 573 2,339 187

Market risk

Foreign exchange risk - - - -

Total - - - -

Operational risk

Alternative Standardised Approach

650,096 52,008 1,350,111 108,009

Total

650,096 52,008 1,350,111 108,009

Total risk exposure amount and total capital requirement 12,349,623 987,971 10,079,383 806,352

Deduction of dividends from own funds has been made in accordance with the Board of Directors’ proposal to the Annual General Meeting.

Deduction of software assets in accordance with EBA’s new calculation method for the deduction of intangible assets from 1 January 2021.

The capital requirement for foreign exchange risk is calculated in accordance with Article 351 of Regulation (EU) 575/2013.

The figures as of December 2022 are calculated according to the Alternative Standardised Approach. The figures as of December 2021 are calculated according to

the Standardised Approach.

Note 31 cont.

70 • Annual Report 2022 • TF Bank AB (publ)

NOTE 32 Pledged assets, contingent liabilities and commitments

SEK thousand 31 Dec 2022 31 Dec 2021

Pledged assets

Restricted bank deposits

54,786 48,536

Total 54,786 48,536

SEK thousand 31 Dec 2022 31 Dec 2021

Commitments

Unutilised credit limits 3,265,256 1,974,365

Future total minimum lease payments for non-cancellable operating leases 22,299 18,391

Total 3,287,555 1,992,756

According to the Board’s assessment, TF Bank has no contingent liabilities.

NOTE 33 Events after 31 December 2022

The Board has appointed Joakim Jansson as the new CEO, starting no later than August 2023. The current CEO Mattias Carlsson will

remain with the Company as a Senior Business Advisor.

The Swedish Financial Supervisory Authority has given TF Bank permission to use the Alternative Standardised Approach to calculate the

capital requirement for operational risk. The change results in the capital requirement for operational risk being significantly closer to the

business’ own perception of its operational risks. The approval has strengthened TF Bank’s capital situation as of 31 December 2022,

NOTE 34 Proposed appropriation of profit or loss

SEK

Tier 1 capital instrument 200,000,000

Retained earnings 999,057,178

Profit for the year 340,440,671

1,539,497,849

The Board proposes:

to be carried forward 1,539,497,849

Total 1,539,497,849

Restricted bank deposits refers to minimum reserve requirements at central banks in Estonia, Finland, Latvia and Poland.

TF Bank AB (publ) • Annual Report 2022 • 71

KEY FIGURES

Parent company

SEK thousand 2022 2021 2020 2019 2018

Income statement

Operating income 1,412,801 1,055,287 876,070 530,399 501,111

Operating expenses -611,229 -442,165 -340,755 -201,268 -168,208

Net loan losses -367,569 -260,564 -272,676 -145,770 -124,940

Operating profit 434,003 352,558 262,639 183,361 207,963

Profit for the year 340,805 277,206 202,719 161,748 182,994

Balance sheet

Loans to the public 14,654,373 10,872,285 7,922,448 4,305,139 3,077,158

Deposit from the public 16,108,130 11,504,749 8,714,032 5,136,820 4,061,396

Key figures

CET1 capital ratio, % 12.3 12.3 12.8 14.5 15.3

Tier 1 capital ratio, % 13.9 14.3 14.2 16.5 17.8

Total capital ratio, % 15.6 16.2 17.4 20.4 20.4

Employees (FTE) 290 236 187 114 93

Comparative figures for 2018-2019 relates to data for the Parent Company TF Bank AB which has been disclosed in previous annual reports.

See separate section with definitions and reconciliation tables, page 72-73.

FIVE-YEAR OVERVIEW

72 • Annual Report 2022 • TF Bank AB (publ)

TF Bank uses Alternative Performance Measures that are not defined in the applicable financial reporting framework

(IFRS). The Alternative Performance Measures are used to increase understanding of the Bank’s financial performance

among users of the financial statements. Alternative Performance Measures may be calculated in different ways and do

not need to be comparable with similar key ratios used by other companies. TF Bank definitions of Alternative Perfor-

mance Measures are shown below.

ADJUSTED EARNINGS PER SHARE

Adjusted net profit for the year attributable to the

shareholders of the parent company divided by the

average number of outstanding shares.

ADJUSTED OPERATING PROFIT

Operating profit for the year excluding items affect-

ing comparability.

ADJUSTED RETURN ON ASSETS

Adjusted net profit for the year attributable to the

shareholders of the parent company divided by aver-

age total assets.

ADJUSTED RETURN ON EQUITY

Adjusted net profit for the year attributable to the

shareholders of the parent company divided by av-

erage equity attributable to the shareholders of the

parent company. Rolling 12 months.

ADJUSTED RETURN ON LOANS TO THE PUBLIC

Adjusted net profit for the year attributable to the

shareholders of the parent company divided by aver-

age lending to the public. Rolling 12 months.

CET1 CAPITAL RATIO

CET1 capital as a percentage of total risk exposure

amount.

COST/INCOME RATIO

Operating expenses divided by operating income.

EARNINGS PER SHARE

Net profit for the year attributable to the sharehold-

ers of the parent company divided by the average

number of outstanding shares.

EMPLOYEES (FTE)

Average number of full-time employees, including

employees on parental leave.

ITEMS AFFECTING COMPARABILITY

Items affecting comparability in 2018 were attribut-

able to reclassification of customer balances with

inactive status that have arisen before 2018.

NET LOAN LOSS RATIO

Net loan losses divided by average loans to the public.

NEW LENDING

New loans (the cash flow) in the period, the amount

is reduced by product returns.

NUMBER OF ACTIVE CREDIT CARDS

All issued cards at the last day of the period with

balance above 0 or transaction in last 12 months prior

to reporting date

OPERATING INCOME MARGIN

Total operating income divided by average loans to

the public.

RETURN ON ASSETS

Net profit for the year attributable to the sharehold-

ers of the parent company divided by average total

assets.

RETURN ON EQUITY

Net profit for the year attributable to the share-

holders of the parent company as a percentage of

equity attributable to the shareholders of the parent

company.

RETURN ON LOANS TO THE PUBLIC

Net profit for the year attributable to the sharehold-

ers of the parent company divided by average loans

to the public.

TIER 1 CAPITAL RATIO

Tier 1 capital, i.e., CET1 capital and Additional Tier 1

capital, as a percentage of total risk exposure amount.

TOTAL CAPITAL RATIO

Own funds as a percentage of the total risk exposure

amount.

TRANSACTION VOLUME

The total sum of all purchases processed through

TF Bank’s payment solutions

From 2021, the denominator in the key figure is calculated as the year’s opening balance plus closing balance, divided by two. The key figure was previously presented

based on rolling 12 months. The change has been implemented to increase clarity regarding the current period’s financial development and to follow the practice that has

been developed by comparable banks listed on Nasdaq Stockholm. The comparative figures in this report have been restated according to the new presentation format.

DEFINITIONS

TF Bank AB (publ) • Annual Report 2022 • 73

KEY FIGURES

Parent company Group

SEK thousand 2022 2021 2020 2019 2018

Income statement

Earnings per share, SEK 15.18 12.55 9.11 10.01 8.75

Net profit for the year attributable to the shareholder's

of the Parent Company 326,445 269,875 195,769 215,160 188,126

Average number of outstanding shares, thousands 21,500 21,500 21,500 21,500 21,500

Key figures

Operating income margin, % 11.1 11.2 12.2 14.0 16.5

Total operating income 1,412,801 1,055,287 876,070 768,864 627,641

Average loans to the public

12,763,329 9,397,367 7,209,114 5,472,503 3,802,757

Net loan loss ratio, % 2.9 2.8 3.8 3.4 4.0

Net loan losses 367,569 260,564 272,676 188,634 150,272

Average loans to the public

12,763,329 9,397,367 7,209,114 5,472,503 3,802,757

Cost/Income ratio, % 43.3 41.9 38.9 37.8 39.4

Total operating expenses 611,229 442,165 340,755 290,875 247,536

Total operating income 1,412,801 1,055,287 876,070 768,864 627,641

Return on equity, % 23.6 24.4 22.0 30.3 33.8

Net profit for the year attributable to the shareholder's

of the Parent Company 326,445 269,875 195,769 215,160 188,126

Average equity attributable to the shareholder's of the

Parent Company

1,382,735 1,107,198 889,387 710,858 556,020

Return on loans to the public, % 2.6 2.9 2.7 3.9 4.9

Net profit for the year attributable to the shareholder's

of the Parent Company 326,445 269,875 195,769 215,160 188,126

Average loans to the public

12,763,329 9,397,367 7,209,114 5,472,503 3,802,757

Return on assets, % 2.1 2.3 2.1 3.0 3.6

Net profit for the year attributable to the shareholder's

of the Parent Company 326,445 269,875 195,769 215,160 188,126

Average total assets

15,869,053 11,797,131 9,335,847 7,256,168 5,269,319

Adjusted key figures

Adjusted earnings per share, SEK 15.18 12.55 9.11 10.01 8.01

Adjusted net profit for the year attributable to the share-

holder's of the Parent Company 326,445 269,875 195,769 215,160 172,296

Average number of outstanding shares, thousands 21,500 21,500 21,500 21,500 21,500

Adjusted return on equity, % 23.6 24.4 22.0 30.3 31.0

Net profit for the year attributable to the shareholder's

of the Parent Company 326,445 269,875 195,769 215,160 172,296

Average equity attributable to the shareholder's of the

Parent Company

1,382,735 1,107,198 889,387 710,858 556,020

Adjusted return on loans to the public, % 2.6 2.9 2.7 3.9 4.5

Net profit for the year attributable to the shareholder's

of the Parent Company 326,445 269,875 195,769 215,160 172,296

Average loans to the public

12,763,329 9,397,367 7,209,114 5,472,503 3,802,757

Adjusted return on assets, % 2.1 2.3 2.1 3.0 3.3

Net profit for the year attributable to the shareholder's

of the Parent Company 326,445 269,875 195,769 215,160 172,296

Average total assets

15,869,053 11,797,131 9,335,847 7,256,168 5,269,319

In order for the five-year overview to reflect a true and fair view, comparative figures for 2018-2019 relates to the Group with TF Bank AB as Parent Company.

Calculation of capital ratios is shown in Note 31.

The average has been calculated as opening balance plus closing balance, divided by two.

Adjusted for items affecting comparability in 2018 that comprises reclassification of customer balances with inactive status that arose before 2018.

RECONCILIATION TABLES

74 • Annual Report 2022 • TF Bank AB (publ)

REGULATORY KEY METRICS

TEMPLATE ”EU KM1 – KEY METRICS TEMPLATE” IS DISCLOSED BELOW AS PER THE TECHNICAL STANDARDS IN THE

COMMISSION IMPLEMENTING REGULATION 2021/637.

SEK thousand 31 Dec 2022 31 Dec 2021

Available own funds

1 Common Equity Tier 1 capital (CET1) 1,522,686 1,237,589

2 Tier 1 capital 1,722,686 200,000

3 Total capital 1,921,346 198,042

Risk-weighted exposure amount

4 Total risk exposure amount 12,349,623 10,079,383

Capital ratios (% of risk-weighted exposure amount)

5 Common Equity Tier 1 ratio, % 12.3 12.3

6 Tier 1 ratio, % 13.9 14.3

7 Total capital ratio, % 15.6 16.2

Additional own funds requirements to address risks other than the risk of excessive leverage

(% of risk-weighted exposure amount)

EU 7a Additional own funds requirements to address risks other than the risk of excessive leverage, % 1.3 0.8

EU 7b - of which, to be made up of CET1 capital, % 0.7 0.5

EU 7c - of which, to be made up of Tier 1 capital, % 1.0 0.6

EU 7d Total SREP own funds requirements, % 9.3 8.8

Combined buffer and overall capital requirement (% of risk-weighted exposure amount)

8 Capital conservation buffer, % 2.5 2.5

EU 8a

Conservation buffer due to macro-prudential or systemic risk identified at the level of a Member

State, % N/A N/A

9 Institution specific countercyclical capital buffer, % 0.8 0.3

EU 9a Systemic risk buffer, % N/A N/A

10 Global Systemically Important Institution buffer, % N/A N/A

EU 10a Other Systemically Important Institution buffer, % N/A N/A

11 Combined buffer requirement, % 3.3 2.8

EU 11a Overall capital requirements, % 12.6 11.6

12 CET1 available after meeting the total SREP own funds requirements, % 7.1 7.3

Leverage ratio

13 Total exposure measure 19,013,626 13,751,040

14 Leverage ratio, % 9.1 10.5

Additional own funds requirements to address risks of excessive leverage (% of leverage

ratio total exposure amount)

EU 14a Additional own funds requirements to address the risk of excessive leverage, % N/A N/A

EU 14b - of which, to be made up of CET1 capital, % N/A N/A

EU 14c Total SREP leverage ratio requirements, % 3.0 3.0

Leverage ratio buffer and overall leverage ratio requirement (% of total exposure measure)

EU 14d Total SREP leverage ratio requirements, % N/A N/A

EU 14e Overall leverage ratio requirements, % 3.0 3.0

Liquidity Coverage Ratio

15 Total high-quality liquid assets (Weighted value – average) 1,842,575 1,537,966

EU 16a Cash outflows – Total weighted value 1,272,157 812,403

EU 16b Cash inflows – Total weighted value 637,160 376,288

16 Total net cash outflows (adjusted value) 634,997 436,115

17 Liquidity coverage ratio, % 290 353

Net Stable Funding Ratio

18 Total available stable funding 16,567,159 12,111,551

19 Total required stable funding 11,984,167 9,460,775

20 NSFR ratio, % 138 128

TF Bank AB (publ) • Annual Report 2022 • 75

The Board of Directors and CEO certify that the annual report has been prepared in accordance with generally

accepted accounting principles in Sweden and in accordance with the International Financial Reporting Stand-

ards (IFRS/IAS), as adopted by EU, the annual report provides a true and fair presentation of the Company’s

financial position and result and the Director’s Report provides a fair overview of the development of the

operations, financial position and results of the Company and describes material risks and uncertainties that the

Company faces.

Borås, 17 March 2023

John Brehmer

Chairman

Niklas Johansson Michael Lindengren

Sara Mindus Fredrik Oweson Mari Thjømøe

Mattias Carlsson

CEO

We submitted our Auditor’s Report on 17 March 2023.

KPMG AB

Dan Beitner

Authorised Public Accountant

Auditor in Charge

ASSURANCE BY THE BOARD OF DIRECTORS

AND THE CEO

76 • Annual Report 2022 • TF Bank AB (publ)

To the general meeting of the shareholders of TF Bank

AB (publ), corp. id 556158-1041

REPORT ON THE ANNUAL ACCOUNTS

Opinions

We have audited the annual accounts of TF Bank

AB (publ) for the year 2022, except for the corporate

governance statement on pages 81-92 and the sustai-

nability report on pages 93-106. The annual accounts

of the company are included on pages 12-75 in this

document.

In our opinion, the annual accounts have been prepa-

red in accordance with the Annual Accounts Act for

Credit Institutions and Securities Companies, and pre-

sent fairly, in all material respects, the financial posi-

tion of TF Bank AB (publ) as of 31 December 2022 and

its financial performance and cash flow for the year

then ended in accordance with the Annual Accounts

Act for Credit Institutions and Securities Companies.

Our opinions do not cover the corporate governance

statement on pages 81-92 and sustainability report on

pages 93-106. The statutory administration report is

consistent with the other parts of the annual accounts.

We therefore recommend that the general meeting

of shareholders adopts the income statement and

balance sheet.

Our opinions in this report on the the annual accounts

are consistent with the content of the additional report

that has been submitted to the audit committee in

accordance with the Audit Regulation (537/2014)

Article 11.

Basis for Opinions

We conducted our audit in accordance with Inter-

national Standards on Auditing (ISA) and generally

accepted auditing standards in Sweden. Our respon-

sibilities under those standards are further descri-

bed in the Auditor’s Responsibilities section. We are

independent of TF Bank AB (publ) in accordance with

professional ethics for accountants in Sweden and

have otherwise fulfilled our ethical responsibilities in

accordance with these requirements.This includes

that, based on the best of our knowledge and belief,

no prohibited services referred to in the Audit Regu-

lation (537/2014) Article 5.1 have been provided to

the audited company or, where applicable, its parent

company or its controlled companies within the EU.

We believe that the audit evidence we have obtained

is sufficient and appropriate to provide a basis for our

opinions.

Key audit matters

Key audit matters of the audit are those matters that,

in our professional judgment, were of most significan-

ce in our audit of the annual accounts of the current

period. These matters were addressed in the context

of our audit of, and in forming our opinion thereon, the

annual accounts as a whole, but we do not provide a

separate opinion on these matters.

Provisions for loan losses

See disclosure 16, 22 and accounting principles on

pages 31-33 in the annual account for detailed infor-

mation and description of the matter.

Description of key audit

matter

Response in the audit

TF Bank AB (publ)’s lending

comprises of non collateral lo-

ans to private individuals. Loans

are granted in several countries

through the Companys’ three

business segments Consumer

Lending, Ecommerce Solutions

and Credit Cards.

The entity’s loans to the public

amounted to SEK 14,654

(10,872) million on 31 December

2022, corresponding to 80 (81) %

of the entity’s total assets. The

entity’s reserves for loan losses

in the loan portfolio amounted

to SEK 608 (485) million.

The reserves for loan losses

in the entity’s loan portfolio

correspond to corporate ma-

nagement’s best estimate of

potentially occurring losses in

the loan portfolio as per the ba-

lance-sheet date. For the entity

there are complex calculations

including critical judgements

and estimates that are being

made by management regar-

ding the provi-sions for loan

losses. This is the reason to why

we believe that this is a key

audit matter.

We have tested the entity’s key

controls in the lending process,

including credit decisions,

credit examinations, rating

classifications and loan loss

provisions.

Controls tested included both

manual controls and automatic

controls in the Application sys-

tem. We also tested general IT

controls including authorisation

Management for the relevant

systems.

We have assessed the entity’s

interpretation of the IFRS 9

accounting standard in order to

see that they have interpreted

it in a reasonable way. We have

tested the entity’s key controls

related to the loan loss provi-

sion process. We have also te-

sted samples of the indata that

goes into the entity’s models

and the reasonableness of the

calculations ans assumptions

being made by the entity’s ma-

nagement when computing the

size of the loan loss provision.

In our audit we have used our

own credit modelling experts

to assist us in the various audit

procedures that we have per-

formed.

In addition we have assessed

that the information presented

in the annual report regarding

the provisions for loan losses

include enough information to

provide the reader an under-

standing of the entity’s estima-

tes in this area.

Other Information than the annual accounts

This document also contains other information than

the annual accounts and is found on pages 1-11, 81-92,

93-106 and 107-108. The other information comprises

also of the remuneration report which we obtained

prior to the date of this auditor’s report. The Board of

AUDITOR’S REPORT

TF Bank AB (publ) • Annual Report 2022 • 77

Directors and the Managing Director are responsible

for this other information.

Our opinion on the annual accounts does not cover

this other information and we do not express any form

of assurance conclusion regarding this other informa-

tion.

In connection with our audit of the annual accounts,

our responsibility is to read the information identified

above and consider whether the information is ma-

terially inconsistent with the annual accounts. In this

procedure we also take into account our knowledge

otherwise obtained in the audit and assess whether

the information otherwise appears to be materially

misstated.

If we, based on the work performed concerning this

information, conclude that there is a material missta-

tement of this other information, we are required to re-

port that fact. We have nothing to report in this regard.

Responsibilities of the Board of Directors and the

Managing Director

The Board of Directors and the Managing Director

are responsible for the preparation of the annual

accounts and that they give a fair presentation in

accordance with the Annual Accounts Act for Credit

Institutions and Securities Companies. The Board of

Directors and the Managing Director are also re-

sponsible for such internal control as they determine

is necessary to enable the preparation of annual

accounts that are free from material misstatement,

whether due to fraud or error.

In preparing the annual accounts The Board of

Directors and the Managing Director are responsible

for the assessment of the company’s ability to con-

tinue as a going concern. They disclose, as appli-

cable, matters related to going concern and using

the going concern basis of accounting. The going

concern basis of accounting is however not applied

if the Board of Directors and the Managing Director

intend to liquidate the company, to cease operations,

or has no realistic alternative but to do so.

The Audit Committee shall, without prejudice to

the Board of Director’s responsibilities and tasks in

general, among other things oversee the company’s

financial reporting process.

Auditor’s responsibility

Our objectives are to obtain reasonable assurance

about whether the annual accounts as a whole are free

from material misstatement, whether due to fraud or

error, and to issue an auditor’s report that includes our

opinions. Reasonable assurance is a high level of assu-

rance, but is not a guarantee that an audit conducted in

accordance with ISAs and generally accepted auditing

standards in Sweden will always detect a material

misstatement when it exists. Misstatements can arise

from fraud or error and are considered material if, indi-

vidually or in the aggregate, they could reasonably be

expected to influence the economic decisions of users

taken on the basis of these annual accounts.

As part of an audit in accordance with ISAs, we exercise

professional judgment and maintain professional scep-

ticism throughout the audit.

We also:

• Identify and assess the risks of material missta-

tement of the annual accounts, whether due to

fraud or error, design and perform audit proce-

dures responsive to those risks, and obtain audit

evidence that is sufficient and appropriate to

provide a basis for our opinions. The risk of not

detecting a material misstatement resulting from

fraud is higher than for one resulting from error,

as fraud may involve collusion, forgery, intentional

omissions, misrepresentations, or the override of

internal control.

• Obtain an understanding of the company’s

internal control relevant to our audit in order to

design audit procedures that are appropriate in

the circumstances, but not for the purpose of

expressing an opinion on the effectiveness of the

company’s internal control.

• Evaluate the appropriateness of accounting poli-

cies used and the reasonableness of accounting

estimates and related disclosures made by the

Board of Directors and the Managing Director.

• Conclude on the appropriateness of the Board of

Directors’ and the Managing Director’s, use of the

going concern basis of accounting in preparing

the annual accounts. We also draw a conclusion,

based on the audit evidence obtained, as to

whether any material uncertainty exists related

to events or conditions that may cast significant

doubt on the company’s ability to continue as a

going concern. If we conclude that a material un-

certainty exists, we are required to draw attention

in our auditor’s report to the related disclosures in

the annual accounts or, if such disclosures are in-

adequate, to modify our opinion about the annual

accounts. Our conclusions are based on the audit

evidence obtained up to the date of our auditor’s

report. However, future events or conditions may

cause the company to cease to continue as a

going concern.

78 • Annual Report 2022 • TF Bank AB (publ)

• Evaluate the overall presentation, structure and

content of the annual accounts, including the

disclosures, and whether the annual accounts

represent the underlying transactions and events

in a manner that achieves fair presentation.

We must inform the Board of Directors of, among

other matters, the planned scope and timing of

the audit. We must also inform of significant audit

findings during our audit, including any significant

deficiencies in internal control that we identified.

We must also provide the Board of Directors with a

statement that we have complied with relevant ethi-

cal requirements regarding independence, and to

communicate with them all relationships and other

matters that may reasonably be thought to bear on

our independence, and where applicable, measu-

res that have been taken to eliminate the threats or

related safeguards.

From the matters communicated with the Board of

Directors, we determine those matters that were of

most significance in the audit of the annual accounts

and consolidated accounts, including the most

important assessed risks for material misstatement,

and are therefore the key audit matters. We describe

these matters in the auditor’s report unless law or

regulation precludes disclosure about the matter.

REPORT ON OTHER LEGAL AND REGULATORY

REQUIREMENTS

Auditor’s audit of the administration and the pro-

posed appropriations of profit or loss

Opinions

In addition to our audit of the annual accounts, we

have also audited the administration of the Board of

Directors and the Managing Director of TF Bank AB

(publ) for the year 2022 and the proposed appropria-

tions of the company’s profit or loss.

We recommend to the general meeting of sharehol-

ders that the profit be appropriated in accordance

with the proposal in the statutory administration report

and that the members of the Board of Directors and

the Managing Director be discharged from liability for

the financial year.

Basis for Opinions

We conducted the audit in accordance with generally

accepted auditing standards in Sweden. Our respon-

sibilities under those standards are further descri-

bed in the Auditor’s Responsibilities section. We are

independent of TF Bank AB (publ) in accordance with

professional ethics for accountants in Sweden and

have otherwise fulfilled our ethical responsibilities in

accordance with these requirements.

We believe that the audit evidence we have obtained

is sufficient and appropriate to provide a basis for our

opinions.

Responsibilities of the Board of Directors and the

Managing Director

The Board of Directors is responsible for the proposal

for appropriations of the company’s profit or loss. At the

proposal of a dividend, this includes an assessment

of whether the dividend is justifiable considering the

requirements which the company’s type of operations,

size and risks place on the size of the company’s equity,

consolidation requirements, liquidity and position in

general.

The Board of Directors is responsible for the company’s

organization and the administration of the company’s

affairs. This includes among other things continuous

assessment of the company’s financial situation and

ensuring that the company’s organization is designed

so that the accounting, management of assets and the

company’s financial affairs otherwise are controlled in a

reassuring manner.

The Managing Director shall manage the ongoing

administration according to the Board of Directors’

guidelines and instructions and among other matters

take measures that are necessary to fulfill the compa-

ny’s accounting in accordance with law and handle the

management of assets in a reassuring manner.

Auditor’s responsibility

Our objective concerning the audit of the administra-

tion, and thereby our opinion about discharge from

liability, is to obtain audit evidence to assess with a

reasonable degree of assurance whether any member

of the Board of Directors or the Managing Director in

any material respect:

• has undertaken any action or been guilty of any

omission which can give rise to liability to the

company, or

• in any other way has acted in contravention of

the Companies Act, the Banking and Financing

Business Act, the Annual Accounts Act for Credit

Institutions and Securities Companies or the

Articles of Association.

Our objective concerning the audit of the proposed

appropriations of the company’s profit or loss, and

thereby our opinion about this, is to assess with reaso-

nable degree of assurance whether the proposal is in

accordance with the Companies Act.

Reasonable assurance is a high level of assurance,

but is not a guarantee that an audit conducted in ac-

cordance with generally accepted auditing standards

in Sweden will always detect actions or omissions that

TF Bank AB (publ) • Annual Report 2022 • 79

can give rise to liability to the company, or that the

proposed appropriations of the company’s profit or

loss are not in accordance with the Companies Act.

As part of an audit in accordance with generally

accepted auditing standards in Sweden, we exerci-

se professional judgment and maintain professional

scepticism throughout the audit. The examination of

the administration and the proposed appropriations

of the company’s profit or loss is based primarily on

the audit of the accounts. Additional audit procedures

performed are based on our professional judgment

with starting point in risk and materiality. This means

that we focus the examination on such actions, areas

and relationships that are material for the operations

and where deviations and violations would have

particular importance for the company’s situation.

We examine and test decisions undertaken, support

for decisions, actions taken and other circumstances

that are relevant to our opinion concerning discharge

from liability. As a basis for our opinion on the Board of

Directors’ proposed appropriations of the company’s

profit or loss we examined whether the proposal is in

accordance with the Companies Act.

The auditor’s examination of the Esef report

Opinion

In addition to our audit of the annual accounts , we

have also examined that the Board of Directors and

the Managing Director have prepared the annual

accounts in a format that enables uniform electronic

reporting (the Esef report) pursuant to Chapter 16,

Section 4(a) of the Swedish Securities Market Act

(2007:528) for TF Bank AB (publ) for year 2022.

Our examination and our opinion relate only to the

statutory requirements.

In our opinion, the Esef report has been prepared in a

format that, in all material respects, enables uniform

electronic reporting.

Basis for opinion

We have performed the examination in accordance

with FAR’s recommendation RevR 18 Examination of

the Esef report. Our responsibility under this recom-

mendation is described in more detail in the Audi-

tors’ responsibility section. We are independent of

TF Bank AB (publ) in accordance with professional

ethics for accountants in Sweden and have otherwi-

se fulfilled our ethical responsibilities in accordance

with these requirements.

We believe that the evidence we have obtained is

sufficient and appropriate to provide a basis for our

opinion.

Responsibilities of the Board of Directors and the

Managing Director

The Board of Directors and the Managing Director

are responsible for the preparation of the Esef report

in accordance with the Chapter 16, Section 4(a) of

the Swedish Securities Market Act (2007:528), and

for such internal control that the Board of Directors

and the Managing Director determine is necessary

to prepare the Esef report without material misstate-

ments, whether due to fraud or error.

80 • Annual Report 2022 • TF Bank AB (publ)

Auditor’s responsibility

Our responsibility is to obtain reasonable assurance whether the Esef report is in all material respects prepared in

a format that meets the requirements of Chapter 16, Section 4(a) of the Swedish Securities Market Act (2007:528),

based on the procedures performed.

RevR 18 requires us to plan and execute procedures to achieve reasonable assurance that the Esef report is

prepared in a format that meets these requirements.

Reasonable assurance is a high level of assurance, but it is not a guarantee that an engagement carried out ac-

cording to RevR 18 and generally accepted auditing standards in Sweden will always detect a material misstate-

ment when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in

aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis

of the Esef report.

The audit firm applies ISQC 1 Quality Control for Firms that Perform Audits and Reviews of Financial Statements,

and other Assurance and Related Services Engagements and accordingly maintains a comprehensive system of

quality control, including documented policies and procedures regarding compliance with professional ethical

requirements, professional standards and legal and regulatory requirements.

The examination involves obtaining evidence, through various procedures, that the Esef report has been pre-

pared in a format that enables uniform electronic reporting of the annual accounts. The procedures selected

depend on the auditor’s judgment, including the assessment of the risks of material misstatement in the report,

whether due to fraud or error. In carrying out this risk assessment, and in order to design procedures that are

appropriate in the circumstances, the auditor considers those elements of internal control that are relevant to

the preparation of the Esef report by the Board of Directors and the Managing Director, but not for the purpose of

expressing an opinion on the effectiveness of those internal controls. The examination also includes an evalu-

ation of the appropriateness and reasonableness of the assumptions made by the Board of Directors and the

Managing Director.

The procedures mainly include a validation that the Esef report has been prepared in a valid XHMTL format and

a reconciliation of the Esef report with the audited annual accounts.

KPMG AB, Box 382, 101 27, Stockholm, was appointed auditor of TF Bank AB (publ) by the general meeting of the

shareholders on May 3, 2022. KPMG AB or auditors operating at KPMG AB have been the company’s auditor since

2021.

Stockholm 17 March 2023

KPMG AB

Dan Beitner

Authorised Public Accountant

Auditor in Charge

TF Bank AB (publ) • Annual Report 2022 • 81TF Bank AB (publ) • Annual Report 2022 • 81

CORPORATE GOVERNANCE REPORT

82 • Annual Report 2022 • TF Bank AB (publ)

TF Bank AB (publ), corporate identity number 556158-1041

INTRODUCTION

TF Bank AB is domiciled in Borås and is authorised

by the Swedish Financial Supervisory Authority to

conduct banking operations in Sweden, and also in

Norway, Finland, Estonia, Latvia and Poland via bank

branches. In addition, TF Bank conducts cross-border

activities in Denmark, Lithuania, Germany, Austria

and Spain in accordance with the Swedish Banking

and Financing Business Act. The Bank also has five

small service subsidiaries: TFB Service UAB, TFB

Service SIA, TFB Service GmbH, TFB Service AB and

TFBN Services S.L.. The shares in TF Bank AB have

been listed on Nasdaq Stockholm’s main market

since 14 June 2016.

TF Bank conducts banking operations and is under

the supervision of the Swedish Financial Supervisory

Authority. TF Bank complies with several laws and

regulations pertaining to good corporate governance

and control of the business, such as the Swedish

Banking and Financing Business Act (2004:297),

the Consumer Credit Act (2010:1846), the Swedish

Companies Act (2005:551), the Annual Accounts Act

(1995:1554), Act (1995:1559) on Annual Accounts in

Credit Institutions and Securities Companies Act, the

Swedish Corporate Governance Code (“the Code”),

Nasdaq’s rulebook for issuers and International Finan-

cial Reporting Standards. TF Bank also adheres to

several regulations and general guidelines issued by

the Swedish Financial Supervisory and the European

Banking Authority (EBA). TF Bank has prepared this

Corporate Governance Report in accordance with

the Annual Accounts Act and the Code.

OWNERSHIP

Ownership structure 31 December 2022:

Owner Number

of shares

Share of

equity, %

1 TFB Holding AB 6,517,375 30.31

2 Tiberon AB 3,239,291 15.07

3 Erik Selin Fastigheter AB 2,697,195 12.55

4 Proventus Aktiebolag 1,109,300 5.16

5 Nordnet Pensionsförsäkring AB 932,158 4.34

6 Jack Weil 913,669 4.25

7 Merizole Holding LTD 531,995 2.47

8 Carnegie Micro Cap 388,009 1.80

9 Skandia fonder 282,032 1.31

10 Avanza Pension 271,109 1.26

11 Skandia livförsäkring 252,000 1.17

12 Futur Pension 217,050 1.01

13 Nordea Nordic Small cap 214,793 1.00

14 Ålandsbanken AB 209,000 0.97

15 Pareto Investment 204,178 0.95

16 BNY Mellon 203,336 0.95

17 Six Sis AG 201,500 0.94

18 Anders Klein 197,700 0.92

19 eQ Nordic Small Cap 182,211 0.85

20 AB Monarda 156,00 0.73

Other shareholders 2,580,099 11.99

Total 21,500,000 100.00

Source: Euroclear

The largest owner, TFB Holding AB, with a total holding

of 30.31 % as at 31 December 2021, is represented on

the Nomination Committee through Paul Källenius.

CORPORATE GOVERNANCE REPORT

TF Bank AB (publ) • Annual Report 2022 • 83

Part of executive management.

CORPORATE GOVERNANCE AND RISK MANAGEMENT IN TF BANK

Internal Audit

Chief

Compliance

Officer

CEO

Chief

Information

Security Officer

Operations

Finance

TF Bank AB Board of Directors

AML

DPO

Dep CEO

CFO/IR

Head of

Credits

Deposit

Credit

analysis

Credit

Workflow

Sweden

Poland

3rd line of

defense

2rd line of

defense

1st line of

defense

Annual General MeetingExternal Audit

Head of

Ecommerce

Solutions

Finland

Baltics

Chief Risk

Officer

Norway

Denmark

Consumer

Lending

Credit Cards

Germany

Norway

Austria

Denmark

Finland

Baltics

Norway

Sweden

Poland

Austria

Spain

Chief

Operating

Officer

84 • Annual Report 2022 • TF Bank AB (publ)

COMPANY STRUCTURE

List of companies included in consolidation for accounting and supervisory purposes:

Parent Company Subsidiaries Corporate identity number Interest Consolidation (supervisory/consolidation)

TF Bank AB 556158-1041

TFB Service AB 55930-467 100% Full/full

TFB Service UAB 304785170 100% Full/full

TFB Service GmbH HRB 208869 B 100% Full/full

TFBN Service S.L. B10781789 100% Full/full

TFB Service SIA 40203015782 100% Full/full

ARTICLES OF ASSOCIATION

The Articles of Association are adopted by the AGM

and contain mandatory information on the basic nature

of TF Bank’s operations. The Articles of Association,

which are available on the Company’s website

www.tfbankgroup.com, set out, inter alia, the kind of

business to be conducted by the Company, the limits

for the share capital, share classes and number of votes

per share, as well as the number of Board members.

The Articles of Association do not contain any provi-

sions on the appointment or dismissal of Board mem-

bers or on amendments to the Articles of Association.

GENERAL MEETING OF SHAREHOLDERS

TF Bank’s shareholders can exercise their decision-

making rights at the General Meeting of Shareholders.

According to the Swedish Companies’ Act, the General

Meeting is the Company’s highest decision-making

body, which takes decisions on such issues as amend-

ments to the Articles of Association, discharge from

liability, adoption of balance sheets and income state-

ments, dividends, election of board members, auditors

and fees to board members and auditors. The Compa-

nies Act and Articles of Association contain rules govern-

ing the General Meeting and what this should include.

Annual General Meeting 2022

The 2022 Annual General Meeting (AGM) was held

on 3 May 2022. The AGM was conducted by postal

voting in advance, without physical participation. The

AGM resolved in accordance with all proposals of the

Board and the Nomination Committee. Among other

resolutions, the AGM resolved on a dividend of

SEK 21,500,000, corresponding to SEK 1.00 per share.

It was further resolved that SEK 1 229 326 044 should

be balanced into new accounts. CEO and the Board

of Directors were discharged from liability for the

fiscal year 2021.

The AGM resolved that the Board should consist of

six members. The AGM resolved to re-elect John

Brehmer, Sara Mindus, Mari Thjømøe and Michael

Lindengren, as well as new election of Fredrik

Oweson and Niklas Johansson as members of the

Board of Directors. Bertil Larsson and Charlotta

Björnberg-Paul left the Board of Directors. John

Brehmer was elected as Chairman of the Board. The

AGM resolved to re-elect KPMG AB as the registered

auditing firm, with Authorised Public Accountant Dan

Beitner as auditor‐in‐charge, for the period until the

end of the next AGM.

Branch Norway

TF Bank AB

Branch Finland

TFB Service AB TFB Service UAB

TFB Service

GmbH

Branch Poland

TFBN Services

S.L.

Branch Estonia Branch Latvia

TFB Service SIA

TF Bank AB (publ) • Annual Report 2022 • 85

The Nomination Committee ahead of the AGM in 2023

comprises:

• Paul Källenius, representing TFB Holding AB

• Erik Selin, representing Erik Selin Fastigheter AB

• Jonas Weil, representing Proventus Aktiebolag

• John Brehmer, Chariman of the Board of

TF Bank AB

• Paul Källenius has been appointed Chairman of

the Nomination Committee

Tiberon AB, the second largest shareholder, declined

to be represented in the Nomination Committee.

However, Tiberon AB’s board member John Brehmer

is a member of the Nomination Committee in his

capacity as Chairman of TF Bank.

The composition of the Nomination Committee was

disclosed through a press release and on the Com-

pany’s website on 28 October 2022.

BOARD OF DIRECTORS

The Board of Directors has the ultimate responsibility

for TF Bank’s organisation and management. In addi-

tion, the Board shall supervise the CEO and ensure

that TF Bank’s financial position is examined in a

satisfactory manner. The decisions taken by the

Board should seek to promote shareholders’ interests

with respect to value generation and returns. The

Board’s duties and working methods are governed by

the Companies Act, the Articles of Association and the

Board’s Rules of Procedure. The duties and work of

the Board of TF Bank as a regulated company are also

governed by the Banking and Financing Business Act.

The responsibilities and duties of the Board of Direc-

tors include establishing objectives and strategies

for the Company’s operations, striving to ensure that

the organisation and operations of the Company’s

business are characterised by internal governance

and control, preparing internal regulations on risk

management and risk control and regularly following

up compliance, ensuring that there is an audit func-

tion and monitoring the Company’s financial position.

Furthermore, it is the task of the Board of Directors to

appoint the CEO, adopt instructions for the CEO’s work

and monitor the outcome of this work. The Board of

Directors receives regular reports from internal and

external auditors and from the CEO and CFO.

The Board of Directors is responsible for considering

TF Bank’s risk-taking and has established rules for a

resolutions procedure, financial reporting and financ-

ing. There are also guidelines for work in other areas

such as: environment, ethics, quality, information,

staff, IT and security monitoring and communication.

The Board’s work follows annually established rules

of procedure which comprise the matters to be dealt

The AGM resolved to authorise the Board, on one or

more occasions, to decide on new share issues, with

or without deviation from shareholders’ preferential

rights, until the next AGM. The number of shares

issued pursuant to the authorisation may not exceed

an increase of twenty percent of the share capital

based on the share capital of the Company at the time

of the AGM 2022. It was also resolved to authorise

the Board of Directors, to decide on the acquisition

and transfer of own shares. A maximum of so many

shares may be acquired that the Company’s holdings,

including shares that have otherwise been acquired

and held, will not exceed five percent of all shares in

the Company.

The AGM resolved to adopt a Share programme 2022

in accordance with the Board of Directors’ proposal.

The programme has a three year duration and means

that senior executives, certain other directors, key

persons and specialists, in aggregate up to 24 persons,

conditional upon that that certain terms are met, may

receive up to 26,000 shares in TF Bank provided that

they have acquired a corresponding number of shares.

The full Articles of Association as well as minutes and

information regarding the 2022 AGM are available at

www.tfbankgroup.com.

NOMINATION COMMITTEE

According to a resolution by the 2021 AGM on the

appointment of the Nomination Committee, the three

largest shareholders in terms of voting power who

wish to participate in the Nomination Committee

will have the right to appoint one member each. The

member representing the largest shareholder should

be appointed Chairman of the Nomination Committee.

The members of the Nomination Committee were

appointed on the basis of the ownership structure as

at 31 August 2022.

The Nomination Committee shall prepare proposals in

the following matters to be submitted to the AGM:

• Proposal for a Chairman for the general meeting;

• Proposal for the Board of Directors;

• Proposal for Chairman of the Board;

• Proposals for Board fees with the distribution

between the Chairman and other Board members,

and fees for Committee work;

• Proposals for auditors; and

• Proposal for remuneration to the Company’s

auditors

The Nomination Committee shall apply Regulation

4.1 of the Code for the preparation of a proposal for

the Board of Directors, in order to achieve a balanced

Board composition in terms of broad range of quali-

fications.

86 • Annual Report 2022 • TF Bank AB (publ)

CEO Mattias Carlsson and CFO Mikael Meomuttel

participated in all meetings.

Reporting to the Board of Directors and Board

committees

The Board of Directors receives a monthly financial

report, including balance sheet and income state-

ments as well as information on the Company’s

capital and liquidity situation. Additionally, the CEO,

CFO and the risk control, compliance and credit risk

functions report directly to the Board of Directors.

The overarching responsibilities of the Board of Di-

rectors cannot be delegated but the Board of

Directors is assisted by three committees: The Remu-

neration Committee, the Audit Committee and Risk

and Compliance Committee.

Remuneration Committee

The Remuneration Committee’s main role is to

support the Board in its work to ensure that risks

associated with TF Bank’s remuneration system are

measured, managed and reported. The Remuneration

Committee is also responsible for assisting the Board

in establishing standards and principles for decisions

on remuneration of TF Bank’s staff and Executive

Management and in ensuring that the remunerations

systems are compatible with applicable laws and

regulations. The Board of Directors decides on remu-

neration of the CEO, Deputy CEO, Compliance Officer

and Chief Risk Officer following the preparatory work

of the Remuneration Committee.

The Remuneration Committee shall prepare a remu-

neration policy for the Company and present it to the

Board of Directors for approval. At least once a year,

the Board of Directors must adopt a remuneration

policy covering all TF Bank staff in accordance with

the Swedish Financial Supervisory Authority’s regu-

lations on remuneration systems in credit institutions

and investment firms. Adoption of the remuneration

policy is based on an analysis that is performed

annually in order to identify employees whose work

has had a significant impact on TF Bank’s risk profile.

The remuneration policy stipulates that remunera-

tion and other benefits must be competitive in order

to promote TF Bank’s long-term interests and to

discourage excessive risk-taking. A more detailed

description of remuneration paid in 2022 can be

found on TF Bank’s website:www.tfbankgroup.com.

The Renumeration Committee shall meet at least

twice a year and otherwise when required. Minutes

shall be taken at each meeting and shall be provided

to all board members.

with by the Board at each ordinary meeting and the

division of duties within the Board, with special

commitments for the Chairman. The rules of proce-

dure also set out rules for financial reporting to the

Board and more detailed rules for the responsibilities

and powers of the CEO.

According to the Articles of Association, the Board

of Directors should comprise not less than three and

not more than ten ordinary members. Information

about the Board representatives is available at

www.tfbankgroup.com and on page 107.

Significant matters

In 2022, the Board held eleven meetings, of which

eight were ordinary meetings (four physical and four

telephone meetings), one extra telephone meeting

and two meetings that were held by correspondence.

Date Significant matters raised at the board meetings

2022-01-24 Year-end report 2021

2022-03-17 The adoption of the Annual Report for 2021 and

Pillar 3 report

2022-03-28 Notice to attend the AGM on May 3 2022

2022-04-18 Interim report Q1 2022 and resolution of ICAAP

2022-05-03

(const.)

Adoption of rules of procedures on the Board of

Directors including rules of procedures on Audit

Committee, Renumeration Committee and Risk

and Compliance Committee respectively aswell

as adoption of CEO instructions. Appointment of

authorised signatories

2022-06-17 Updates of policies and validation of model for

loan loss provisions

2022-07-11 Interim report Q2 2022

2022-09-22 Strategy discussion and policy updates

2022-10-16 Interim report Q3 2022

2022-12-07 Decision to submit an application for permission

to change the method of calculating the capital

requirement for operational risk.

2022-12-15 Approval of budget 2023, Decision to determine

the activity plan for the risk and compliance func-

tion for 2023.

Board attendance was as follows:

Board member Independent

of major

shareholders

Attendance

John Brehmer (Chairman) No 11 of 11

Bertil Larsson (resigned at the AGM) Yes 3 of 11

Charlotta Björnberg-Paul (resigned

at the AGM) Yes 3 of 11

Mari Thjømøe Yes 11 of 11

Sara Mindus Yes 10 of 11

Michael Lindengren Yes 11 of 11

Niklas Johansson (new elected at

the AGM) Yes 7 of 11

Fredrik Oweson (new elected at the

AGM) Yes 6 of 11

TF Bank AB (publ) • Annual Report 2022 • 87

In connection with the AGM, the Board of Directors

appointed the Remuneration Committee by re-election

of John Brehmer and new election of Fredrik Oweson.

During the year, all members of the Remuneration

Committee have been members of the Board.

Board member Fredrik Oweson was appointed Chair-

man of the Remuneration Committee.

In 2022, the Remuneration Committee held two

minuted meetings. Attendance at Committee meet-

ings was as follows:

Board member Attendence

Fredrik Oweson (Chairman) 2 of 2

John Brehmer 2 of 2

Audit Committee

The Audit Committee is responsible for the prepara-

tion of the Board’s work on quality assurance of the

Company’s financial reporting, internal control and

risk management. The Audit Committee carries out

the preparatory work by looking at critical account-

ing issues and the financial reports submitted by the

Company.

In addition, the Audit Committee shall meet with

the Company’s auditor on a regular basis to monitor

adherence to accounting policies, obtain informa-

tion about changes in current regulations as well as

information about the focus and scope of the audit,

and to discuss coordination of the external and in-

ternal audit and the view of the Company’s risks. The

Audit Committee shall also review and monitor the

impartiality and independence of the auditor, paying

particular attention to whether the auditor provides

the Company with services other than audit services.

The Audit Committee shall also evaluate the work

carried out by the auditor and inform the Compa-

ny’s Nomination Committee of the outcome of the

evaluation and assist the Nomination Committee in

the preparation of proposals for auditor and setting

the fee for the audit work. The Audit Committee

shall meet at least four times per financial year and

otherwise as required. Minutes must be taken at each

meeting and be distributed to all Board members.

In connection with the AGM, the Board of Directors

appointed the Audit Committee by re-electing John

Brehmer and Michael Lindengren as well as by new

election of Niklas Johansson. Mari Thjømøe was re-

lieved from the committee at the AGM.

During the year, all members of the Audit Committee

have been members of the Board.

Board member Michael Lindengren was re-elected as

Chairman of the Audit Committee.

In 2022, the Audit Committee held eight minuted

meetings. Attendance at Committee meetings was as

follows:

Board member Attendance

Michael Lindengren (Chairman) 8 of 8

John Brehmer 8 of 8

Niklas Johansson 4 of 8

Mari Thjømøe 3 of 8

CFO and Head of Group Accounting have participated

in all meetings, CEO, Head of Internal Control and

auditor‐in‐charge from KPMG have participated in

several meetings.

Risk and Compliance Committee

The Risk and Compliance Committee is responsible

for preparing and following up issues concerning risk

management, regulatory compliance, capitalisation

and liquidity management. The Committee shall

address the Company’s overall current and future risk

appetite and risk strategy and assist the Board when

it monitors the executive management’s implementa-

tion of the strategy.

The Risk and Compliance Committee shall ensure

that the products that the Company offers its custom-

ers take into account the Company’s Business model

and risk strategy. If the prices do not correctly reflect

the risks in accordance with the business model and

the risk strategy, the Risk and Compliance Committee

shall draw up an action plan for the Board.

The Risk and Compliance Committee shall meet at

least four times a year and otherwise as required.

Minutes shall be drawn up at each meeting and shall

be sent to all board members.

In the board meeting held immediately following the

AGM, it was decided to appoint all Board members

as members of the Risk and Compliance Committee

with Niklas Johansson as the Committee Chairman.

During 2022, the Risk and Compliance Committee

had three minuted meetings. The participation in the

committee work has been as follows:

Board member Attendance

Niklas Johansson (Chairman) 2 of 3

John Brehmer 3 of 3

Sara Mindus 3 of 3

Fredrik Oweson 2 of 3

Mari Thjømøe 2 of 3

Michael Lindengren 2 of 3

88 • Annual Report 2022 • TF Bank AB (publ)

TF Bank’s Chief Compliance Officer, Chief Risk Officer

and Chief Credit Risk Officer have participated in all

meetings. Chief Information Security Officer and CFO

have attended some meetings.

Remuneration of Board members

The 2022 AGM resolved on the following remuneration

for Board members:

• Chairman of the Board SEK 1,200,000,

• Other members of the Board SEK 400,000,

• Chairman of the Audit Committee SEK 150,000,

• Other members of the Audit Committee

SEK 70,000,

• Chairman of the Remuneration Committee

SEK 100,000,

• Other members of the Remuneration Committee

SEK 50,000,

• Chairman of the Risk and Compliance Committee

SEK 150,000,

• Other members of the Risk and Compliance

Committee SEK 75,000.

Evaluation of the Board’s work

The Board of Directors regularly performs a system-

atic evaluation where Board members are offered the

opportunity to give their views on working methods,

Board materials, their own and other members’

contributions to the Board’s work in order to develop

the work performed by the Board, and to provide

the Nomination Committee with relevant information

required for decisions ahead of the AGM. The evalu-

ation before the AGM in 2023 was carried out and the

results of the evaluation have been presented to the

Board of Directors and Nomination Committee.

CEO AND EXECUTIVE MANAGEMENT

The CEO is responsible for the management of the

Company in accordance with the Swedish Companies

Act and the instructions of the Board of Directors. The

CEO is responsible for keeping the Board informed

about the Company’s operations and for ensuring that

the Board is provided with as true and accurate infor-

mation as possible as basis for decisions.

As at December 31, 2022, TF Bank’s Executive

Management comprised of Mattias Carlsson (CEO),

Mikael Meomuttel (CFO) and Espen Johannesen

(COO).

Further information about Executive Management

representatives is available at www.tfbankgroup.com

and on page 108.

Remuneration of senior executives

The guidelines for remuneration of senior executives

comprise CEO, CFO and other members of the Exec-

utive Management. The guidelines shall be applied

on remuneration which has been agreed upon, and

changes made to already agreed remuneration, after

the guidelines have been adopted by the AGM. The

AGM in 2021 adopted the following guidelines for

remuneration of TF Bank’s senior executives:

Guidelines for promoting the Bank’s business

strategy, long-term interests and sustainability

TF Bank was founded 1987 and is an internet-based

niche bank offering consumer banking services

and e-commerce solutions through a proprietary IT

platform with a high degree of automation. Deposit

and lending activities are conducted in Sweden,

Finland, Norway, Denmark, Estonia, Latvia, Lithuania,

Poland, Germany, Austria and Spain through branch

or cross-border banking with the support of the

Swedish banking license. From 2020 the operations

are divided into three segments: Consumer Lending,

Credit Cards and Ecommerce Solutions.

A successful implementation of the Bank’s business

strategy and the safeguarding of the Bank’s long-

term interests, including its sustainability, requires

the Bank to be able to recruit and retain qualified

members of staff. This means that the Bank must be

able to offer a competitive remuneration package.

The guidelines enable the Bank to offer a competitive

remuneration package to its executive management.

Variable cash remuneration which are compromised

by these guidelines should aim to promote the Com-

pany’s business strategy and long-term interests,

including its sustainability.

The forms of remuneration, etc.

The remuneration shall be competitive and may

comprise the following components: fixed salary,

variable remuneration, pensions and other economic

benefits. In addition, the Annual General Meeting may

decide upon, for example, share- and share price-

related remuneration.

The fulfilment of criterions for variable cash remu-

neration must be measurable over a time period of

one or several years. The variable cash remuneration

may amount to a maximum of 100 per cent of the

total fixed salary during the measurement period.

Furthermore, the following applies in accordance with

the regulations in place with regards to remuneration

in banks. Variable remuneration can be emanated in

the form of shares, and there shall be a limit to the

maximum result. Payment of variable remuneration

shall be postponed and be made conditional on that

the criteria on which the remuneration is based was

shown to be sustainable in the long-term and on that

the Bank’s position has not declined substantially. If

TF Bank AB (publ) • Annual Report 2022 • 89

the conditions for payment are not met, the remuner-

ation shall be cancelled in whole or in part.

Pension benefits, including health insurance, shall

be premium-determined, insofar as the executive is

not covered by a collective bargaining agreement

and/or premium based benefit. Pension premiums

for defined contribution schemes may amount to a

maximum of 25 per cent of pension-based income.

Regarding employment conditions that are governed

by rules other that Swedish, in so far as pension benefits

and other benefits are concerned, appropriate adjust-

ments are made to comply with such mandatory rules

or fixed local practices, whereby the general purpose

of these guidelines should be met as far as possible.

Termination of employment

In the event of termination of employment by the

Bank, the notice period may not exceed 12 months.

Fixed salary during the notice period and severance

pay may not, in total, exceed an amount correspond-

ing to the fixed salary for 6-12 months. In the event of

termination by the executive, the notice period may

not exceed six months, and there will be no right to

receive severance pay.

Furthermore, compensation for any commitment to

restrict competition may be received. Such remunera-

tion shall compensate for any loss of income and shall

only be paid to the extent that the former executive

has no right to severance pay. The remuneration shall

be based on the fixed salary at the time of termination

and shall be paid during the period subject to the

restriction of competition, which shall not exceed 6-12

month after termination of employment.

Criteria for distributing variable remuneration

The variable remuneration shall be linked to pre-

determined and measurable criteria’s that may be

financial or non-financial. The criteria’s may also be

individualised quantitative or qualitative goals. The

criteria’s must be designed to promote the Bank’s

business strategy and long-term interests including

its sustainability, for example by having a clear link

to the business strategy or promoting the long-term

development of the executive.

When the measurement period for fulfilment of the

criteria for payment of variable remuneration has

been completed, the extent to which the criteria’s

have been met shall be assessed and determined,

respectively. The Board of Directors are responsible

for such an assessment in respect of variable cash

remuneration to senior executives. The fulfilment of

financial criteria’s must be determined based on the

latest financial information published by the Company.

Salary and terms of employment for the employees

In preparing the Boards proposal for these remuner-

ation guidelines, salaries and terms of employment

for the Bank’s employees have been considered in

that information about employees’ total remuneration,

the components of the remuneration and the increase

and rate of remuneration over time have been part of

the Boars decision when evaluating the reasonable-

ness of the guidelines and the limitations that follow.

The decision-making process to establish, review

and implement the guidelines

The Board of Directors shall establish proposals

for new guidelines when there is a need for signifi-

cant changes, at least every 4 years. The proposals

shall be submitted for the resolution at the AGM. The

guidelines shall apply until new guidelines have been

adopted by the AGM. The board shall also follow and

evaluate programs for variable remuneration for the

executives, the application of guidelines for remune-

ration senior executives, as well as current remune-

ration structures and remuneration levels in the Bank.

The CEO and other members of executive manage-

ment shall not attend board meeting when decisions

are being made about remuneration-related issues,

insofar as they are affected by the issues.

Deviations from the guidelines

The Board of Directors may decide to temporarily

deviate from the guidelines, in whole or part, if there

are special reasons that motivate such action in an

individual case and deviation is necessary to meet

the Bank’s long-term interests, including its sustaina-

bility, or to ensure the Bank’s financial viability.

Commission-based compensation for senior

executives

In 2022, commission-based compensation amoun-

ted to SEK 300 thousand (1,136). Additional com-

mission-based compensation is paid on the basis of

individual attainment of financial targets established

for the year. TF Bank has ensured that all targets

related to commission-based compensation for the

fiscal year can be measured in a reliable way. None

of the commission-based compensation payments

are qualifying payments for pension purposes.

INTERNAL GOVERNING DOCUMENTS

In addition to laws, ordinances, regulations, etc. TF Bank

has a number of internal governing documents relating

to daily management. These have been adopted by the

Board of Directors, CEO or other managers and include

the Articles of Association, the Board of Directors’ Rules

of Procedure, instructions for the Audit Committee and

Remuneration Committee, instructions for the CEO

and financial reporting to the Board, insider policy, risk

90 • Annual Report 2022 • TF Bank AB (publ)

management policy, credit policy, remuneration policy,

management of ethical issues and conflicts of interest

(code of conduct), outsourcing, business continuity,

liquidity management, financial policy, capital policy,

governing documents for risk control, compliance and

internal audit, handling of complaints and anti-money

laundering and terrorist financing policy. All governing

documents are available on the intranet.

EXTERNAL AUDITORS

The Company’s external auditors are appointed by the

AGM. It is the responsibility of the external auditors to

review the Annual Report and the financial statements,

as well as the work of the Board of Directors and the

CEO. In 2022, KPMG AB was appointed auditor of the

Company with Authorised Public Accountant Dan

Beitner as auditor in charge.

Information about fees and reimbursement of

expenses for the auditors is presented in Note 10.

INTERNAL CONTROL AND RISK MANAGEMENT

First line of defence

TF Bank’s activities primarily comprise three business

areas; Consumer Lending, Credit Cards and

Ecommerce Solutions, and four company-wide

support functions, Credits, Finance, Operations, HR

and IT.

Risk management is based on the business and

support units and includes all employees. In the first

line of defence, managers of units/functions are

responsible for daily risk management and compli-

ance, and for taking appropriate action in the event of

unwanted risk exposure or failing compliance within

the respective business areas. Reporting lines are to

the immediate manager, the Compliance function,

Risk Control and Information Security functions or the

CEO.

Second line of defence - Compliance, Information

Security and Risk Control

The independent control functions Compliance,

Information Security and Risk Control examine, evalu-

ate and report to the Executive Management and the

Board of Directors regarding risks and compliance. The

work of the three functions is governed by instructions

established by the Board of Directors. The control

functions in the second line of defence are responsible

for reviewing risk management and compliance in the

first line of defence but should also provide support for

the latter.

An independent review of compliance with external

and internal regulations is carried out by the

Compliance function in accordance with applicable

laws and regulations in the countries where TF Bank

has operations, as well as the Swedish Financial

Supervisory Authority’s (or equivalent) regulations and

general guidelines on governance and control in credit

institutions. The Compliance function is organised

under the CEO and reports directly to the Board of

Directors and is regularly reviewed by the internal audit

function. TF Bank’s Chief Compliance Officer is Niclas

Carling. The Compliance function is independent of all

business units and support functions.

Independent risk control and monitoring of risk

management in TF Bank is carried out by the internal

independent Risk Control function in accordance

with current risk practice, the Swedish Financial

Supervisory Authority’s regulations and general

guidelines on governance, risk management and

control in credit institutions as well as applicable

guidelines and recommendations issued by the EBA.

The Risk Control function is also organised under the

CEO and reports directly to the Board of Directors and

is regularly reviewed by the internal audit function.

Reporting to the Board of Directors covers the Com-

pany’s capital position, liquidity risk, credit risk, market

risk and operational risk, including any incidents.

TF Bank’s Chief Risk Officer is Magnus Loefgren.

The Risk Control function seeks to ensure that all

risks in the business are identified and highlighted.

The function’s responsibilities include independent

monitoring and analysis of how risks at an aggre-

gate level develop over time, and to report on these

to the Board of Directors and management. The

function’s responsibilities also include contributing

to the development of risk management processes,

for instance by providing methods for identification,

measurement, analysis and reporting of risks. The

Risk Control function works independently of all

business units and support functions.

Information security is achieved by analysing the

Bank’s processes and defining vulnerability based on

confidentiality, accuracy, availability and traceability.

The function is responsible for defining appropriate

levels of security measures, including policies and

routines, processes, organisational structures and

functions in software and hardware based on the

Bank’s information assets and its risk classification.

The work of the information security function is based

on TF Bank’s Information Security instruction and

Instruction for classification, marking and handling of

information and IT systems. TF Bank’s Chief Informa-

tion Security Officer (CISO) is Navaz Sumar.

TF Bank AB (publ) • Annual Report 2022 • 91

Third line of defence - Internal audit

TF Bank’s internal audit is an independent audit func-

tion, reporting directly to the Board of Directors. The

internal audit is primarily responsible for providing the

Board of Directors with reliable and objective evalua-

tion of risk management, financial reporting and

control and governance processes in order to reduce

the occurrence of risks and improve the control struc-

ture. TF Bank’s internal audit carried out by Harvest

Law firm and the person principally responsible for

the task was Björn Wendleby. The audits are performed

according to an audit plan adopted by the Board of

Directors.

The internal audit function reviews and assesses

whether systems, internal controls and procedures

are appropriate and effective and issues recommen-

dations and monitors adherence to the recommen-

dations. In 2022, the audit performed by the internal

audit function in addition to the mandatory areas

included TF Bank’s handling of the requirements

related to the regulations regarding compensation

systems, management of credit risks, and measures

against money laundering and financing of terrorism.

The Board of Directors issues and revises all the

policies that form the framework for the business at

least once a year.

INFORMATION IN ACCORDANCE WITH CHAPTER

6, SECTION 2 OF THE ACT (2014:968) ON SPECIAL

SUPERVISION OF CREDIT INSTITUTIONS AND IN-

VESTMENT FIRMS AND CHAPTER 8, SECTION 2 OF

THE FINANCIAL SUPERVISORY AUTHORITY’S REG-

ULAIONS ON PRUDENTIAL REQUIREMENTS AND

CAPITAL BUFFERS (FFFS 2014:12)

TFB Service UAB, TFB Service SIA, TFB Service

GmbH, TFBN Service S.L. and TFB Service AB are

100 % owned by TF Bank. All companies are wholly

owned subsidiaries and as the sole or majority share-

holder, TF Bank is able to control the companies by

exercising its voting rights at the AGM. Through its

shareholding, TF Bank is also able to determine the

board that is elected at each company’s AGM.

THE BOARD OF DIRECTORS’ DESCRIPTION OF

INTERNAL CONTROL AND RISK MANAGEMENT

RELATING TO FINANCIAL REPORTING

The Board of Directors is responsible for the internal

control of TF Bank AB and its subsidiaries according to

the Swedish Companies Act and the Swedish Annual

Accounts Act.

Internal control relating to financial reporting is a

process designed to provide reasonable assurance

regarding the reliability of external financial reporting

and whether the financial statements are prepared

in accordance with generally accepted accounting

principles, applicable laws and regulations and other

requirements for companies whose negotiable debt

instruments are admitted to trading on a regulated

market. The internal regulatory framework of policies,

instructions and procedure and process descriptions

constitutes the primary tool for safeguarding financial

reporting. The effectiveness and practicality of control

mechanisms are reviewed on an annual basis by the

control functions and internal audit function.

The internal control activities form part of TF Bank’s

administrative procedures. TF Bank’s internal control

is based on a control environment that covers values

and management culture, follow-up, a clear and

transparent organisational structure, segregation of

duties, the duality principle and quality and efficien-

cy of internal communications. The basis for internal

control of financial reporting also comprises a control

environment covering organisation, decision-making

pathways, powers and responsibilities that are docu-

mented and communicated in governing documents

and job descriptions for control functions.

TF Bank takes a proactive approach to risk manage-

ment, focusing on ongoing controls and training. Risk

management is an integral part of the business. The

control activities include both general and detailed

controls intended to prevent and detect errors and

discrepancies so that these can be rectified. The

control activities are developed and documented at

company and departmental level, at an appropriate

level based on the risk of errors and the effect of

such errors. The manager responsible for each func-

tion is the person who in the first instance is

responsible for managing the risks associated with

the activities and financial reporting processes of

their department (so-called “first line of defence”).

The procedures and processes relating to financial

reporting are also controlled by TF Bank’s Risk Control

function (“second line of defence”). The control con-

sists of an assessment of whether existing procedures

and processes are adequate and of spot checks.

Monthly financial reports are submitted to the Board

of Directors and the financial position of the Company

is discussed each board meeting. The Board of Direc-

tors receives a report from the Risk Control function

and the Compliance function before all scheduled

meetings.

FURTHER INFORMATION

Further information regarding corporate governance

in TF Bank is available at www.tfbankgroup.com.

92 • Annual Report 2022 • TF Bank AB (publ)

THE AUDITOR’S EXAMINATION OF THE CORPORATE GOVERNANCE STATEMENT

To the Annual General Meeting of TF Bank AB (publ), organisation number 556158-1041.

Assignment and responsibility allocation

The Board of Directors is responsible for that the corporate governance statement on pages 81-91 has been

prepared in accordance with the Annual Accounts Act.

Focus and scope of the audit

Our examination of the corporate governance statement is conducted in accordance with FAR´s recommen-

dation RevR 16 The auditor´s examination of the corporate governance statement. This means that our exami-

nation of the corporate governance statement is different and substantially less in scope than an audit con-

ducted in accordance with International Standards on Auditing and generally accepted auditing standards in

Sweden. We believe that the examination has provided us with sufficient basis for our opinions.

Statement

A corporate governance statement has been prepared. Disclosures in accordance with chapter 6 section 6 the

second paragraph points 2-6 of the Annual Accounts Act and chapter 7 section 31 the second paragraph the

same law are consistent with the other parts of the annual accounts and are in accordance with the Annual

Accounts Act for Credit Institutions and Securities Companies.

Stockholm 17 March 2023

KPMG AB

Dan Beitner

Authorised Public Accountant

Auditor in Charge

TF Bank AB (publ) • Annual Report 2022 • 93

SUSTAINABILITY REPORT

TF Bank AB (publ) • Annual Report 2022 • 93

94 • Annual Report 2022 • TF Bank AB (publ)

At TF Bank, our goal is to contribute to financial inclusion by offering responsible

lending. In a functioning economy, responsible lending is a necessary and important

product category. We want to give our customers the opportunity to access the

products and services they are in need of in a sustainable and responsible way. In

December 2020, TF Bank’s Board of Directors adopted a sustainability program with

four focus areas, which are described in more detail in this report.

This is TF Bank’s statutory Sustainability Report for the financial year 2022. The report comprises TF Bank AB.

Business model

TF Bank offers unsecured consumer credits to creditworthy individuals, digital payment solutions for both

brick-and-mortar retailers and online retailers, credit cards for creditworthy individuals and savings accounts

with competitive interest rates. Our marketing strategy consists of providing easily available, straight-forward

savings and credit products without complex terms and conditions and with high availability. Our offering and

our processes are to the greatest extent digital and automated. We continuously develop, adapt, and improve

our digital processes to achieve our goal of organic growth and to be accessible to creditworthy individuals.

TF Bank operates in the Nordics, the Baltics, Poland, Germany, Austria, and Spain. It is important for the Bank

to have the capacity to provide personal service when requested. TF Bank has local presence in nine of the

eleven countries where TF Bank operates, while support functions are located at the headquarters in Borås

and at the Bank’s office in Gdansk.

Sustainability governance

The Board of Directors adopts the sustainability policy and approves the Sustainability Report and is hence

ultimately responsible for the Bank’s sustainability work. The CEO decides on the sustainability strategy,

including plans, goals and performance indicators, and report these to the Board. The sustainability policy is

adopted on a yearly basis and includes all sustainability aspects according to the Swedish Annual Accounts

Act: environment, social sustainability, employees, anti-corruption and human rights, and describes our work

and governance relating to sustainability. The sustainability policy also describes the importance of integrating

sustainability in the operations.

Significant events during 2022:

• During the year, TF Bank has signed the UN’s Global Compact which is an important factor in TF Bank’s

active work with human rights.

• By hiring a Group HR Manager, a common HR function has been established in the Bank.

• During the year, TF Bank has established a climate report for the years 2021 and 2022. By calculating the CO

emissions, the Bank can take measures that lead to a reduced negative impact on the environment.

SUSTAINABILITY REPORT

Suppliers and

business partners

45%

Society

17%

Employees

20%

Shareholders

Customers

15%

TF Bank AB (publ) • Annual Report 2022 • 95

TF Banks sustainability program aims to integrate sustainability throughout the entire organisation. The sustaina-

bility program includes four sustainability areas: responsible lending, business ethics and governance. attractive

employer and climate change. These areas have been assessed as the most material in regards to TF Bank’s

impact on the environment. The diagram below illustrates how TF Bank integrates sustainability and how sus-

tainability efforts are linked to the UN’s Sustainable Development Goals. Read more about TF Bank’s materiality

analysis on page 97.

TF BANKS SUSTAINABILITY PROGRAM

Employees

Focus areas

Sustainable

Development Goals

(SDG)

Suppliers and

business partners

Customers

Shareholders

Stakeholders

Responsible

lending

Business ethics

and governance

Attractive

employer

Climate change

Social

partnerships

Contribute to

financial inclusion

Economic values

TF Bank generates economic values for most of its stakeholder groups: Deposit account customers in the

form of interest payments, employees in the form of salaries, suppliers and business partners for purchases

of services, shareholders in the form of dividends, and society at large in the markets where we are active

through taxes and fees.

Initiative prior to the adoption of the sustainability program in 2020.

96 • Annual Report 2022 • TF Bank AB (publ)

Stakeholders

TF Bank’s operations are affected by have an effect on several different stakeholder groups. The Company

has an ongoing dialogue with the groups that are assessed to be primary stakeholders.

Stakeholders Type of dialogue / channels Key issues 2022

Customers (existing and new) - Credit granting process

- Customer service contacts

- Marketing

- Robust credit assessment

- Focus on new markets

Capital markets (sharehol-

ders, investors, analysts)

- 1-1 meetings

- AGM

- Press releases

- Interim reports

- Website

- Development of credit cards and e-commerce solutions

- Impact from increasing inflation/increased rates

- The war in Ukraine

Employees - Intranet

- Employee survey

- Development talks

- Code of conduct

- Hybrid work

Risks relating to sustainability

All our risk categories can include a sustainability perspective. The Board of Directors has the ultimate respon-

sibility for limiting and following up on the sustainability risks. The main principle of the risk management is

based on the three lines of defence, the first being the business units, the second comprising Compliance,

Information Security and Risk Management functions and the third comprising the Internal Audit. In addition to

the risks being described in note 3 of the annual report, TF Bank has identified the following specific sustaina-

bility risks:

Sustainability risk Consequence Management

Excessive indebtedness

The risk that TF Bank contributes

to excessive indebtedness in

society

The trust in TF Bank and the financial sector as

a whole may decrease, customers may face

financial difficulties

For every individual application, TF Bank ensures accurate

credit assessment through our established credit granting

process that is continuously being tested, developed and

improved.

Compliance

The risk that TF Bank fails to

comply with current regulations

in its markets

The trust in TF Bank and the financial sector

as a whole may decrease, TF Bank may

receive fines or, in a worst-case scenario, lose

permissions

TF Bank’s compliance function continuously work to

ensure that TF Bank fulfils all applicable regulations, often

in close dialogue with local supervisory authorities. A whist-

le-blower function is available to all employees.

Corruption

The risk that TF Bank’s employ-

ees act on their own interest and

in violence with the company’s

code of conduct

The trust in TF Bank may decrease All employees undergo training in the code of conduct,

and special training regarding anti-corruption. The training

provides guidance in how to act if being uncertain in a

relation or business situation.

Money laundering and terror

financing

The risk that TF Bank’s services

are used for money laundering

and terror financing

The trust in TF Bank and the financial sector

as a whole may decrease, TF Bank may

receive fines or, in a worst-case scenario, lose

permissions

Risk assessment and KYC process for every new customer

in the Bank. Continuous monitoring of transactions and

activities. Suspicious activities are reported to relevant

authorities.

Suppliers

The risk that TF Bank’s suppliers

act in a way that may harm the

Bank’s operations or trust in the

market

TF Bank may suffer both from a trust and

financial perspective

TF Bank evaluates suppliers based on various criteria.

The Bank has a code of conduct for suppliers, and an

annual follow-up is conducted.

IT and data security

The risk that TF Bank becomes

the target of an IT attack or

data breach with the purpose

of obtaining customer data or

exposing customers to fraud

TF Bank’s customers may suffer financially

or integrity-wise, the trust for TF Bank in the

market may decrease, which could lead to

outflows

TF Bank works preventively with systematic information

security.

Health and safety

The risk that TF Bank’s employ-

ees suffer from illness or that

the workplaces don’t fulfil work

environment requirements

TF Bank may lose staff, the employer brand

may be harmed, and TF Bank could as a

consequence face difficulties to recruit new

employees

TF Bank works with preventive work environment activities

in close cooperation between management, staff, the work

safety organisation and occupational health. TF Bank con-

tinually evaluates the Company’s efforts regarding work

environment in order to be able to continuously improve

the work environment.

TF Bank AB (publ) • Annual Report 2022 • 97

Materiality analysis

TF Bank’s materiality analysis comprises an identification of the most material sustainability areas for the

operations. The selection has been made with the assistance of chosen stakeholders and is summarised as

follows.

Sustainability program

In December 2020, TF Bank’s Board of Directors adopted a long-term sustainability program with four focus

areas. The focus areas are based on the materiality analysis and provide a unifying framework for the Bank’s

sustainability work. The areas have also been developed in the light of the UN Sustainable Development

Goals (SDGs). Within each area, a number of measurable KPIs that show the development over time will also

be used. In addition to the four focus areas, the Bank also has a number of social partnerships with the aim of

making an effort for the most vulnerable.

Prioritised Very prioritised

• Tax (2)

• Emissions (4)

• Waste (4)

• Community engagement (

)

• Health and safety (3)

• Diversity (2,3)

• Equality (2,3)

• Customer satisfaction (1,2,4)

• Innovation (4)

• Digitalisation (4)

• Employee development (3)

• Responsible lending (1)

• Business ethics (2)

• Anti-corruption (2)

• Anti money-laundering (2)

• Compliance (2)

• Data security (2)

• IT security (2)

• Customer integrity (2)

Linked to focus areas

1. Responsible lending

2. Business ethics and governance

3. Attractive employer

4. Climate change

Social partnerships

Prioritised Very prioritised

• Tax (2)

• Emissions (4)

• Waste (4)

• Community engagement (

)

• Health and safety (3)

• Diversity (2,3)

• Equality (2,3)

• Customer satisfaction

(1,2,4)

• Innovation (4)

• Digitalisation (4)

• Employee develop

ment (3)

• Responsible lending (1)

• Business ethics (2)

• Anti-corruption (2)

• Anti money-laundering (2)

• Compliance (2)

• Data security (2)

• IT security (2)

• Customer integrity (2)

1. Responsible lending

2. Business ethics and

governance

3. Attractive employer

4. Climate change

Social partnerships

SDGsFocus areasMaterial sustainability aspects

Initiative prior to the adoption of the sustainability program in 2020..

98 • Annual Report 2022 • TF Bank AB (publ)

TF Bank’s focus areas in sustainability

TF Bank works systematically with four focus areas. The areas are chosen by the Board based on what is most

relevant given our business operations and the risks and opportunities it entails.

Area Purpose and Relevance Our promise Sub-areas SDG

Responsible

lending

Responsible lending activities are busi-

ness critical and contribute to low loan

losses for TF Bank and a well-functio-

ning economy in general.

For every individual application,

we ensure accurate credit as-

sessment through our establis-

hed credit granting process that

is continuously being tested,

developed and improved.

• Growth in a controlled manner

• Customer protection

• Financial inclusion

Business ethics

and governance

Good business ethics and sound cor-

porate governance are basic prere-

quisites for TF Bank’s values and trust

from customers, employees and the

market, and also contribute to public

trust in the financial sector.

We always act responsibly

with a clear focus on regula-

tory compliance and high risk

awareness.

• Anti-corruption, AML and

prevention of terror financing

• Data security and customer

integrity

• Sound corporate governance

and efficient risk manage-

ment

Attractive employer By attracting talented employees with

different experiences and perspectives,

we create the innovative climate requi-

red for long-term business success.

We offer a physically, men-

tally and socially healthy and

developing workplace for all

employees.

• Diversity and equality

• Safe work environment

• Competence development

5, 8

Climate change Climate change is the most important

societal issue of our time, and despite

its small direct environmental impact,

TF Bank will contribute to the global

goals and to reducing our global

footprint on the environment.

We will reduce our own impact

and contribute to reduced

climate impact through our

services.

• Reduce own climate impact

• Digital processes

• Contribute to energy transi-

tion

Responsible lending

KPIs 2022 2021

Loan loss ratio (%) 2.9 2.8

Income from late payments (%) 6.4 6.9

Number of loan applications 8,347,038 7,043,040

- Of which denied 4,364,206 3,485,867

Average loan amount (SEK) 46,628 44,635

Share of markets with local customer service (%) 82 80

Sub-area 1: Growth in a controlled manner

TF Bank prioritises organic growth in a controlled manner. With the combination of well-developed credit

granting processes and relatively low credit amounts, calculated risks are taken that can be quickly adjusted

when the conditions on macro level change. It is inevitable that credit losses in absolute terms increase as the

loan portfolio grows. However, our goal is to reduce the loan loss ratio annually. During 2022 the loan loss ratio

increased slightly to 2.9 percent (2.8).

Sub-area 2: Customer protection

To become a customer of TF Bank, one must not have payment defaults and must have financial margins, which

are ensured through a calculation of residual income. In the credit assessment process, we also investigate

whether a loan with us would lead to the customer having too high a level of indebtedness. Additionally, TF Bank’s

credits are characterised by relatively low loan amounts and short repayment periods, which increases the proba-

bility that our customers will be able to repay their loans, even if their financial circumstances change.

In order to protect customers against changes in their financial circumstances, we also offer customers in the

Nordics the facility to take out insurance against suspension of payments due to unemployment or illness, as

well as a life insurance.

Should the customers still encounter problems repaying their loan, we are committed to helping them. TF Bank

has specially trained employees who contact the customer at an early stage in the event of a late payment in

order to jointly agree on a solution and, if possible, provide advice and support.

TF Bank AB (publ) • Annual Report 2022 • 99

Credit assessment

In 2022, we processed around 8.3 million loan applications (7.0), of which above half were denied credit as

a result of our robust credit assessment. In each case, we ensure accurate credit assessment through our

established credit granting process that is continuously being tested, developed and improved. Our long

experience in the industry, our various geographical markets and different economic conditions, have given

us the know-how and data to be able to develop our models.

Credit assessment is performed in accordance with good lending practice and is always based on the

customer’s financial position and implemented in accordance with TF Bank’s credit policy. In some countries

we may be required to contact customers by telephone to ensure that the information provided by the

applicant is correct. In markets where we have access to less information via credit information services

companies, we ask for supplementary information, such as pay slips and tax returns, in order to ensure that

our customers have the financial capacity to repay the loan.

Sub-area 3: Financial inclusion

Responsible lending is a necessary and important product category and function in a well-functioning economy.

By taking a credit, consumers can spread expenses over time. TF Bank’s products shall be characterised by

easy-to-understand terms and high availability, with the ambition of meeting the needs of creditworthy people

who need to take a loan. Our lending therefore combines automated processes with manual processing. Our

automated credit assessment process allows us to provide customers with efficient credit management while

also ensuring an accurate credit assessment. By providing local customer service, customers have the opportunity

to get in touch and receive support with their matters in the local language.

Business ethics and governance

KPIs 2022 2021

Number of customer complaints 46 21

Number of reported GDPR breaches 0 0

Number of reports to whistle-blower function 0 0

Tax payments (SEK thousand) 134,349 107,990

Sub-area 1: Anti-corruption, AML and prevention of terror financing

Corruption primarily refers to the giving or accepting of a bribe or undue benefit, and inappropriate conduct in

conflicts of interest. Conducting operations in a way that ensures corruptive practices cannot gain a foothold is

a fundamental prerequisite for the continued trust of our customers, staff and the market. The Bank’s anti-cor-

ruption work is based on the Bank’s code of conduct, which encompasses all employees. The code of conduct

is reviewed and updated every year, and the updated code is shared with the Bank’s employees. In 2022, a

special educational effort on the code of conduct was carried out. Furthermore, anti-corruption training is

carried out regularly to give employees guidance on how to act in the best way if they experience uncertainty

in a relationship or business relationship. All in all, this contributes to an awareness among all employees that

the work with anti-corruption is an ongoing process.

We work proactively to prevent TF Bank from being used for money laundering or terrorist financing both to

counteract this societal problem and to protect our customers. The work takes place within the framework of

the risk assessment and KYC process carried out on each new customer in the Bank. Thereafter, transactions

and activities are continuously monitored. Suspected cases of money laundering or terrorist financing are

investigated and reported to the relevant supervisory authorities in each market.

TF Bank has an internal whistle-blower function where suspected cases of deviations from the code of conduct,

breaches of internal or external regulations as well as money laundering and terrorist financing can be reported

anonymously by employees. If possible, the report should be made to the employee’s immediate manager, but

in case it is not appropriate or possible, the report is directed to the Bank’s Chief Compliance Officer. An employee

who makes a report to the whistle-blower function and who chooses not to be anonymous is considered to act

loyally with his or her employer and is guaranteed to not suffer any damage from a labour law perspective.

100 • Annual Report 2022 • TF Bank AB (publ)

TF Bank has also adopted a code of conduct for suppliers. The document is distributed to suppliers who then

will approve our code of conduct for suppliers or demonstrate that they have an internal equivalent code of

conduct. The Bank’s compliance function ensures that annual follow-ups of suppliers in relation to the code of

conduct are conducted.

Sub-area 2: Information security and GDPR

TF Bank works preventively with systematic information security. We continuously adapt the security measures

based on the Organisation’s needs and risks in accordance with regulatory requirements, good practice and

ethical standards.

We also require that persons who process personal data undertake confidentiality through written agreements

and strict information security measures. This also applies to our suppliers, which is established in our code of

conduct for suppliers.

It is TF Bank’s obligation that the personal data we process is correct, complete and up to date. Personal data is

protected by bank secrecy, which means that TF Bank may not disclose personal data to unauthorised persons.

The Bank also has extensive routines for processing personal data in accordance with GDPR.

Sub-area 3: Sound corporate governance and efficient risk management

TF Bank follows the Swedish Code of Corporate Governance and uses a well-proven model for corporate

governance with clear responsibilities, guidelines and policies in all significant areas.

The Company’s risk management is based on three lines of defence that start in the business and support units,

which include all employees. The second line comprises the independent control functions Compliance and

Risk Control, which review, evaluate and report to management and the board regarding risks and compliance.

The third line consists of internal audit, which is an independent audit function directly subordinate to the board.

The internal audit is mainly responsible for providing the Board with reliable and objective evaluation of risk

management, financial reporting and control and governance processes in order to reduce the presence of risks

and improve the control structure.

More information about TF Bank’s corporate governance can be found in the corporate governance report on

page 81-91.

Human rights

TF Bank respects universal human rights in all countries where the Bank operates. The Bank supports the UN’s

Universal Declaration of Human Rights and associated conventions. In 2022, TF Bank joined the UN’s Global

Compact initiative. This collaboration serves as an important factor in TF Bank’s active work with human rights.

By joining the UN’s Global Compact, the Bank commits to communicating its progress (CoP) on their ten prin-

ciples for human rights, labour rights, environment, and anti-corruption, as well as the SDGs.

Attractive employer

KPIs 2022 2021

Number of employees 290 236

- Of which women 154 126

- Share of women (%) 53 52

Share of female members of Board of Directors and executive management (%) 22 33

- In Board of Directors (%) 33 50

- In executive management (%) 0 0

- In extended management team (%) 21 16

Number of nationalities in Board of Directors 2 3

Average age of employees 35 35

Sick absence (%) 4.7 3.5

Staff turnover rate (%) 18.7 16.6

Number of part-time employed students 24 20

TF Bank AB (publ) • Annual Report 2022 • 101

Sub-area 1: Diversity and equality

At TF Bank, all shall be treated with respect and dignity in accordance with our business principles. TF Bank

strives for long-term business success and believes that employees with diverse experiences and perspec-

tives are a crucial factor in creating the innovative climate required to achieve this. As a smaller company,

we understand that our success depends on the diversity and competence of our employees, who are our

most important asset. The area of diversity and equality is addressed in our code of conduct.

We work to ensure that all employees have the same rights, obligations and opportunities in all important

areas of life. Important aspects of our gender equality work are to facilitate the opportunities to reconcile work

and parenthood, to prevent and deter discrimination, to work for a more even gender distribution within our

operations and to give all employees equal pay and conditions for equal work.

Sub-area 2: Safe work environment

All employees within TF Bank shall have an inspiring and safe work environment, both physically and psychoso-

cially. The physical work environment must be designed to promote health and safety, and all employees must

have a good ergonomically designed workplace. Great emphasis is placed on preventive work environment

measures, which takes place in close collaboration between management, employees, the safety organisation

and occupational health care. TF Bank continuously evaluates the company’s efforts in the work environment

area in order to be able to make continuous improvements in the daily work environment.

Sub-area 3: Competence development

A basic principle for TF Bank is to provide all employees with the opportunity for development and training. We

continuously train all employees in issues that affect their own work tasks, as well as in broader and business-

critical issues such as money laundering. Based on development talks between each employee and the

immediate manager, individual goals are set with the opportunity for individual development based on needs

and ambitions. The ambition is for all employees to understand their role and the importance of their own work,

to be able to influence their work situation, to feel responsible for their tasks and to develop their skills.

The Bank also wants to be a springboard to working life and in several markets there are opportunities for

part-time work while studying.

102 • Annual Report 2022 • TF Bank AB (publ)

A cornerstone for TF Bank is to grow organically.

This is also implemented into the HR function. The

goal is to safeguard existing human assets while

actively working to attract new competencies.

- Engagement is one of the most important parts

of ensuring that employees thrive, feel a greater

commitment, and perform better. This is an area that

is the starting point in my approach. The goal is for

all employees to know what TF Bank stands for and

where we are headed. Everyone should have a clear

understanding of their own role and how the work

they do contributes to the whole. Each employee

should be able to influence their work situation, feel

responsible for their tasks, and be given the opportu-

nity to develop their skills.

TF Bank is an exciting employer with

a stable foundation that offers a very

developing work environment.

Josefine Viklund started working at TF Bank in the

fall of 2022. One thing that appealed to Josefine from

the start was that she, at TF Bank, would have the

opportunity to help build a centralised HR depart-

ment from scratch. The Bank’s HR work had previously

consisted of each individual country manager being

responsible for the HR issues relevant to their specific

unit.

- My ambition is to establish an annual schedule

and a common process for HR-related activities in

all units within TF Bank. A common approach for our

managers that is recognised regardless of which

office or country they work in. It’s something I’m

working on right now, and as part of that work, I’ve

had meetings with our segment and country mana-

gers during this winter.

TF Bank sees a great advantage in being locally

present in the countries where they operate to offer

customers service in the local language. Additio-

nally, the Bank believes that people with different

experiences and perspectives are a crucial factor in

creating the innovative climate required for long-

term business success. TF Bank is growing rapidly,

and the number of employees is also increasing

rapidly.

- To attract, recruit, and retain talents, it’s important

that we have a strong employer brand. This will be

among my focus areas in the future. It’s important

that we do small things all the time to constantly

become a better employer.

TF BANK AS EMPLOYER

TF Bank AB (publ) • Annual Report 2022 • 103

Climate change

Sub-area 1: Reduce own climate impact

The climate transition is the most important societal issue of our time, and despite limited direct environmental

impact, TF Bank aims to contribute to the SDGs and reduce its environmental footprint. The Bank has a sustaina-

bility policy that is regularly updated. This policy has been adopted by the Board of Directors and is accessible

for all employees of the Bank. During the year, the Bank has taken steps to reduce its environmental footprint,

including calculating its carbon footprint in collaboration with external consultants.

The indirect environmental impact occurs mainly through our suppliers’ energy use, especially regarding server

capacity. The Bank uses a cloud-based server solution that is considered more secure and is more energy effi-

cient than having own servers. The server hall used is powered by 100% green electricity and is environmentally

certified according to ISO 14001.

The calculation is based on the Greenhouse Gas protocol (GHG-protocol) and is estimated using the conso-

lidation method with an operational control approach. The Bank’s climate impact has been calculated using

the market-based method. Measurements have been made within scope 1 (refrigerants and service vehicles),

scope 2 (electricity, district heating, and district cooling), and part of scope 3 (business travel and indirect life

cycle emissions related to each emission source).

KPIs 2022 2021

Climate impact (t CO2e) 463.4 294.6

Climate impact per employee (t CO2e / FTE) 1.6 0.72

Climate impact per net sales (t CO2e / MSEK) 0.33 0.16

Climate impact per office space (t CO2e / m2) 0.03 0.02

Energy consumption per office space (kWh / m2) 148.43 141.86

As TF Bank’s operations are located in several countries, video conferencing opportunities have been prioritised

in all branches to reduce the company’s environmental impact in the form of travel, and to facilitate meetings

between the Bank’s various units.

In our offices, we ensure that we have well-functioning recycling procedures. Paper, cartons, toner and

electronic equipment are sorted and left for recycling. Our office supplies are purchased from environmen-

tally certified suppliers and we strive to choose environmentally friendly products.

We consider it of utmost importance that our suppliers follow high ethical standards and act responsibly which

is why we have adopted our code of conduct for suppliers. The document is distributed to suppliers who then

will approve our code of conduct for suppliers or demonstrate that they have an internal equivalent code of

conduct.

Sub-area 2: Digital processes

TF Bank is on a digitalisation journey where we develop internal processes and smart solutions for our custo-

mers, but different conditions apply in the various markets due to the country’s maturity to accept digital so-

lutions. In the Baltic countries and in Norway, all marketing and customer communication takes place digitally.

The majority of new lending takes place digitally through loan intermediaries on all channels.

We strive to reduce our paper use through several different initiatives. We encourage our customers to sign loan

agreements electronically and have come a long way in this work in several markets. We also see an improve-

ment regarding the use of e-invoices and invoices via e-mail to handle notices to our customers. The percentage

of invoices sent digitally amounted to 91 % during 2022.

Both in our marketing and in our administration, we use Nordic eco-labelled or FSC-labelled products, both in

terms of paper, envelopes and cartons. In the e-commerce business, we offer our partners an AI tool, Avarda

Return Optimiser, to reduce their return rates, which in turn contributes to reduced transports.

104 • Annual Report 2022 • TF Bank AB (publ)

Sub-area 3: Contribute to energy transition

TF Bank is continuously investigating business opportunities to offer financing solutions that can facilitate

climate change with a focus on modern energy. Currently, sales financing is offered for the installation of solar

panels in Poland as part of a national initiative to increase the energy share from renewable sources. Via the

Bank’s e-commerce customers, it is also possible to finance the purchase of modern energy solutions.

Corporate Sustainability Reporting Directive (CSRD)

TF Bank will be subject to the new EU directive for sustainability reporting, Corporate Sustainability Reporting

Directive (CSRD), during the fiscal year 2025 with reporting in 2026. This means that the Bank will report accor-

ding to European Sustainability Reporting Standards (ESRS). The directive entails increased requirements for

more comprehensive disclosures and information related to sustainability than what is currently required.

UN Sustainable Development Goals

TF Bank has identified the UN SDGs number 5, 7, 8 and 16 as most relevant in relation to its operations and

where the largest contributions are made. In addition, TF Bank contributes through social partnerships

within goal 4.

5.5 Ensure women’s full and effective partici-

pation and equal opportunities for leadership

at all levels of decision-making in political,

economic and public life

7.1 Ensure universal access to affordable, reli-

able and modern energy services

7.2 Increase substantially the share of renewa-

ble energy in the global energy mix

8.5 Achieve full and productive employment and decent work for all women and men, including for young people

and persons with disabilities, and equal pay for work of equal value

8.6 Substantially reduce the proportion of youth not in employment, education or training

8.8 Protect labour rights and promote safe and secure working environments for all workers, including migrant

workers, in particular women migrants, and those in precarious employment

8.10 Strengthen the capacity of domestic financial institutions to encourage and expand access to banking, insu-

rance and financial services for all

16.4 Significantly reduce illicit financial and

arms flows, strengthen the recovery and return

of stolen assets and combat all forms of orga-

nised crime

16.5 Substantially reduce corruption and bribe-

ry in all their forms

4.4 Substantially increase the number of youth

and adults who have relevant skills, including

technical and vocational skills, for employment,

decent jobs and entrepreneurship

4.5 Eliminate gender disparities in education

and ensure equal access to all levels of educa-

tion and vocational training for the vulnerable,

including persons with disabilities, indigenous

peoples and children in vulnerable situations

TF Bank AB (publ) • Annual Report 2022 • 105

TF Bank’s social efforts – social partnerships for the most vulnerable

Zelmerlöw & Björkman Foundation

TF Bank has a collaboration with Zelmerlöw & Björkman Foundation (ZBF) where TF Bank finances the educa-

tion for a class of 47 students, 28 girls and 19 boys, at Kenswed Academy in Kenya. The Kenswed model is based

on the idea that it is not enough to provide theoretical education for young people from difficult circumstances

to find their driving force and get out of poverty. There is also a need to add other values that include creativity,

health and that the basic needs are met. For ZBF, it is important to reach the most vulnerable young people in

the areas where the foundation is active, and it therefore has an extra focus on girls. TF Bank’s contribution finan-

ces the education, including teacher salaries, materials, classrooms, sports activities, food and drink. The class

will graduate in 2023.

PlayOnside

TF Bank also cooperates with PlayOnside, which is based in the Thai border town of Mae Sot on the eastern

border with Myanmar. Myanmar is experiencing one of the most serious humanitarian crises in the world with

internal conflict contributing to thousands of civilian casualties, forced relocations and resettlement in other

countries. PlayOnside uses the power of football to educate and empower displaced Myanmar refugees and

immigrants. Now, every weekend, about 700 children from 22 different migrant schools gather to play, learn

and compete while making new friends and expanding their network in the process.

106 • Annual Report 2022 • TF Bank AB (publ)

THE AUDITOR’S OPINION REGARDING THE STATUTORY SUSTAINABILITY REPORT

To the Annual General Meeting of TF Bank AB (publ), organisation number 556158-1041.

Assignment and responsibility allocation

The Board of Directors is responsible for the sustainability report on pages 93-105, and that it is prepared in

accordance with the Annual Accounts Act.

Focus and scope of the audit

Our examination has been conducted in accordance with FAR:s auditing standard RevR 12 The auditor’s opinion

regarding the statutory sustainability report. This means that our examination of the statutory sustainability

report is different and substantially less in scope than an audit conducted in accordance with International

Standards on Auditing and generally accepted auditing standards in Sweden. We believe that the examination

has provided us with sufficient basis for our opinion.

Statement

A statutory sustainability report has been prepared.

Stockholm 17 March 2023

KPMG AB

Dan Beitner

Authorised Public Accountant

Auditor in Charge

TF Bank AB (publ) • Annual Report 2022 • 107

JOHN BREHMER

Chairman of the Board since

2020. Board member since

2010.

Born: 1965

Education: MSc in Business

and Economics, industrial

marketing, Stockholm School

of Economics.

Current directorships:

Chairman: Mederion AB, Tibe-

ron AB, Zebware AB.

Board member: Consortio

Invest AB, Consortio Business

Center AB.

Holdings in Company: 3 361

852 shares

Independent of the Company

and its management. Affilia-

tion with major shareholders.

MARI THJØMØE

Board member since 2017.

Born: 1962

Education: Master of Eco-

nomics and Business, BI

Norwegian Business School

and Chartered Financial

Analyst, Norwegian School of

Economics.

Current directorships:

Chairman: Seilsport Maritimt

Forlag AS, ThjømøeKranen

AS.

Board member: Tryg A/S,

Deezer S.A., Hafslund AS, FCG

Fonder AB, Norconsult AS,

Sintef Eiendom Holding AS.

Holdings in Company: 12 154

Independent of the Company,

its management and major

shareholders.

FREDRIK OWESON

Board member since 2022.

Born: 1968

Education: M.Sc. Business

and Administration, Stock-

holm School of Economics.

Current directorships:

Chairman: Scope Capital SA,

Woffel SA.

Board member: Swedish Bra

Holding AB, Artificial Solutions

International AB.

Holdings in Company: 0

Independent of the Company,

its management and major

shareholders.

NIKLAS JOHANSSON

Board member since 2022.

Born: 1961

Education: B.A., Linköping

university, MBA, Uppsala uni-

versity and CEFA, Stockholm

School of Economics.

Current directorships:

Chairman: Apoteket AB:s Pen-

sionsstiftelse, AREIM AB.

Board member: Livförsäk-

ringsbolaget Skandia, Euroc-

lear Sweden AB.

Holdings in Company: 300

Independent of the Company,

its management and major

shareholders.

SARA MINDUS

Board member since 2020.

Born: 1972

Education: Master of Laws

and BSc in Business Adminis-

tration at Stockholm Univer-

sity.

Current directorships:

Board member: K-Fast Holding

AB, Besqab AB, Dreams AB,

Colibri Ventures AB, Faboss

Invest AB, Sara Mindus AB,

Duco Förvaltning AB.

Holdings in Company: 25 000

Independent of the Company,

its management and major

shareholders.

Refers to directly or indirectly holdings as of December 31, 2022.

MICHAEL LINDENGREN

Board member since 2021.

Born: 1956

Education: MSc in Business

and Economics, Gothenburg

University.

Current directorships:

Chairman: Acrap AB.

Deputy chairman: Tidaholms

Sparbank

Board member: Sparbanksstif-

telsen Sjuhärad, Sparbanken

Sjuhärad (publ) AB, Simplicity

AB.

Holdings in Company: 5 000

Independent of the Company,

its management and major

shareholders.

BOARD OF DIRECTORS

108 • Annual Report 2022 • TF Bank AB (publ)

AUDITOR

DAN BEITNER

Authorised Public

Accountant

Auditor in charge

KPMG AB

MATTIAS CARLSSON

CEO

Born: 1972

Education: MSc Eng in Engi-

neering and Physics, Uppsala

University.

At TF Bank since 2008 as CEO

until 2015, Chairman of the

board between 2015 and 2017

and CEO from 2017. Previous

experience from Resurs Bank

and SEB.

Current directorships:

Chairman: Tobisflöte Holding

AB.

Board member: Tronstad

Consulting AB, TFB Service

AB.

Holdings in Company: 261 651

1,2

MIKAEL MEOMUTTEL

CFO and Deputy CEO

Born: 1976

Education: MSc in Business/

Economics and Finance at

Borås University/Gothenburg

University.

At TF Bank since 2009, 2014

Deputy CEO and from 2018

also Head of IR. Previous ex-

perience: Financial controller

at Consortio Fashion Group

AB (CFG).

Current directorships:

Chairman: Torhamnsskär

Holding AB.

Holdings in Company: 28 000

1,2

ESPEN JOHANNESEN

COO

Born: 1981

Education: Executive MBA

Management Control Nor-

wegian School of Economics

(NHH), BA Economics, Busi-

ness BI Norwegian School of

Management.

At TF Bank since 2015 as CEO

of BB Bank 2015-2020 (now

branch Norway). More than 10

year’s of experience in consu-

mer finance.

Holdings in Company: 45 198

Refers to directly or indirectly holdings as of December 31, 2022.

TF Bank´s principal owners TFB Holding AB, Erik Selin Fastigheter AB, Tiberon AB and Merizole Holding Ltd have agreed on market terms with TF Bank´s CEO Mattias Carlsson and

CFO Mikael Meomuttel on an incentive program consisting of call options regarding shares in TF Bank. The incentive program has a term of approximately five years. The call

options have been acquired on market terms and no compensation cost has been reported by the company and will not be reported during the remaining part of the five-year

period.

EXECUTIVE MANAGEMENT

AUDITOR

TF Bank • Annual Report 2015 • 109

TF Bank AB (publ) • Annual Report 2021 • 109TF Bank AB (publ) • Annual Report 2021 • 109

CONTACT

Investor Relations

Mikael Meomuttel

Tel: +46 706 26 95 33

ir@tfbank.se

www.tfbankgroup.com

TF Bank AB (publ) • Annual Report 2022 • 109

TF Bank AB (publ)

PO Box 947, 501 10 Borås, Sweden

Tel.: +46 33 722 35 00

Email: ir@tfbank.se