ANNUAL REPORT

2021

2 • Annual Report 2021 • TF Bank AB (publ)

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 are taking place in carefully

selected segments and markets. The business is

conducted in Sweden, Finland, Norway, Denmark,

Estonia, Latvia, Lithuania, Poland, Germany and

Austria through branch or cross-border banking.

The business is divided into three segments:

Consumer Lending with focus on unsecured con-

sumer loans, Ecommerce Solutions with digital

payment solutions primarily to online retailers and

Credit Cards with focus on offering credit cards. The

target group for all services creditworthy individuals

and the loan amounts are relatively small with short

repayment terms. TF Bank also offers deposit prod-

ucts in several markets.

ADJUSTED OPERATING PROFIT

(SEK million)

ADJUSTED RETURN ON EQUITY (%)

LOANS TO THE PUBLIC (SEK million)

TOTAL CAPITAL RATIO (%)

TF BANK IN BRIEF

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 68-69.

2,000

4,000

6,000

8,000

10,000

12,000

2017 2018 2019 2020 2021

100

200

300

400

2017 2018 2019 2020 2021

TF Bank AB (publ) • Annual Report 2021 • 3

FINANCIAL PERFORMANCE 2021

• The loan portfolio amounted to SEK 10,872 million,

compared to December 2020 the increase in local

currencies was 33 %

• Operating profit increased by 34 % to SEK 352.6

million, the comparison period was affected by an

additional loan loss provision of SEK 30 million

• Earnings per share increased by 38 % to SEK 12.55

• Cost/income ratio increased to 41.9 % (38.9)

• Total capital ratio has decreased to 16.2 % (17.4)

• Return on equity amounted to 24.4 % (22.0)

• The Board proposes to the Annual General Meeting a

dividend of SEK 1.00 per share for 2021

See separate section with definitions and reconciliation tables, page 68-69.

SIGNIFICANT EVENTS 2021

• The Credit Cards segment reported an operating

profit for the fourth quarter and the German credit

card portfolio has increased by 154 %.

• TF Bank’s e-commerce initiative Avarda launched

a payment solution for Boozt’s whole fast-growing

ecommerce environment.

• The Board of TF Bank has resolved on new financial

targets. By the first half of 2025, the Bank’s loan

portfolio shall amount to SEK 20 billion and the

return on equity shall be well above 20 %.

FINANCIAL CALENDAR

Interim report January-March 2022 19 April 2022

Annual General Meeting 2022 3 May 2022

Interim report January-June 2022 12 July 2022

Interim report January-September 2022 17 October 2022

For further information, see www.tfbankgroup.com

or contact Investor Relations at ir@tfbank.se.

The Annual General Meeting 2022 will be held on Tuesday

3 May 2022. Notice of the Annual General Meeting will be pub-

lished no later than Tuesday 5 April 2022.

KEY FIGURES

SEK million 2021 2020

Operating income 1,055 876

Operating profit 353 263

Earnings per share, SEK 12.55 9.11

Loans to the public 10,872 7,922

New lending 11,187 7,305

Cost/Income ratio, % 41.9 38.9

Return on equity, % 24.4 22.0

Total capital ratio, % 16.2 17.4

Employees (FTE) 236 187

YEAR IN BRIEF

”

When summarising 2021, we can look back at an addi-

tional year with profitable growth. TF Bank’s loan port-

folio increased by 33 % in local currencies, surpassing

SEK 10 billion. At the same time, earnings per share

increased by 38 % compared to 2020 and return on

equity amounted to over 24 %.

4 • Annual Report 2021 • TF Bank AB (publ)

Strong growth in the Nordics for Ecommerce

Solutions

TF Bank’s digital payment solutions have had a

successful year with strong growth and solid profita-

bility. Our brand Avarda has experienced a commer-

cial breakthrough in the Nordic markets through an

attractive white label solution that puts focus on the

retailers and the customer offering. Avarda Checkout+

is built on a scalable technology and new retailers are

integrated in a highly efficient manner. Many of our

retailers are also using the AI based tool Avarda Re-

turn Optimiser that decreases the return rates, which

is positive both from an environmental and financial

perspective.

The loan portfolio for the Ecommerce Solutions

segment increased by 51 % in local currencies during

2021. The growth was related to an increased number

of retail partners as well as expanded cooperations

with existing retailers. The Nordic portfolio increased

by 71 %, mainly driven by the new cooperation agree-

ment with one of the Nordic region’s leading online

retailers, Boozt, which has generated significant

volumes since April 2021. The segment’s loan portfolio

in the Baltics is currently primarily present in Estonia,

but we intend to launch payment solutions in Latvia

and Lithuania shortly.

Decreased loan loss ratio in Consumer Lending

Within our largest segment Consumer Lending, it is

satisfying that the loan loss ratio decreased to

2.2 % during 2021. The decrease is mostly related to

an improvement of the credit quality in our Finnish

loan portfolio over the past year. We also continue

to grow in Norway where the credit quality for a long

period of time has been better than the segment’s

average.

The loan portfolio for the Consumer Lending segment

increased by 18 % in local currencies during 2021. The

growth has primarily been generated in Norway and

Finland, while we have had a more cautious approach

to the highly competitive Swedish market. Our Polish

consumer loan portfolio has been in a run-off during

the entire year. The segment’s exposures in the Baltics

and Poland all together have more or less been un-

changed since the start of the pandemic. During 2022,

growth in Norway and Finland will continue to be the

top priority, which is positive for the loan loss ratio in

the segment.

Strong organic growth and high profitability

When summarising 2021, we can look back at an

additional year with profitable growth. TF Bank’s

loan portfolio increased by 33 % in local currencies,

surpassing SEK 10 billion. At the same time, earnings

per share increased by 38 % compared to 2020 and

return on equity amounted to over 24 %. The devel-

opment of the loan portfolio during 2021 is further

described in the segment sections below, but first a

few words on our ability to combine strong organic

growth with high profitability.

For fast-growing banks, capital is often a limiting

factor; but by being diversified in many different

geographic markets, TF Bank’s management team

has always had the opportunity to choose where to

allocate the capital. Hence, I would say that we are

good at pricing the risk, which is crucial to run a

successful banking business. Naturally, we some-

times make wrong decisions, but with a humble ap-

proach we don’t have any problems to re-assess the

analysis and make a new decision. These are some

of the things that I believe enable TF Bank to com-

bine strong organic growth with high profitability.

Credit Cards turned to profitability in Q4

In connection with the acquisition of the Norwegian

company BB Finans in July 2015, TF Bank obtained a

small but profitable credit card portfolio in Norway.

Following an analysis of the opportunities to expand

the credit card operations in Europe, it was decided

to enter Germany and in 2018, TF Bank delivered its

first German credit cards. Therefore, we were very

happy to announce in the Year-end report 2021 that

the Credit Cards segment reported an operating

profit for the fourth quarter.

The loan portfolio for the Credit Cards segment

increased by as much as 115 % in local currencies

during 2021. The growth was almost completely

attributable to an increased amount of newly issued

credit cards in Germany and increased utilisation of

cards already issued. In addition, economies of scale

in the business are expected to result in a decreasing

C/I ratio for the segment going forward. Our German

credit card business is growing significantly faster

than the market in general, and our assessment is

that the segment has favourable conditions to deliver

attractive risk-adjusted return in the coming years.

CEO’S COMMENTS

TF Bank AB (publ) • Annual Report 2021 • 5

First year with new sustainability program

2021 was the first year of TF Bank’s new sustainability

program, which was developed by the Board and

management during 2020. The program encompass-

es four focus areas: Responsible lending, Business

ethics and governance, Attractive employer and

Climate change, that take both risks and opportu-

nities into account while also connecting to the UN

Global Goals. It has been special to work with many

of these questions during the pandemic, from

upholding the credit quality and grow without

exposing loan customers for unnecessary risks, to

strengthening TF Bank as an employer when the

standard has been to work from home. I am proud of

how we have handled these challenges.

TF Bank puts a large emphasis on creating an inclusive

and developing workplace. We have many examples

of employees that build their whole career within the

Bank; from part-time work during studies to a full-time

work and growing responsibilities over time. As we

expand on new markets, the working environment

becomes more international, but at the same time we

have our feet firmly on the ground in our home city

Borås. With our local connection, we have built a strong

culture where we avoid unnecessary risks while being

careful with money.

TF Bank’s expansion continues in 2022

Given the starting point that the Bank has created

during the second half of 2021, I am optimistic

regarding a continued strong growth in the coming

year. During 2022, we plan for further expansion,

primarily in our German credit card business, but

also in the Nordic markets within Consumer Lending

and Ecommerce Solutions. During 2022, we will also

launch consumer loans in Denmark and Spain, as

well as credit cards in Austria. The volumes will ini-

tially be small and then gradually increase when we

feel comfortable with the risk, as is our habit when

entering new markets. We do this to maximise our

options when allocating our capital in the long term

to achieve as high risk-adjusted return as possible.

As always, we have a humble approach to the future

and put all our focus on creating the best possible

conditions to manage the various challenges that

may arise. Finally, I would like to take this opportunity

to thank all employees for a more than well-done

job. I also would like to wish all new shareholders

and also all new employees in our offices around

Europe a warm welcome to TF Bank!

Mattias Carlsson

CEO

6 • Annual Report 2021 • TF Bank AB (publ)

ANNUAL REPORT FOR THE FINANCIAL YEAR 2021

The Board of Directors and the CEO hereby submit

the Annual report for TF Bank AB, corporate identity

number 556158-1041.

TABLE OF CONTENTS

TF Bank as an investment 7

Geographical presence 8

The share 9

Loan portfolio performance 10

Directors’ Report 11

Financial information 24

Notes 29

Five-year overview 67

Definitions 68

Reconciliation tables 69

Regulatory key metrics 70

Assurance by the Board of Directors

and the CEO 71

Auditor’s Report 72

Corporate Governance Report 77

Sustainability Report 89

Board of Directors 101

Executive Management 102

Auditor 102

Unless otherwise stated, all amounts are shown in

thousands of Swedish kronor. The figures in brackets

are for the previous year.

6 • Annual Report 2021 • TF Bank AB (publ)

TF Bank AB (publ) • Annual Report 2021 • 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, Ecommerce Solutions and Credit

Cards, all of which benefits from the Bank’s IT platform

and models for credit scoring.

Yields are driven by high growth and cost efficiency. High

yields facilitate significant reinvestment in the business

and attractive risk-adjusted returns for shareholders.

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 expan-

sion is taking place within carefully selected segments

and markets. Our lending activities have successfully

expanded from the operations in Sweden to the other

Nordic countries and new markets around the Baltic

sea. 66 % of the loan portfolio is attributable to Sweden,

Finland, Norway and Denmark, with the remaining 34 %

attributable to the Baltic States, Germany, Poland and

Austria.

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 industry-leading

efficiency

Efficiency and cost control have been TF Bank’s

mantra from the beginning. To be able to take the

step from decision to action without high costs

and long lead times is one the business’s biggest

strengths. The high degree of automation in the

company’s IT platform is designed for scalability and

adaptability to different products, countries, curren-

cies and digital banking solutions. Thanks to our flat

organisational structure, the scalable platform and

cost control throughout the business, we are able to

achieve a high level of efficiency. TF Bank’s C/I ratio

has for a long time been one of the lowest in the

industry.

Credit cards and e-commerce offers new oppor-

tunities for growth

In the Credit Cards segment, TF Bank offers credit

cards to creditworthy individuals in Germany and

Norway. The number of issued cards has increased

significantly over the past years and the utilisation

rate has improved which is essential for the profita-

bility going forward.

In the Ecommerce Solutions segment, TF Bank offers

digital payment solutions primarily within e-commerce

to creditworthy individuals in the Nordic countries, the

Baltics and Poland. The products have over the past

year experienced a commercial breakthrough with

many new retailers and increased transaction volumes.

Together, the products in credit cards and e-commerce

constitute new growth opportunities in line with

TF Bank’s focus on organic growth. The Bank will con-

tinue to invest in the segments in the coming year.

HIGH YIELD

ESTABLISHED

LENDING

PROCESS

SCALABLE IT-

PLATTFORM

COST CONTROL

DIVERSIFIED

PORTFOLIO

RESPONSIBLE

GROWTH

LONG AND

STABLE HISTORY

TF BANK AS AN INVESTMENT

8 • Annual Report 2021 • TF Bank AB (publ)

Norway

Loan portfolio SEK 3,497 million

(32 %)

Change 2021: +36 %

Continued positive long term

outlook on the Norwegian

economy. Focus on growth

and margins within Consumer

Lending. Important deals signed

within Ecommerce Solutions

waiting for implementation.

Finland

Loan portfolio SEK 2,612 million

(24 %)

Change 2021: +30 %

The regulatory rate cap of 10 %

has been removed and higher

volumes is expected for

Consumer Lending. Ecommerce

Solutions has great

performance.

Sweden

Loan portfolio SEK 1,028 million

(9 %)

Change 2021: +40 %

Focus on profitability and

e-commerce. Black week and

Christmas shopping saw

exceptional growth in transac-

tion volumes.

Baltic states

Loan portfolio SEK 1,829 million

(17 %)

Change 2021: +20 %

Portfolio management and

profitability focus in Consumer

Lending. Lithuania is now a

positive net contributor and the

main driver for growth in the

region.

Poland

Loan portfolio SEK 450 million

(4 %)

Change 2021: -3 %

Focus on e-commerce and

profitability. Consumer Lending

is in run-off.

Germany

Loan portfolio SEK 1,423 million

(13 %)

Change 2021: +150 %

Credit card product in high

demand. Weak spending

towards the end of the quarter

due to pandemic restrictions.

Share of TF Bank’s total loans to the public as at 31 December 2021.

GEOGRAPHICAL PRESENCE

TF Bank AB (publ) • Annual Report 2021 • 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 2021, the

closing price of the share was SEK 229.50. Since

the listing TF Bank has paid out a total of SEK 7.75

per share in dividend to shareholders. The market

capitalisation at the end of the year was SEK 4,934

million.

Turnover and volume

The share trades under the ticker name TFBANK and

the ISIN code is SE0007331608. On the last trading day

of 2021, the share closed at SEK 229.50, an increase of

164 % during the year. In total, 6.2 million shares worth

approximately SEK 1,034 million were traded on

Nasdaq Stockholm during 2021.

Share capital and number of shares

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

company had 21,500,000 ordinary shares. Accord-

ing 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.

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, Pareto Securities and

Nordea are following the company. At the end of 2021

all four institutions had issued a buy recommendation

for the TF Bank share.

Ownership of TF Bank AB as at 31 December 2021

Shareholder %

TFB Holding AB 30.31

Tiberon AB 15.07

Erik Selin Fastigheter AB 12.57

Proventus Aktiebolag 5.16

Jack Weil 4.19

Nordnet Pensionsförsäkring AB 3.43

Nordea Nordic Small Cap Fund 2.37

Merizole Holding LTD 2.36

Carnegie fonder 1.80

Avanza Pension 1.40

Other shareholders 21.34

Total 100.00

Source: Euroclear

21.5 million

Number of shares

4,345

Number of shareholders 31 December 2021

SEK 89.20

Lowest closing price during 2021

SEK 255.50

Highest closing price during 2021

THE SHARE

100,000

200,000

300,000

400,000

500,000

600,000

700,000

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 2021 • TF Bank AB (publ)

LOAN PORTFOLIO PERFORMANCE IN

2019-2021 (SEK MILLION)

10 • Annual Report 2021 • TF Bank AB (publ)

6,496

6,990

7,047

7,574

7,922

8,643

9,130

9,970

10,872

6,000

7,000

8,000

9,000

10,000

11,000

12,000

Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021

TF Bank AB (publ) • Annual Report 2021 • 11

TF Bank AB, corporate identity number 556158-1041, is

a bank domiciled in Borås, Sweden. The company 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 and Austria through branch or cross-border

banking. From 2020 the operations are divided into

three segments: Consumer Lending, Ecommerce

Solutions and Credit Cards. TF Bank is listed at Nas-

daq 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 Ecommerce

Solutions segment, TF Bank offers digital payment

solutions, primarily to online retailers. Customers are

mainly the end-consumers who use the Bank’s pay-

ment solutions. In the Credit Cards segment

TF Bank offers credit cards to creditworthy individu-

als in Germany and Norway.

Significant events during the year

During April, TF Bank’s e-commerce initiative Avarda

launched a payment solution for Boozt’s whole

fast-growing ecommerce environment after a success-

ful pilot project with Booztlet.com during the autumn

of 2020.

During the first half of the year, new agreements for

continuing sale of past due loans have been signed

and TF Bank now has agreements in place in all

essential markets.

At the Annual General Meeting 4 May, it was resolved

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

was re-elected as Chairman of the Board and Michael

Lindengren was new elected as member of the Board.

Tone Bjørnov was dismissed from the Board of Direc-

tors. The other members of the Board were re-elected

at the Meeting.

During July, TF Bank implemented a change in its

executive management team, which now consists of

CEO Mattias Carlsson, deputy CEO and CFO Mikael

Meomuttel, and Espen Johannesen who has been

appointed a new role as Chief Operating Officer

(COO).

In September, TF Bank started a branch in Latvia, in

light of which the Bank intends to liquidate the Latvian

subsidiary TFB Service SIA.

The Board of TF Bank has resolved on new financial

targets. By the first half of 2025, the Bank’s loan port-

folio shall amount to SEK 20 billion and the return on

equity shall be well above 20 %.

In December, TF Bank has successfully issued sub-

ordinated Additional Tier 1 bonds of SEK 100 million

with perpetual tenor and first call date in December

2026.

The Credit Cards segment reported an operating

profit for the fourth quarter and the German credit

card portfolio has increased by 154 %.

Significant events after the end of the financial

year

The situation in Ukraine and Russia has led to a sharp

increase in geopolitical unrest and uncertainty in

Europe. The financial market, which already in the

beginning of 2022 showed great volatility with higher

long-term interest rates, a depreciated Swedish krona

and increased inflation, now risks being affected

further. The long-term effects on the outside world

and the global economy are impossible to predict at

this point.

DIRECTORS’ REPORT

12 • Annual Report 2021 • TF Bank AB (publ)

Parent company Group

SEK thousand 2021 2020 2019 2018 2017

Income statement

Operating income 1,055,287 876,070 768,864 627,641 511,570

Operating expenses -442,165 -340,755 -290,875 -247,536 -189,289

Net loan losses -260,564 -272,676 -188,634 -150,272 -129,343

Operating profit 352,558 262,639 289,355 250,128 192,938

Profit for the year 277,206 202,719 221,926 191,826 147,836

Earnings per share, SEK 12.55 9.11 10.01 8.75 7.04

Balance sheet

Loans to the public 10,872,285 7,922,448 6,495,780 4,449,225 3,156,289

Deposits from the public 11,504,749 8,714,032 7,197,075 5,096,463 3,754,030

New lending 11,186,800 7,304,603 6,037,302 4,518,697 2,968,611

Key figures

Operating income margin, % 11.2 12.2 14.0 16.5 18.1

Net loan loss ratio, %

2.8 3.8 3.4 4.0 4.6

Cost/Income ratio, % 41.9 38.9 37.8 39.4 37.0

Return on equity, % 24.4 22.0 30.3 33.8 30.4

Return on loans to the public, % 2.9 2.7 3.9 4.9 5.4

Return on assets, % 2.3 2.1 3.0 3.6 4.1

CET1 capital ratio, % 12.3 12.8 12.7 13.0 13.2

Tier 1 capital ratio, % 14.3 14.2 14.3 15.2 13.2

Total capital ratio, % 16.2 17.4 17.4 17.4 16.2

Employees (FTE) 236 187 174 140 110

Adjusted key figures

Operating profit 352,558 262,639 289,355 250,128 192,938

Items affecting comparability

- - - -20,295 -

Adjusted operating profit 352,558 262,639 289,355 229,833 192,938

Adjusted tax on profit for the year -75,352 -59,920 -67,429 -53,837 -45,102

Adjusted profit for the year 277,206 202,719 221,926 175,996 147,836

Adjusted earnings per share, SEK 12.55 9.11 10.01 8.01 7.04

Adjusted return on equity, % 24.4 22.0 30.3 31.0 30.4

Adjusted return on loans to the public, % 2.9 2.7 3.9 4.5 5.4

Adjusted return on assets, % 2.3 2.1 3.0 3.3 4.1

In order for the five-year overview to reflect a true and fair view, comparative figures for 2017-2019 relates to the Group with TF Bank AB as Parent Company. Compara-

tive figures 2017-2019 for the Parent Company is presented on page 67.

Net loan losses for 2017 are reported according to IAS 39.

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 68-69.

EXCHANGE RATES

SEK 2021 2020 2019 2018 2017

EUR Income statement (average) 10.14 10.49 10.59 10.25 9.63

EUR Balance sheet (end of reporting period) 10.23 10.04 10.43 10.28 9.85

NOK Income statement (average) 1.00 0.98 1.07 1.07 1.03

NOK Balance sheet (end of reporting period) 1.03 0.95 1.06 1.02 1.00

PLN Income statement (average) 2.22 2.36 2.46 2.41 2.26

PLN Balance sheet (end of reporting period) 2.23 2.22 2.44 2.39 2.36

FIVE-YEAR OVERVIEW

TF Bank AB (publ) • Annual Report 2021 • 13

Operating profit

Operating profit increased by 34 % to SEK 352.6

million (262.6). The comparison period was affected

by an additional loan loss provision of SEK 30 million

related to the uncertain macroeconomic situation

during the initial phase of the pandemic. Earnings per

share increased by 38 % to SEK 12.55 (9.11). Return on

equity amounted to 24.4 % (22.0).

Operating income

TF Bank’s operating income has increased by 20 % to

SEK 1,055 million (876.1). The operating income during

the year comprised 90 % net interest income and

10 % net fee and commission income. The operating

income margin has decreased to 11.2 % (12.2), mainly

due to a changed product mix in the Consumer

Lending segment.

Interest income

Interest income increased by 18 % to SEK 1,074 million

(911.9). The growth for German credit cards is the main

driver, but higher interest income for the Ecommerce

Solutions segment and Norwegian consumer loans

have also contributed to the increase. Currency effects

have had a slightly negative impact on interest income

due to a lower average rate for the Euro compared to

2020.

Interest expense

TF Bank’s interest expenses decreased by 2 % to

SEK 120.4 million (122.6). The decrease is mostly

related to lower funding costs in Norway and Germany.

However, the decrease has been mitigated by increas

ing deposit volumes in Germany, an increasing share

of fixed-rate accounts with slightly higher interest rate

levels as well as an increased deposit guarantee fee.

Net fee and commission income

Net fee and commission income increased by 26 % to

SEK 106.2 million (84.6). The increase is mainly attrib

utable to higher fee and commission income within

the Ecommerce Solutions segment. During the year,

52 % of TF Bank’s fee and commission income derives

from charges and 48 % from insurance premiums and

other income.

Operating expenses

TF Bank’s operating expenses have increased by 30 % to

SEK 442.2 million (340.8). Most of the increase is related

to higher expenses within the growing Ecommerce

Solutions and Credit Cards segments. Both segments

have more employees and higher sales-related costs

compared to the previous year. TF Bank’s C/I ratio

increased to 41.9 % (38.9).

Net loan losses

Net loan losses decreased by 4 % to SEK 260.6 million

(272.7). The loan portfolio’s credit quality has improved

during the year, which has resulted in a decreased

loan loss ratio amounting to 2.8 % (3.8). An additional

loan loss provision of SEK 30 million related to the

uncertain macroeconomic situation during the initial

phase of the pandemic affects the comparison num

ber. Excluding the additional provision, the loan loss

ratio in 2020 amounted to 3.4 %.

Tax expense

TF Bank’s tax expense increased to SEK 75.4 million

(59.9), explained by a higher operating profit. The

tax rate of 21.4 % (22.8) was positively affected by a

decrease of the corporate tax in Sweden from

1 January 2021.

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

RESULTS AND FINANCIAL POSITION

250

500

750

1,000

1,250

2020 2021

100

200

300

400

500

2020 2021

14 • Annual Report 2021 • TF Bank AB (publ)

Loans to the public

The loan portfolio amounted to SEK 10,872 million

(7,922), an increase in local currencies of 33 % during

2021. Positive currency effects have affected the loan

portfolio by another 4 %. New lending increased by

53 % to SEK 11,187 million (7,305) compared to 2020,

among other things attributable to higher invoice vol

umes from new retailers within Ecommerce Solutions.

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

tively small exposures in many different geographic

markets. At the end of the year, the three largest

markets were Norway at 32 %, Finland at 24 % and

Germany at 13 %. The growth for the loan portfolio

during 2021 has primarily been generated by German

credit cards, Nordic Ecommerce Solutions as well as

consumer loans in Norway and Finland.

Deposits from the public

Deposits from the public amounted to SEK 11,505 mil

lion (8,714), an increase in local currencies of 28 %. Posi-

tive currency effects have affected the loan portfolio by

another 4 %. At the end of 2021, deposits were geo

graphically distributed over Germany at 63 %, Norway at

28 %, Sweden at 6 % and Finland at 3 %.

The increased deposits in 2021 are mainly attributable

to savings accounts in Germany. Several new saving

accounts with terms up to five years have also been

launched during the year, meaning that parts of

TF Bank’s financing are fixed and tied to current inter

est rate levels. At the end of the year, accounts with a

fixed term comprise 36 % of the total deposits.

Cash and cash equivalents

Cash and cash equivalents have increased by SEK 247

million to SEK 2,366 million (2,119) during 2021. Cash

flow from operating activities amounted to SEK 225

million (352). TF Bank’s investments increased to

SEK 37 million compared to SEK 25 million in 2020. The

investments mainly relate to IT development within

the Ecommerce Solutions and Credit Cards segments.

Cash flow from financing activities amounted to SEK 23

million (32). Positive currency effects had an impact on

cash and cash equivalents by SEK 36 million (-61).

At the end of 2021, TF Bank’s available liquidity

reserve amounted to 19 %

(24) of deposits from the

public. 69 % (55) of the liquidity reserve is placed at

central banks and in treasury bills eligible for refi

nancing, while the remaining part primarily is placed

on overnight accounts in various Nordic banks. During

the fourth quarter, NOK 250 million of the liquidity

reserve was placed in Norwegian government bonds

with maturity in February 2026.

Capital adequacy

At the end of the year, the CET1 capital ratio was

12.3 % (12.8), the tier 1 capital ratio was 14.3 % (14.2),

and the total capital ratio was 16.2 % (17.4). The Board’s

dividend proposal of SEK 1.00 per share (1.00) affects

all capital ratios through a deduction of SEK 21.5 mil

lion from the capital base.

During the year, all capital ratios have been negatively

affected by an increased phase-in of loan loss provi

sions according to the transitional rules. However, this

was partly mitigated by a lower deduction of intangible

assets in the capital base following a regulatory meth

odology change. During the fourth quarter, TF Bank

issued Additional Tier 1 bonds of SEK 100 million

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

RESULTS AND FINANCIAL POSITION

2,500

5,000

7,500

10,000

12,500

2020 2021

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

TF Bank AB (publ) • Annual Report 2021 • 15

In the Consumer Lending segment, TF Bank offers

unsecured consumer loans to creditworthy individ-

uals. The product offering may differ between the

various markets and is adjusted according to the

specific conditions in each country. As of 31 December

2021, the average loan amount per customer was

approximately SEK 62 thousand.

The Nordic loan portfolio comprises 76 % of the

segment. The Nordic markets for consumer loans

are characterised by credit information that is easy

to access, a high share of credit intermediators, and

a well-functioning system for collection of unpaid

debts. The average loan amount for the segment is

slightly higher in Norway and Finland.

The Baltic and Polish loan portfolio comprises 24 %

of the segment. The Baltic countries have fast-grow-

ing credit markets with several established Nordic

players operating locally. In Poland, new lending has

discontinued.

The loan portfolio

Loans to the public amounted to SEK 7,114 million

(5,807), an increase in local currencies of 18 % com-

pared to December 2020. Positive currency effects

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

5 %. The segment’s new lending has increased by

21 % to SEK 4,721 million (3,902).

The loan portfolio in Norway has increased by 22 % to

NOK 2,796 million (2,287) during 2021. The increase is

mainly related to higher volumes during the second

half of the year. The loan portfolio in Finland has in-

creased by 20 % to EUR 161 million (134). The Finnish

new lending has increased significantly following the

lifting of the pandemic-related marketing restrictions

and the regulatory rate cap of 10 % from 1 October

2021. The Swedish loan portfolio amounted to

SEK 471 million (457).

The loan portfolio in the Baltics has increased by

15 % to EUR 154 million (134) over the past year. The

growth has mainly been generated in Lithuania, but

the loan portfolio in Latvia has also increased during

the second half of the year. The Polish loan portfolio

decreased to PLN 48.1 million (81.1).

Results

The operating profit for the segment increased by

22 % to SEK 308.3 million (253.7). The comparison

period was affected by an additional loan loss

provision of SEK 30 million related to the uncertain

macroeconomic situation during the initial phase of

the pandemic. Excluding the additional provision,

operating profit increased by 9 %.

The operating income increased by 3 % to SEK 645.0

million (628.7). The increase was mainly related to

higher income from the Norwegian loan portfolio.

The operating income margin has decreased to

10.0 % (11.5), which is due to that the growing Norwe-

gian and Finnish loan portfolios have slightly lower

interest rate levels than the segment’s average.

The operating expenses for the segment have

increased by 7 % to SEK 192.1 million (178.9). Higher

volumes in Norway and Finland as well as higher

marketing expenses contribute to the increase. The

segment’s C/I ratio amounted to 29.8 % (28.5) during

the year.

Net loan losses amounted to SEK 144.5 million (196.1)

and the loan loss ratio decreased to 2.2 % (3.6). The

comparison numbers were affected by an addi-

tional loan loss provision of SEK 30 million, and the

adjusted loan loss level was 3.0 % in the comparison

period. The segment’s credit quality has improved

over the past year, which has had a positive effect on

the loan loss ratio.

For further information about the loan portfolio and

results of this segment, see Note 4 Segment reporting.

SHARE OF THE BANK’S LOANS TO THE PUBLIC SHARE OF THE BANK’S OPERATING INCOME

In this section, loan portfolio refers to loans to the household sector in stage 1 and 2, gross (see note 4 and 23).

CONSUMER LENDING

65 %

61 %

16 • Annual Report 2021 • TF Bank AB (publ)

Within Consumer Lending we have

continued to focus on the Nordic market

and despite the pandemic, the credit

quality for the segment improved during

the year. Espen Johannesen, Head of

Consumer Lending, talks about the

development during the year and the

potential going forward.

Consumer Lending is TF Bank’s largest segment

and the offer consists of unsecured consumer loans.

At the end of 2021, the average loan amounted to

approximately SEK 62,000, which is lower than the

industry average.

- Responsible lending is the core of our business. Our

business is based on creating growth without expo-

sing consumers to unnecessary risks. Despite the

pandemic, we have succeeded in combining respon-

sible lending with profitable growth in all markets.

We have adhered to the customer segment we want

and the business model we work by.

The pandemic has made it tempting for businesses

in the industry to increase their average lending

amount, however, TF Bank has not followed the

trend.

- Customers borrow mainly on rational grounds and

when they have an actual need. We offer consumer

loans with competitive terms that customers can

also redeem in full whenever they wish. At the

beginning of the pandemic, we were unsure of how

loan losses would develop, but we experienced that

reduced consumption first led to increased savings.

The increased savings in combination with national

support packages led to our customers paying more

punctually on their loans. The increased savings ratio

among our customers has also led to lower loan losses

today than we had before the pandemic and to greater

access to financing through savings accounts.

CONSUMER LENDING

The loan portfolio in the segment has increased by

18 % in local currencies during 2021, which is mainly

attributable to Norway and Finland.

- The growth in 2021 has been with a satisfactory

margin despite the pandemic. At TF Bank, we have

the advantage of being able to optimise our profita-

bility and growth by allocating our capital to several

different countries.

Having a pure business without unnecessary

risk-taking has been an important aspect of

TF Bank’s growth strategy throughout the years.

- Risk awareness and humility is something we con-

tinue to include in everything we do. This applies not

only to the Consumer Lending segment, but to the

entire TF Bank. We are a different bank today than

we were five years ago and we are constantly evol-

ving. We grow without sacrificing our core values.

TF Bank AB (publ) • Annual Report 2021 • 17

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. In total, the Bank has had 257 (196)

active commercial partners during the fourth quarter.

The Avarda brand has over the past year experienced

a commercial breakthrough in the Nordic markets.

With implementations of retailers such as Boozt and

Wakakuu during 2021, the market position has been

further strengthened. 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. Initiatives such as Avarda Return Opti-

miser (ARO) is part of the work in offering products and

services that aim to be relevant for our commercial

partners in more ways than by just offering a payment

solution. In total, the transaction volumes for the seg-

ment have increased by 90 % compared to last year.

The loan portfolio

The loan portfolio amounted to SEK 2,070 million

(1,349) an increase in local currencies of 51 % com-

pared to December 2020. Currency effects affected

the loan portfolio positively by 2 %. The segment’s

new lending has increased to SEK 4,018 million

(2,335). This is mostly explained by an increased

number of partners and expanded cooperation with

existing retailers.

The Nordic loan portfolio has increased to SEK 1,452

million (849) over the past year and comprises 72 % of

the segment. In Finland, the portfolio has increased

by 41 % to EUR 74.6 million (52.9) during 2021. The

increase is explained by a continued growth for

e-commerce and by implementing several new

partners. The Swedish loan portfolio has increased by

109 % to SEK 511 million (245) following strong sales

development during the past quarters. In Norway

the loan portfolio has increased by 269 % to NOK 149

million (40.4). In Denmark, the loan portfolio amounted

to DKK 19.2 million (26.4).

The loan portfolio in Estonia has increased by 28 %

to EUR 21.9 million (17.1) during 2021. The increase

is mainly explained by growth from existing larger

retailers, but also a continued strong inflow of new

partners. In Poland, the loan portfolio has increased

by 11 % to PLN 147 million (133).

Results

The operating profit for the segment has increased

by 41 % to SEK 56.2 million (39.8). The increase is

mostly related to increasing operating income and a

lower loan loss ratio compared to 2020.

The operating income increased by 38 % to SEK 253.7

million (183.7). The increase is mainly attributable to

higher transaction volumes in several geographic mar-

kets compared to 2020, resulting in a strong growth

for the interest income as well as growing fee and

commission income. The operating income margin

amounted to 14.8 % (15.3).

The operating expenses for the segment have

increased by 47 % to SEK 159.0 million (108.5). This

is explained by increased sales-related costs, more

employees and an increased investment pace in

product development. The C/I ratio amounted to

62.7 % (59.0).

Net loan losses increased by 9 % to SEK 38.5 million

(35.4). The net loan loss ratio however decreased to

2.3 % (2.9), mainly due to strengthened credit quality

in the segment following implementations of partners

with a history of lower loan loss ratios.

For further information about the loan portfolio and

results of this segment, see Note 4 Segment reporting.

SHARE OF THE BANK’S LOANS TO THE PUBLIC SHARE OF THE BANK’S OPERATING INCOME

In this section, loan portfolio refers to loans to the household sector in stage 1 and 2, gross (see note 4 and 23).

ECOMMERCE SOLUTIONS

19 %

24 %

18 • Annual Report 2021 • TF Bank AB (publ)

It is just over four years since Avarda

became part of TF Bank’s segment

Ecommerce Solutions. Despite the pan-

demic, the segment has succeeded in

building a competitive platform, both

in the Swedish market and in other

markets where the segment operates.

Mikael Johansson, Head of Ecommerce

Solutions, talks about the work that has

been done and the ambitions ahead.

- Today consumers can shop around the clock no

matter where they are. With just a few clicks, they

can compare prices, order products and pay via an

external payment solution. We want to add value

for the merchant and make sure that their brand is

visible throughout the whole purchase chain. Ideally,

the shopping experience should begin and end at

the merchant. This is made possible through our

Avarda Checkout + and Avarda Marketing Opportuni-

ties solutions, which handle the entire after flow.

Checkout + is a white lable payment solution which

is tailored to the merchant’s specific needs. TF Bank

has intensified its sales efforts by launching the mar-

keting tool Avarda Marketing Opportunities (AMO).

The solution gives the merchant full control over the

customer’s purchase and adds more communication

opportunities with customers.

- A problem in the e-commerce industry is increased

returns, especially in fashion. The newly launched

Avarda Return Optimiser (ARO) has been developed to

minimise the merchants’ return flows and reduce their

costs as well as reduce the environmental impact.

The check-out and payment solutions are currently

used by a growing number of merchants in Sweden,

Finland, Norway, Denmark, Estonia and Poland.

ECOMMERCE SOLUTIONS

- In 2021, we have had the goal of expanding to new

markets in the Baltics. We have invested heavily in

sales and marketing, but also in IT systems and per-

sonnel to manage future growth.

TF Bank has extensive experience of payment solu-

tions and has established a stable IT system that can

handle large volumes and increase growth.

- Our goal for the future is to continue to build and

improve our offering and our product, that is the

key. There are plenty of organic growth opportuni-

ties with the products that we have today and the

platform we have built.

TF Bank AB (publ) • Annual Report 2021 • 19

In the Credit Cards segment, TF Bank offers credit

cards to creditworthy individuals in Germany and

Norway. The business in Germany was started in the

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

local 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 our credit cards will be compatible with both

Google and Apple Pay during the first quarter of

2022. At the end of the year, the number of active

German credit cards amounted to approximately

67,000.

The offering in Norway has been part of the Bank

since 2015. Since the start of 2020, the business is

organised under TF Bank’s Norwegian branch. At

the end of the year, the number of active Norwegian

credit cards amounted to approximately 13,000. During

2022, the Norwegian credit cards will be transferred

from VISA to Mastercard, which is expected to

contribute to a streamlining of TF Bank’s credit card

business.

The loan portfolio

The loan portfolio amounted to SEK 1,688 million

(766), an increase in local currencies of 115 % com-

pared to December 2020. The segment’s new lending

has increased by 129 % to SEK 2,447 million (1,068).

The increase is mainly related to the operations in

Germany.

The loan portfolio in Germany has increased by

154 % to EUR 127 million (50.0) during 2021. The

growth is attributable to an increased number of

newly issued credit cards as well as increased utilisa-

tion of cards that previously have been issued. Mar-

keting in new channels have had a certain positive

effect on growth. The transaction volume per active

card has been affected by pandemic-related restric-

tions in Germany.

CREDIT CARDS

The loan portfolio in Norway has increased by 28 % to

NOK 235 million (183) over the past year. The Norwe-

gian authorities’ travel restrictions have had a slightly

dampening effect on growth during the first half of

2021. However, volumes have increased significantly

during the second half of the year.

Results

The operating profit for the segment amounted to

SEK -12.0 million (-30.9). The result for the year is bur-

dened by investments related to the German credit

card expansion. Higher income contributed to an

operating profit of SEK 2.4 million (-5.2) in the fourth

quarter.

The operating income increased by 146 % to SEK 156.6

million (63.7). The increase is mostly related to the high

growth in Germany. The operating income margin

amounted to 12.8 % (12.0) and was affected by the fact

that new customers mainly are generated through loan

intermediators.

The operating expenses for the segment increased by

71 % to SEK 91.1 million (53.4). The increase in absolute

numbers is mainly affected by more employees, high-

er sales-related costs and marketing in new channels.

However, the C/I ratio decreased to 58.2 % (83.8)

thanks to economies of scale in the business model.

Net loan losses increased by 88 % to SEK 77.5 million

(41.2). The increase is mainly related to actual loan

losses but is also impacted by higher provisions for

expected credit losses according to IFRS 9. Towards

the end of the second quarter 2021, an agreement

for the continuing sales of past due loans in Germany

was signed. The segment’s loan loss ratio has de-

creased to 6.3 % (7.8).

For further information about the loan portfolio and

results of this segment, see Note 4 Segment reporting.

SHARE OF THE BANK’S LOANS TO THE PUBLIC SHARE OF THE BANK’S OPERATING INCOME

In this section, loan portfolio refers to loans to the household sector in stage 1 and 2, gross (see note 4 and 23).

16 %

15 %

20 • Annual Report 2021 • TF Bank AB (publ)

TF Bank started the operations in the

German market with the launch of

savings accounts in 2017. Credit Cards

were introduced on a small scale in

2018 and later established as separate

segment within the Bank in 2020. Verena

Neudecker, Country Manager for TF Bank

Germany describes the progress the seg-

ment has made this year and the plans

onwards.

- The German market has grown not only in portfolio

size, but also in terms of employees throughout the

year 2021. It is partly due to the recruitment of expe-

rienced individuals that we have managed to grow to

the extent that we see today. Despite the restrictions

caused by the pandemic, we managed to exceed

the milestone of EUR 100 million in portfolio size this

summer.

Within the Credit Cards segment TF Bank offers

Mastercard Gold and Credits Gold to creditworthy

individuals in Germany and Norway respectively. In

combination with the credit card, TF Bank has deve-

loped a proprietary app that launched in September

2020.

- We are bringing it down to basics. Our offer

consists of a credit card that is free of charge and

includes flexible repayment options. What makes

TF Bank’s offer stand out amongst competitors is

that we are able to offer our customers a combina-

tion of an application form that is easy to understand

and a quick onboarding process.

TF Banks scoring model is continuously under deve-

lopment in order to optimise the future actual loan

loss levels.

- Product development was our key focus during

2021. Improvements were made to both the credit

card and the accompanying app.

CREDIT CARDS

Verena was appointed the position of Country Mana-

ger for TF Bank Germany in August 2021. The Credit

Card segment had an impressive growth of 115 % in

local currencies during 2021 and showed profitability

during the fourth quarter.

- Our goal for 2022 is to bring the business to the

next level. We wish to combine profitable growth

with a low loan loss level. We plan to further develop

our product and the features that come with it.

TF Bank AB (publ) • Annual Report 2021 • 21

Annual General Meeting 2022

The Annual General Meeting 2022 will be held on

Tuesday 3 May 2022. Notice of the Annual General

Meeting will be published no later than Tuesday

5 April 2022.

Proposed dividend

The Board of Directors proposes to the Annual General

Meeting that a dividend of SEK 1.00 per share to be

distributed for 2021. The total dividend to shareholders

according to the proposal will be SEK 21.5 million.

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

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 remuner-

ation, commission-based compensation, other ben-

efits, and pension. External Board members receive

fees determined by the Annual General Meeting.

The AGM in 2021 adopted the following guidelines

for remuneration of TF Bank’s senior executives:

Guidelines for promoting the Bank’s business strat-

egy, 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 plat-

form with a high degree of automation. Deposit and

lending activities are conducted in Sweden, Finland,

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

Germany and Austria through branch or cross-border

banking. From 2020 the operations are divided into

three segments: Consumer Lending, Ecommerce Solu-

tions and Credit Cards.

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 com-

prise 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 remune-

ration 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 maxi-

mum 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 the conditions

for payment are not met, the remuneration 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

OTHER FINANCIAL INFORMATION

22 • Annual Report 2021 • TF Bank AB (publ)

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-deter-

mined 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 exam-

ple 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 infor-

mation published by the Company.

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

Boars decision when evaluating the reasonableness 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 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 remuneration senior

OTHER FINANCIAL INFORMATION

executives, as well as current remuneration structures

and remuneration levels in the Bank. The CEO and

other members of executive management 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 sustainability, or

to ensure the Bank’s financial viability.

Commission-based compensation

Additional commission-based compensation is paid

on the basis of individual accomplishment of financial

targets established for the year. TF Bank has ensured

that all targets related to commission-based compen-

sation for the fiscal year can be measured in a reliable

way. None of the commission-based compensation

payments are qualifying payments for pension

purposes.

Share-based renumeration

At the Annual General Meeting in 2018 a share

warrant programme was adopted comprising a

total of 1,372,338 warrants. The share warrants were

subscribed for by senior executives. Payment corre-

sponding to the market value has been made and

was recognised as other contributed capital under

equity. In 2020, the Board of Directors submitted an

offer to the holders of the warrants to repurchase their

warrants. The offer was utilised for all warrants.

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 annu-

al 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 termi-

nation is initiated by the Company, basic salary is

payable during the period of notice, however variable

remuneration, if agreed before the notice was issued,

is not payable. Severance pay is adjusted for salary

that the CEO receives from a new employer.

TF Bank AB (publ) • Annual Report 2021 • 23

Covid-19

Covid-19 continued to affect TF Bank during 2021 and

the Bank´s personnel to a large extent have worked

remotely in accordance with national recommenda-

tions. During the year, management have held a close

dialogue with the respective country manager to be

updated on the situation locally.

At the end of the first quarter of 2020, TF Bank made

an extra loan loss provision of SEK 30 million as a

result of the uncertain macroeconomic situation.

In connection with the 2020 annual accounts, the

provision was transferred into the ordinary provision-

ing model. For further information, see page 19 in the

annual report for 2020.

No significant disruptions occurred in the Bank’s

operations during the year, but there is still some

uncertainty about the humanitarian and economic

consequences of the pandemic. It can therefore not

be ruled out that TF Bank’s operations, new lending

and credit losses may be negatively affected by

Covid-19 in the future.

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, personnel

risks, IT and systemic risks and external risks)

• Other business risks (including strategic risks, busi-

ness risks, cyclical risks and reputational risks)

The Bank estimates credit risks, liquidity risks and

operational risks as the most significant risks that

arise within the framework of its banking opera-

tions. In order to limit and control risk-taking in the

business, the Board, which is ultimately responsible

for internal controls, has established policies and in-

structions 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 33.

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.

At all times, the Bank must fulfil the specified capi-

tal and liquidity requirements and have capital and

access to liquidity. TF Bank monitors changes related

to capital and liquidity requirements and takes these

into consideration regarding the financial targets.

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.

Environment

Environmental resources are used responsibly and

conservatively throughout the Bank’s entire opera-

tions. The Bank strives to conduct its operations in

an environmentally sustainable way by, for example,

enhancing efficiency and investing in sustainable

products and services.

Sustainability report

In accordance with Chapter 6 Section 11 of the Annual

Accounts Act, TF Bank has chosen to establish the

statutory Sustainability Report as a report separated

from the Directors’ Report in the Annual Report. The

Sustainability Report was submitted to the auditor at

the same time as the Annual Report. The Sustainability

Report appears on the pages 89-99.

OTHER FINANCIAL INFORMATION

24 • Annual Report 2021 • TF Bank AB (publ)24 • Annual Report 2021 • TF Bank AB (publ)

FINANCIAL INFORMATION

TF Bank AB (publ) • Annual Report 2021 • 25

INCOME STATEMENT

SEK thousand Note 2021 2020

2,3,4

Operating income

Interest income 7 1,074,113 911,945

Interest expense 8 -120,439 -122,648

Net interest income 953,674 789,297

Fee and commission income 140,478 103,556

Fee and commission expense -34,265 -18,968

Net fee and commission income 9 106,213 84,588

Net results from financial transactions 10 -4,600 2,185

Total operating income 1,055,287 876,070

Operating expenses

General administrative expenses 11,12,13,31 -380,224 -302,508

Depreciation and amortisation of tangible and intangible assets 14,15,24 -28,638 -20,674

Other operating expenses 16 -33,303 -17,573

Total operating expenses -442,165 -340,755

Profit before loan losses 613,122 535,315

Net loan losses 17 -260,564 -272,676

Operating profit 352,558 262,639

Tax on profit for the year 18 -75,352 -59,920

Profit for the year 277,206 202,719

Profit for the year attributable to:

Shareholders of the Parent Company

269,875 195,769

Additional tier 1 capital holders

7,331 6,950

Basic earnings per share (SEK)

12.55 9.11

Diluted earnings per share (SEK)

12.55 9.11

STATEMENT OF OTHER COMPREHENSIVE INCOME

SEK thousand 2021 2020

Profit for the year 277,206 202,719

Other comprehensive income

Items that may subsequently be reclassified to the income statement

Exchange rate differences during the period, net of tax - -

Other comprehensive income for the year - -

Total comprehensive income for the year 277,206 202,719

Comprehensive income for the year attributable to:

Shareholders of the Parent Company

269,875 195,769

Additional tier 1 capital holders

7,331 6,950

26 • Annual Report 2021 • TF Bank AB (publ)

BALANCE SHEET

SEK thousand Note 31 Dec 2021 31 Dec 2020

2,3,5,6,19,20

ASSETS

Cash and balances with central banks 1,270,092 1,097,991

Treasury bills eligible for refinancing, etc. 21 316,411 60,022

Loans to credit institutions 22 779,636 960,989

Loans to the public 4,23 10,872,285 7,922,448

Shares 257 20,135

Shares in subsidiaries 32 341 316

Goodwill 24 10,202 11,477

Intangible assets 14 71,365 61,762

Tangible assets 15 2,699 2,658

Other assets 25,31 21,842 36,154

Deferred tax assets 26 4,781 47

Prepaid expenses and accrued income 40,905 29,447

TOTAL ASSETS 13,390,816 10,203,446

LIABILITIES AND EQUITY

Liabilities

Deposits and borrowings from the public 27 11,504,749 8,714,032

Other liabilities 28,31 94,020 52,864

Current tax liabilities 36,089 1,832

Deferred tax liabilities 26 5,641 5,642

Accrued expenses and prepaid income 29 121,584 100,318

Subordinated liabilities 30 198,042 245,053

Total liabilities 11,960,125 9,119,741

Equity

Restricted equity

Share capital 107,500 107,500

Statutory reserve 1,000 1,000

Development costs fund 71,365 61,762

Other contributed capital - -

Total restricted equity 179,865 170,262

Non-restricted equity

Tier 1 capital instrument 200,000 100,000

Retained earnings 773,620 610,724

Comprehensive income for the period 277,206 202,719

Total non-restricted equity 1,250,826 913,443

Total equity 1,430,691 1,083,705

TOTAL LIABILITIES AND EQUITY 13,390,816 10,203,446

TF Bank AB (publ) • Annual Report 2021 • 27

STATEMENT OF CHANGES IN EQUITY

SEK thousand

Restricted equity Non-restricted equity

capital

Statutory

reserve

Develop-

ment costs

fund

Other

contribut-

ed capital

Tier 1

capital

instru-

ment

Retained

earnings

Profit for

the year Total equity

Equity as at 1 Jan 2020 107,500 1,000 27,464 2,786 100,000 397,272 161,748 797,770

Profit for the year - - - - - - 202,719 202,719

Other comprehensive income for

the year - - - - - - - -

Transfer of previous year’s profit - - - - - 161,748 -161,748 -

Development costs from merger - - 28,007 - - -28,007 - -

Capitalisation of development costs - - 18,408 - - -18,408 - -

Amortisation of capitalised develop-

ment costs

- - -12,117 - - 12,117 - -

Interest Tier 1 capital - - - - - -6,950 - -6,950

Share-based remuneration - - - -2,786 - -4,938 - -7,724

Merger result - - - - - 97,890 - 97,890

Equity as at 31 Dec 2020 107,500 1,000 61,762 - 100,000 610,724 202,719 1,083,705

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 paid to shareholders - - - - - -21,500 - -21,500

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

Amortisation of capitalised develop-

ment 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

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.

28 • Annual Report 2021 • TF Bank AB (publ)

CASH FLOW STATEMENT

SEK thousand 2021 2020

Operating activities

Operating profit 352,558 262,639

Adjustment for items not included in cash flow

Depreciation and amortisation of tangible and intangible assets 28,638 20,674

Accrued interest income and expense 6,681 6,813

Other non-cash items -12 476

Paid income tax -41,095 -72,364

346,770 218,238

Increase/decrease in loans to the public -2,949,837 -1,426,668

Increase/decrease in other short-term receivables -29,573 37,360

Increase/decrease in deposits and borrowings from the public 2,790,717 1,516,957

Increase/decrease in other short-term liabilities 67,152 6,060

Cash flow from operating activities 225,229 351,947

Investing activities

Investments in tangible assets -1,452 -1,581

Investments in intangible assets -35,554 -23,753

Investments in subsidiaries -25 -

Cash flow from investing activities -37,031 -25,334

Financing activities

Issue of Tier 1 capital 98,611 -

Issue of Tier 2 capital - 100,000

Redemption of Tier 2 capital -47,000 -53,000

Interest on Tier 1 capital -7,331 -6,950

Redemption of warrants - -7,724

Dividend to shareholders -21,500 -

Cash flow from financing activities 22,780 32,326

Cash flow for the year 210,978 358,939

Cash and cash equivalents at the beginning of the year 2,119,002 1,320,411

Cash and cash equivalents from merger - 500,528

Exchange rate difference in cash and cash equivalents 36,159 -60,876

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

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

Interest expenses paid 125,170 112,752

Interest payments received 923,990 771,836

Components of cash and cash equivalents

Cash and balances with central banks 1,270,092 1,097,991

Treasury bills eligible for refinancing 316,411 60,022

Loans to credit institutions 779,636 960,989

Total cash and cash equivalents 2,366,139 2,119,002

TF Bank AB (publ) • Annual Report 2021 • 29

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 and

Austria via a branch or cross-border 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 %

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

branches.

On 17 March 2022, the Board of Directors approved this Annual Report

for publication, for adoption by the AGM in 2022.

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 compli-

ance 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 corre-

spond 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 expect-

ed loan losses and goodwill impairment testing.

Provisions for expected loan losses

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

cordance with IFRS 9, where expected credit losses on financial

assets are calculated at the first accounting date. A loan loss

reserve is recognised for all financial assets that are valued at

amortised cost. These are calculated using models developed by

the Bank, all of which are based on the calculation of expected

loan loss. This is done by calculating the product of probability

of default, loss given default and exposure in default. The Bank’s

issued loans that are due for payment without being paid by

the debtor are sold to debt collection companies in different

countries depending on geographical market. To make provi-

sions for expected loan losses, careful analysis of available data

is required to make reliable forecasts of the future. TF Bank uses

analyses of historical outcomes and available customer informa-

tion to make as reasonable assumptions about the future as pos-

sible. In connection with the implementation of IFRS 9, the Bank

performed quantitative analyses of a number of macroeconomic

parameters without finding any given correlations with the Bank’s

credit losses. 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 23.

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 24.

New standards and amendments and interpretations of existing

standards that have been adopted by the Bank

Below is a description of the changed accounting principles that

TF Bank applies from 1 January 2021.

Changes in IFRS as a result of the reference interest rate reform

(IBOR reform phase 2)

The Bank applies the amendments made to IAS 39 concerning

the reference interest rate reform phase 2 from 1 January 2021.

Amendments to phase 2 contain practical relief from certain

requirements in IFRS standards. The reductions are attributable

to accounting for the modification of financial instruments that

took place as a direct consequence of the reference interest rate

being replaced by a new alternative reference interest rate. The

changes also allow for relief in terms of hedge accounting when

the reference rate is replaced by a new alternative reference rate.

If the contractual cash flows for a financial asset or financial

liability that is valued at amortised cost change as a result of the

reference interest rate reform, the Bank updates the effective in-

terest rate for the financial asset or financial liability to reflect the

change that the reference interest rate reform has entailed.

The changes have been applied retroactively. As the Company

did not have any transactions for which the reference rate has

been replaced by an alternative reference rate as of 31 December

2020, there is no impact on the opening balance 1 January 2021

for equity as a result of the retroactive application.

IFRS IC agenda decision (IU 03-19)

In 2021, the IFRS Interpretation Committee published an agenda

decision on costs to configure and adapt software in a Software

as a Service arrangement (SaaS), i.e. a cloud-based software

solution. These costs can no longer be recognised as an intan-

gible asset and should instead be seen as a service that the

customer receives over the contract term. This is because the

customer usually does not control the software being configured

or adapted and the services do not create a separate intangible

asset. This decision has not had any impact on the Bank as there

are only proprietary software recognised as intangible assets.

NOTES

30 • Annual Report 2021 • TF Bank AB (publ)

No other new standards, amendments, interpretations and annu-

al improvement projects that have entered into force have caused

any significant changes on TF Bank’s financial reports.

New standards and amendments and interpretations of exist-

ing 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

2021 or later. The IASB allows early adoption of these. TF Bank

has not applied the following changes in the 2021 annual report.

Insurance contracts (IFRS 17)

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

1, 2023. The standard has not yet been adopted by the EU. 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 eco-

nomic environment in which the branch operates (functional cur-

rency). The currency used in the financial statements is Swedish

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

presentation 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 func-

tional 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 trans-

action date. Since the items are seen as balances with the foreign

branches, all recalculations 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 compat-

ible with the internal reports submitted to the function respon-

sible 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. Tangi-

ble 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.

Intangible 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 appro-

priate. 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-

generating 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 imme-

diately recognised as an expense and is not reversed.

Goodwill has an indefinite useful life and in accordance with

RFR 2, the Company writes off the item over 60 months.

Financial instruments – classification, recognition and measure-

ment

The classification and valuation of financial assets is based on an

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.

Note 2 cont.

TF Bank AB (publ) • Annual Report 2021 • 31

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 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 5 “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 amortised

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

principa,l 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 comprehen-

sive income are held according to a business model whose objec-

tives 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 comprehensive 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 categories. 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 agreement

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

cost which are reported on the settlement date. Financial 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 bal-

ance 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 modifi-

cation results in removal from the balance sheet.

A loan is considered to be modified when the terms and conditions

governing cash flows change compared to the original agreement,

for example due to easing of loan terms, changes in market condi-

tions, 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.

Financial liabilities are removed from the balance sheet when the

debt is extinguished by the agreement being fulfilled, cancelled or

terminated.

Impairment of financial assets

TF Bank has a model for calculating loan loss provisions based

on 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 bor-

rower will default on its obligation. The EAD is an expected expo-

sure at the time of default and the LGD represents the expected

loss on a defaulted exposure, taking into account such factors

as counterparty characteristics and product type. Expected loan

losses are determined by calculating PD, LGD and EAD for each

future month up to and including the end of the expected term of

a credit exposure. These three parameters are multiplied and in

this way the monthly expected loan losses are calculated, which

are then discounted 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. Furthermore, this is supplemented with risk parameters

that are used to calculate expected loan losses. In cases where

the effect of relevant factors is not captured by risk models, the

Bank uses expert adjustments. In connection with the implemen-

tation of IFRS 9, the Bank performed quantitative analyses of a

number of macroeconomic parameters without finding any given

correlations with the calculation of loan loss provisions.

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. 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

Note 2 cont.

32 • Annual Report 2021 • TF Bank AB (publ)

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

correspond in all material respects to the Bank’s regulatory defi-

nition 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-pay-

ments, expected relief in loan terms, expected bankruptcy or

breach of loan terms.

Determining a significant increase in credit risk since initial recog-

nition

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 incorporates

the effects of past and current forecasted economic conditions.

Qualitative indicators are also considered in the stage allocation

assessment; for example, whether a borrower is monitored on

the watch list or has been extended performing forbearance

measures. Furthermore, a significant increase in credit risk is

considered to have occurred for all financial instruments which

are 30 days past due. The Bank applies this policy to financial

instruments issued to sovereign and financial institutions only. 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 recognised in the balance sheet on the

contract date and measured at fair value through profit and loss,

both on initial recognition and at subsequent remeasurements.

The profit or loss that arises from revaluation is reported 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 27 and note 30.

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.

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 proba-

ble that future taxable profits will be available against which the

temporary 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 ob-

ligations 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 instruments, 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 as-

sessed for this entire class of obligations as a whole. A provision 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

expected life using the effective interest method. Transaction

costs related to loans payable and loans receivable are therefore

recognised as part of the loan. Transaction costs refer to commis-

sion. Transaction costs, arrangement fees and notification charg-

es are recognised over the expected term of the loan. Invoicing

charges are also included in interest income.

The Bank regularly makes amortisation of assets and unappro-

priated 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.

Note 2 cont.

TF Bank AB (publ) • Annual Report 2021 • 33

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.

Note 2 cont.

34 • Annual Report 2021 • TF Bank AB (publ)

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 li-

quidity 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 for the Bank’s financial results. The Board establishes written policies with regards 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. Credit risk arises pri-

marily through lending to the public and is the most significant risk in the Bank. 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 perfor-

mance is provided at every ordinary Board meeting.

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 agree-

ments 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 23). The is due

to that The Bank regularly sells past due loans 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. As a result, The Bank realises expected loan losses on a monthly basis

through the sale of past due loans. In connection with sale of past due loans all risks are transferred to the counterpart. The remaining

portfolio has a limited number of non-performing loans in stage 3 and consequently a relatively low level of provisions.

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 payments 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 payments 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.

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.

Treasury bills, government bonds and balances with central banks, as well as

exposure to subsidiaries, are exempted from both limits.

Market risk

(i) Currency risk

Exchange rate risk arises when TF Bank holds positions in financial instruments denominated in foreign currencies. Currency risk involves

the following currencies: EUR, NOK, DKK, PLN and USD. According to The Bank’s financial policy, currency risk is managed through the

statement of financial position by continuously exchanging the earnings in foreign currencies to SEK. The Bank uses even forward contracts

for EUR, NOK, DKK, PLN and USD. Forward contracts normally 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

of exchange rate movements of 8.6 %. Other variables are kept constant. TF Bank has chosen the level 8.6 % by analysing the biggest ex-

change rate movements between specific dates in the period 2011-2021 for the currencies in which the Bank has the biggest exposure.

TF Bank has chosen to calculate worst case scenarios with 99.999 % confidence based on the largest movement in each currency. The

stress tests resulted in the following outcomes on positions excluding tax effects:

CURRENCY RISK

SEK thousand 2021 2020

EUR +/- 667 +/- 683

NOK +/- 424 +/- 376

DKK +/- 9 +/- 18

PLN +/- 216 +/- 113

USD +/- 0 -

According to Article 25 of Regulation (EU) No 575/2013, Tier 1 capital is the sum of the Common Equity Tier 1 capital and Additional Tier 1 capital for capital adequacy

purpose.

TF Bank AB (publ) • Annual Report 2021 • 35

Note 3 cont.

(ii) Interest rate risk

Interest rate risk arises when TF Bank has different maturities or different fixed interest terms for assets and liabilities. The main part of

TF Bank’s assets matures with variable rate of interest. At the same time, TF Bank has chosen to offer deposits at fixed rate of interest

to minimise The Bank’s liquidity risk. A change of the market interest rate by 1 percentage-point, increase/decrease the Bank’s interest

expenses for the next 12 months by SEK 30 million calculated on interest-bearing assets and liabilities on the closing date.

TF Bank aims to match the fixed-term deposits through investing part of the liquidity reserve in longer term government bonds to mini-

mise the capital requirement for interest rate risk in the banking book. According to the financial policy, at maximum, 30 % of The Bank’s

available liquidity may have a remaining term of more than six months. As at the balance sheet date, TF Bank holds Norwegian govern-

ment bonds amounting SEK 256 million (-) with a remaining maturity of just over 4 years, which corresponds to 12 % (-) of the available

liquidity.

Liquidity risk

The main liquidity risk comprises The Bank’s ability to meet its obligations to repay customer deposits from Swedish, Finnish, Norwegian

and German 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. All funding other than deposits from the

public comprises securities issues and equity.

As at the balance sheet date, The Bank’s liquidity reserve amounted to SEK 2,217 million (2,094), which corresponds to 19 % (24) of The

Bank’s deposits from the public. The Bank’s liquidity coverage ratio was 353 % (556) and the ratio of deposits from the public/loans to

the public was 1.06 (1.10)

For contractual maturity dates for liabilities, see Note 20.

Credit quality of loans that are neither past due nor impaired

Credit quality of gross receivables in stage 1 and stage 2 (see Note 23) that are neither past due nor impaired has 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 taking into account historical information

retrieved from our the Bank’s database.

SEK thousand 2021 2020

Household sector

Low risk 7,323,382 5,290,430

Moderate risk 2,212,003 1,604,507

High risk 1,125,238 899,983

Total 10,660,623 7,794,920

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 2021 2020

Cash and balances with central banks

AAA - 179,280

AA+ 1,190,663 871,221

AA- 36,299 35,627

A+ 37,850 -

A- 5,280 11,863

Treasury bills eligible for refinancing

AAA 316,411 60,022

Loans to credit institutions

A-1+ 408,396 665,846

A-1 311,045 258,441

A-2 60,195 36,702

Other assets

A-1+ 241 27,390

A-1 12,186 21,160

Unrated 9,342 6,813

Total 2,387,908 2,174,365

According to Article 4 of Commission Delegated Regulation (EU) 2015/61, liquidity coverage ratio should be calculated by dividing the liquidity buffer with net liquidi-

ty outflows over a 30-calendar day stress period. The regulatory liquidity coverage ratio requirement is 100 % as of 31 December 2017.

36 • Annual Report 2021 • TF Bank AB (publ)

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 2021 2020

Net interest income 604,695 590,645

Net fee and commission income 43,471 36,735

Net results from financial transactions -3,128 1,304

Total operating income 645,038 628,684

General administrative expenses -170,908 -160,116

Depreciation and amortisation of tangible and intangible assets -5,639 -7,756

Other operating expenses -15,596 -11,026

Total operating expenses -192,143 -178,898

Profit before loan losses 452,895 449,786

Net loan losses -144,546 -196,074

Operating profit 308,349 253,712

Balance sheet, SEK thousand

31 Dec 2021 31 Dec 2020

Loans to the public

Household sector 7,076,557 5,807,224

Corporate sector

37,597 -

Total loans to the public 7,114,154 5,807,224

Household sector

Stage 1, net 6,620,083 5,360,722

Stage 2, net 164,451 202,687

Stage 3, net

292,023 243,815

Total household sector 7,076,557 5,807,224

Key figures

2021 2020

Operating income margin, % 10.0 11.5

Net loan loss ratio, % 2.2 3.6

Cost/Income ratio, % 29.8 28.5

Return on loans to the public, % 3.6 3.5

New lending, SEK thousand 4,720,963 3,901,806

Lending to the corporate sector consists of loans in category 1 to a counterparty regarding sale of past due loans.

The Bank regularly sells past due loans in markets where the Board of Directors considers the price level to be favourable for the Bank’s performance and risk profile.

See separate section with definitions and reconciliation tables, page 68-69.

TF Bank AB (publ) • Annual Report 2021 • 37

ECOMMERCE SOLUTIONS

Income statement, SEK thousand 2021 2020

Net interest income 184,868 132,032

Net fee and commission income 69,649 51,176

Net results from financial transactions -828 458

Total operating income 253,689 183,666

General administrative expenses -139,247 -96,623

Depreciation and amortisation of tangible and intangible assets -18,190 -11,075

Other operating expenses -1,518 -755

Total operating expenses -158,955 -108,453

Profit before loan losses 94,734 75,213

Net loan losses -38,533 -35,383

Operating profit 56,201 39,830

Balance sheet, SEK thousand

31 Dec 2021 31 Dec 2020

Loans to the public

Household sector 2,069,680 1,341,205

Corporate sector

- 8,030

Total loans to the public 2,069,680 1,349,235

Household sector

Stage 1, net 1,972,671 1,258,251

Stage 2, net 83,557 73,598

Stage 3, net

13,452 9,356

Total household sector 2,069,680 1,341,205

Key figures

2021 2020

Operating income margin, % 14.8 15.3

Net loan loss ratio, % 2.3 2.9

Cost/Income ratio, % 62.7 59.0

Return on loans to the public, % 2.5 2.5

New lending, SEK thousand 4,018,465 2,334,580

Transaction volume, SEK thousand 6,612,133 3,487,070

Lending to the corporate sector consists of loans in category 1 to a foreign partner within Ecommece Solutions, which has been fully repaid during Q2 2021.

The Bank regularly sells past due loans in markets where the Board of Directors considers the price level to be favourable for the Bank’s performance and risk profile.

See separate section with definitions and reconciliation tables, page 68-69.

Note 4 cont.

38 • Annual Report 2021 • TF Bank AB (publ)

Note 4 cont.

CREDIT CARDS

Income statement, SEK thousand 2021 2020

Net interest income 164,111 66,620

Net fee and commission income -6,907 -3,323

Net results from financial transactions -644 423

Total operating income 156,560 63,720

General administrative expenses -70,069 -45,769

Depreciation and amortisation of tangible and intangible assets -4,809 -1,843

Other operating expenses -16,189 -5,792

Total operating expenses -91,067 -53,404

Profit before loan losses 65,493 10,316

Net loan losses -77,485 -41,219

Operating profit -11,992 -30,903

Balance sheet, SEK thousand

31 Dec 2021 31 Dec 2020

Loans to the public

Household sector 1,652,293 765,989

Corporate sector

36,158 -

Total loans to the public 1,688,451 765,989

Household sector

Stage 1, net 1,584,192 720,073

Stage 2, net 40,222 15,021

Stage 3, net

27,879 30,895

Total household sector 1,652,293 765,989

Key figures

2021 2020

Operating income margin, % 12.8 12.0

Net loan loss ratio, % 6.3 7.8

Cost/Income ratio, % 58.2 83.8

Return on loans to the public, % neg neg

New lending, SEK thousand 2,447,372 1,068,217

Number of active credit cards 79,952 44,833

Lending to the corporate sector consists of loans in category 1 to a counterparty regarding sale of past due loans.

The Bank regularly sells past due loans in markets where the Board of Directors considers the price level to be favourable for the Bank’s performance and risk profile.

See separate section with definitions and reconciliation tables, page 68-69.

TF Bank AB (publ) • Annual Report 2021 • 39

RECONCILIATION AGAINST FINANCIAL INFORMATION

Income statement, SEK thousand 2021 2020

Operating income

Consumer Lending 645,038 628,684

Ecommerce Solutions 253,689 183,666

Credit Cards 156,560 63,720

Total operating income 1,055,287 876,070

Operating profit

Consumer Lending 308,349 253,712

Ecommerce Solutions 56,201 39,830

Credit Cards -11,992 -30,903

Total operating profit 352,558 262,639

Balance sheet, SEK thousand 31 Dec 2021 31 Dec 2020

Loans to the public

Consumer Lending 7,114,154 5,807,224

Ecommerce Solutions 2,069,680 1,349,235

Credit Cards 1,688,451 765,989

Total loans to the public 10,872,285 7,922,448

Note 4 cont.

40 • Annual Report 2021 • TF Bank AB (publ)

NOTE 5 Classification of financial assets and liabilities

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

31 Dec 2020

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 - - 1,097,991 - 1,097,991

Treasury bills eligible for refinancing, etc. 60,022 - - - 60,022

Loans to credit institutions - - 960,989 - 960,989

Loans to the public - - 7,922,448 - 7,922,448

Shares 20,135 - - - 20,135

Derivatives 27,390 - - - 27,390

Other assets - - - 114,471 114,471

Total assets 107,547 - 9,981,428 114,471 10,203,446

Liabilities

Deposits and borrowings from the public - - 8,714,032 - 8,714,032

Subordinated liabilities - - 245,053 - 245,053

Derivatives - - - - -

Other liabilities - - - 160,656 160,656

Total liabilities - - 8,959,085 160,656 9,119,741

TF Bank AB (publ) • Annual Report 2021 • 41

NOTE 6 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 ac-

cording 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 2021

SEK thousand Level 1 Level 2 Level 3 Total

Assets

Treasury bills eligible for refinancing 60,035 - - 60,035

Shares - 257 - 257

Derivatives - 241 - 241

Total assets 60,035 498 - 60,533

Liabilities

Derivatives - 23,452 - 23,452

Total liabilities - 23,452 - 23,452

31 Dec 2020

SEK thousand Level 1 Level 2 Level 3 Total

Assets

Treasury bills eligible for refinancing 60,022 - - 60,022

Shares 19,896 239 - 20,135

Derivatives - 27,390 - 27,390

Total assets

79,918 27,629 - 107,547

Liabilities

Derivatives - - - -

Total liabilities - - - -

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.

For loans to the public the fair value is based on discounted cash flows using an interest rate based on the market rate at the balance

sheet date, which was 12.66 % as at 31 December 2021 and 13.82 % as at 31 December 2020. .

An instrument is classified as Level 3 in cases where one or more of the significant inputs are not based on observable market data

42 • Annual Report 2021 • TF Bank AB (publ)

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 -

31 Dec 2020

SEK thousand Carrying amount Fair value

Fair value gain (+)/

Fair value loss (-)

Assets

Cash and balances with central banks 1,097,991 1,097,991 -

Treasury bills eligible for refinancing, etc. 60,022 60,022 -

Loans to credit institutions 960,989 960,989 -

Loans to the public 7,922,448 7,922,448 -

Shares 20,135 20,135 -

Derivatives 27,390 27,390 -

Total assets 10,088,975 10,088,975 -

Liabilities

Deposits and borrowings from the public 8,714,032 8,714,032 -

Subordinated liabilities 245,053 245,053 -

Derivatives - - -

Total liabilities 8,959,085 8,959,085 -

Note 6 cont.

TF Bank AB (publ) • Annual Report 2021 • 43

NOTE 7 Interest income

SEK thousand 2021 2020

Interest income from loans to the public 1,073,215 910,486

Interest income, treasury bills eligible for refinancing 507 -

Other interest income 391 1,459

Total interest income 1,074,113 911,945

- of which interest income according to effective interest rate method

1,042,406 880,106

- of which interest income from non-performing loans

23,402 12,664

Geographical breakdown of interest income:

Norway 277,693 232,758

Finland 251,265 222,150

Germany 139,513 44,045

Estonia 119,954 128,736

Sweden 116,479 112,689

Latvia 96,451 91,323

Poland 38,343 57,804

Lithuania 27,288 14,942

Denmark 6,531 6,283

Austria 596 1,215

Total interest income 1,074,113 911,945

NOTE 8 Interest expense

SEK thousand 2021 2020

Interest expense, deposits from the public -75,927 -89,215

Interest expense, subordinated liabilities -11,248 -11,505

Deposit fees to credit institutions -7,404 -5,632

Interest expense, treasury bills eligible for refinancing -154 -195

Other financial expense -25,706 -16,101

Total interest expense -120,439 -122,648

- of which interest expenses according to effective interest rate method -102,634 -112,077

- of which costs for deposit guarantee and resolution fee -17,805 -8,362

44 • Annual Report 2021 • TF Bank AB (publ)

NOTE 9 Net fee and commission income

SEK thousand 2021 2020

Fee and commission income

Reminder fees 72,896 53,211

Insurance premiums 50,865 39,873

Other fee and commission income 16,717 10,472

Total fee and commission income 140,478 103,556

Fee and commission expense

Insurance expense -17,009 -11,475

Other fee and commission expense -17,256 -7,493

Total fee and commission expense -34,265 -18,968

Net fee and commission income 106,213 84,588

Geographical breakdown of fee and commission income:

Norway 56,231 39,153

Sweden 38,840 29,598

Finland 29,908 24,660

Germany 5,665 1,650

Estonia 4,348 4,168

Denmark 3,509 2,723

Latvia 1,340 1,108

Poland 528 420

Lithuania 90 44

Austria 19 32

Total fee and commission income 140,478 103,556

NOTE 10 Net results from financial transactions

SEK thousand 2021 2020

Exchange rate fluctuations -4,601 1,658

Gains/losses on investments in funds and other securities 1 527

Total net results from financial transactions -4,600 2,185

TF Bank AB (publ) • Annual Report 2021 • 45

NOTE 11 General administrative expenses

SEK thousand 2021 2020

Staff costs

Salaries and fees -120,459 -98,171

Social security costs -32,638 -25,544

Pension costs -8,468 -6,266

Other staff costs -4,567 -3,065

Total staff costs -166,132 -133,046

Other general administrative expenses

Information services and customer communication -52,173 -40,277

IT costs -45,413 -36,480

Postage and telephone -17,791 -13,809

Bank fees -14,729 -10,941

Debt collection costs -12,687 -7,940

Rent and property costs -10,901 -9,285

Auditors’ remuneration -3,980 -3,011

Other -56,418 -47,719

Total other general administrative expenses -214,092 -169,462

Total general administrative expenses -380,224 -302,508

NOTE 12 Auditors’ remuneration

SEK thousand 2021 2020

KPMG

Audit assignment 3,702 -

Audit services in addition to the audit assignment 278 -

Tax advices - -

Other services - -

PricewaterhouseCoopers

Audit assignment - 2,248

Audit services in addition to the audit assignment - 159

Tax advices - 35

Other services - 569

Total auditors’ remuneration 3,980 3,011

The amounts include auditors’ remuneration for KPMG AB of SEK 2,378 thousands, divided between the audit assignment SEK 2,100

thousands and audit services other than the audit assignment SEK 278 thousands.

46 • Annual Report 2021 • TF Bank AB (publ)

NOTE 13 Average number of employees, salaries, other remuneration and social security costs

AVERAGE NUMBER OF EMPLOYEES, DISTRIBUTED BETWEEN WOMEN AND MEN:

2021 2020

Women 123 99

Men 113 88

Total 236 187

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

2021 2020

Sweden

Women 38 35

Men 41 35

Total 79 70

Finland

Women 14 12

Men 13 11

Total 27 23

Poland

Women 25 14

Men 34 25

Total 59 39

Estonia

Women 22 20

Men 3 2

Total 25 22

Norway

Women 22 18

Men 20 15

Total 42 33

Latvia

Women 2 -

Men 2 -

Total 4 -

SALARIES AND REMUNERATION:

SEK thousand 2021 2020

Board of Directors and CEO 7,935 6,189

Other staff 112,524 91,982

Total salaries and remuneration 120,459 98,171

Social costs pursual to legislation and agreements 32,638 25,544

Pension costs 8,468 6,266

Total salaries, remuneration, social security costs and pension costs 161,565 129,981

TF Bank AB (publ) • Annual Report 2021 • 47

SALARIES AND REMUNERATION FOR BOARD MEMBERS AND SENIOR EXECUTIVES:

SEK thousand 2021 2020

Chairman of the Board: John Brehmer

Board fees

830 680

Other benefits - -

Pension costs - -

Total Chairman of the Board 830 680

SEK thousand 2021 2020

Fees

other Board members:

Bertil Larsson 400 350

Charlotta Björnberg-Paul 380 330

Mari Thjømøe 400 350

Michael Lindengren 450 -

Sara Mindus 450 300

Tone Bjørnov - 400

Total 2,080 1,730

SEK thousand 2021 2020

CEO: Mattias Carlsson

Basic salary

4,501 3,650

Variable remuneration - -

Other benefits 146 129

Pension costs 1,100 836

Total 5,747 4,615

SEK thousand 2021 2020

Deputy CEO: Mikael Meomuttel

Basic salary

3,001 2,268

Variable remuneration - -

Other benefits 185 150

Pension costs 699 695

Total 3,885 3,113

Other senior executives

Basic salary 3,340 3,986

Variable remuneration 1,136 318

Other benefits 260 287

Pension costs 363 572

Total 5,099 5,163

Expensed in 2020 and 2021 respectively and includes fees that will be paid until the Annual General Meeting during the subsequent year.

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

SEK 302 thousand respectively.

During 2020 and the first half of 2021, other senior executives consisted of Head of Consumer Lending and Head of Ecommerce Solutions. From July 2021, the executive

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

Note 13 cont.

48 • Annual Report 2021 • 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 com-

prise 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 1,136 thousand (318). Additional commission-based compensation is paid on

the basis of individual accomplishment of financial targets established for the year. TF Bank has ensured that all targets related to commis-

sion-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.

Share-based remuneration

At the Annual General Meeting in 2018 a share warrant programme was adopted comprising a total of 1,372,338 warrants. The share

warrants were subscribed for by senior executives. Payment corresponding to the market value has been made and was recognised as

other contributed capital under equity. In 2020, the Board of Directors submitted an offer to the holders of the warrants to repurchase

their warrants. The offer was utilised for all warrants.

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 remu-

neration, if agreed before the notice was issued, is not payable. Severance pay is adjusted for 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 three committees are 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

2021 2020

Number on

reporting date

Of which

women (%)

Number on

reporting date

Of which

women (%)

Board members 6 50 6 67

CEO and other senior executives 3 0 4 0

Note 13 cont.

TF Bank AB (publ) • Annual Report 2021 • 49

NOTE 14 Intangible assets

SEK thousand

Internally

developed

software

Ongoing

development Total

2020

Cost, opening balance 52,940 7,980 60,920

Additions from merger 34,243 8,394 42,637

Additions 1,063 25,119 26,182

Reclassification 30,404 -31,010 -606

Sales and disposals -12,030 - -12,030

Exchange rate differences -2,395 -230 -2,625

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

Amortisations, opening balance -32,764 - -32,764

Amortisations from merger -14,630 - -14,630

Amortisations for the year -18,154 - -18,154

Sales and disposals 11,775 - 11,775

Exchange rate differences 1,057 - 1,057

Amortisations, closing balance -52,716 - -52,716

Carrying amount 51,509 10,253 61,762

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

50 • Annual Report 2021 • TF Bank AB (publ)

NOTE 15 Tangible assets

SEK thousand Equipment Total

2020

Cost, opening balance 6,545 6,545

Additions from merger 3,330 3,330

Additions 1,702 1,702

Sales and disposals - -

Exchange rate differences -462 -462

Cost, closing balance 11,115 11,115

Amortisations, opening balance -4,880 -4,880

Amortisations from merger -2,673 -2,673

Amortisations for the year -1,245 -1,245

Sales and disposals - -

Exchange rate differences 341 341

Amortisations, closing balance -8,457 -8,457

Carrying amount 2,658 2,658

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 2021 • 51

NOTE 16 Other operating expenses

SEK thousand 2021 2020

Marketing expenses -33,303 -17,573

Total -33,303 -17,573

NOTE 17 Net loan losses

SEK thousand 2021 2020

Change in provision for sold non-performing loans -146,696 -79,605

Realised loan losses -37,960 -39,707

Recovered from previous write-offs 565 468

Change in provision for expected loan losses, stage 1-3 -76,473 -153,832

Net loan losses -260,564 -272,676

Loan losses are attributable to Loans to the public and classified as amortised cost.

NOTE 18 Tax on profit for the year

SEK thousand 2021 2020

Current tax on profit for the year -85,277 -54,046

Tax due to changes in tax relating to prior years -191 -164

Other taxes -199 -189

Deferred tax 10,315 -5,521

Tax on profit for the year

-75,352 -59,920

Reconciliation of tax on profit for the year

Profit before tax 352,558 262,639

Tax according to applicable tax rate -72,627 -56,205

Tax effect of non-deductible expenses -13,408 -9,280

Tax effect of non-taxable income 11,073 5,918

Tax due to changes in tax relating to prior years -191 -164

Other taxes -199 -189

Tax on profit for the year recognised in the income statement -75,352 -59,920

Weighted average tax rate for the Bank was 21.4 % (22.8).

52 • Annual Report 2021 • TF Bank AB (publ)

NOTE 19 Foreign currency

THE FOLLOWING CURRENCY EXPOSURES ARE AGAINST THE BANK’S TRANSACTION CURRENCIES

SEK thousand 31 Dec 2021 31 Dec 2020

Assets in EUR:

Cash and balances with central banks 1,264,811 906,848

Loans to credit institutions 404,550 359,783

Loans to the public 5,743,390 4,102,747

Other assets 28,702 31,409

Total assets 7,441,453 5,400,787

Liabilities in EUR:

Deposits and borrowings from the public -7,667,158 -4,996,007

Other liabilities -87,825 -61,159

Total liabilities -7,754,983 -5,057,166

Currency forward contracts 305,775 -351,313

Total -7,755 -7,692

SEK thousand 31 Dec 2021 31 Dec 2020

Assets in NOK:

Cash and balances with central banks - 179,280

Treasury bills eligible for refinancing, etc. 256,376 -

Loans to credit institutions 150,632 92,055

Loans to the public 3,495,110 2,568,152

Other assets 8,307 25,705

Total assets 3,910,425 2,865,192

Liabilities in NOK:

Deposits and borrowings from the public -3,174,844 -2,715,914

Other liabilities -64,144 -49,646

Total liabilities -3,238,988 -2,765,560

Currency forward contracts -666,510 -95,456

Total 4,928 4,177

TF Bank AB (publ) • Annual Report 2021 • 53

SEK thousand 31 Dec 2021 31 Dec 2020

Assets in PLN:

Cash and balances with central banks 5,280 11,863

Loans to credit institutions 13,518 26,221

Loans to the public 449,484 463,760

Other assets 2,431 1,093

Total assets 470,713 502,937

Liabilities in PLN:

Other liabilities -5,366 1,194

Total liabilities -5,366 1,194

Currency forward contracts -467,859 -505,385

Total -2,511 -1,253

SEK thousand 31 Dec 2021 31 Dec 2020

Assets in DKK:

Loans to credit institutions 3,652 13,744

Loans to the public 26,166 35,591

Other assets 445 91

Total assets 30,263 49,426

Liabilities in DKK:

Other liabilities -1,274 -658

Total liabilities -1,274 -658

Currency forward contracts -28,881 -48,571

Total 108 197

SEK thousand 31 Dec 2021 31 Dec 2020

Assets in USD:

Other assets 12,186 -

Total assets 12,186 -

Currency forward contracts -12,182 -

Total

4 -

THE TABLE BELOW SHOWS OUTSTANDING CURRENCY FORWARD CONTRACTS AT MARKET VALUE IN MILLIONS IN THE RESPECTIVE

CURRENCY:

31 Dec 2021 31 Dec 2020

EUR - 35.0

NOK 650.0 100.0

PLN 210.0 228.0

DKK 21.0 36.0

USD 1.3 -

Note 19 cont.

54 • Annual Report 2021 • TF Bank AB (publ)

NOTE 20 Maturity information

SEK thousand 31 Dec 2021 31 Dec 2020

Payable on demand 1,270,092 1,097,991

Cash and balances with central banks 1,270,092 1,097,991

Remaining term to maturity of up to 3 months 60,000 60,022

More than 1 year but less than 5 years 272,647 -

Treasury bills eligible for refinancing 332,647 60,022

Payable on demand 679,338 960,989

More than 1 year but less than 5 years 100,298 -

Loans to credit institutions 779,636 960,989

Remaining term to maturity of up to 3 months 1,172,014 788,254

Remaining term to maturity of more than 3 months but less than 1 year 2,749,971 1,844,771

Remaining term to maturity of more than 1 year but less than 5 years 8,855,718 6,639,017

Loans to the public 12,777,703 9,272,042

Payable on demand 257 20,135

Remaining term to maturity of up to 3 months 62,783 102,760

More than 1 year but less than 5 years 7,821 212,028

Other assets 70,861 334,923

Payable on demand 8,038,772 6,876,307

Remaining term to maturity of more than 3 months but less than 1 year 2,304,686 501,375

More than 1 year but less than 5 years 1,161,290 1,336,351

Deposits and borrowings from the public 11,504,750 8,714,033

Remaining term to maturity of up to 3 months - 46,990

Remaining term to maturity of more than 5 years 292,528 289,945

Subordinated liabilities 292,528 336,935

Remaining term to maturity of up to 3 months 130,398 115,342

Remaining term to maturity of more than 3 months but less than 1 year 24,475 33,355

Remaining term to maturity of more than 1 year but less than 5 years 15,948 21,840

Other liabilities 170,821 170,537

Payable on demand 1,974,365 957,332

Commitments 1,974,365 957,332

The amounts given in the table are contracted, non-discounted cash flows and include both interest and repayments, as a result of

which the amounts are not directly related to the balance sheet.

NOTE 21 Treasury bills eligible for refinancing

SEK thousand 31 Dec 2021 31 Dec 2020

Treasury bills eligible for refinancing 60,035 60,022

Government securities eligible for refinancing 256,376 -

Total treasury bills eligible for refinancing, etc. 316,411 60,022

TF Bank AB (publ) • Annual Report 2021 • 55

NOTE 22 Loans to credit institutions

SEK thousand 31 Dec 2021 31 Dec 2020

Accounts receivable Swedish currency 289,444 592,409

Accounts receivable foreign currency 490,192 368,580

Total loans to credit institutions 779,636 960,989

NOTE 23 Loans to the public

SEK thousand 31 Dec 2021 31 Dec 2020

Loans to the household sector 10,798,530 7,914,418

Loans to the corporate sector

73,755 8,030

Total loans to the public 10,872,285 7,922,448

Loans to the household sector

Stage 1, gross 10,330,411 7,466,964

Stage 2, gross 330,212 327,956

Stage 3, gross

623,294 512,298

Total loans to the household sector, gross 11,283,917 8,307,218

Provisions for expected loan losses, household sector

Stage 1 -153,465 -127,918

Stage 2 -41,982 -36,650

Stage 3

-289,940 -228,232

Total provisions for expected loan losses, household sector -485,387 -392,800

Loans to the household sector

Stage 1, net 10,176,946 7,339,046

Stage 2, net 288,230 291,306

Stage 3, net

333,354 284,066

Total loans to the household sector, net 10,798,530 7,914,418

Geographical distribution of net loans:

Norway 3,497,344 2,566,609

Finland 2,612,182 2,014,444

Germany 1,422,692 568,511

Sweden 1,027,610 735,373

Estonia 821,748 786,207

Latvia 675,810 583,551

Poland 449,519 464,299

Lithuania 331,482 155,985

Denmark 26,240 35,763

Austria 7,658 11,706

Total loans, net book value 10,872,285 7,922,448

Lending to the corporate sector consists of loans in stage 1 to counterparties regarding sale of past due loans and loans in stage 1 to a foreign partner within Ecommerce

Solutions, which has been fully repaid during Q2 2021.

The Bank regularly sells past due loans in markets where the Board of Directors considers the price level to be favourable for the Bank’s performance and risk profile.

56 • Annual Report 2021 • TF Bank AB (publ)

LOANS TO THE CORPORATE SECTOR

SEK thousand 31 Dec 2021 31 Dec 2020

Loans, gross 73,755 8,030

Total loans, net book value 73,755 8,030

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 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 23 cont.

TF Bank AB (publ) • Annual Report 2021 • 57

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 2020 6,186,669 311,638 223,773 6,722,080

Financial assets added during the year 7,304,603 - - 7,304,603

Repayments -4,645,305 -227,421 -24,632 -4,897,358

Financial assets sold during the year - -289,846 -48,537 -338,383

Stage transfers -912,877 545,826 367,051 -

- from 1 to 2 -697,126 697,126 - -

- from 1 to 3 -296,954 - 296,954 -

- from 2 to 1 81,203 -81,203 - -

- from 2 to 3 - -70,097 70,097 -

- from 3 to 2 - - - -

Exchange rate differences -458,095 -12,241 -5,357 -475,693

Loans to the public, gross, closing balance 31 December 2020 7,474,995 327,956 512,298 8,315,249

Provision for expected loan losses, opening balance

1 January 2020 -88,792 -28,322 -109,185 -226,299

Changes reported as net loan losses

Financial assets added during the year -108,678 - - -108,678

Repayments 56,037 10,154 2,855 69,046

Financial assets sold during the year - 10,584 30,975 41,559

Stage transfers 7,784 -32,012 -156,708 -180,936

- from 1 to 2 4,355 -38,978 - -34,623

- from 1 to 3 4,511 - -131,559 -127,048

- from 2 to 1 -1,082 4,420 - 3,338

- from 2 to 3 - 2,546 -25,149 -22,603

- from 3 to 2 - - - -

Exchange rate differences 5,732 2,946 3,831 12,509

Provision for expected loan losses, closing balance

31 December 2020

-127,918 -36,650 -228,232 -392,800

Note 23 cont.

58 • Annual Report 2021 • TF Bank AB (publ)

NOTE 24 Goodwill

SEK thousand 31 Dec 2021 31 Dec 2020

Cost, opening balance 12,753 -

Change during the year

Merger - 12,753

Cost, closing balance 12,753 12,753

Amortisations, opening balance -1,276 -

Change during the year

Amortisations according to plan -1,275 -1,276

Amortisations, closing balance -2,551 -1,276

Carrying amount 10,202 11,477

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 25 Other assets

SEK thousand 31 Dec 2021 31 Dec 2020

Derivatives 241 27,390

Deposit to partner 12,186 1,264

Other assets 9,415 7,500

Total other assets 21,842 36,154

TF Bank AB (publ) • Annual Report 2021 • 59

NOTE 26 Deferred tax

SEK thousand 31 Dec 2021 31 Dec 2020

Deferred tax assets

Accrued taxes attributable to unrealised derivatives 4,781 -

Deferred tax attributable to tax paid abroad - 47

Deferred tax assets 4,781 47

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

5641 -

Deferred tax on unrealised currency derivatives - 5,642

Deferred tax on temporary differences 5,641 5,642

The deferred tax liabilities are expected to be settled as follows:

Within 12 months 5,641 5,642

Later than within 12 months - -

5,641 5,642

The gross change in deferred tax is as follows:

Opening balance -5,595 1,541

Effect of changed branch taxation -5,581 -

Recognised in the income statement 10,316 -7,136

Recognised in other comprehensive income - -

Closing balance -860 -5,595

NOTE 27 Deposits and borrowings from the public

SEK thousand 31 Dec 2021 31 Dec 2020

Germany 7,332,430 4,657,899

Norway 3,174,844 2,715,914

Sweden 662,747 1,002,111

Finland 334,728 338,108

Total deposits and borrowings from the public 11,504,749 8,714,032

Deposits and borrowings from the public only occur in the household sector. 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 36 % (32) of total deposits

from the public. Maturities are shown in Note 20.

CHANGES IN DEPOSITS AND BORROWINGS FROM THE PUBLIC

SEK thousand 31 Dec 2021 31 Dec 2020

Opening balance 8,714,032 5,136,820

Change by merger - 2,060,255

Change for the year 2,429,388 2,008,132

Exchange rate differences 361,329 -491,175

Closing balance 11,504,749 8,714,032

60 • Annual Report 2021 • TF Bank AB (publ)

NOTE 28 Other liabilities

SEK thousand 31 Dec 2021 31 Dec 2020

Debts to ecommerce partners 53,573 35,272

Accounts payables 6,783 8,033

Derivatives 23,452 -

Other liabilities 10,212 9,559

Total other liabilities 94,020 52,864

NOTE 29 Accrued expenses and prepaid income

SEK thousand 31 Dec 2021 31 Dec 2020

Accrued interest on deposits from the public 21,323 26,457

Accrued salaries and holiday pay liability 20,790 18,501

Accrued social security costs 11,216 9,587

Accrued interest on loans to the public 3,456 2,235

Other accrued expenses and prepaid income 64,799 43,538

Total accrued expenses and prepaid income 121,584 100,318

NOTE 30 Subordinated liabilities

SEK thousand 31 Dec 2021 31 Dec 2020

Time-bound subordinated liabilities 198,042 245,053

Total 198,042 245,053

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

TF Bank AB (publ) • Annual Report 2021 • 61

NOTE 31 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 2021 31 Dec 2020

The following transactions took place between companies within the Group:

General administrative expenses -18,341 -16,210

Total -18,341 -16,210

SEK thousand 31 Dec 2021 31 Dec 2020

The following transactions have been made with other related parties:

Interest income (transaction costs) -47,957 -57,440

890 -

General administrative expenses -3,109 -3,301

Total -50,176 -60,741

Acquisition of assets and liabilities from other related parties:

Ecommerce Solutions 596,687 630,718

Total 596,687 630,718

SEK thousand 31 Dec 2021 31 Dec 2020

Assets and liabilities at the end of the period as a result of transactions with other related parties:

Other assets 1,461 781

Other liabilities 14 343

62 • Annual Report 2021 • TF Bank AB (publ)

NOTE 32 Shares and participations in Group companies

TFB Service

UAB TFB Service SIA

TFB Service

GmbH TFB Service AB

Avarda AB -

Group BB Bank ASA

Country of registration

and operation Lithuania Latvia Germany Sweden Sweden Norway

Operation Administration Administration Administration Administration Financial Financial

Number of shares 1 1 25,000 25,000 - -

Percentage of shares

owned by TF Bank, % 100 100 100 100 - -

Carrying amount as at 31

December 2021 25 26 264 25 - -

Operating income 2021 3,896 4,235 6,659 - - -

Profit before tax 2021 -15 876 381 0 - -

Tax on profit 2021 - - -117 - - -

Average number of

employees 2021 10 8 8 - - -

TFB Service

UAB TFB Service SIA

TFB Service

GmbH TFB Service AB

Avarda AB -

Group BB Bank ASA

Carrying amount as at 1

January 2020 25 26 264 - 235,825 279,371

Merger

- - - - -235,825 -279,371

Carrying amount as at

31 December 2020 25 26 264 - - -

Carrying amount as at 1

January 2021 25 26 264 - - -

Shares issuance - - - 25 - -

Carrying amount as at

31 December 2021 25 26 264 25 - -

In 2020, the Avarda AB Group and BB Bank ASA were merged with TF Bank AB.

TF Bank AB (publ) • Annual Report 2021 • 63

NOTE 33 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 guide-

lines 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 10 February 2021 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 foreseeable 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.

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 adequate to serve as the basis for current and future operations and to ensure that the amount and composition of own funds is ap-

propriate. 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 its 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 annually.

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 applica-

ble 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.

Leverage ratio

The leverage ratio is a non-risk sensitive capital requirement defined in Regulation (EU) no 575/2013 (CRR). The ratio states the amount

of equity in relation to total assets including items that are not recognised in the balance sheet and is calculated by the Tier 1 capital as a

percentage of the total exposure measure.

EBA’s changed method for intangible assets deduction

In December 2020, a change took effect in the method for how intangible assets should be treated in own funds calculation according

to Article 36 of (EU) 575/2013, which gives the possibility of deducting prudently valued software assets from the own funds. According

to the previous method, the book value of intangible assets relating to software assets was deducted in its entirety from the own funds

calculation, however, in the new method only the difference between the book amortisation of the software assets and the value based

on prudent amortisation (three-years amortisation) is deducted from the own funds. The Bank choose to use the new calculation

method starting from 1 January 2021.

64 • Annual Report 2021 • TF Bank AB (publ)

CAPITAL SITUATION

SEK thousand 31 Dec 2021 31 Dec 2020

Common Equity Tier 1 capital (CET1) 1,237,589 973,823

Additional Tier 1 capital (AT1) 200,000 100,000

Tier 2 capital 198,042 245,053

Own funds

1,635,631 1,318,876

Risk exposure amount 10,079,383 7,582,576

- of which: credit risk 8,726,933 6,438,797

- of which: credit valuation adjustment 2,339 7,491

- of which: market risk - -

- of which: operational risk 1,350,111 1,136,288

Capital ratios

CET1 capital ratio, % 12.3 12.8

Tier 1 capital ratio, % 14.3 14.2

Total capital ratio, % 16.2 17.4

REGULATORY CAPITAL REQUIREMENTS

31 Dec 2021 31 Dec 2020

SEK thousand Amount Percent

Amount Percent

Capital requirement under pillar 1

CET1 capital requirement 453,572 4.5 341,216 4.5

Tier 1 capital requirement 604,763 6.0 454,955 6.0

Total capital requirement 806,351 8.0 606,606 8.0

Capital requirement under pillar 2

CET1 capital requirement 46,834 0.5 44,696 0.6

Tier 1 capital requirement 62,445 0.6 52,145 0.7

Total capital requirement 83,260 0.8 74,493 1.0

- of which, concentration risk 81,944 0.8 73,294 1.0

- of which, currency risk 1,316 0.0 1,199 0.0

Total capital requirement under pillar 1 and pillar 2

CET1 capital requirement 500,406 5.0 385,912 5.1

Tier 1 capital requirement 667,208 6.6 507,100 6.7

Total capital requirement 889,611 8.8 681,099 9.0

Institution-specific buffer requirement

Total buffer requirement 282,444 2.8 212,312 2.8

- of which, capital conservation buffer requirement 251,985 2.5 189,564 2.5

- of which, countercyclical buffer requirement 30,460 0.3 22,748 0.3

Total capital requirement including buffer requirement

CET1 capital 782,850 7.8 598,224 7.9

Tier 1 capital 949,652 9.4 719,412 9.5

Total capital 1,172,055 11.6 893,411 11.8

Capital available to use as buffer

CET1 capital 737,183 7.3 587,112 7.7

Tier 1 capital 770,381 7.6 565,790 7.5

Total capital 746,020 7.4 637,777 8.4

In accordance with the commission implementing regulation (EU) 2021/637 TF Bank AB discloses the information about capital adequacy and other information as

per the template “EU KM1” in page 70.

After any regulatory adjustments.

Capital requirements expressed as a percentage of the risk exposure amount.

Note 33 cont.

TF Bank AB (publ) • Annual Report 2021 • 65

OWN FUNDS

SEK thousand 31 Dec 2021 31 Dec 2020

CET1 capital

Share capital

107,500 107,500

Other reserves 72,365 62,762

Retained earnings including net profit for the period reviewed by the auditor

1,050,826 813,443

Adjustments to CET1 capital:

- Deduction of foreseeable costs and dividends

-21,500 -21,500

- IFRS 9 transitional arrangements

71,257 84,857

- Intangible assets

-32,657 -61,762

- Goodwill

-10,202 -11,477

Total CET1 capital 1,237,589 973,823

Additional Tier 1 capital

Perpetual subordinated loan 200,000 100,000

Tier 2 capital

Fixed term subordinated loan 198,042 245,053

Own funds 1,635,631 1,318,876

SPECIFICATION OF RISK EXPOSURE AMOUNT AND CAPITAL REQUIREMENT

31 Dec 2021 31 Dec 2020

SEK thousand

Risk

exposure

amount

Capital

requirement

8 %

Risk

exposure

amount

Capital

requirement

8 %

Credit risk under the standardised approach

Corporate exposures 38,346 3,068 8,927 714

Household exposures 8,012,089 640,967 5,857,782 468,623

Secured by collateral 14,945 1,196 217 17

Exposures in default 390,444 31,236 327,336 26,187

Exposures to institutions with a short-term credit assessment 176,588 14,127 208,994 16,720

Equity exposures 597 48 555 44

Other items 93,924 7,514 34,986 2,799

Total

8,726,933 698,156 6,438,797 515,104

Credit valuation adjustment

Standardised method 2,339 187 7,491 599

Total

2,339 187 7,491 599

Market risk

Foreign exchange risk - - - -

Total - - - -

Operational risk

Standardised approach 1,350,111 108,009 1,136,288 90,903

Total

1,350,111 108,009 1,136,288 90,903

Total risk exposure amount and total capital requirement 10,079,383 806,352 7,582,576 606,606

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.

Note 33 cont.

66 • Annual Report 2021 • TF Bank AB (publ)

Note 33 cont.

LEVERAGE RATIO

SEK thousand 31 Dec 2021 31 Dec 2020

Tier 1 capital 1,437,589 1,073,823

Leverage ratio exposure 13,751,040 10,517,624

Leverage ratio, % 10.5 10.2

NOTE 34 Pledged assets, contingent liabilities and commitments

SEK thousand 31 Dec 2021 31 Dec 2020

Pledged assets

Restricted bank deposits

48,536 33,346

Total 48,536 33,346

SEK thousand 31 Dec 2021 31 Dec 2020

Commitments

Unutilised credit limits 1,974,365 957,332

Future total minimum lease payments for non-cancellable operating leases 18,391 22,733

Total 1,992,756 980,065

According to the Board’s assessment, TF Bank has no contingent liabilities.

NOTE 35 Events after 31 December 2021

The situation in Ukraine and Russia has led to a sharp increase in geopolitical unrest and uncertainty in Europe. The financial market,

which already in the beginning of 2022 showed great volatility with higher long-term interest rates, a depreciated Swedish krona and

increased inflation, now risks being affected further. The long-term effects on the outside world and the global economy are impossible

to predict at this point.

NOTE 36 Proposed appropriation of profit or loss

SEK

Tier 1 capital instrument 200,000,000

Retained earnings 773,619,577

Profit for the year 277,206,467

1,250,826,044

The Board proposes:

a dividend of SEK 1.00 per share (21,500,000 shares) 21,500,000

to be carried forward 1,229,326,044

Total 1,250,826,044

Board of Directors’ assessment of the proposed dividend

The proposed dividend will reduce the leverage ratio to 10.52 %. Against the background that the Company’s operations remain profitable,

the leverage ratio is at a satisfactory level. Liquidity risk is expected to remain significantly above the level set out in the Company’s policy

for management of liquidity risk. Consequently, the Board’s view is that the proposed dividend will not prevent the Company from fulfilling

its obligations in the short and long term, nor from completing any necessary investments. The proposed dividend is therefore justifiable

pursuant to what is stated in the Swedish Companies Act, Chapter 17, Section 3, paragraphs 2-3.

Restricted bank deposits refers to reserve requirements at central banks in Estonia, Finland, Latvia and Poland.

TF Bank AB (publ) • Annual Report 2021 • 67

KEY FIGURES

Parent company Parent company

SEK thousand 2021 2020 2019 2018 2017

Income statement

Operating income 1,055,287 876,070 530,399 501,111 437,568

Operating expenses -442,165 -340,755 -201,268 -168,208 -140,177

Net loan losses -260,564 -272,676 -145,770 -124,940 -121,579

Operating profit 352,558 262,639 183,361 207,963 175,812

Profit for the year 277,206 202,719 161,748 182,994 150,373

Balance sheet

Loans to the public 10,872,285 7,922,448 4,305,139 3,077,158 2,252,638

Deposit from the public 11,504,749 8,714,032 5,136,820 4,061,396 3,017,287

Key figures

CET1 capital ratio, % 12.3 12.8 14.5 15.3 16.9

Tier 1 capital ratio, % 14.3 14.2 16.5 17.8 16.9

Total capital ratio, % 16.2 17.4 20.4 20.4 20.4

Employees (FTE) 236 187 114 93 78

Comparative figures for 2017-2019 relates to data for the Parent Company TF Bank AB which has been disclosed in previous annual reports. Net loan losses for 2017

are reported according to IAS 39.

See separate section with definitions and reconciliation tables, page 68-69.

FIVE-YEAR OVERVIEW

68 • Annual Report 2021 • 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.

EQUITY RATIO

Total equity as a percentage of total assets.

ITEMS AFFECTING COMPARABILITY

Items affecting comparability in 2018 were attribut-

able to reclassification of customer balances with

inactive status that have arisen before 2018.

LEVERAGE RATIO

Tier 1 capital as a percentage of total assets includ-

ing off-balance sheet items.

NET LOAN LOSS RATIO

Net loan losses divided by average loans to the public.

NEW LENDING

New loans (the cash flow) in the period. For Ecom-

merce Solutions the amount is reduced by product

returns.

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.

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 presenta-

tion format.

DEFINITIONS

TF Bank AB (publ) • Annual Report 2021 • 69

KEY FIGURES

Parent company Group

SEK thousand 2021 2020 2019 2018 2017

Income statement

Earnings per share, SEK 12.55 9.11 10.01 8.75 7.04

Net profit for the year attributable to the shareholder's of

the Parent Company 269,875 195,769 215,160 188,126 151,459

Average number of outstanding shares, thousands 21,500 21,500 21,500 21,500 21,500

Key figures

Operating income margin, % 11.2 12.2 14.0 16.5 18.1

Total operating income 1,055,287 876,070 768,864 627,641 511,570

Average loans to the public

9,397,367 7,209,114 5,472,503 3,802,757 2,822,786

Net loan loss ratio, % 2.8 3.8 3.4 4.0 4.6

Net loan losses 260,564 272,676 188,634 150,272 129,343

Average loans to the public

9,397,367 7,209,114 5,472,503 3,802,757 2,822,786

Cost/Income ratio, % 41.9 38.9 37.8 39.4 37.0

Total operating expenses 442,165 340,755 290,875 247,536 189,289

Total operating income 1,055,287 876,070 768,864 627,641 511,570

Return on equity, % 24.4 22.0 30.3 33.8 30.4

Net profit for the year attributable to the shareholder's of

the Parent Company 269,875 195,769 215,160 188,126 151,459

Average equity attributable to the shareholder's of the

Parent Company

1,107,198 889,387 710,858 556,020 498,830

Return on loans to the public, % 2.9 2.7 3.9 4.9 5.4

Net profit for the year attributable to the shareholder's of

the Parent Company 269,875 195,769 215,160 188,126 151,459

Average loans to the public

9,397,367 7,209,114 5,472,503 3,802,757 2,822,786

Return on assets, % 2.3 2.1 3.0 3.6 4.1

Net profit for the year attributable to the shareholder's of

the Parent Company 269,875 195,769 215,160 188,126 151,459

Average total assets

11,797,131 9,335,847 7,256,168 5,269,319 3,718,338

Adjusted key figures

Adjusted earnings per share, SEK 12.55 9.11 10.01 8.01 7.04

Adjusted net profit for the year attributable to the share-

holder's of the Parent Company 277,206 195,769 215,160 172,296 151,459

Average number of outstanding shares, thousands 21,500 21,500 21,500 21,500 21,500

Adjusted return on equity, % 24.4 22.0 30.3 31.0 30.4

Net profit for the year attributable to the shareholder's of

the Parent Company 277,206 195,769 215,160 172,296 151,459

Average equity attributable to the shareholder's of the

Parent Company

1,107,198 889,387 710,858 556,020 498,830

Adjusted return on loans to the public, % 2.9 2.7 3.9 4.5 5.4

Net profit for the year attributable to the shareholder's of

the Parent Company 277,206 195,769 215,160 172,296 151,459

Average loans to the public

9,397,367 7,209,114 5,472,503 3,802,757 2,822,786

Adjusted return on assets, % 2.3 2.1 3.0 3.3 4.1

Net profit for the year attributable to the shareholder's of

the Parent Company 277,206 195,769 215,160 172,296 151,459

Average total assets

11,797,131 9,335,847 7,256,168 5,269,319 3,718,338

In order for the five-year overview to reflect a true and fair view, comparative figures for 2017-2019 relates to the Group with TF Bank AB as Parent Company.

Calculation of capital ratios is shown in Note 33

The average has been calculated as opening balans plus closing balance, divided by two. In order for the key figures in 2020 to reflect a true and fair view, the

Group’s opening balance for year 2020 has been used.

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

RECONCILIATION TABLES

70 • Annual Report 2021 • 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 2021 31 Dec 2020

Available own funds

1 Common Equity Tier 1 capital (CET1) 1,237,589 973,823

2 Tier 1 capital 200,000 100,000

3 Total capital 198,042 245,053

Risk-weighted exposure amount

4 Total risk exposure amount 10,079,383 7,582,576

Capital ratios (% of risk-weighted exposure amount)

5 Common Equity Tier 1 ratio, % 12.3 12.8

6 Tier 1 ratio, % 14.3 14.2

7 Total capital ratio, % 16.2 17.4

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, % 0.8 1.0

EU 7b - of which, to be made up of CET1 capital, % 0.5 0.6

EU 7c - of which, to be made up of Tier 1 capital, % 0.6 0.7

EU 7d Total SREP own funds requirements, % 8.8 9.0

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, % 0.3 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, % 2.8 2.8

EU 11a Overall capital requirements, % 11.6 11.8

12 CET1 available after meeting the total SREP own funds requirements, % 7.3 7.7

Leverage ratio

13 Total exposure measure 13,751,040 10,517,624

14 Leverage ratio, % 10.5 10.2

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) 1,537,966 1,131,705

EU 16a Cash outflows – Total weighted value 812,403 686,291

EU 16b Cash inflows – Total weighted value 376,288 482,853

16 Total net cash outflows (adjusted value) 436,115 203,438

17 Liquidity coverage ratio, % 353 556

Net Stable Funding Ratio

18 Total available stable funding 12,111,551 9,288,295

19 Total required stable funding 9,460,775 6,946,774

20 NSFR ratio, % 128 134

TF Bank AB (publ) • Annual Report 2021 • 71

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 2022

John Brehmer

Chairman

Mari Thjømøe Bertil Larsson

Charlotta Björnberg- Paul Michael Lindengren Sara Mindus

Mattias Carlsson

CEO

We submitted our Auditor’s Report on 17 March 2022.

KPMG AB

Dan Beitner

Authorised Public Accountant

Auditor in Charge

ASSURANCE BY THE BOARD OF DIRECTORS

AND THE CEO

72 • Annual Report 2021 • 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 2021, except for the corporate gover-

nance statement on pages 77-87 and the sustainability

report on pages 89-99. The annual accounts of the

company are included on pages 11-71 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 position

of TF Bank AB (publ) as of 31 December 2021 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 opini-

ons do not cover the corporate governance statement

on pages 77-87 and sustainability report on pages

89-99. 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.

Other Matter

The audit of the annual accounts for year 2020 was

performed by another auditor who submitted an

auditor´s report dated 18 March 2021, with unmodified

opinions in the Report on the annual accounts.

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 Note 17 and accounting principles on pages 29-33

in the annual account for detailed information 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 10,872 (7,922) million on 31

December 2021, corresponding

to 81 (78) % of the entity’s total

assets. The entity’s reserves for

loan losses in the loan portfolio

amounted to SEK 485 (393)

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 provisions 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 1-10 and

101-104. The Board of Directors and the Managing

Director are responsible for this other information.

AUDITOR’S REPORT

TF Bank AB (publ) • Annual Report 2021 • 73

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

information.

In connection with our audit of the annual accounts, our

responsibility is to read the information identified above

and consider whether the information is materially

inconsistent with the annual accounts. In this procedure

we also take into account our knowledge otherwise

obtained in the audit and assess whether the informa-

tion 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 responsible for such inter-

nal 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 conti-

nue as a going concern. They disclose, as applicable,

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 liqui-

date 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 exer-

cise professional judgment and maintain professional

scepticism 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, ba-

sed 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 uncertainty 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 inadequate, to

modify our opinion about the annual accounts. Our

conclusions are based on the audit evidence obtai-

ned up to the date of our auditor’s report. However,

future events or conditions may cause the compa-

ny to cease to continue as a going concern.

• Evaluate the overall presentation, structure and con-

tent of the annual accounts, including the disclosu-

res, 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

ethical requirements regarding independence, and

74 • Annual Report 2021 • TF Bank AB (publ)

to communicate with them all relationships and other

matters that may reasonably be thought to bear on

our independence, and where applicable, measures

that have been taken to eliminate the threats or rela-

ted 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 2021 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 the-

reby our opinion about this, is to assess with reasonable

degree of assurance whether the proposal is in accor-

dance with the Companies Act.

Reasonable assurance is a high level of assurance, but

is not a guarantee that an audit conducted in accor-

dance with generally accepted auditing standards in

Sweden will always detect actions or omissions that

can give rise to liability to the company, or that the pro-

posed 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 accep-

ted auditing standards in Sweden, we exercise profes-

sional judgment and maintain professional scepticism

throughout the audit. The examination of the adminis-

tration and the proposed appropriations of the compa-

ny’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 ex-

amination 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

TF Bank AB (publ) • Annual Report 2021 • 75

opinion on the Board of Directors’ proposed appropri-

ations of the company’s profit or loss we examined the

Board of Directors’ reasoned statement and a selection

of supporting evidence in order to be able to assess

whether the proposal is in accordance with the Com-

panies 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 2021.

Our examination and our opinion relate only to the

statutory requirements.

In our opinion, the Esef report NxthWnQLbDWCmt0=

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 Auditors’

responsibility 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 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 Ma-

naging Director determine is necessary to prepare the

Esef report without material misstatements, whether

due to fraud or error.

76 • Annual Report 2021 • 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 prepa-

red 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 accor-

ding to RevR 18 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, individually or in aggrega-

te, 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 prepared

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 evaluation of the appropriateness

and reasonableness of the assumptions made by the Board of Directors and the Managing Director.

The procedures mainly include a technical validation of the Esef report, i.e. if the file containing the Esef report me-

ets the technical specification set out in the Commission’s Delegated Regulation (EU) 2019/815 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 the 4 May 2021. KPMG AB or auditors operating at KPMG AB have been the company’s auditor

since 2021.

Stockholm 17 March 2022

KPMG AB

Dan Beitner

Authorised Public Accountant

Auditor in Charge

TF Bank AB (publ) • Annual Report 2021 • 77TF Bank AB (publ) • Annual Report 2021 • 77

CORPORATE GOVERNANCE REPORT

78 • Annual Report 2021 • 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 and Austria

in accordance with the Swedish Banking and Financ-

ing Business Act. The Bank also has four small service

subsidiaries: TFB Service UAB, TFB Service SIA och

TFB Service GmbH and TFB Service AB. 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

Financial Reporting Standards. TF Bank also adheres

to a number of regulations and general guidelines

issues by the Swedish Financial Supervisory and the

European Banking Authority (EBA). TF Bank has pre-

pared this Corporate Governance Report in accord-

ance with the Annual Accounts Act and the Code.

OWNERSHIP

Ownership structure 31 December 2021:

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 2,703,525 12.57

4 Proventus Aktiebolag 1,109,300 5.16

5 Jack Weil 900,200 4.19

6 Nordnet Pensionsförsäkringar AB 736,745 3.43

7 Nordea Nordic Small Cap Fund 510,264 2.37

8 Merizole Holding LTD 507,495 2.36

9 Carnegie Micro Cap 388,009 1.80

10 Avanza Pension 299,971 1.40

11 Skandia Småbolag Sverige 275,000 1.28

12 Pareto Investment Fund 237,000 1.10

13 Futur Pension 217,671 1.01

14 BNY Mellon NA 197,197 0.92

15 Ålandsbanken AB 190,390 0.89

16 CBLDN-EQ Nordic Small Cap Fund 170,000 0.79

17 Anders Klein 165,000 0.77

18 Six Sis AG 159,433 0.74

19 AB Monarda 156,000 0.73

20 Mattias Carlsson 154,432 0.72

Other shareholders 2,665,702 12.39

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 2021 • 79

CORPORATE GOVERNANCE AND RISK MANAGEMENT IN TF BANK

Internal Audit

Chief

Compliance

Officer

CEO

CISO

Operations

Finance

TF Bank AB Board of Directors

AML

DPO

Dep CEO

CFO/IR

Head of

Credits

Head of

Ecommerce

Solutions

Deposit

Credit

analysis

Credit

Workflow

COO/Head of

Consumer

Lending

Finland

Baltics

Norway

Sweden

Poland

Austria

3rd line of

defense

2rd line of

defense

1st line of

defense

Annual General MeetingExternal Audit

Head of

Credit Cards

Germany

Norway

Finland

Baltics

Norway

Sweden

Poland

Denmark

Chief Risk

Officer

Part of executive management.

80 • Annual Report 2021 • 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 SIA 40203015782 100% Full/full

TFB Service UAB 304785170 100% Full/full

TFB Service GmbH HRB 208869 B 100% Full/full

TFB Service AB 559310-4697 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-mak-

ing 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.

Branch Finland

TF Bank AB

Branch Norway

TFB Service SIA TFB Service UAB

TFB Service

GmbH

Branch Poland

TFB Service AB

Branch Estonia Branch Latvia

Annual General Meeting 2021

The 2021 Annual General Meeting (AGM) was held

on 4 May 2021. Due to the Covid-19-pandemic and

the restrictions that had been introduced to limit the

spread of infection, 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 21,500

TSEK, corresponding to SEK 1.00 per share. It was fur-

ther resolved that 891,943 TSEK should be balanced

into new accounts. CEO and the Board of Directors

were discharged from liability for the fiscal year 2020.

The AGM resolved, for the period up to the end of the

next AGM, to re-elect John Brehmer, Bertil Larsson, Sara

Mindus, Charlotta Björnberg-Paul and Mari Thjømøe,

as well as new election of Michael Lindengren as

members of the Board of Directors. Tone Bjørnov left

the Board of Directors. John Brehmer was elected

as Chairman of the Board. The AGM resolved on the

new-election of 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.

TF Bank AB (publ) • Annual Report 2021 • 81

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 qualifi-

cations.

The Nomination Committee ahead of the AGM in 2021

comprises:

• Paul Källenius, representing TFB Holding AB

• Erik Selin, representing Erik Selin Fastigheter AB

• Jonas Weil, representing Proventus Aktiebolag

• Paul Källenius has been appointed Chairman of the

Nomination Committee

Tiberon AB declined to be represented in the Nomi-

nation Committee. However, Tiberon AB’s board mem-

ber 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 Company’s

website on 27 October 2021.

BOARD OF DIRECTORS

The Board of Directors has the ultimate responsi-

bility for TF Bank’s organisation and management.

In addition, 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 (see below). The duties

and work of the Board of TF Bank as a regulated com-

pany 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,

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 is-

sued 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 2021. It was also resolved to authorise the Board

of Directors, to decide on the acquisition and transfer

of own shares on or outside Nasdaq Stockholm or in

accordance with an offer made to all shareholders.

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 2021 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 25 persons), condi-

tional upon that that certain terms are met, may receive

up to 62,000 shares in TF Bank provided that they have

acquired a corresponding number of shares.

The AGM resolved to amend the articles of association

in accordance with the board of directors’ proposal,

with the purpose of, i.a., facilitating postal voting at fu-

ture general meetings. The Articles of Association were

also adopted to amendments in laws. . The full Articles

of Association as well as minutes and information

regarding the 2021 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 rep-

resenting 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 2021.

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

82 • Annual Report 2021 • TF Bank AB (publ)

Board attendance was as follows:

Board member Independent of

major shareholders

Attend-

ance

John Brehmer (Chairman) No 11 of 11

Bertil Larsson Yes 11 of 11

Tone Bjørnov (resigned at the

AGM) Yes 4 of 11

Charlotta Björnberg-Paul Yes 11 of 11

Mari Thjømøe Yes 11 of 11

Sara Mindus Yes 11 of 11

Michael Lindengren (new elected

at the AGM) Yes 7 of 11

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 Direc-

tors cannot be delegated but the Board of Directors

is assisted by three committees: The Remuneration

Committee, the Audit Committee and Risk and

Compliance Committee.

Remuneration Committee

The Remuneration Committee shall meet twice a year

and its main role is to support the Board in its work to

ensure that risks associated with TF Bank’s remuner-

ation 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 ap-

plicable laws and regulations. The Board of Directors

decides on remuneration 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.

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

with by the Board at each ordinary meeting and the

division of duties within the Board, with special com-

mitments for the Chairman. The rules of procedure

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 101.

Significant matters

In 2021, the Board held eleven meetings, of which

four were ordinary meetings, five were additional/

telephone meetings and two meetings were held by

correspondence.

Date Significant matters raised at the board meetings

2021-01-27 Year-end report 2020

2021-03-18 The adoption of the Annual Report for 2021 and

Pillar 3 report

2021-03-25 Notice to attend the AGM on May 4 2021

2021-04-18 Interim report Q1 2021 and resolution to publish

certain key figures on a monthly basis

2021-05-04

(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

2021-06-14 ICAAP 2020 and updating policies

2021-07-12 Interim report Q2 2021

2021-09-22 Resolved on a pilot project concerning Consumer

Lending in Denmark and issue Additional Tier 1

capital.

2021-10-17 Interim report Q3 2021 and resolution on financial

targets

2021-11-16 Issuing Additional Tier 1 bonds up to SEK 150

million

2021-12-17 Approval of budget 2022, Updates of policies,

guidelines and instructions. Resolution on annual

plan 2022 and reviewing risk assessment of risk

control and compliance

TF Bank AB (publ) • Annual Report 2021 • 83

The remuneration policy stipulates that remuneration

and other benefits must be competitive in order to

promote TF Bank’s long-term interests and to discour-

age excessive risk-taking. A more detailed description

of remuneration paid in 2021 can be found on

TF Bank’s website: www.tfbankgroup.com.

In connection with the AGM, the Board of Directors

appointed the Remuneration Committee by re-election

of Bertil Larsson, John Brehmer and Charlotta

Björnberg-Paul.

All members of the Remuneration Committee have

been members of the Board.

Board member Bertil Larsson is Chairman of the

Remuneration Committee.

In 2021, the Remuneration Committee held two

minuted meetings. Attendance at Committee meet-

ings was as follows:

Board member Attendence

Bertil Larsson (Chairman) 2 of 2

John Brehmer 2 of 2

Charlotta Björnberg-Paul 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 information

about changes in current regulations as well as infor-

mation about the focus and scope of the audit, and to

discuss coordination of the external and internal audit

and the view of the Company’s risks. The Audit Com-

mittee shall also review and monitorthe impartiality

and independence of the auditor, paying particular

attention to whether the auditor provides the Compa-

ny with services other than audit services.

The Audit Committee shall also evaluate the work

carried out by the auditor and inform the Company’s

Nomination Committee of the outcome of the eval-

uation 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 oth-

erwise 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 Mari

Thjømøe and John Brehmer and by new election of

Michael Lindengren.

All members of the Audit Committee have been

members of the Board.

Board member Michael Lindengren took over as Cha-

riman of the Audit Committee and Tone Bjørnov was

dismissed from the Audit Committee.

In 2021, the Audit Committee held seven minuted

meetings. Attendance at Committee meetings was as

follows:

Board member Attendance

Michael Lindengren (Chairman after the AGM) 4 of 7

John Brehmer 7 of 7

Mari Thjømøe 7 of 7

Tone Bjørnov (Chairman prior the AGM) 3 of 7

CFO and Head of Group Accounting have participated

in all meetings, CEO, Head of Internal Control and

auditor‐in‐charge from PwC/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 ad-

vise the board on the Company’s overall current and

future risk appetite and risk strategy and assist the

Board when it monitors the executive management’s

implementation 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.

As the Risk and Compliance Committee has been

newly established, in 2021, there have only been three

minuted meetings. The participation in the committee

work has been as follows:

84 • Annual Report 2021 • TF Bank AB (publ)

Board member Attendance

Sara Mindus (Chairman) 3 of 3

John Brehmer 3 of 3

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 2021 AGM resolved on the following remuneration

for Board members:

• Chairman of the Board SEK 700,000,

• Other members of the Board SEK 350,000,

• Chairman of the Audit Committee SEK 100,000,

• Other members of the Audit Committee SEK 50 000,

• Chairman of the Remuneration Committee SEK 50 000,

• Chairman of the Risk and Compliance Committee

SEK 100,000,

• Other members of the Remuneration Committee

SEK 30 000.

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 meth-

ods, 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 2021 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, 2021, TF Bank’s Executive

Management comprised of Mattias Carlsson (CEO),

Mikael Meomuttel (CFO) and Espen Johannesen (Chief

Operating Officer).

Further information about Executive Management

representatives is available at www.tfbankgroup.com

and on page 102.

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 has 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 plat-

form with a high degree of automation. Deposit and

lending activities are conducted in Sweden, Finland,

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

Germany and Austria through branch or cross-border

banking. From 2020 the operations are divided into

three segments: Consumer Lending, Ecommerce

Solutions and Credit Cards.

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 com-

prise 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 remuner-

ation 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

TF Bank AB (publ) • Annual Report 2021 • 85

shown to be sustainable in the long-term and on that

the Bank’s position has not declined substantially. If

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 maxi-

mum of 25 per cent of pension-based income.

Regarding employment conditions that are governed

by rules other that Swedish, in so far as pension ben-

efits and other benefits are concerned, appropriate

adjustments are made to comply with such mandato-

ry 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 termina-

tion 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 devel-

opment 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, respec-

tively. The Board of Directors are responsible for such

an assessment in respect of variable cash remuner-

ation 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 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 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 significant

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 remuner-

ation senior executives, as well as current remunera-

tion 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 sustainability,

or to ensure the Bank’s financial viability.

Commission-based compensation for senior

executives

In 2021, commission-based compensation amounted

to SEK 1,136 thousand (318). Additional commis-

sion-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

86 • Annual Report 2021 • TF Bank AB (publ)

of Procedure, instructions for the Audit Committee and

Remuneration Committee, instructions for the CEO

and financial reporting to the Board, insider policy, risk

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 2021, 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 12.

INTERNAL CONTROL AND RISK MANAGEMENT

First line of defence

TF Bank’s activities primarily comprise three business

areas; Consumer Lending, Ecommerce Solutions and

Credit Cards, and four company-wide support func-

tions, Credits, Finance, Operations 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, 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, eval-

uate and report to the Executive Management and

the Board of Directors regarding risks and compli-

ance. 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 Compli-

ance function in accordance with applicable laws

and regulations in the countries where TF Bank has

operations, as well as the Swedish Financial Supervi-

sory Authority’s (or equivalent) regulations and general

guidelines on governance and control in credit insti-

tutions. The Compliance function is organised under

the CEO and reports directly to the Board of Direc-

tors 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 Supervi-

sory Authority’s regulations and general guidelines on

governance, risk management and control in credit

institutions as well as applicable guidelines and rec-

ommendations 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 Company’s capital

position, liquidity risk, credit risk, market risk and oper-

ational risk, including any incidents.

TF Bank’s Chief Risk Officer is Magnus Löfgren.

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 aggregate

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 devel-

opment of risk management processes, for instance

by providing methods for identification, measure-

ment, 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 Instruc-

tion for classification, marking and handling of infor-

mation and IT systems. TF Bank’s Chief Information

Security Officer (CISO) is Navaz Sumar.

TF Bank AB (publ) • Annual Report 2021 • 87

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 structure.

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 recommenda-

tions. In 2021, the audit performed by the internal audit

function in addition to the mandatory areas included

TF Bank’s handling of the requirements regarding its

deposit system, handling of the regulations regarding

compensation systems, measures against money

laundering and information security.

The Board of Directors issues and revises all the poli-

cies that form the framework for the business at least

annually.

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

and TFB Service AB are 100% owned by TF Bank. All

companies are wholly owned subsidiaries and as the

sole or majority shareholder, 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 compa-

ny’s AGM.

THE BOARD OF DIRECTORS’ DESCRIPTION OF

INTERNAL CONTROL AND RISK MANAGEMENT RE-

LATING 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 function 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 consists

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.

88 • Annual Report 2021 • TF Bank AB (publ)

THE AUDITOR’S EXAMINATION OF THE CORPORATE GOVERNANCE STATEMENT

The Board of Directors is responsible for that the corporate governance statement on pages 77-87 has been

prepared in accordance with the Annual Accounts Act.

Our examination of the corporate governance statement is conducted in accordance with FAR´s auditing

standard RevR 16 The auditor´s examination of the corporate governance statement. This means that our

examination of the corporate governance statement 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 opinions.

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.

KPMG AB, Box 382, 101 27, Stockholm, was appointed auditor of TF Bank AB (publ) by the general meeting of

the shareholders on the 4 May 2021. KPMG AB or auditors operating at KPMG AB have been the company’s

auditor since 2021.

Stockholm 17 March 2022

KPMG AB

Dan Beitner

Authorised Public Accountant

Auditor in Charge

TF Bank AB (publ) • Annual Report 2021 • 89

SUSTAINABILITY REPORT

TF Bank AB (publ) • Annual Report 2021 • 89

90 • Annual Report 2021 • TF Bank AB (publ)

For TF Bank, sustainability is about conducting a responsible business where our intention is to have as limited

negative impact on the environment and people as possible, and which creates sustainable values for our stake-

holders. Sustainability for us includes environmental, social and financial impact. As a bank, employer and listed

company, we have a responsibility and an opportunity to impact society positively by pursuing the sustainability

issues that are most important to us. In December 2020, TF Bank’s Board of Directors adopted a new sustainabili-

ty 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 2021. 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.TF Bank’s activities are concentrated in the Nordic region and other coun-

tries around the Baltic Sea as well as Austria. Our marketing strategy consists of providing easily available,

straight-forward savings and credit products without complex terms and conditions and with high availability.

The process is as digital and automated as possible, making us accessible while limiting our environmental

impact. Within customer service, the Bank considers it important to have the capacity to offer personal service

where this is required. Employees who are in direct contact with customers are largely based on site in the

ten countries where TF Bank has operations, while central functions are based at the head office in Borås in

Sweden. The average number of employees in the Bank amounts to 236 (187).

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.

Human rights

TF Bank supports the UN’s International Declaration of Human Rights and associated conventions. In 2022, our

intention is to sign the UN Global Compact.

Economic value

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.

SUSTAINABILITY REPORT

Suppliers and

business partners

43%

Society

19%

Employees

21%

Shareholders

Customers

13%

TF Bank AB (publ) • Annual Report 2021 • 91

Risks relating to sustainability

All our risk categories can include a sustainability perspective. The Board of Directors has the ultimate responsi-

bility 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 sustainability 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 reviews each new supplier based on different

criteria. Suppliers must accept TF Bank’s supplier code

of conduct, with a yearly follow-up.

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 has well-established and high-quality guidelines

and routines for information security, and uses security

measures such as SSL encryption, backup and firewalls.

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..

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 pf dialogue / channels Key issues 2021

Customers (existing and new) - Credit granting process

- Customer service contacts

- Marketing

- Credit assessment

- Credit cards offering in Germany

Capital markets (sharehol-

ders, investors, analysts)

- 1-1 meetings

- AGM

- Press releases

- Interim reports

- Website

- Development for credit cards and e-commerce solutions

- Impact from Covid-19

- Impact from increasing inflation/increased rates

Employees - Intranet

- Employee survey

- Development talks

- Code of conduct

- Handling of Covid-19

- Distance working

92 • Annual Report 2021 • TF Bank AB (publ)

Materiality analysis

TF Bank’s materiality analysis comprises an identification of the most material sustainability areas for the

operations.

Sustainability program

In December 2020, TF Bank’s Board of Directors adopted a long-term new 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 Develop-

ment 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

TF Bank AB (publ) • Annual Report 2021 • 93

TF Bank’s focus areas in sustainability

TF Bank structures its sustainability work within four focus areas. The areas have been selected by the Board

based on what is most relevant given our business and the risks it entails. The most significant risks that have

been identified within each focus area are described below.

Area Why? 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 corpo-

rate governance are basic prerequisites

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 foot-

print 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 2021 2020

Loan loss ratio (%) 2.8 3.8

Income from late payments (%) 6.9 6.1

Number of loan applications 7,043,040 5,519,888

- Of which denied 3,485,867 2,652,344

Average loan size (SEK) 36,542 42,766

Share of markets with local customer service (%) 80 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, but growth must never take place at the expense of higher risk. Thus, the ambition is

for the Bank’s lending growth to be higher than the credit loss growth. Our goal is also to reduce the loan loss

ratio annually. In 2021, loan losses decreased by 4 percent. Excluding the additional loan loss provision of

SEK 30 million related to the uncertain macroeconomic situation during the initial phase of the pandemic in

2020, loan losses increased by 7 percent during 2021. At the same time, the loan loss ration decreased to 2.8

percent as a result of improved credit quality in the loan portfolio.

94 • Annual Report 2021 • TF Bank AB (publ)

Sub-area 2: Customer protection

A customer in TF Bank must not have a prior record of late payments and must have flexibility in their finances,

which we ensure through our “left-to-live-on” calculation. Our customers must also not have a too high level

of indebtedness. Additionally, TF Bank’s credits are characterised by relatively low loan amounts and short

repayment periods, which increases the probability 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 the

facility to take out insurance against suspension of payments due to unemployment or illness.

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.

Sub-area 3: Financial inclusion

Responsible lending is a necessary and important product category and function in a well-functioning eco-

nomy. 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 auto-

matic processes with manual processing. By providing local customer service, customers have the opportuni-

ty to get in touch and receive support with their matters in the local language.

Business ethics and governance

KPIs 2021 2020

Number of customer complaints 21 18

Number of reported GDPR breaches 0 0

Number of reports to whistle-blower function 0 0

Tax payments (SEK thousand) 107,990 86,970

Sub-area 1: Anti-corruption, AML and prevention of terror financing

At TF Bank, 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-corruption work is based on the Bank’s Code of Conduct, which encompasses employees at every

level. Our Compliance function ensures that the Code of Conduct is reviewed and updated every year, and

that the updated Code is shared with the Bank’s employees. In 2022, a special educational effort on the Code

of Conduct will be carried out. Furthermore, regular anti-corruption training is carried out to give employees

guidance on how to act in the best way if they experience uncertainty in a relationship or business relations-

hip. All in all, this contributes to an awareness among all employees that the work with anti-corruption is an

ongoing process.

Credit assessment

In 2021, we processed around 7.0 million loan applications (5.5), where about 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 difference economic conditions, has 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 custo-

mer’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.

TF Bank AB (publ) • Annual Report 2021 • 95

We work proactively to prevent TF Bank from being used for money laundering both to counteract this socie-

tal 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 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 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.

TF Bank has also adopted a Code of Conduct for suppliers. Suppliers must accept the code of conduct, or

alternatively provide their own code of conduct with a corresponding content, in order to be able to deliver

services to TF Bank. The Bank’s compliance department carries out an annual review of suppliers in relation to

the Code of Conduct.

Sub-area 2: Data security and customer integrity

TF Bank has well-established and high-quality guidelines and routines for information security, and uses secu-

rity measures such as SSL encryption, backup and firewalls.

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 per-

sons. 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 com-

pliance. 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 evalu-

ation 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 77-87.

Attractive employer

KPIs 2021 2020

Number of employees 236 187

- Of which women 126 99

- Share of women (%) 52 53

Share of female members of Board of Directors and executive management (%) 33 40

- In Board of Directors (%) 50 67

- In executive management (%) 0 0

- In extended management team (%) 16 -

Number of nationalities in Board of Directors 3 3

Average age of employees 35 34

Sick absence (%) 3.5 2.5

Staff turnover rate (%) 16.6 19.0

Number of part-time employed students 20 30

96 • Annual Report 2021 • TF Bank AB (publ)

Sub-area 1: Diversity and equality

TF Bank’s diversity policy has been adopted by the Board. At TF Bank, all people shall be treated with respect

and dignity in accordance with our business principles. TF Bank believes that people with different experien-

ces and perspectives are a crucial factor in creating the innovative climate required for long-term business

success. As a small company, we know that our success depends on the diversity and competence of our

employees.

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 busi-

ness-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.

TF Bank AB (publ) • Annual Report 2021 • 97

Since TF Bank was founded in 1987,

competence development has been

an important part of the business. One

of the Bank’s focus areas within sustai-

nability is to be an attractive employer.

TF Bank believes that the best way to

achieve this, is for talented employees

to develop and grow within the Bank.

Nadja Garrote, AML (Anti-Money Laun-

dering) officer, talks about her journey

within TF Bank.

Nadja Garrote started working at TF Bank in February

2019. In just over two years, she has developed and

advanced through four different positions within the

Bank.

- I was recommended to apply for a position in

Pre-collection by a friend who enjoyed working at

TF Bank. Only after four days, I got the chance to

work with customer service. In the autumn of 2020, I

received the offer to start a new role in Back Office.

Nadja is one of several employees who have deve-

loped within TF Bank and the business continues to

invest in its employees.

- At the beginning of 2021, I accepted my dream job

at the AML department. The job advertisement was

sent through internal channels a few weeks before

Christmas 2020. For long, I have had an interest in

AML and I never hesitated applying for the position.

Throughout the recruitment process, I received

support from various persons. Among others, from

my, now previous, boss who supported me and

pushed me to take this step in my career.

- The recruitment process was delayed and first after

the new year I received the answer that I got the

job. The tension was high and I was more nervous

than I had ever been before. When I finally got the

information, I was overjoyed. Being able to work with

AML feels like a milestone both in terms of career

and personality. It was therefore important for me to

share this with my friends and acquaintances on social

media.

A JOURNEY WITHIN TF BANK

After a few years with the Bank, Nadja has built up an

understanding of TF Bank as a company and become

part of the culture at the Bank. This is something that

TF Bank sees great value in and that the Bank wants

to take advantage of.

- The Bank is in an expansive phase and is constantly

evolving. No two weeks are the same, which makes

it so incredibly exciting to work here. Time flies when

having fun, and time really flies at TF Bank.

98 • Annual Report 2021 • TF Bank AB (publ)

Climate change

Sub-area 1: Reduce own climate impact

TF Bank has a limited direct impact on the environment and sees no significant risk in the environmental area,

but we still challenge ourselves to reduce our impact by, for example, minimising the number of business

travel. The indirect environmental impact occurs mainly through our suppliers’ energy use, especially regar-

ding server capacity. The Bank uses a cloud-based server solution that is considered more secure and is more

energy efficient than having own servers. The server hall used is powered by 100 % green electricity and is

environmentally certified according to ISO 14001.

As TF Bank’s operations are located in several countries, video conferencing opportunities have been prio-

ritised 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.

During spring 2022. TF Bank will assess the business’s CO2 emissions within scope 1 and scope 2, which will be

published on the company’s website.

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.

In Sweden and Finland, the majority of new lending takes place digitally via loan intermediation but is supple-

mented by targeted campaigns via letters.

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 room

for improvement regarding the use of e-invoices and invoices via e-mail to handle notices to our customers.

Our Norwegian and Baltic customers are almost exclusively sent e-invoices and invoices by e-mail, while the

majority of notices in Finland and Sweden are sent digitally.

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.

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, such as

solar panels at Bolindo.

TF Bank AB (publ) • Annual Report 2021 • 99

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

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.

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 43 students, 28 girls and 15 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 finances

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 has experienced 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.

100 • Annual Report 2021 • TF Bank AB (publ)

THE AUDITOR’S OPINION REGARDING THE STATUTORY SUSTAINABILITY REPORT

The Board of Directors is responsible for the sustainability report on pages 89-99, and that it is prepared in

accordance with the Annual Accounts Act.

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.

A statutory sustainability report has been prepared.

KPMG AB, Box 382, 101 27, Stockholm, was appointed auditor of TF Bank AB (publ) by the general meeting of

the shareholders on the 4 May 2021. KPMG AB or auditors operating at KPMG AB have been the company’s

auditor since 2021.

Stockholm 17 March 2022

KPMG AB

Dan Beitner

Authorised Public Accountant

Auditor in Charge

TF Bank AB (publ) • Annual Report 2021 • 101

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, Billington Process

Technology AS, ThjømøeKra-

nenAS.

Board member: Hafslund Eco

AS, FCG Fonder AB, Ice ASA,

Tryg A/S, Norconsult AS, Sin-

tef Eiendom Holding AS.

Holdings in Company: 9 850

Independent of the Company,

its management and major

shareholders.

CHARLOTTA BJÖRN-

BERG-PAUL

Board member since 2017.

Born: 1974

Education: M.Sc. Econ.

Hanken School of Economics,

Finland.

Current directorships:

Chairman: Saxo Oy

Board member: Mekalasi Oy,

Plastone Oy

Co-funder: Superskills

Entrepreneur: Anki Rugs

Holdings in Company: 0

Independent of the Company,

its management and major

shareholders.

BERTIL LARSSON

Board member since 2007.

Born: 1946

Current directorships:

Chairman: Minso Solutions AB,

Minso Holding AB, Aktiebola-

get Borås Tidning.

Board member: ConperaAB,

Tore G Wärenstams stiftelse,

Gota Media AB, BRF Asplyckan,

Kyrkesunds Båthamnsförening.

Holdings in Company: 5 000

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.

Holdings in Company: 22 500

Independent of the Company,

its management and major

shareholders.

Refers to directly or indirectly holdings as of December 31, 2021.

MICHAEL LINDENGREN

Board member since 2021.

Born: 1956

Education: Civilekonom (Han-

delshögskolan vid Göteborg

Universitet).

Current directorships:

Chairman: Acrap AB.

Deputy chairman: Tidaholms

Sparbank

Board member: Sparbanksstif-

telsen Sjuhärad, Sparbanken

Sjuhärad (publ) AB, Simplicity

AB.

Holdings in Company: 2 000

Independent of the Company,

its management and major

shareholders.

BOARD OF DIRECTORS

102 • Annual Report 2021 • 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: Hoist

Finance AB (Chairman), Tobis-

flöte Holding AB (Chairman),

Tronstad Consulting AB (Board

member), TFB Service AB

(Board member).

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:

Torhamnsskär Holding AB

(Chairman).

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.

Within the Bank since 2015

as CEO of BB Bank 2015-2020

(now branch Norway). More

than 10 year’s of experience in

consumer finance.

Holdings in Company: 45 198

Refers to directly or indirectly holdings as of December 31, 2021.

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 • 103

TF Bank AB (publ) • Annual Report 2021 • 103TF Bank AB (publ) • Annual Report 2021 • 103

CONTACT

Investor Relations

Mikael Meomuttel

Tel: +46 706 26 95 33

ir@tfbank.se

www.tfbankgroup.com

TF Bank AB (publ) • Annual Report 2021 • 103

TF Bank AB (publ)

PO Box 947, 501 10 Borås, Sweden

Tel.: +46 33 722 35 00

Email: ir@tfbank.se