Aktia Bank PLC Class A · OMXHEX:AKTIA
Aktia Bank PLC Class A — Q3 2019 Earnings Presentation
37 slides from Aktia Bank PLC Class A's earnings presentation, Oct 30, 2019
Slide 1: Aktia Q3 2019 Investor presentation
30 OCTOBER 2019 Aktia Q3 2019 Investor presentation Aktia Q3 2019 Investor Presentation 30 October 2019 1
Slide 2: 200 years of banking
200 years of banking 2017 strategy Aktia expands sales of emerging Aktia introduces the first completely concentrates on market government bond strategy to digital credit card in Finland individual wealth international markets management and Aktia Bank is listed on the financing main list of Nasdaq
Slide 3: 3 business areas organised into 2+1 reporting segments
3 business areas organised into 2+1 reporting segments Business areas Retail Banking Corporate Banking Asset in banking operations in banking operations Management Personal Banking Corporate Banking Asset Management Premium Banking Life Insurance Private Banking Reporting segments Banking Business A
Slide 4: Aktia in brief
Aktia in brief 2019 Appr. 280,000 151,756 37,000 EUR 600 million Private customers Aktia Wallet Shareholders Market cap application downloads 30,000 10.2 M 45% 55% Corporate and institutional Online banking logins Senior management gender distribution customers Rating Long-term Short-term Outlook bo
Slide 5: Key figures
Key figures 2018 210.1 143.0 0.69 Outlook: Total operating income, Operating Expenses, Comparable Despite the uncertainty of the EUR million EUR million cost-to-income ratio economic development, the +0% (210.3) -11% (160.7) +3% (0.71) comparable operating profit 2019 is expected to be approximately
Slide 6: Assets under management on highest level ever
Assets under management on highest level ever Asset Management Assets under management excluding custody (AuM) • Assets under management (AuM) reached EUR million its highest level ever and amounted to EUR 9,849 12,000 (8,353) million. 9,849 10,000 8,806 • The increase is related to both strong sale
Slide 7: Strong lending and high customer activity
Strong lending and high customer activity Banking Business • The growth in lending was still stable and acquisition of new customers was strong. • The demand on housing loans is still increasing but it seems to be stabilising slowly. • The intensive price competition in housing loans continued, espe
Slide 8: Structure of lending and deposits
Structure of lending and deposits September 30, 2019 Lending Deposits Total EUR 6,273 million Total EUR 4,116 million 1% 7% 10 % 19 % 12 % 77 % 74 % Households Corporates Households Corporates Housing associations Public entities and non-profit organisations Public entities and non-profit organisati
Slide 9: Responsibility in Aktia
Aktia Q3 2019 Investor presentation Responsibility in Aktia Aktia Q3 2019 Investor Presentation 30 October 2019 9
Slide 10: New responsibility programme
New responsibility programme In 2018 Aktia launched a new corporate responsibility Aktia’s corporate responsibility programme programme together with stakeholders. As a part of the programme we created an action plan for the responsibility programme for the coming 5-year period. Aktia reports every
Slide 11: Responsible investments in Aktia
Responsible investments in Aktia Cornerstones in our business Our view Our methods GHG emissions Initiatives and memberships Only by considering all • Exclusion We calculate and report the material aspects regarding • Norm-based screening carbon footprint of our equity the environment, society and •
Slide 12: Aktia Q3 2019
Aktia Q3 2019 Investor presentation Aktia Q3 2019 Aktia Q3 2019 Investor Presentation 30 October 2019 12
Slide 13: Financial summary Q3 and YTD
Financial summary Q3 and YTD EUR million 3Q2019 3Q2018 , % 1-9/2019 1-9/2018 , % Total operating income 52.9 55.4 -4% 166.2 162.4 2% Net interest income 19.6 21.0 -7% 58.2 65.2 -11% Net commission income 24.6 22.9 7% 71.3 73.0 -2% Net income from life insurance 6.8 5.5 25% 21.7 16.3 34% Other inco
Slide 14: The good underlying development of Aktia's business operations continued
The good underlying development of Aktia’s business operations continued Income mix Net interest income: EUR million +2% Net interest income decreased by 11% to EUR 58.2 million. Net interest income 180 from borrowing and lending increased 162.4 166.2 by 5% to EUR 54.8 million. 160 Net commission in
Slide 15: Operating income for Asset Management increased by 20%
Operating income for Asset Management increased by 20% Operating income per segment EUR million +2% 180 162.4 166.2 160 0% 140 120 98.3 98.7 100 +20% 80 -2% 60 48.8 40.6 40 24.9 24.2 20 0 -1.4 -5.5 -20 Banking Business Asset Group Functions Other & Total operating Management Eliminations income 1-9/
Slide 16: Total cost level is unchanged
Total cost level is unchanged Operating expenses Staff costs: EUR million The increase in staff costs was mainly related to somewhat higher costs for the AktiaUna 0 programme and phasing of holiday pay reserve. The ongoing staff costs were approximately on -9.4 the same level as last year. -20 -14.6
Slide 17: Comparable operating profit decreased by 11%
Comparable operating profit decreased by 11% Comparable operating profit per segment Banking Business: EUR million Solid development in lending. The interest -7% income from Aktia’s TLTRO financing 70 -11% programme amounted to EUR 1.2 (3.1) million. 59.5 Impairments on credits and other commitments
Slide 18: The debt investment case
Aktia Q3 2019 Investor presentation The debt investment case Aktia Q3 2019 Investor Presentation 30 October 2019 18
Slide 19: CET1 on a solid level
CET1 on a solid level Capital adequacy and capital requirement • Aktia’s Common Equity Tier 1 (CET1) Capital is at a good level at 15.6% Capital requirement % (2Q19 16.4%). CET1 % 8.0% • Total Capital Ratio after successful Tier 2 issue is 20.0% (2Q19 18.6%) Pillar 1 min req 4.5% • Target for CET 1
Slide 20: Prudent and low-risk lending policy
Prudent and low-risk lending policy Low long-term trend in non-performing loans Aktia Bank operates under strict origination criteria: ECL (IFRS 9) • Identification of the customer mandatory (KYC). (EUR million) Stage 1 Stage 2 Stage 3 • Responsible lending: customer ability to pay stress tested. ≤
Slide 21: High-quality liquidity portfolio
High-quality liquidity portfolio The liquidity portfolio consists The Liquidity Coverage ratio (LCR) was 133%. of high-quality assets that can be used to meet liquidity Total Liquidity Sept 30, June 30, 2% portfolio 2019 2019 requirements in stressed EUR million 1,410 1,478 situations. The unencumbe
Slide 22: Sound funding profile
Sound funding profile Customers deposits and covered bonds dominate but year ahead will bring in substantial senior refinancing interest. Total 7,294 EUR million Redemptions Millions 5% 1,000 3% 900 13 % MEUR 917 800 700 600 500 400 56 % 300 MEUR 4,116 200 22 % MEUR 1,632 100 0 2020 2021 2022 2023 2
Slide 23: Aktia Bank as covered bond issuer
Aktia Bank as covered bond issuer Aktia Bank operates under • The Aktia Bank mortgage loan portfolio is of very high quality: the legislation as mortgage • Only prime residential mortgage loans bank (Act on Mortgage • Collateral located in Finland Credit Bank Operations, • Low average LTV MCBA 688/2
Slide 24: Cover pools
Cover pools Lappi 3Q 2019 COVER POOL 2 COVER POOL 1 Pohjois-Pohjanmaa Total asset pool EUR 2,136 million EUR 172 million (No substitute assets) 2% No of loans / 35,448 / EUR 60,256 2,374 / EUR 72,482 average loan balance Kainuu Types of loans First ranking residential First ranking residential mortg
Slide 25: Finland − growing but very export driven economy
Aktia Q3 2019 Investor presentation Finland − growing but very export driven economy Aktia Q3 2019 Investor Presentation 30 October 2019 25
Slide 26: The Finnish Economy
The Finnish Economy Key facts about Finland • Member of EU and Euro area • Population: 5.5 million • Area: 338,430 sq. Km • GDP per capita EUR 42,502 (2018) Credit ratings: • Aa1 (stable) / AA+ (stable) / AA+ (stable) Aktia Q3 2019 Investor Presentation 30 October 2019 26
Slide 27: The Finnish Economy: Growth continues, but weaker
The Finnish Economy Growth continues, but weaker Aktia Q3 2019 Investor Presentation 30 October 2019 27
Slide 28: The Finnish Economy
The Finnish Economy Aktia Q3 2019 Investor Presentation 30 October 2019 28
Slide 29: Macroeconomic environment
Macroeconomic environment Worrying environment Aktia Q3 2019 Investor Presentation 30 October 2019 29
Slide 30: Finnish housing market
Finnish housing market Solid and stable market, a slowdown in growth projected Aktia Q3 2019 Investor Presentation 30 October 2019 30
Slide 31: Going forward
Aktia Q3 2019 Investor presentation Going forward Aktia Q3 2019 Investor Presentation 30 October 2019 31
Slide 32: Our three strategic priorities
Our three strategic priorities 2023 Win in asset management Acquire new customers in growing cities Drive operational efficiency to capitalise on our challenger position Banking & Insurance Aktia Q3 2019 Investor Presentation 30 October 2019 32
Slide 33: Long-term financial targets 2023
Long-term financial targets 2023 Comparable Return on Comparable Common Equity operating profit Equity (ROE) cost-to-income Tier 1 capital ratio EUR 100 million above 11% ratio under 0.60 (CET1) 1.5–3 percentage points over the regulatory requirements 1–9/2019: 1–9/2019: 1–9/2019: 1–9/2019: EUR 49.0
Slide 34: Continuous releases on the digital front
Continuous releases on the digital front Mobile banking is growing fast throughout our client base − 55% increase in mobile services during last 12 months • Increased control with real-time push notifications for card payments through Aktia Wallet • Possibility for biometric identification instead o
Slide 35: Appendices
Aktia Q3 2019 Investor presentation Appendices Aktia Q3 2019 Investor Presentation 30 October 2019 35
Slide 36: Award-winning Asset Management
Award-winning Asset Management Morningstar awards Lipper fund awards Best Fund House Fixed Income 2013, 2014, 2015, 2018, 2019 Overall Group Award: TOP 3 Fund House Fixed Income 2016, 2017 Small Company Fixed Income 2019 TOP 3 Fund House Overall 2019 Small Company 2017 Best Balanced Fund (Aktia Secu
Slide 37: The good bank. And a great asset manager.
The good bank. And a great asset manager.