Aktia Bank PLC Class A · OMXHEX:AKTIA
Aktia Bank PLC Class A — Debt Investor Presentation (2019)
28 slides from Aktia Bank PLC Class A's debt investor presentation, 2019
Slide 1: Debt Investor presentation 4Q2018
Debt Investor presentation 4Q2018 Timo Ruotsalainen Head of Treasury
Slide 2: Aktia Bank Plc Executive Summary
Aktia Bank Plc Executive Summary Retail bank with focus on growth areas in Finland Provides banking services to private customers, small and middle sized companies and institutional investors. Business supported by own branch network and digital services Households accounts for 78 % of the loan port
Slide 3: Aktia's 2018 in brief
Aktia’s 2018 in brief • A year of solid growth despite market challenges during the last quarter. • The total operating income was on the same level as the previous year and the operating expenses decreased by 11% in 2018. • The comparable operating profit increased by 9%. • The Board of Aktia Bank
Slide 4: Personal & Corporate Banking: Continuous high demand of mortgage loans
Personal & Corporate Banking: Continuous high demand of mortgage loans Loan book by sector • The demand for housing loans is still high but hard competition puts pressure on margins. • The 19% increase in the corporate business loan book 9.9% reflects both our growth efforts within the segment as we
Slide 5: Wealth Management: Strong growth in international markets
Wealth Management: Strong growth in international markets EUR million • Great success was reached during 10 000 Assets under management excluding custody 2018 with Nordic and European in Wealth Management (AuM) institutions ‒ the UI-Aktia 9 000 8,860 mutual fund capital was over 8 000 7,962 EUR 1.1
Slide 6: Financial targets 2022
Financial targets 2022 Comparable operating profit to approximately EUR 80 million 1–12/2018: EUR 65.4 million Comparable cost-to-income ratio to 0.61 1–12/2018 (comparable): 0.69 Return on Equity ROE to 9.7% 1–12/2018: 9.4% Common Equity Tier 1 capital ratio CET1 to 1.5–3 percentage points over reg
Slide 7: Priorities for the year 2019
Priorities for the year 2019 Operational excellence Reshape customer experience Sales 7
Slide 8: Financial overview
Financial overview 8
Slide 9: Operating income was burdened by unfavourable market development in last quarter
Operating income was burdened by the unfavourable market development during the last quarter of the year EUR million 4Q2018 4Q2017 , % 1-12/2018 1-12/2017 , % Total operating income 47.7 52.7 -9% 210.1 210.3 0% Net interest income 20.7 21.8 -5% 85.9 89.6 -4% Net commission income 22.6 23.7 -5% 95.
Slide 10: Good increase in net commission income regardless Q4 market turbulence
Income mix: Good increase in net commission income regardless Q4 market turbulence EUR million • Net interest income: Despite lower margins for 250 0% mortgage loans the average margin for the total loan book remained 210,1 210,3 stable. Volume growth for lending compensated for low margins in 200 m
Slide 11: The Group's cost efficiency improved further
Operating expenses: The Group's cost efficiency improved further • Staff costs: EUR million The staff costs decreased Other operating Total operating Staff costs IT expenses Depreciations expenses expenses considerably due to savings from the 0 restructuring in 2017 and a decrease in staff. -20 -12,
Slide 12: Solid development in profitability
Comparable operating profit per segment: Solid development in profitability EUR million +38% • Personal & Corporate Banking: 80 +9% Strong net commission income and implementation of the new core banking 67.6 system in 2017 as well as introduction of 65.4 a new business model and restructuring 59.9
Slide 13: Aktia – the debt investment case
Aktia – the debt investment case 13
Slide 14: CET1 on a solid level
Capital adequacy and Capital requirements: CET1 on a solid level • Aktia’s Common Equity Tier 1 (CET1) Capital is at a good Capital Requirement level at 17,5 % (18.0 % on 31 December 2017) • Target over time is to exceed the regulative requirement CET1 % 8.0% with 150-300 basis points Pillar 1 min r
Slide 15: Finnish households a key business driver
Structure of lending and deposits: Finnish households a key business driver Public entities and non-profit Public entities and non- organisations Housing profit organisations associations 4% 0,6 % 9.9 % Corporate Corporates s 11.6% 22 % Lending Deposits EUR 6 029 million EUR 3 963million (2017: 5 83
Slide 16: Prudent and low-risk lending policy
Stable long-term trend in non-performing loans: Prudent and low-risk lending policy Aktia Bank operates under strict ECL (IFRS 9) Stage 1 Stage 2 Stage 3 €mio origination criteria: ≤ 30 days 3,2 5,1 0,0 • Identification of the customer Households 2,9 5,1 0,0 mandatory (KYC) > 30 ≤ 90 0,0 18,1 0,1 •
Slide 17: High-quality liquidity portfolio
High-quality liquidity portfolio At the end of December 2018 the Bank Group’s liquidity buffer was approximately equivalent to the estimated outgoing cash flow of finance from the wholesale market for 21 months. The Liquidity Coverage ratio (LCR) was 134%. 31.12.2018 31.12.2017 EUR million 1 368 1 8
Slide 18: Sound funding profile
Sound funding profile Customers deposits and covered bonds dominate Debt maturity profile Subordinated debt 3% REPOs & ECB EUR million 8% 800 Senior debt 600 MEUR 794 11% Customer 400 EUR 7,130 deposits million MEUR 3 963 56% 200 Covered bonds MEUR 1,666 23% 0 2019 2020 2021 2022 2023-> Covered Bond
Slide 19: Aktia Bank as covered bond issuer
Aktia Bank as covered bond issuer • The Aktia Bank mortgage loan portfolio is of very high quality: ✓ Only prime residential mortgage loans ✓ Collateral located in Finland ✓ Low average LTV Aktia Bank operates under the • Aktia Bank covered bonds are CRR & UCITS, ECB repo and legislation as mortgage
Slide 20: Cover pools
Cover pools 4Q 2018 Cover Pool 2 Cover Pool 1 Total asset pool EUR 2,073 million EUR 191 million (No substitute assets) No of loans / average loan 34,820 / EUR 59,523 2,540 / EUR 75,369 balance First ranking residential mortgages First ranking residential mortgages Types of loans and pledges of shar
Slide 21: The Finnish Economy
The Finnish Economy Strong but very export driven Economy 21
Slide 22: The Finnish Economy: Export driven growth
The Finnish Economy Export driven growth Key facts about Finland • Member of EU and Euro area • Population: 5.5 million • Area: 338 430 sq. km • GDP per capita EUR 38 959 (2016) • Credit ratings: Aa1 (stable) / AA+ (stable) / AA+ (stable) 21
Slide 23: The Finnish Economy
The Finnish Economy Growth continues, but weaker 22
Slide 24: The Finnish Economy
The Finnish Economy Employment rate, 15-64 year olds 80 7 78 ” 76 8 ™ 13 2 n 0 6 68 er 66 85 Private debt, % of GDP 225 A/a al WA Q S| e SraSaaes ZN aw ™N [Finland i fi \ ~~ DA al 2001 2002 2008 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 ‘Sources: Aktia and
Slide 25: Macroeconomic environment
Macroeconomic environment Worrying environment. 24
Slide 26: Finnish housing market
Finnish housing market Solid and stable market, a slowdown in growth prjected 25
Slide 27: Courageously. Skilfully. Together.
Courageously. Skilfully. Together.
Slide 28: Contacts and additional information
28 Contacts and additional information Timo Ruotsalainen Outi Henriksson Head of Treasury CFO Tel. +358 10 247 7211 Tel. +358 10 247 6236 [email protected] [email protected] Debt investor information: http://www.aktia.com/en/velkasijoittajat (website) http://www.aktia.com/en/julkaisu