Aktia Bank PLC Class A · OMXHEX:AKTIA
Aktia Bank PLC Class A — Debt Investor Presentation (November 2021)
41 slides from Aktia Bank PLC Class A's debt investor presentation, Nov 4, 2021
Slide 1: Q3 Debt investor presentation
4 NOVEMBER 2021 Q3 Debt investor presentation
Slide 2: Continued good performance in all business areas
Continued good performance in all business areas EUR million 3Q2021 3Q2020 % • Good net interest income Total operating income 67.1 49.4 36% • Net commission income also at a very good level Net interest income 23.1 20.0 16% • Strong net income from life insurance was Net commission income 33.5 24.
Slide 3: Comparable operating profit 2017–3Q2021
Comparable operating profit 2017–3Q2021 EUR million 80 70 68.2 66.7 65.4 59.9 60 55.1 Q3 23.8 50 Q4 19.8 40 30 Q2 26.0 Q3 16.0 20 10 Q2 16.5 Q1 16.9 0 Q1 2.8 2017 2018 2019 2020 2021 Aktia Q3 2021 Debt investor presentation 4 November 2021 3
Slide 4: Asset Management
Asset Management • Integration work continued in Q3 and proceeded according to plans and timetable • The organisational structure of Aktia’s asset management was completed during Q3 • Customer service models merged, and piloting projects initiated during Q3 • Financing of investments well received b
Slide 5: Assets under Management
Assets under Management AuM excluding custody EUR million • Net subscriptions positive during Q3 16,000 15,582 15,581 14,000 • Volatility of the equity 12,000 market and the 9,853 10,447 10,379 10,000 nervousness of investors 8,353 weighed the changes in 7,628 8,000 5,597 6,235 market values 6,000 4
Slide 6: Banking Business
Banking Business • Growth in loan book continues • Loan margins from corporate customers continued to increase during Q3 • Goal not to increase volume or gain market share as such, we hold strong focus on profitability and good quality of the credit portfolio • Aktia and Finnair have agreed on co-op
Slide 7: Life Insurance
Life Insurance • The demand for risk life insurances continued to increase, particularly the sales of critical illness insurances developed well • Co-operation with Finlands Företagarskydd continued well, strengthening Aktia Life’s position particularly amongst SME companies • Focus within business
Slide 8: Our three strategic priorities
Our three strategic priorities 2025 1 OUR VISION Win in wealth management The leading wealth A) The most preferred wealth manager among private and institutional customers manager bank B) Success in integrating Taaleri’s wealth management operations OUR MISSION 2 Building wealth for our Growth among
Slide 9: Focus on guiding customers to our focal point
Focus on guiding customers to our focal point Growth in our strategic sweet-spot Focus on excellent customer experience Offering comprehensive wealth ASSET MANAGEMENT and offering for single product customers management to our target segments, including wealth plans, financing, asset management serv
Slide 10: The financial targets 2025
The financial targets 2025 Comparable Comparable Comparable Common Equity operating profit return on cost-to-income Tier 1 capital ratio above EUR 120 Equity (ROE) ratio under 0.60 (CET1) above 1.5 million above 12% percentage points over the regulatory requirement 1–9/2021; 30 September 2021; 1–9/2
Slide 11: Sustainability at Aktia
Sustainability at Aktia Driver for long term profitable growth Our goal since 1825 has been to Strong Values Gender Distribution of Top Management build wealth for our customers of Sustainability and society. At present, sustainability is not only our We have strong values of sustainability. Our lic
Slide 12: Financial overview
Aktia Q3 2021 Debt investor presentation Financial overview Aktia Q3 2021 Debt investor presentation 4 November 2021 12
Slide 13: Structure of lending and deposits
Structure of lending and deposits 30 September 2021 (31 December 2020) Lending Deposits Total EUR 7,413 (7,000) million Total EUR 4,607 (4,466) million 1% (0%) 8% (7%) EUR 55 EUR 367 1% (2%) 13% (13%) (30) million (314) million EUR 65 EUR 972 (66) million (908) million 20% (21%) EUR 911 15% (14%) (9
Slide 14: Balance sheet total increased to EUR 11,374 million
Balance sheet total increased to EUR 11,374 million 30 September 2021 Total assets Total liabilities and equity EUR million EUR million 11,374 11,374 10,573 10,573 Deposits from the 10,000 10,000 public 4,607 Lending to the public Liabilities to central 8,000 4,466 and public-sector 8,000 banks and
Slide 15: Comparable operating profit and income
Comparable operating profit and income Q-o-Q Comparable operating income Comparable operating profit EUR million EUR million 80 73.3 70 3.4 66.5 30 10.5 0.1 57.0 57.9 9.7 26.0 60 0.6 1.6 25 23.8 49.4 Other 10.2 9.9 6.8 1.8 50 0.5 4.7 19.8 Net income from 20 Centralised 31.7 40 33.5 life insurance 16
Slide 16: AuM – Net subscriptions and market changes
AuM – Net subscriptions and market changes Asset Management, Aktia UI Q-o-Q Asset Management, domestic institutions Q-o-Q EUR million EUR million AUM Market Net AUM Market Net AUM AUM Market Net AUM Net AUM Market 9/2020 changes subscriptions 3/2021 changes subscriptions 9/2021 9/2020 changes subscr
Slide 17: AuM – Net subscriptions and market changes
AuM – Net subscriptions and market changes Banking Business, Retail Q-o-Q EUR million Net AUM Market Organisational Market Net AUM subscriptions 12/2020 changes adjustments changes subscriptions 9/2021 AUM Market Net AUM Net AUM Market 9/2020 changes subscriptions 3/2021 subscriptions 6/2021 changes
Slide 18: Comparable operating expenses
Comparable operating expenses 1–9/2021 vs 1–9/2020 Staff costs: EUR million The comparable staff costs increased by 18% to EUR 60.2 (51.2) million. The increase is mainly attributable to increase in personnel as a result of acquisition of Taaleri’s wealth management operations (in 2Q). IT expenses:
Slide 19: Impairments for future expected credit losses
Impairments for future expected credit losses Change in expected credit losses (ECL) 1–9/2021 Impairment of credits and other EUR million commitments 1–9/2021 EUR –4.6 million • Impairments on credits and other commitments increased to EUR -4.6 (-3.2) million, of which the change in the allowance fo
Slide 20: The debt investment case
Aktia Q3 2021 Debt investor presentation The debt investment case Credit ratings Moody's: A1 / P-1, neg, Covered Bonds: Aaa S&P: A- / A-2, stable Aktia Q3 2021 Debt investor presentation 4 November 2021 20
Slide 21: CET1 Capital ratio
CET1 ratio above the requirement Capital Adequacy • At the end of the period, the Bank Group’s Common Equity CET1 Tier 1 (CET1) capital ratio was 10.4% % % 20 • CET1 capital decreased by EUR 115.7 million during the 18 9 15.6 15.9 15.7 15.6 period 16 14.7 14.0 13.8 • The decrease was expected and ma
Slide 22: CET1 ratio above the requirement
CET1 ratio above the requirement Capital requirement % • Minimum CET1 requirement ratio is 7.71 % (3Q21 CET1 10,4%). Pillar 1 req 4.5% • Total minimum capital ratio requirement 11.76% (3Q21 Total capital:14.8%). Pillar 2 CET1 req 0.70% • Aktia Bank Group’s leverage ratio was 3.7% (4Q20 4.6%). Capita
Slide 23: Funding activities
Funding activities • During the Q3/2021 Aktia completed two private placement transaction. From the beginning of the year 2021 has Aktia Bank issued 14 pieces of senior preferred debt under the EMTN program. The total volume has been approximately EUR 215 million with maturities in the range of 3–10
Slide 24: High-quality liquidity reserve
High-quality liquidity reserve The Liquidity Coverage ratio (LCR) was 125%. • The unencumbered assets in Unencumbered Liquidity reserve, the liquidity portfolio, which can market value be used as a liquidity reserve, including cash and balances 30 Sep 31 Dec with central banks, had a 2021 2020 EUR m
Slide 25: Low risk liquidity portfolio
Low risk liquidity portfolio The liquidity portfolio consists of high-quality assets that can be used to meet liquidity requirements in stressed situations. Assets are: - LCR and ECB eligible covered and SSA notes - Commercial or Municipalities issued short term papers Aktia Q3 2021 Debt investor pr
Slide 26: Sound funding profile
Sound funding profile Covered Bond issuance and customer deposits dominate Borrowing from the public and public-sector entities increased to EUR 4,607 (4,466) million. Aktia’s market share of deposits was 3.0% (3.1%) at the end of September. The value of bonds issued by Aktia Bank totalled EUR 2,901
Slide 27: Redemption schedule
Redemption schedule The year 2022 redemptions are starting to show in funding activities Aktia Q3 2021 Debt investor presentation 4 November 2021 27
Slide 28: Aktia Bank as covered bond issuer
Aktia Bank as covered bond issuer Aktia Bank operates under the • The Aktia Bank mortgage loan portfolio is of very high quality: legislation as mortgage bank (Act • Prime residential mortgage loans and loans to Housing Companies on Mortgage Credit Bank • Collateral located in Finland Operations, MC
Slide 29: Cover pools
Cover pools Lappi 3Q 2021 0.1% COVER POOL 2 COVER POOL 1 Pohjois-Pohjanmaa Total asset pool EUR 2,254 million EUR 111 million (No substitute assets) 3% No of loans / 34,910 / EUR 64,574 1,712 / EUR 65,031 average loan balance Kainuu Types of loans First ranking residential First ranking residential
Slide 30: Finland − a strong but very export driven economy
Aktia Q3 2021 Debt investor presentation Finland − a strong but very export driven economy Aktia Q3 2021 Debt investor presentation 4 November 2021 30
Slide 31: Services only sector which has not fully recovered
Services only sector which has not fully recovered Aktia Q3 2021 Debt investor presentation 4 November 2021 31
Slide 32: Aktia’s economic forecast for Finland
Aktia’s economic forecast for Finland Forecast Annual volume growth, % 2018 2019 2020 2021 2022 2023 GDP 1,1 1,3 -2,9 3,3 2,3 1,2 Exports 1,5 6,8 -6,7 3,9 6,6 1,5 Imports 5,7 2,3 -6,4 3,9 6,5 1,9 Consumption 1,8 1,1 -3,1 2,7 2,1 1,5 Private 1,7 0,7 -4,7 2,8 2,7 1,9 Public 2,0 2,0 0,5 2,4 1,0 0,6 Inv
Slide 33: Private demand: services up and durable goods down
Private demand: services up and durable goods down Aktia Q3 2021 Debt investor presentation 4 November 2021 33
Slide 34: Labour market: almost at pre-corona
Labour market: almost at pre-corona Aktia Q3 2021 Debt investor presentation 4 November 2021 34
Slide 35: Residential construction activity has turned faster than expected
Residential construction activity has turned faster than expected Aktia Q3 2021 Debt investor presentation 4 November 2021 35
Slide 36: Finnish housing market
Finnish housing market Solid and stable market, positive development focused on growing cities Prices of old apartments Aktia Q3 2021 Debt investor presentation 4 November 2021 36
Slide 37: Contacts and additional information
Contacts and additional information Outi Henriksson Lotta Borgström CFO Director, IR and Communications Tel. +358 10 247 6236 Tel. +358 10 247 6838 outi.henriksson@aktia.fi lotta.borgstrom@aktia.fi Timo Ruotsalainen Head of Treasury Tel. +358 10 247 7211 timo.ruotsalainen@aktia.fi Debt investor info
Slide 38: The good bank. And a great asset manager.
The good bank. And a great asset manager.
Slide 39: Appendices
Aktia Q3 2021 Debt investor presentation Appendices Aktia Q3 2021 Debt investor presentation 4 November 2021 39
Slide 40: Net interest income mix
Net interest income mix EUR million 30 27.7 23.4 22.9 3.9 25 21.5 21.8 23.5 23.1 3.9 3.6 20.7 0.7 21.0 20.7 20.8 21.3 0.5 3.5 3.4 19.6 19.3 19.7 20.1 20.0 0.6 0.5 1.4 0.4 1.2 3.3 3.3 2.8 2.0 19.4 19.2 0.6 0.6 1.5 1.4 20 1.3 1.2 0.8 0.7 0.5 1.7 1.6 4.6 3.8 1.7 1.6 1.5 1.4 1.4 3.4 3.1 2.4 2.2 2.0 1.6
Slide 41: Net commission income mix
Net commission income mix EUR million ◼ Other 35 33.5 ◼ Insurance 31.7 1.0 ◼ Lending 0.6 1.4 2.4 ◼ Card, payment services and borrowing 30 0.5 2.7 ◼ Mutual funds, asset management 25.4 25.0 25.0 5.4 and securities brokerage 25 24.2 1.5 0.3 1.3 5.5 1.3 0.3 0.4 2.4 2.2 2.3 20 5.4 5.4 5.5 15 24.2 21.6
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