Aktia Bank PLC Class A · OMXHEX:AKTIA
Aktia Bank PLC Class A — Debt Investor Presentation (November 2020)
41 slides from Aktia Bank PLC Class A's debt investor presentation, Nov 3, 2020
Slide 1: Q3 Debt investor presentation
3 NOVEMBER 2020 Q3 Debt investor presentation Timo Ruotsalainen Head of Treasury
Slide 2: Aktia's Q3 2020 in brief
Aktia’s Q3 2020 in brief • Customers’ interest in investment advice increased noticeably, Asset Management’s product selection was expanded further • Stable growth of the loan book and low financing expenses contributed to the good development of net interest income • Unchanged credit loss provision
Slide 3: Structure of lending and deposits
Structure of lending and deposits 30 September 2020 (31 December 2019) Lending Deposits Total EUR 6,780 (6,429) million Total EUR 4,497 (4,060) million 0% (1%) 9% (6%) EUR 30 EUR 413 13% (11%) (35) million (256) million EUR 856 (738) million 21% (19%) 13% (12%) EUR 943 EUR 897 (777) million (771) mi
Slide 4: Remarkable growth in total loan book
Remarkable growth in total loan book Total loan book EUR +351 million and +5% YTD • The Group’s lending to the EUR million EUR million public and public-sector 1,600 6,780 6,800 entities increased to EUR 1,400 6,600 6,780 million. 1,200 6,400 • Aktia’s new lending 6,273 amounted to EUR 1,275 1,000 6
Slide 5: Stable growth of AuM continues
Stable growth of AuM continues Asset Management Assets under management excluding custody (AuM) Asset Management EUR million • Aktia acquired Askel Partners’ fund business 12,000 • Morningstar’s ratings of Aktia’s funds increased to all- 9,853 time high levels 9,623 10,000 9,233 8,353 • A new distri
Slide 6: Customer activity increased in all digital channels
Customer activity increased in all digital channels Banking Business Private customers • Aktia’s digital solutions were well received by the customers and the interest in advice increased, which contributed to more customer activity in all digital channels and in the telephone service • Development
Slide 7: Outlook 2020
Outlook 2020 Aktia informed on 18 March 2020 that the significant worsening of the macroeconomic outlook and the grown volatility on the market as a result of the coronavirus outbreak are expected to have a negative impact on Aktia’s operating profit in 2020. Although the comparable operating profit
Slide 8: COVID-19: impacts and measures
Aktia Q3 2020 Debt investor presentation COVID-19: impacts and measures
Slide 9: Coronavirus pandemic: impacts and measures
Coronavirus pandemic: impacts and measures • Business is still very much dependent on how the COVID-19 situation evolves • As an agile organisation, Aktia has been very well prepared for the second wave of the coronavirus • Operational reliability is ensured through active crisis management and busi
Slide 10: Our strategic priorities still valid
Our strategic priorities still valid 2023 Win in asset management Acquire new customers in growing cities Drive operational efficiency to capitalise on our challenger position Banking & Insurance Aktia Q3 2020 Debt investor presentation 3 November 2020 10
Slide 11: The financial targets for 2023
The financial targets for 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 requirement 1–9/2020; 30 September 2020; 1–9/2020; 30 September
Slide 12: Financial overview
Aktia Q3 2020 Debt investor presentation Financial overview Aktia Q3 2020 Debt investor presentation 3 November 2020 12
Slide 13: Balance sheet total increased to EUR 10,589 million
Balance sheet total increased to EUR 10,589 million 30 September 2020 Total assets Total liabilities and equity EUR million EUR million 10,589 10,589 9,697 Deposits from the public 10,000 9,697 10,000 Lending to the public 4,497 Liabilities to central 8,000 and public-sector 8,000 banks and credit 4
Slide 14: Comparable operating profit
Comparable operating profit Q-o-Q Comparable operating income Comparable operating profit EUR million EUR million 25 60.0 52.9 55.2 54.8 1.7 20 1.6 49.4 1.2 50.0 8.3 39.9 0.5 6.8 10.1 0.3 4.7 15 40.0 Other 25.3 25.8 25.2 22.9 24.2 30.0 Net income from 10 19.2 life insurance 17.6 16.5 16.0 20.0 Net c
Slide 15: Total operating income decreased by 13%
Total operating income decreased by 13% Income mix EUR million -13% 180 166.2 160 144.1 140 120 -1% 100 +3% 80 73.3 72.2 58.2 59.9 60 -56% 40 21.7 20 9.6 13.0* 2.3 0 Net interest Net commission Net income from Other income Total operating income income life insurance income 1-9/2019 1-9/2020 * inclu
Slide 16: Recovery of AuM has continued after the drop in the end of Q1
Recovery of AuM has continued after the drop in the end of 1Q Asset Management, Aktia UI 1–9/2020 Asset Management, domestic 1–9/2020 EUR million EUR million AUM Market Net AUM Market AUM Market Net AUM Market 12/2019 changes subscriptions 6/2020 changes 12/2019 changes subscriptions 6/2020 changes
Slide 17: Recovery of AuM has continued after the drop in the end of Q1
Recovery of AuM has continued after the drop in the end of 1Q Banking Business, Retail 1–9/2020 EUR million AUM Market Net AUM Market 12/2019 changes subscriptions 6/2020 changes Net AUM Market Net AUM subscriptions 3/2020 changes subscriptions 9/2020 Aktia Q3 2020 Debt investor presentation 3 Novem
Slide 18: Comparable operating expenses flat
Comparable operating expenses flat 1–9/2020 vs 1–9/2019 EUR million Comparable staff costs EUR 1.3 Staff costs: million higher than a year ago Comparable staff costs increased by 3% to EUR 51.2 (49.9) million and mainly relate 0.8 to recruitments to speed up development, 2.1 0.4 1.4 process automati
Slide 19: The debt investment case
Aktia Q3 2020 Debt investor presentation The debt investment case Credit ratings Moody's: A1 / P-1, stable, Covered Bonds: Aaa S&P: A- / A-2, neg Aktia Q3 2020 Debt investor presentation 3 November 2020 19
Slide 20: Capital is at solid level
Capital is at solid level Capital adequacy and Capital & MREL requirements • Aktia’s Common Equity Tier 1 (CET1) Capital is at a good level at 15.6% CET1 (2Q20 15.7%). CET1 ratio considering the maximum pay-out for 2019 EUR million % 800 24 was 14.0%. 20.1 20.5 19.4 20.0 19.4 700 18.6 18.6 18.9 18.5
Slide 21: Provisions for future expected credit losses
Provisions for future expected credit losses Change in Estimated Credit Losses (ECL) 1–9/2020 EUR million • We have not made any significant changes Impairment of credits and other to the model-based credit loss provisions commitments 1–9/2020 EUR -3,2 million that we reported previously. Macroecono
Slide 22: Funding activities record high
Funding activities record high • During the year 2020 Aktia has been a very active issuer in the senior preferred market. Aktia has completed 23 transactions under the EMTN program. The total volume is close to EUR 748 million with maturities in the range of 2–15 years. Aktia is considering to issue
Slide 23: High-quality liquidity reserve
High-quality liquidity reserve The Liquidity Coverage ratio (LCR) was 124%. • The unencumbered assets in the liquidity portfolio, which can Liquidity reserve, market value be used as a liquidity reserve, 30 Sep 31 Dec including cash and balances 2020 2019 with central banks, had a EUR million Cash a
Slide 24: Low risk liquidity portfolio
Low risk liquidity portfolio The liquidity portfolio consists Q3 2020, Total EUR 1,496 million of high-quality assets that can Domestic Municipalities, not rated be used to meet liquidity 8.7% requirements in stressed Baa1-Baa3 9.1% situations. Assets are: A1-A3 6.7% - LCR and ECB eligible covered a
Slide 25: Sound funding profile
Sound funding profile Covered Bond issuance and customer deposits dominate Borrowing from the public and public-sector entities increased to EUR 4,497 (4,060) million. Aktia’s market share of deposits was 3.1 (3.2) % at the end of September. The value of bonds issued by Aktia Bank totalled EUR 2,912
Slide 26: Redemption schedule
Redemption schedule The year 2021 is gentle on redemptions Aktia Q3 2020 Debt investor presentation 3 November 2020 26
Slide 27: 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 • Prime residential mortgage loans and loans to Housing Companies bank (Act on Mortgage • Collateral located in Finland Credit Bank Operations, •
Slide 28: Cover pools
Cover pools Lappi 3Q 2020 0.1% COVER POOL 2 COVER POOL 1 Pohjois-Pohjanmaa Total asset pool EUR 2,200 million EUR 137 million (No substitute assets) 3% No of loans / 35,281 / EUR 62,325 2,028 / EUR 67,635 average loan balance Kainuu Types of loans First ranking residential First ranking residential
Slide 29: The Finnish Economy
Aktia Q3 2020 Debt investor presentation The Finnish Economy Aktia Q3 2020 Debt investor presentation 3 November 2020 29
Slide 30: 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 38,959 (2016) • Credit ratings: Aa1 (stable) / AA+ (stable) / AA+ (stable) Aktia Q3 2020 Debt investor presentation 3 November 2020 30
Slide 31: The Finnish Economy
The Finnish Economy • 2020 GDP is forecasted to decline 4.5% but growth is expected to return on 2021 (+2.6%) (MoF) Aktia Q3 2020 Debt investor presentation 3 November 2020 31
Slide 32: The Finnish Economy
The Finnish Economy Aktia Q3 2020 Debt investor presentation 3 November 2020 32
Slide 33: Macroeconomic environment
Macroeconomic environment Macroeconomic environment Aktia Q3 2020 Debt investor presentation 3 November 2020 33
Slide 34: Finnish housing market
Finnish housing market Segregating but stable housing market Finland: Prices, old apartments “In Greater Helsinki, (house) prices rose by 7.1 per cent and in the rest of the country they fell by 2.2 per cent. Compared with the previous quarter, prices of old single-family houses increased by 2.5 per
Slide 35: Contacts and additional information
Contacts and additional information Outi Henriksson Timo Ruotsalainen CFO Head of Treasury Tel. +358 10 247 6236 Tel. +358 10 247 7211 outi.henriksson@aktia.fi timo.ruotsalainen@aktia.fi Debt investor information: http://www.aktia.com/en/velkasijoittajat (website) http://www.aktia.com/en/julkaisut (
Slide 36: The good bank. And a great asset manager.
The good bank. And a great asset manager.
Slide 37: Appendices
Aktia Q3 2020 Debt investor presentation Appendices Aktia Q3 2020 Debt investor presentation 3 November 2020 37
Slide 38: Financial summary Q3 and YTD
Financial summary Q3 and YTD EUR million Q32020 Q32019 , % 1-9/2020 1-9/2019 , % Total operating income 49.4 52.9 -7% 144.1 166.2 -13% Net interest income 20.0 19.6 2% 59.9 58.2 3% Net commission income 24.2 25.3 -5% 72.2 73.3 -1% Net income from life insurance 4.7 6.8 -31% 9.6 21.7 -56% Other inc
Slide 39: Key Figures Q3 2020
Key Figures Q3 2020 (Q3 2019) Net interest income +2% EUR 20.0 (19.6) million Net commission income -5% EUR 24.2 (25.3) million Total operating income -7% EUR 49.4 (52.9) million Comparable operating income -7% EUR 49.4 (52.9) million Total operating expenses -10% EUR -33.8 (-37.5) million Comparabl
Slide 40: Net interest income mix
Net interest income mix EUR million 30 23.8 23.7 24.6 24.1 23.9 23.4 22.9 25 23.0 21.5 21.8 23.5 4.0 4.0 4.0 4.0 4.0 3.9 3.6 20.7 0.7 21.0 20.7 4.0 3.5 3.4 19.4 19.2 19.6 19.7 20.1 20.0 3.3 3.3 2.8 2.0 19.3 0.6 0.6 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 6.5 5.9 5.4 3.4 3.1 2.4 2.
Slide 41: Net commission income mix
Net commission income mix EUR million ◼ Other ◼ Insurance ◼ Lending 80 Total 73.3 Total 72.2 ◼ Card, payment services and borrowing 70 3.8 3.9 ◼ Savings and investment products 1.8 1.0 7.4 -1% 6.6 (incl. mutual funds, asset management 60 and securities brokerage) 18.4 17.1 50 40 30 20 41.9 43.6 10 0
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