Aktia Bank PLC Class A · OMXHEX:AKTIA
Aktia Bank PLC Class A — Debt Investor Presentation (May 2022)
42 slides from Aktia Bank PLC Class A's debt investor presentation, May 13, 2022
Slide 1: Debt investor presentation
Debt investor presentation
Slide 2: Highlights in Q1 2022
. Aktia Q12022 Aktia Debt investor presentation Highlights in Q1 2022 * Solid underlying business performance continued ¢ — Strong growth in net interest income ¢ Net commission income was down mainly due to the market turbulence * The negative unrealised value changes in the life insurance company'
Slide 3: Asset Management Key focus areas
Aktia Q1 2022 Aktia Debt investor presentation 13/5/22 3 Asset Management Key focus areas Award-winning expertise in different asset classes creates a strong basis for successful investment operations. Emerging Market Debt * Proven track record since 2006 in different market conditions. * Investment
Slide 4: Growth driven by corporate lending continues
. Aktia Q12022 Aktia Debt investor presentation 13/5/22 4 Growth driven by corporate lending continues Excellent development in the corporate customer business Growth achieved without change in our risk profile Private customers more cautious due to the increased interest rates and general uncertain
Slide 5: High market volatility decreased AUM
Aktia Q1 2022 Aktia Debt investor presentation High market volatility decreased AUM AuM decreased by approx. EUR 1 billion High turbulence in the market affected market values Net subscriptions amounted to approx. EUR -210 million Reallocation of investments by a few foreign institutional investors
Slide 6: Increase in interest rates weighed down investment portfolio
Aktia Aktia Q12022 Debt investor presentation Increase in interest rates weighed down investment portfolio Positive development in Life Insurance: The actuarially calculated result for Q1 increased to EUR 4.3 (3.5) million Premiums written increased by 18% since last year and sales of investment-lin
Slide 7: Focus on guiding customers to our focal point
. Aktia Q1 2022 Aktia Debt investor presentation 13/5/22 7 Focus on guiding customers to our focal point e Growth in our strategic sweet-spot Offering comprehensive wealth management to our target segments, including wealth plans, financing, asset management services, personal life insurance and con
Slide 8: The financial targets 2025
Aktia Aktia Q1 2022 Debt investor presentation The financial targets 2025 13/5/22 Comparable operating profit above EUR 120 million 1-3/2022; EUR 13.3 million Comparable return on Equity (ROE) above 12% 31 March 2022; 6.5% Comparable cost-to-income ratio under 0.60 1-3/2022; 0.78 Common Equity Tier
Slide 9: Sustainability at Aktia
. Aktia Q1 2022 Aktia Debt investor presentation Sustainability at Aktia Our goal since 1825 has been to build wealth for our customers and society. At present, sustainability is not only our licence to operate, but is also a major driver of profitable growth in the long term. 2006 2010 Aktia's Resp
Slide 10: Sustainability update
. Aktia Q1 2022 Aktia Debt investor presentation Sustainability update In 2021, Aktia continued to work with sustainability issues according to the group's corporate responsibility programme and action plan for 2021-2023. Aktia reports every six months on selected indicators of our corporate respons
Slide 11: Financial overview
Financial — overview i! x: a
Slide 12: Financial summary Q1
. Aktia Q1 2022 Aktia Debt investor presentation 13/5/22 12 Financial summary Q1 EUR million 192021 4Q2021 A% Total operating income 59.0 579 2% 65.5 -10% Net interest income 251 213 18% 244 4% Net commission income 313 25.0 25% 33.7 T% Net income from life insurance 18 99 ~82% 76 16% Other income 0
Slide 13: Balance sheet total increased to EUR 11,731 million
. Aktia Q1 2022 Aktia Debt investor presentation 13/5/22 13 Balance sheet total increased to EUR 11,731 million Total assets Total liabilities and equity EUR million EUR million 11,653 11,731 11,653 11,731 10,000 10,000 &™ Deposits from the public 8,000 t= Lending to the public 8,000 H Liabilities t
Slide 14: Solid business performance continued
. Aktia Q12022 Aktia Debt investor presentation 13/5/22 4 Solid business performance continued Net interest income up 18% Y-o-Y The strong growth was driven by excellent development in the corporate customer business 25% growth in net commission income Y-o-Y mainly due to acquisition of Taaleri weal
Slide 15: Comparable operating profit affected by market conditions
. Aktia Q12022 Aktia Debt investor presentation 13/5/22 15 Comparable operating profit affected by market conditions * Very solid development in Banking Business, profitability affected by the EUR 46 million reservation for the stability fee * Negative value changes in the life insurance company's i
Slide 16: Underlying profit increased by 8%
. Aktia Q1 2022 Aktia Debt investor presentation 13/5/2216 Underlying profit increased by 8% Comparable operating profit 1-3/2022 vs 1-3/2021 EUR million Actuarially calculated result (Net income from Net life insurance) ‘commission 16.9 income -8.8 Net interest Net income 18 .! income from 13.3 inv
Slide 17: Expected credit losses at a very moderate level
. Aktia Q1 2022 Aktia Debt investor presentation 13/5/22 7 Expected credit losses at a very moderate level We have not observed any major new risk concentrations in our credit portfolio The macroeconomic assumptions in the ECL model were updated again in Q1, slightly positive but no material impact
Slide 18: Credit ratings
. Aktia Q1 2022 Aktia Debt investor presentation Credit ratings Moody's: A1/P-1, neg, Covered Bonds: Aaa S&P: A- / A-2, stable
Slide 19: CET1 ratio 2.9 percentage points above the requirement
Aktia Q1 2022 Aktia requirement * The CET1 ratio was 10.6% and decreased from year end by 06 percentage points ¢ Aktia Life Insurance Ltd paid a dividend of EUR 20 million to the parent company in March, which strengthened the Bank’s CET1 capital * The fair value reserve was negatively affected by t
Slide 20: CET1 ratio above the requirement
Aktia Q1 2022 Akt la Debt investor presentation 20 CET1 ratio above the requirement © Minimum CET1 requirement ratio is 7.71% (1Q22 CET1 10.6%). Capital requ % © Total minimum capital ratio requirement 11.76% (1Q22 Total capital:14.8%). Pillar 1req 45% © Aktia Bank Group’s leverage ratio was 3.8% (4
Slide 21: Funding activities
—_ ~ 2 . Aktia Q1 2022 Aktia Debt investor presentation 13/5/22 Funding activities * During Q12022, Aktia completed 8 senior preferred private placement transactions. The total volume has been approximately EUR 276 million with maturities in the range of 2-12 years. The bank will continue to issue s
Slide 22: High-quality liquidity reserve
. Aktia Q1 2022 Aktia Debt investor presentation 13/5/22 22 High-quality liquidity reserve The Liquidity Coverage ratio (LCR) was 136%. The unencumbered assets in the Une liquidity portfolio, which can be used as a liquidity reserve, including cash and balances with central banks, had Cash and holdi
Slide 23: The liquidity portfolio consists of high-quality assets
. Aktia Q1 2022 Aktia Debt investor presentation 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 13/5/22 23 e e e e e Low risk liquidity portfolio Finnish municipa
Slide 24: Sound funding profile
Aktia Q1 2022 Aktia Debt investor presentation 13/5/22 24 Sound funding profile Covered Bond issuance and customer deposits dominate Borrowing from the public and public- sector entities increased to EUR 4,699 (4,503) million. Aktia’s market share of deposits was 3.0% (3.0%) at the end of Dec 2021.
Slide 25: Redemption schedule
. Aktia Q1 2022 Aktia Debt investor presentation 13/5/22 25 Redemption schedule 2023 ow redemptions =n requires good 0 planning so I Subordinated debts MARKET VALUE. EUR 2022 2023 2024 2025 2026 2027 2028 ‘Year of MATURITY DATE
Slide 26: Aktia Bank as covered bond issuer
. Aktia Q1 2022 Aktia Debt investor presentation 13/5/2226 Aktia Bank as covered bond issuer Aktia Bank operates under the legislation as ¢ The Aktia Bank mortgage loan portfolio is of very high quality: mortgage bank (Act on Mortgage Credit © Prime residential mortgage loans and loans to Housing Co
Slide 27: Aktia Cover pool 1Q 2022
. Aktia Q1 2022 Aktia Debt investor presentation 13/5/22 Lope e Aktia Cover poo ” 1Q 2022 Peon Cover pool 3% Total asset pool EUR 2,740 million location vious (No substitute assets) No of loans / 38,966 / EUR 70,324 average loan balance eSabpponjannles Types of loans First ranking residential mortga
Slide 28: Finland - a responsible welfare economy
Finland = — a responsible welfare econt Aktia
Slide 29: Gross domestic product behind trend
. Aktia Q1 2022 Aktia Debt investor presentation 13/5/2229 Gross domestic product behind trend Finland, quarterly gross domestic product, 2015 prices —GDP —Trend 2015-2019 Billion EUR 61 60,4 60 59 58,9 58 57 56 55 54 53 52 Qi Q3 Qi Q3 Qi Q3 Qi Q3 Qi Q3 Qi Q3 Qi Q3 Qi 2015, 2016 2017 2018 2019 2020
Slide 30: Service exports supported by weak euro
. Aktia Q1 2022 Aktia Debt investor presentation 13/5/22 30 Service exports supported by weak euro Finland, export of goods and services Index 2011 Q4=100 160 158 Services 150 140 130 120 120 Goods 110 100 90 Qi Q3.« Q3. (Qt Q3. Qt a3. Q3. «(Qt Q3. Qt Q3. Qt Q3 Q3. «(Ql Q3 Qi 2011 = 2012 2013 2014 2
Slide 31: Household indebtedness is not growing
. Aktia Q1 2022 Akt la Debt investor presentation 13/5/22 31 Household indebtedness is not growing Quarterly change in households’ indebtedness ratio Percentage points 15 1,0 0,5 0,0 0,5 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Source: Aktia, Macrobond, Statistics Finland,
Slide 32: Labor market: almost at pre-corona
. Aktia Q1 2022 Aktia Debt investor presentation 13/5/22 32 Labor market: almost at pre-corona Unemployed persons in Finland Persons 450000 425000 400000 375000 350000 325000 300000 275000 250000 250722 225000 200000 175000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2
Slide 33: More good news from the labor market
. Aktia Q1 2022 Aktia Debt investor presentation 13/5/2233 More good news from the labor market Youth unemployment in Finland (aged 15-24) Percent 23 22 24 20 19 18 17 16 15 44 14% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Source: Aktia, Macrobond, Statistics Finland,
Slide 34: Industrial output and service sector fully recovered
. Aktia Q1 2022 Aktia Debt investor presentation Industrial output and service sector fully recovered Sales volume and industrial production Index 2019=100 110 409 Construction 105 105 Services 102 Industrial production 101 100 Trade 95 90 85 Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar M
Slide 35: Permissions in residential construction are decreasing
. Aktia Q1 2022 Aktia Debt investor presentation 13/5/2238 Permissions in residential construction are decreasing Residential construction activity Million m2, 12 month rolling sum 43 42 41 4,07 Starts 4,0 3.9 38 3,78 Permissions 3,7 3,6 35 34 3,30 38 Completed 3,2 31 Mar May Jul Sep Nov Jan Mar May
Slide 36: Finnish housing market
. Aktia Q1 2022 Aktia Debt investor presentation 13/5/22 36 Finnish housing market Solid and stable market, positive development focused on growing cities Finland: Prices, old appartments Real House Prices, <Property IndexBase not found.> Index 2005=100 170 180 160 170 150 160 150 140 140 130 130 12
Slide 37: Thank you
BOO Thank you Aktia
Slide 38: Contacts and additional information
. Aktia Q1 2022 Akt la Debt investor presentation 13/5/22 38 Contacts and additional information Outi Henriksson Lotta Borgstr6m Timo Ruotsalainen CFO. Director, IR and Communications Head of Treasury Tel. +358 10 247 6236 Tel. +358 10 247 6838 Tel. +358 10 247 7211 outi.henriksson@aktiafi lotta.bor
Slide 39: Appendices
. Aktia Q1 2022 Aktia Debt investor presentation 13/5/2239 Appendices
Slide 40: Net interest income mix
. Aktia Q1 2022 Aktia Debt investor presentation 13/5/22 40 Net interest income mix EUR million 35 207 30 251 234 264 25 21.3 Kei Other 7 hed ti cia 20 fa = TLTRO loan 5 ™ Hedging with interest rate derivatives Liquidity portfolio 10 = Borrowing and lending 5 0) : a 6 rs “U7 5 av2021 2/2021 93/2021
Slide 41: Net commission income mix
. Aktia Q1 2022 Akt la Debt investor presentation 13/5/22 a Net commission income mix EUR million 35 317 33.7 . 31.3 30 d 25 27 25.0 55 Other 25 55 Insurance 20 Lending ™ Card, payment services and borrowing 15 Mutual funds, asset management and securities brokerage 10 5 () 1/2021 2/2021 93/2021 Q4/
Slide 42: Aktia
Aktia