Aktia Bank PLC Class A · OMXHEX:AKTIA
Aktia Bank PLC Class A — Debt Investor Presentation (May 2021)
44 slides from Aktia Bank PLC Class A's debt investor presentation, May 5, 2021
Slide 1: Q1 Debt investor presentation
5 MAY 2021 Q1 Debt investor presentation
Slide 2: Aktia's Q1 2021 in brief
Aktia’s Q1 2021 in brief • The good development of the net interest income continued mainly due to the strong balance growth of corporate credits • The housing market continued to be active and the demand on especially holiday homes increased • Assets under management were at the same level as at th
Slide 3: Aktia won all three categories in Morningstar awards
Aktia won all three categories in Morningstar awards Asset Management Assets under management excluding custody (AuM) Asset Management EUR million • Aktia’s extensive and top-quality asset management competence was rewarded with Morningstar’s all three 12,000 10,447 fund house awards 9,853 10,379 10
Slide 4: Aktia's Morningstar rating extraordinary strong
Aktia’s Morningstar rating extraordinary strong 3/2021 4.50 4.30 4.10 3.90 3.70 3.50 3.30 3.10 2.90 2.70 2.50 1/2018 4/2018 7/2018 10/2018 1/2019 4/2019 7/2019 10/2019 1/2020 4/2020 7/2020 10/2020 1/2021 Aktia Competitor 1 Competitor 2 Competitor 3 Competitor 4 Competitor 5 Competitor 6 Competitor 7
Slide 5: Growth in total loan book continues
Growth in total loan book continues Total loan book EUR +139 million (+2%) Q-o-Q • Group lending to the public EUR million EUR million and public-sector entities 7,139 increased by EUR 139 million 700 7,100 to EUR 7,139 (7,000) million 7,000 600 7,000 500 6,900 • Aktia’s total new lending was 400 6,
Slide 6: Implementation of the service model continues
Implementation of the service model continues Banking Business Private customers • The good development in housing loan operations continued during Q1 and the number of digital housing transactions increased further. • Aktia’s customer-oriented service model has become a part of the company’s everyd
Slide 7: Our strategic priorities
Our 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 Q1 2021 Debt investor presentation 5 May 2021 7
Slide 8: The financial targets 2023
The 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 requirement 1–3/2021; 31 March 2021; 1–3/2021; 31 March 2021; EUR 1
Slide 9: Aktia acquired the wealth management operations of Taaleri – key figures
Aktia acquired the wealth management operations of Taaleri – key figures • The transaction was completed on 30 April 2021 € 4.4/7.1 bn appr. 100 ~5,600 • The acquired Taaleri wealth management AUM # of employees # of customers business is profitable and expected to have positive contribution to oper
Slide 10: Transaction synergies
Transaction synergies Revenue synergies Cost synergies ▪ Offering expansion for the ▪ Reduced cost base due to transferring customers - increased scale of the banking services, Aktia’s business investment and insurance products ▪ Consolidation of IT and infrastructure ▪ Offering expansion for Aktia’
Slide 11: Corporate responsibility programme
Corporate responsibility programme In 2020, Aktia updated indicators and actions to group’s corporate Aktia’s corporate responsibility programme responsibility programme and action plan for 2021–2023. Aktia reports every six months on the selected indicators of our corporate responsibility programme
Slide 12: Coronavirus pandemic: Improving development
Coronavirus pandemic: Improving development • Strong and decisive measures by the Finnish government and healthcare network have saved Finland for the worst possible outcome of the pandemic so far. • Vaccination program proceeds successfully. At the beginning May roughly one third of Finns have alre
Slide 13: Financial overview
Aktia Q1 2021 Debt investor presentation Financial overview Aktia Q1 2021 Debt investor presentation 5 May 2021 13
Slide 14: Comparable operating profit and income
Comparable operating profit and income Q-o-Q Comparable operating profit Comparable operating income EUR million EUR million 60 57.0 57.9 19.8 54.8 1.6 20 0.6 0.3 1.6 49.4 16.9 50 10.2 9.9 16.5 39.9 10.1 0.5 16.0 4.7 0.6 0.3 15 2.7 40 11.6 Other 6.2 Centralised functions and 25.2 25.4 25.0 22.9 24.2
Slide 15: Assets under Management – Net subscriptions and market changes
Assets under Management – Net subscriptions and market changes Asset Management, Aktia UI Q-o-Q Asset Management, domestic Q-o-Q EUR million EUR million AUM Market Net AUM Market Net AUM AUM Market Net AUM Market Net AUM 3/2020 changes subscriptions 9/2020 changes subscriptions 3/2021 3/2020 changes
Slide 16: Assets under Management – Net subscriptions and market changes
Assets under Management – Net subscriptions and market changes Banking Business, Retail Q-o-Q EUR million AUM Market Net AUM Market Net AUM 3/2020 changes subscriptions 9/2020 changes subscriptions 3/2021 Net AUM Market Net AUM Market subscriptions 6/2020 changes subscriptions 12/2020 changes Aktia
Slide 17: Comparable operating expenses
Comparable operating expenses 1–3/2021 vs 1–3/2020 EUR million Staff costs: Staff expenses increased by 6% to EUR 17.6 (16.6) million, which relate to recruitments in 2020. IT expenses: IT expenses increased to EUR 6.4 (5.6) million, partially related to timing of recognising certain IT costs. The r
Slide 18: Impairments for future expected credit losses
Impairments for future expected credit losses Change in expected credit losses (ECL) 1–3/2021 EUR million Impairment of credits and other • Impairments on credits and other commitments 1–3/2021 EUR –2.2 million commitments increased to EUR -2.2 (-1.4) million, of which the change in the allowance fo
Slide 19: Structure of lending and deposits
Structure of lending and deposits 31 March 2021 (31 December 2020) Lending Deposits Total EUR 7,139 (7,000) million Total EUR 4,371 (4,466) million 1% (0%) 7% (7%) EUR 29 EUR 301 1% (2%) 13% (13%) (30) million (314) million EUR 60 EUR 941 (66) million (908) million 20% (21%) EUR 850 14% (14%) (946)
Slide 20: Balance sheet total increased to EUR 10,647 million
Balance sheet total increased to EUR 10,647 million 31 March 2021 Total assets Total liabilities and equity EUR million EUR million 10,573 10,674 10,573 10,674 Deposits from the public 10,000 10,000 Lending to the public 4,466 4,371 Liabilities to central 8,000 and public-sector 8,000 banks and cred
Slide 21: Financial summary Q1
Financial summary Q1 EUR million 1Q2021 1Q2020 % 4Q2020 % Total operating income 57.9 39.9 45% 57.0 2% Net interest income 21.3 19.7 8% 20.8 2% Net commission income 25.0 25.2 0% 25.4 -1% Net income from life insurance 9.9 -5.2 - 10.2 -3% Other income 1.6 0.3 503% 0.6 181% Total operating expenses
Slide 22: The debt investment case
Aktia Q1 2021 Debt investor presentation The debt investment case Credit ratings Moody's: A1 / P-1, stable, Covered Bonds: Aaa S&P: A- / A-2, stable Aktia Q1 2021 Debt investor presentation 5 May 2021 22
Slide 23: CET1 on a solid level
CET1 on a solid level Capital Adequacy • At the end of the period of Q1, the Bank Group’s Common CET1 Equity Tier 1 (CET1) capital ratio was 13.8%. EUR million % • Target range at the end of period 11.3–12.8%. 800 24 • During the Q1 Aktia implemented the new definition of default (DoD) for IRB model
Slide 24: CET1 meets regulative targets
CET1 meets regulative targets Capital adequacy Capital requirement % • The regulative capital requirement levels for Aktia Bank Group are following: CET1 % 8.0% • Tier 1: 9.76% (CET1: 8.26%) 31.3.2021: 13.8% (CET1) Pillar 1 min req 4.5% • Total Capital ratio: 11.76% 31.3.2021: 16.3% Pillar 2 req 1.2
Slide 25: Funding activities and AT1
Funding activities and AT 1 • During the Q1 2021 Aktia has continued to be active issuer in the senior preferred market. Aktia has completed over 30 transactions under the EMTN program. The total volume during the first quarter was EUR 170 million with maturities in the range of 2–15 years. • The ba
Slide 26: High-quality liquidity reserve
High-quality liquidity reserve The Liquidity Coverage ratio (LCR) was 139%. • The unencumbered assets in Unencumbered Liquidity reserve, the liquidity portfolio, which can market value be used as a liquidity reserve, including cash and balances 31 Mar 31 Dec with central banks, had a 2021 2020 EUR m
Slide 27: Low risk liquidity portfolio
Low risk liquidity portfolio The liquidity portfolio consists Q1 2021, Total EUR 1,380 million of high-quality assets that can Domestic Municipalities, not rated be used to meet liquidity 8.4% requirements in stressed Baa1-Baa3 9.3% situations. Assets are: A1-A3 9.5% - LCR and ECB eligible covered a
Slide 28: Sound funding profile
Sound funding profile Covered Bond issuance and customer deposits dominate Borrowing from the public and public-sector entities decreased to EUR 4,371 (4,466) million. Aktia’s market share of deposits was 3.0% (3.1%) at the end of March. The value of bonds issued by Aktia Bank totalled EUR 2,871 (2,
Slide 29: Redemption schedule
Redemption schedule The year 2021 is gentle on redemptions but growth increases volumes Aktia Q1 2021 Debt investor presentation 5 May 2021 29
Slide 30: 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 31: Cover pools
Cover pools Lappi 1Q 2021 0.1% COVER POOL 2 COVER POOL 1 Pohjois-Pohjanmaa Total asset pool EUR 2,240 million EUR 124 million (No substitute assets) 3% No of loans / 35,280 / EUR 63,501 1,858 / EUR 66,536 average loan balance Kainuu Types of loans First ranking residential First ranking residential
Slide 32: Finland − a strong but very export driven economy
Aktia Q1 2021 Debt investor presentation Finland − a strong but very export driven economy Aktia Q1 2021 Debt investor presentation 5 May 2021 32
Slide 33: Finnish economy proved resilient during pandemic
Finnish economy proved resilient during pandemic Aktia Q1 2021 Debt investor presentation 5 May 2021 33
Slide 34: Economic rebound well under way
Economic rebound well under way Aktia Q1 2021 Debt investor presentation 5 May 2021 34
Slide 35: Employment improving
Employment improving Aktia Q1 2021 Debt investor presentation 5 May 2021 35
Slide 36: Housing market rallies
Housing market rallies Aktia Q1 2021 Debt investor presentation 5 May 2021 36
Slide 37: Residential construction activity is turning
Residential construction activity is turning Aktia Q1 2021 Debt investor presentation 5 May 2021 37
Slide 38: Real estate market polarisation continued despite corona
Real estate market polarisation continued despite corona Aktia Q1 2021 Debt investor presentation 5 May 2021 38
Slide 39: 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 40: The good bank. And a great asset manager.
The good bank. And a great asset manager.
Slide 41: Appendices
Aktia Q1 2021 Debt investor presentation Appendices Aktia Q1 2021 Debt investor presentation 5 May 2021 41
Slide 42: Key figures Q1 2021
Key figures Q1 2021 (Q1 2020) Net interest income +8% EUR 21.3 (19.7) million Net commission income 0% EUR 25.0 (25.2) million Total operating income +45% EUR 57.9 (39.9) million Comparable operating income +45% EUR 57.9 (39.9) million Total operating expenses +9% EUR -38.7 (-35.6) million Comparabl
Slide 43: Net interest income mix
Net interest income mix EUR million 30 23.4 22.9 25 21.5 21.8 23.5 3.9 3.6 20.7 0.7 21.0 20.7 20.8 21.3 3.5 3.4 19.6 19.3 19.7 20.1 20.0 0.6 0.5 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 15 10 19.4 19.5 20.6 20.7 17.9
Slide 44: Net commission income mix
Net commission income mix EUR million 30 25.2 25.4 25.0 25 24.2 1.3 22.9 1.5 1.3 0.6 1.3 0.3 0.3 2.1 1.3 0.4 2.4 2.2 0.1 2.3 20 2.3 6.0 5.4 5.4 5.5 5.6 15 ◼ Other ◼ Insurance 10 ◼ Lending 15.2 14.7 15.8 15.8 13.6 ◼ Card, payment services and borrowing 5 ◼ Mutual funds, asset management and securitie