Aktia Bank Plc – Half-year report January–June 2019: Stable development of net interest and net commission income, cost level maintained
Aktia Bank Plc
Stock Exchange Release
August 1, 2019 at 8 a.m.
Aktia Bank Plc – Half-year report January–June 2019
Stable development of net interest and net commission income, cost level maintained
In brief
- Strong lending and a high customer activity during the second quarter while tough competition is still putting pressure on margins.
- Net interest income from borrowing and lending increased by 5% during the period.
- The market environment developed favourably and Aktia’s total fund book increased to a record level at the end of June.
- Assets under management in internationally sold UI-Aktia funds increased by 38% from the year-end and amounted to EUR 1.6 billion.
- Comparable operating expenses were approximately on the same level as last year.
- Comparative figures include some accruements and structural changes affecting the comparability between the periods.
Outlook 2019 (unchanged)
- Despite the uncertainty of the economic development, the comparable operating profit 2019 is expected to be approximately on the same level as for 2018.
Mikko Ayub, CEO:
The positive development of Aktia’s underlying business operations continued during the second quarter of the year, despite the challenging market still marked by low interest rates and pressed margins. I want to point out that the comparative figures for e.g. net interest and net commission income include some accruements and structural changes affecting the comparability between the periods. These are described in detail in the profit section of the report.
Net interest income was strengthened especially as a result of the strong growth in lending to both private persons and companies and the demand on interest rate cap and interest rate collar products was on a good level. Credit quality was still good.
The underlying development of the commission income was also positive during the second quarter of the year, compared to the corresponding period last year. The market environment developed favourably and Aktia's total fund book rose at the end of June to an all-time high. The internationalisation of asset management is progressing according to plan and assets under management in our UI-Aktia funds sold on international markets increased from the year-end by 38% and amounted to EUR 1.6 billion. In total, approximately 25% of the capital in funds managed by Aktia was of foreign origin at the end of the second quarter.
We also managed to keep costs for the quarter at the same level as last year, despite the challenging investment and regulatory environment.
I am satisfied with the quarter as a whole, but I am convinced that we can do even better in the future. We will continue our determined work to develop Aktia further to a modern and forward-looking bank for both customers, owners and our employees.
Key figures
| (EUR million) | 2Q2019 | 2Q2018 | ∆ % | Jan-Jun 2019 | Jan-Jun 2018 | ∆ % | 1Q2019 | 2Q/1Q | 2018 |
| Net interest income | 19.2 | 23.5 | -18% | 38.7 | 44.2 | -13% | 19.4 | -1% | 85.9 |
| Net commission income | 24.0 | 26.2 | -9% | 46.7 | 50.1 | -7% | 22.7 | 6% | 95.6 |
| Net income from life insurance | 6.6 | 5.0 | 33% | 14.9 | 10.8 | 38% | 8.3 | -20% | 21.4 |
| Other operating income | 10.8 | 1.1 | 856% | 13.1 | 2.0 | 562% | 2.3 | 374% | 7.3 |
| Total operating income | 60.6 | 55.8 | 9% | 113.3 | 107.0 | 6% | 52.7 | 15% | 210.1 |
| Total operating expenses | -35.0 | -38.3 | -9% | -71.1 | -71.8 | -1% | -36.1 | -3% | -143.0 |
| Impairment of credits and other commitments | -1.4 | 0.7 | - | -2.5 | 0.1 | - | -1.1 | 32% | -0.8 |
| Operating profit | 24.2 | 18.2 | 33% | 41.4 | 35.9 | 15% | 17.2 | 41% | 67.6 |
| Comparable operating income1 | 50.6 | 55.8 | -9% | 103.2 | 107.0 | -4% | 52.7 | -4% | 206.1 |
| Comparable operating expenses1 | -34.9 | -38.0 | -8% | -71.0 | -71.1 | 0% | -36.1 | -3% | -141.2 |
| Comparable operating profit1 | 14.3 | 18.5 | -23% | 31.4 | 36.6 | -14% | 17.2 | -17% | 65.4 |
| Cost-to-income ratio | 0.58 | 0.69 | -16% | 0.63 | 0.67 | -6% | 0.69 | -16% | 0.68 |
| Comparable cost-to-income ratio1 | 0.69 | 0.68 | 1% | 0.69 | 0.66 | 5% | 0.69 | 0% | 0.69 |
| Earnings per share (EPS), EUR | 0.30 | 0.21 | 43% | 0.50 | 0.43 | 16% | 0.21 | 46% | 0.81 |
| Comparable earnings per share (EPS), EUR1 | 0.16 | 0.22 | -27% | 0.36 | 0.44 | -18% | 0.21 | -24% | 0.77 |
| Return on equity (ROE), % | 13.7 | 10.1 | 36% | 11.8 | 10.2 | 15% | 9.4 | 45% | 9.4 |
| Comparable return on equity (ROE), %1 | 7.2 | 10.3 | -31% | 8.4 | 10.4 | -19% | 9.4 | -24% | 9.0 |
| Common Equity Tier 1 capital ratio (CET1), %2 | 16.5 | 16.3 | 1% | 16.5 | 16.3 | 1% | 16.9 | -2% | 17.5 |
1) Alternative performance measures excluding items affecting comparability
2) At the end of the period
Webcast from the results conference
A live webcast from the results conference will take place on 1 August 2019 at 10 am. CEO Mikko Ayub and CFO Outi Henriksson will present the results. The conference is held in Finnish and Swedish and can be seen live at /2019-q2-results. A recording of the webcast will be available at
AKTIA BANK PLC
For more information:
Outi Henriksson, CFO, tel. +358 10 247 6236
Lotta Borgström, Head of Investor Relations, tel. +358 10 247 6838,
Distribution:
Nasdaq Helsinki Ltd
Central media
Aktia provides a broad range of solutions within banking, asset management and personal insurance. Aktia operates in coastal areas and inland growth areas. Aktia’s customers are served at branch offices and online, through mobile interfaces as well as through telephone services. Aktia's share is listed on the list of Nasdaq Helsinki Ltd. For more information about Aktia, see
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