Aktia Bank Plc - Interim report January-September 2019: Strong growth in asset management
Aktia Bank Plc
Stock Exchange Release
October 30, 2019 at 8 a.m.
Aktia Bank Plc – Interim report January–September 2019
Strong growth in asset management
In brief
- Strong growth in assets under management (AuM) which increased by 5% or EUR 0.5 billion during the third quarter.
- Net subscriptions of UI-Aktia funds offered internationally amounted to EUR 319 million during the quarter.
- Strong lending and high customer activity continued.
- Net interest income from borrowing and lending for the quarter increased by 5% from last year.
- Comparable operating expenses increased by 7% for the quarter.
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:
Aktia’s third quarter proceeded in many ways according to our expectations and goals. Lending especially to private customers was still strong. Aktia improved its private customer satisfaction the most in the September EPSI rating, measuring banking customers’ satisfaction. The excellent sentiment also continued within asset management. Assets under management in UI-Aktia fixed income funds offered to international customers amounted to EUR 1.9 billion at the end of the third quarter and have increased by 67% since year-end, which I am especially proud of. It’s great to be a part of creating an international success story in asset management. Aktia’s special competence in equity asset management for small and medium-sized companies has also been successful. Morningstar rates 85% of Aktia’s all funds as 4- or 5- star funds.
Aktia’s comparable operating profit for the quarter decreased by 6% from last year but exceeded the earlier quarters this year, which shows that we are heading in the right direction. Comparable operating income for the quarter increased by 5% from the corresponding period last year. The good development in asset management resulted in 7% increase in commission income, which together with the strong net income from life insurance contributed to the good income development. Net interest income from borrowing and lending increased by 5% in the third quarter. The Group’s net interest income decreased by 7% from last year and was weighed down mainly by the interest rate hedges unwound in 2012 and from reduced return from the bank’s liquidity portfolio. The comparable expenses for the third quarter increased by 7% mainly due to accruements within staff costs – the total cost level is unchanged.
The past autumn has been eventful for Aktia. We updated our strategy and our financial targets at the beginning of September and presented them at Aktia’s Capital Market Day on 10 September 2019. The new strategy update extends to the year 2023 and according to the strategy Aktia is seeking even stronger growth in asset management and new customers in growing cities in Finland where most of Aktia’s existing customers already are. In addition, Aktia is improving the profitability of its operations and freeing resources for growth investments.
On the continuously changing banking market we want through our strategy update to be known as a stable but agile actor who meets its customers with a holistic perspective in all stages of life. We will also come across as an asset manager who provides its customers with world-class investment services. I believe that through these resources we have all the possibilities for growth.
Key figures
| (EUR million) | 3Q2019 | 3Q2018 | ∆ % | Jan-Sep 2019 | Jan-Sep 2018 | ∆ % | 2Q2019 | 2Q/1Q | 1Q2019 | 2018 |
| Net interest income | 19.6 | 21.0 | -7% | 58.2 | 65.2 | -11% | 19.2 | 2% | 19.4 | 85.9 |
| Net commission income | 24.6 | 22.9 | 7% | 71.3 | 73.0 | -2% | 24.0 | 3% | 22.7 | 95.6 |
| Net income from life insurance | 6.8 | 5.5 | 25% | 21.7 | 16.3 | 34% | 6.6 | 3% | 8.3 | 21.4 |
| Other operating income | 1.9 | 6.0 | -68% | 15.0 | 7.9 | 89% | 10.8 | -82% | 2.3 | 7.3 |
| Total operating income | 52.9 | 55.4 | -4% | 166.2 | 162.4 | 2% | 60.6 | -13% | 52.7 | 210.1 |
| Total operating expenses | -37.5 | -31.8 | 18% | -108.6 | -103.6 | 5% | -35.0 | 7% | -36.1 | -143.0 |
| Impairment of credits and other commitments | -1.2 | -0.8 | 52% | -3.7 | -0.7 | 424% | -1.4 | -15% | -1.1 | -0.8 |
| Operating profit | 14.3 | 23.7 | -40% | 55.6 | 59.5 | -7% | 24.2 | -41% | 17.2 | 67.6 |
| Comparable operating income1 | 52.9 | 50.3 | 5% | 156.2 | 157.4 | -1% | 50.6 | 5% | 52.7 | 206.1 |
| Comparable operating expenses1 | -34.2 | -31.8 | 7% | -105.2 | -102.9 | 2% | -34.9 | -2% | -36.1 | -141.2 |
| Comparable operating profit1 | 17.6 | 18.6 | -6% | 49.0 | 55.2 | -11% | 14.3 | 23% | 17.2 | 65.4 |
| Cost-to-income ratio | 0.71 | 0.57 | 25% | 0.65 | 0.64 | 2% | 0.58 | 22% | 0.69 | 0.68 |
| Comparable cost-to-income ratio1 | 0.65 | 0.63 | 3% | 0.67 | 0.65 | 3% | 0.69 | -6% | 0.69 | 0.69 |
| Earnings per share (EPS), EUR | 0.16 | 0.29 | -45% | 0.67 | 0.72 | -8% | 0.30 | -47% | 0.21 | 0.81 |
| Comparable earnings per share (EPS), EUR1 | 0.20 | 0.23 | -13% | 0.56 | 0.66 | -14% | 0.16 | 25% | 0.21 | 0.77 |
| Return on equity (ROE), % | 7.4 | 13.7 | -46% | 10.2 | 11.2 | -8% | 13.7 | -46% | 9.4 | 9.4 |
| Comparable return on equity (ROE), %1 | 9.2 | 10.9 | -15% | 8.6 | 10.2 | -15% | 7.2 | 29% | 9.4 | 9.0 |
| Common Equity Tier 1 capital ratio (CET1), %2 | 15.6 | 16.6 | -6% | 15.6 | 16.6 | -6% | 16.5 | -5% | 16.9 | 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 30 October 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-q3-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, ir (at) aktia.fi
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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