Bank of Åland Plc: Half-Year Financial Report for the period January - June 2019
Bank of Åland Plc
Half-Year Financial Report
July 18, 2019 9:00 am
Half-Year Financial Report for the period January - June 2019
”In terms of earnings, one of our best quarters ever. Net commission income and total expenses developed satisfactorily. Net interest income decreased due to a lower risk level, where we actively downweighted high-margin lending for commercial properties in favour of lending to private individuals. Net commission income has now surpassed net interest income in size, which shows our ability to generate income from less capital-intensive operations."
Peter Wiklöf, Managing Director and Chief Executive
January−June 2019 compared to January - June 2018
- Net operating profit increased by 7 per cent to EUR 14.5 M (13.6).
- Profit for the period attributable to shareholders rose by 8 per cent to EUR 11.5 M (10.6).
- Net interest income decreased by 5 per cent to EUR 26.5 M (27.9).
- Net commission income increased by 1 per cent to EUR 27.9 M (27.7).
- Total expenses decreased by 3 per cent to EUR 49.4 M (51.1).
- Net impairment losses on financial assets (including recoveries) totalled EUR 0.6 M (0.7), equivalent to a loan loss level of 0.03 (0.03) per cent.
- Return on equity after taxes (ROE) amounted to 9.6 (9.3) per cent.
- Earnings per share increased to EUR 0.74 (0.69).
- The common equity Tier 1 ratio amounted to 13.3 per cent (13.0 on December 31, 2018).
- Unchanged future outlook: The Bank of Åland expects its net operating profit in 2019 to be at about the same level as in 2018.
The second quarter of 2019 compared to the second quarter of 2018
- Net operating profit increased by 4 per cent to EUR 8.7 M (8.4).
- Profit for the period attributable to shareholders rose by 5 per cent to EUR 6.9 M (6.6).
- Net interest income decreased by 3 per cent to EUR 13.4 M (13.8).
- Net commission income increased by 3 per cent to EUR 13.8 M (13.4).
- Total expenses decreased by 1 per cent to EUR 23.4 M (23.6).
- Net impairment losses on financial assets (including recoveries) totalled EUR 0.2 M (0.5), equivalent to a loan loss level of 0.01 (0.05) per cent.
- Return on equity after taxes (ROE) amounted to 11.5 (11.5) per cent.
- Earnings per share amounted to EUR 0.45 (0.43).
Financial summary
| Group | Q2 2019 | Q1 2019 | % | Q2 2018 | % | Jan-Jun 2019 | Jan-Jun 2018 | % |
| EUR M | ||||||||
| Income | ||||||||
| Net interest income | 13.4 | 13.2 | 2 | 13.8 | -3 | 26.5 | 27.9 | -5 |
| Net commission income | 13.8 | 14.1 | -2 | 13.4 | 3 | 27.9 | 27.7 | 1 |
| Net income from financial items at fair value | 0.8 | 0.4 | 85 | 0.9 | -18 | 1.2 | 1.3 | -12 |
| Other income | 4.3 | 4.6 | -6 | 4.4 | -1 | 8.9 | 8.5 | 5 |
| Total income | 32.3 | 32.3 | 0 | 32.5 | -1 | 64.6 | 65.4 | -1 |
| Staff costs | -14.5 | -14.5 | 0 | -14.5 | 0 | -29.0 | -29.5 | -2 |
| Other expences | -6.0 | -8.7 | -31 | -7.3 | -18 | -14.8 | -17.9 | -17 |
| Depreciation/amortisation | -2.8 | -2.8 | -1 | -1.8 | 54 | -5.7 | -3.7 | 54 |
| Total expenses | -23.4 | -26.0 | -10 | -23.6 | -1 | -49.4 | -51.1 | -3 |
| Profit before impairment losses | 8.9 | 6.2 | 43 | 8.9 | 0 | 15.1 | 14.3 | 6 |
| Impairment losses on financial assets, net | -0.2 | -0.4 | -62 | -0.5 | -64 | -0.6 | -0.7 | -9 |
| Net operating profit | 8.7 | 5.8 | 51 | 8.4 | 4 | 14.5 | 13.6 | 7 |
| Income taxes | -1.8 | -1.2 | 47 | -1.8 | -2 | -3.0 | -2.9 | 2 |
| Profit for the report period | 6.9 | 4.6 | 51 | 6.6 | 5 | 11.5 | 10.6 | 8 |
| Attributable to: | ||||||||
| Shareholders in Bank of Åland Plc | 6.9 | 4.6 | 52 | 6.6 | 5 | 11.5 | 10.6 | 8 |
| Volume | ||||||||
| Receivables from the public and public sector | 4,001 | 4,017 | 0 | 3,963 | 1 | |||
| Deposits from the public and public sector | 3,225 | 3,107 | 4 | 3,095 | 4 | |||
| Actively managed assets 1 | 5,637 | 5,476 | 3 | 5,650 | 0 | |||
| Equity capital | 242 | 247 | -2 | 229 | 5 | |||
| Balance sheet total | 5,514 | 5,542 | -1 | 5,301 | 4 | |||
| Risk exposure amount | 1,577 | 1,548 | 2 | 1,575 | 0 | |||
| Financial ratios | ||||||||
| Return on equity after taxes, % (ROE) 2 | 11.5 | 7.6 | 11.5 | 9.6 | 9.3 | |||
| Return on equity after taxes, % (ROE), moving 12-month avarage to end of report period | 10.0 | 9.9 | 9.4 | |||||
| Expence/income ratio 3 | 0.72 | 0.81 | 0.73 | 0.77 | 0.78 | |||
| Loan loss level, % 4 | 0.01 | 0.05 | 0.05 | 0.03 | 0.03 | |||
| Liquidity coverage ratio (LCR), % 5 | 165 | 171 | 135 | |||||
| Loan/deposit ratio, % 6 | 124 | 129 | 128 | |||||
| Core funding ratio, % 7 | 89 | 90 | 90 | |||||
| Equity/assets ratio, % 8 | 4.4 | 4.5 | 4.3 | |||||
| Common equtiy Tier 1 capital ratio, % 9 | 13.3 | 13.4 | 12.7 | |||||
| Earnings per share, EUR 10 | 0.45 | 0.30 | 51 | 0.43 | 5 | 0.74 | 0.69 | 8 |
| Earnings per share after dilution, EUR | 0.45 | 0.30 | 51 | 0.42 | 5 | 0.74 | 0.68 | 8 |
| Earnings per share, EUR, moving 12-month average to the end of report period | 1.54 | 1.52 | 1 | 1.40 | 10 | |||
| Equity capital per share, EUR 11 | 15.59 | 15.91 | -2 | 14.85 | 5 | |||
| Equity capital per share after dilution, EUR | 15.54 | 15.86 | -2 | 14.75 | 5 | |||
| Market price per Series A share, EUR | 14.60 | 15.10 | -3 | 14.50 | 1 | |||
| Market price per Series B share, EUR | 14.55 | 14.20 | 2 | 13.50 | 8 | |||
| Number of shares outstanding, 000s | 15,525 | 15,525 | 15,448 | 1 | ||||
| Number of shares outstanding, after dilution, 000s | 15,595 | 15,595 | 0 | 15,586 | 0 | |||
| Working hours re-calculated to full-time equivalent positions | 702 | 683 | 3 | 693 | 1 | 694 | 686 | 1 |
1 Actively managed assets encompassed managed assets in the Group’s own mutual funds, as well as discretionary and advisory securities volume
2 Profit for the report period attributable to shareholders / Average shareholders´portion of equity capital
3 Expenses / Income
4 Impairment losses on loan portfolio and other commitments / Receivables from the public and public sector at the beginning of the period
5 Liquidity coverage ratio (LCR) = liquid assets, level 1 and 2 / 30-day net outflow
6 Receivables from the public and public sector / Deposits from the public and public sector
7 Receivables from the public and public sector / Deposits including certificates of deposit, index bonds and debentures issued to the public and public sector plus coveredbonds issued
8 Equity capital / Balance sheet total
9 Common equity Tier 1 capital / Risk exposure amount
10 Shareholders’ portion of earnings for the period / Avarage number of shares
11 Shareholders’ portion of equity capital / Number of shares on closing day
The Bank of Åland (Ålandsbanken) follows the disclosure procedure stipulated in "Disclosure obligation of the issuer (7/2013)", published by the Finnish Financial Supervisory Authority and hereby publishes its Half-Year Financial Report for the period January – June 2019, which is enclosed with this stock exchange release. The Bank`s Half-Year Financial Report for the period January – June 2019 is attached to this release in PDF format and is also available on the company’s web site at
Mariehamn, July 18, 2019
THE BOARD OF DIRECTORS
For more information please contact:
Peter Wiklöf, Managing Director and Chief Executive, Bank of Åland Plc, tel. + 358 (0)40 512 7505
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