Aktia Bank Plc's Financial Statement Release January–December 2019: A year of stable growth – strong comparable operating profit in the last quarter
Aktia Bank Plc
Stock Exchange Release
February 14, 2020 at 8 a.m.
Aktia Bank Plc’s Financial Statement Release January–December 2019
A year of stable growth – strong comparable operating profit in the last quarter
The quarter in brief
- Comparable operating profit increased by EUR 9.0 million to EUR 19.2 million.
- Assets under management (AuM) amounted to EUR 9.9 billion, which was on the same level as at the end of the third quarter.
- Strong lending and high customer activity continued.
- Value changes in real estate and fund investments contributed to the positive financial performance in the life
insurance business. - Comparable operating expenses decreased by EUR 3.1 million to EUR 35.2 million.
The year in brief
- Comparable operating profit increased by EUR 2.8 million to EUR 68.2 million.
- A successful year for asset management: assets under management in funds sold internationally increased by 68%.
- Cost development according to plan – costs on the same level as last year.
- Dividend proposal EUR 0.63 (0.61) per share.
Outlook 2020
Despite the uncertainty of the economic development, the comparable operating profit in 2020 is expected to be somewhat higher than in 2019.
Mikko Ayub, CEO:
2019 was an important step in the development and renewal of our business. According to the strategy update in September, Aktia is now even more determined in seeking growth in asset management and among new private and corporate customers in growing cities in Finland as well as in increasing operational efficiency further.
Aktia’s financial performance for the whole year was stable and the Group’s comparable operating profit increased by 4%. However, the underlying financial performance was significantly better and without the effect of the interest rate hedges unwound in 2012, the increase was 17%. In addition, several structural changes affected the comparability.
The year was a considerable success for Aktia especially within asset management. Assets under management in fixed income funds sold to international customers increased by 68% during the year, which shows that Aktia’s asset management is already a success story. Total customer assets under management increased by 18%, of which the growth as a result of net subscriptions was 10%.
Aktia’s Board of Directors proposes that a dividend of EUR 0.63 (0.61) per share be paid for 2019, which is 70% of the profit for the year. The proposal is in line with the improved results and it strengthens Aktia’s equity, thus creating conditions for growth.
A strong fourth quarter
The extremely strong fourth quarter was an excellent closing of the year for Aktia. The comparable operating profit for the fourth quarter increased by EUR 9.0 million to EUR 19.2 million, an increase of as much as 88% from last year. The strong increase is mainly explained by the good development in the asset management, but also by the excellent latter part of the year in the life insurance business as well as the moderate cost level.
Net commission income increased in the last quarter by 11% from last year. The increase was mainly due to the growth in customer assets under management (AuM), although the market drop at the end of 2018 lowered the comparative figures. Net income from life insurance also experienced a considerable increase of 62% from last year. Value changes in real estate and fund investments as well as a better product mix, together with a decreasing interest-linked stock, contributed to the good earnings performance. Net interest income for the fourth quarter decreased by 6%, while net interest income from borrowing and lending increased by 2%. Comparable operating expenses decreased by 8%, mainly as a result of the increasing operational efficiency.
It feels good to be able to end Aktia’s year 2019 with such a good result. However, we have already started thinking ahead. The determined work for the development of Aktia continues, and we are actively investigating even possibilities for inorganic growth. We are well positioned for the ongoing year due to both a competitive asset management and a stable banking business. At the same time, we will continue our work to ensure a moderate cost level.
Key figures
| (EUR million) | 4Q2019 | 4Q2018 | ∆ % | 2019 | 2018 | ∆ % | 3Q2019 | 3Q/2Q | 2Q2019 | 1Q2019 |
| Net interest income | 19.3 | 20.7 | -6% | 77.6 | 85.9 | -10% | 19.6 | -1% | 19.2 | 19.4 |
| Net commission income | 25.1 | 22.6 | 11% | 96.4 | 95.6 | 1% | 24.6 | 2% | 24.0 | 22.7 |
| Net income from life insurance | 8.3 | 5.1 | 62% | 30.0 | 21.4 | 40% | 6.8 | 21% | 6.6 | 8.3 |
| Total operating income | 55.2 | 47.7 | 16% | 221.4 | 210.1 | 5% | 52.9 | 4% | 60.6 | 52.7 |
| Total operating expenses | -35.3 | -39.4 | -11% | -143.9 | -143.0 | 1% | -37.5 | -6% | -35.0 | -36.1 |
| Impairment of credits and other commitments | -0.8 | -0.1 | 464% | -4.5 | -0.8 | 431% | -1.2 | -38% | -1.4 | -1.1 |
| Operating profit | 19.1 | 8.0 | 138% | 74.8 | 67.6 | 11% | 14.3 | 34% | 24.2 | 17.2 |
| Comparable operating income1 | 55.2 | 48.7 | 13% | 211.4 | 206.1 | 3% | 52.9 | 4% | 50.6 | 52.7 |
| Comparable operating expenses1 | -35.2 | -38.3 | -8% | -140.4 | -141.2 | -1% | -34.2 | 3% | -34.9 | -36.1 |
| Comparable operating profit1 | 19.2 | 10.2 | 88% | 68.2 | 65.4 | 4% | 17.6 | 9% | 14.3 | 17.2 |
| Cost-to-income ratio | 0.64 | 0.83 | -23% | 0.65 | 0.68 | -4% | 0.71 | -10% | 0.58 | 0.69 |
| Comparable cost-to-income ratio1 | 0.64 | 0.79 | -19% | 0.66 | 0.69 | -4% | 0.65 | -2% | 0.69 | 0.69 |
| Earnings per share (EPS). EUR | 0.23 | 0.09 | 156% | 0.90 | 0.81 | 10% | 0.16 | 44% | 0.30 | 0.21 |
| Comparable earnings per share (EPS). EUR1 | 0.23 | 0.12 | 92% | 0.79 | 0.77 | 3% | 0.20 | 15% | 0.16 | 0.21 |
| Return on equity (ROE). % | 10.5 | 4.4 | 140% | 10.3 | 9.4 | 9% | 7.4 | 41% | 13.7 | 9.4 |
| Comparable return on equity (ROE). %1 | 10.5 | 5.6 | 89% | 9.1 | 9.0 | 2% | 9.2 | 14% | 7.2 | 9.4 |
| Common Equity Tier 1 capital ratio (CET1). %2 | 14.7 | 17.5 | -16 % | 14.7 | 17.5 | -16 % | 15.6 | -6 % | 16.5 | 16.9 |
| Dividend per share (proposal from Board Directors), EUR | 0.63 | 0.61 | 3% |
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 event will take place on 14 February 2020 at 10 a.m. CEO Mikko Ayub and CFO Outi Henriksson will present the results. The event is held in Finnish and Swedish and can be seen live at /2019-q4-results. A recording of the webcast will be available at after the event.
AKTIA BANK PLC
For more information:
Outi Henriksson, CFO, tel. +358 10 247 6236
Lotta Borgström, Director, Investor Relations and Communications, tel. +358 10 247 6838, ir (at) aktia.fi
Distribution:
Nasdaq Helsinki Ltd
Central media
Aktia is a Finnish asset manager, bank and life insurer that has been creating wealth and welfare from one generation to the next already for 200 years. We serve our customers through digital channels everywhere and face to face in our offices in the Helsinki region as well as in Oulu, Tampere, Turku and Vaasa regions. Funds in our awarded asset management are also sold internationally. We employ approximately 800 people around Finland. Aktia's share is listed on Nasdaq Helsinki Ltd (AKTIA). aktia.com.
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