Bank of Åland Plc: Half-Year Financial Report for the period January - June 2020
Bank of Åland Plc
Half-Year Financial Report
July 17, 2020 9:00 am
Half-Year Financial Report for the period January - June 2020
“Looking at net operating profit, the second quarter (EUR 9.8 M) was the best we have ever achieved.
“Our operating profit before impairment losses − which largely consist of provisions for possible future coronavirus effects − was 40 per cent better than in the first half of last year. We achieved this through a clearly higher income level, in which our Swedish operations made especially great progress.
“We are not yet seeing any rising levels of non-performing loans due to the pandemic, but we expect its negative impact to be more clearly visible this coming winter.”
Peter Wiklöf, Managing Director and Chief Executive
January - June 2020 compared to January - June 2019
• Net operating profit increased by 15 per cent to EUR 16.7 M (14.5).
• Profit for the period attributable to shareholders rose by 14 per cent to EUR 13.2 M (11.5).
• Net interest income increased by 10 per cent to EUR 29.3 M (26.5).
• Net commission income increased by 17 per cent to EUR 32.6 M (27.9).
• Total expenses increased by 7 per cent to EUR 53.0 M (49.4).
• Net impairment losses on financial assets (including recoveries) totalled EUR 4.6 M (0.6), equivalent to a loan loss level of 0.22 (0.03) per cent.
• Return on equity after taxes (ROE) increased to 10.1 (9.6) per cent.
• Earnings per share increased by 14 per cent to EUR 0.85 (0.74).
• The common equity Tier 1 ratio increased to 14.5 per cent (13.4 on December 31, 2019).
• Future outlook: Due to low visibility and high volatility in the market, until further notice the Bank of Åland has decided to refrain from issuing any outlook for 2020.
The second quarter of 2020 compared to the second quarter of 2019
• Net operating profit increased by 12 per cent to EUR 9.8 M (8.7).
• Profit for the period attributable to shareholders rose by 12 per cent to EUR 7.8 M (6.9).
• Net interest income increased by 11 per cent to EUR 14.8 M (13.4).
• Net commission income increased by 14 per cent to EUR 15.7 M (13.8).
• Total expenses increased by 10 per cent to EUR 25.8 M (23.4).
• Net impairment losses on financial assets (including recoveries) totalled EUR 0.8 M (0.2), equivalent to a loan loss level of 0.08 (0.01) per cent.
• Return on equity after taxes (ROE) increased to 11.8 (11.5) per cent.
• Earnings per share increased by 11 per cent to EUR 0.50 (0.45).
Financial summary
| Group | Q1 2020 | Q1 2020 | % | Q2 2019 | % | Jan-Jun 2020 | Jan-Jun 2019 | % |
| EUR M | ||||||||
| Income | ||||||||
| Net interest income | 14.8 | 14.5 | 3 | 13.4 | 11 | 29.3 | 26.5 | 10 |
| Net commission income | 15.7 | 16.9 | -7 | 13.8 | 14 | 32.6 | 27.9 | 17 |
| Net income from financial items at fair value | 0.0 | 0.7 | -94 | 0.8 | -94 | 0.8 | 1.2 | -33 |
| Other income | 5.7 | 5.8 | 0 | 4.3 | 33 | 11.5 | 8.9 | 29 |
| Total income | 36.3 | 37.9 | -4 | 32.3 | 12 | 74.2 | 64.6 | 15 |
| Staff costs | -15.6 | -15.2 | 3 | -14.5 | 7 | -30.7 | -29.0 | 6 |
| Other expences | -7.1 | -9.0 | -21 | -6.0 | 18 | -16.1 | -14.8 | 9 |
| Depreciation/amortisation | -3.1 | -3.1 | -1 | -2.8 | 8 | -6.1 | -5.7 | 8 |
| Total expenses | -25.8 | -27.2 | -5 | -23.4 | 10 | -53.0 | -49.4 | 7 |
| Profit before impairment losses | 10.6 | 10.7 | -2 | 8.9 | 19 | 21.3 | 15.1 | 40 |
| Impairment losses on financial assets, net | -0.8 | -3.8 | -79 | -0.2 | -4.6 | -0.6 | ||
| Net operating profit | 9.8 | 6.9 | 41 | 8.7 | 12 | 16.7 | 14.5 | 15 |
| Income taxes | -2.0 | -1.5 | 34 | -1.8 | 13 | -3.5 | -3.0 | 17 |
| Profit for the report period | 7.8 | 5.4 | 43 | 6.9 | 12 | 13.2 | 11.5 | 14 |
| Attributable to: | ||||||||
| Shareholders in Bank of Åland Plc | 7.8 | 5.4 | 43 | 6.9 | 12 | 13.2 | 11.5 | 14 |
| Volume | ||||||||
| Receivables from the public and public sector | 4,188 | 4,076 | 3 | 4,001 | 5 | |||
| Deposits from the public and public sector | 3,459 | 3,409 | 1 | 3,225 | 7 | |||
| Actively managed assets 1 | 6,107 | 5,431 | 12 | 5,651 | 8 | |||
| Equity capital | 271 | 258 | 5 | 242 | 12 | |||
| Balance sheet total | 5,708 | 5,599 | 2 | 5,514 | 4 | |||
| Risk exposure amount | 1,661 | 1,589 | 5 | 1,577 | 5 | |||
| Financial ratios | ||||||||
| Return on equity after taxes, % (ROE) 2 | 11.8 | 8.4 | 11.5 | 10.1 | 9.6 | |||
| Return on equity after taxes, % (ROE), moving 12-month avarage to end of report period | 11.0 | 10.9 | 10.0 | |||||
| Expence/income ratio 3 | 0.71 | 0.72 | 0.72 | 0.71 | 0.77 | |||
| Loan loss level, % 4 | 0.08 | 0.37 | 0.01 | 0.22 | 0.03 | |||
| Liquidity coverage ratio (LCR), % 5 | 142 | 146 | 165 | |||||
| Loan/deposit ratio, % 6 | 121 | 120 | 124 | |||||
| Core funding ratio, % 7 | 95 | 89 | 89 | |||||
| Equity/assets ratio, % 8 | 4.8 | 4.6 | 4.4 | |||||
| Common equtiy Tier 1 capital ratio, % 9 | 14.48 | 14.40 | 13.30 | |||||
| Earnings per share, EUR 10 | 0.50 | 0.35 | 42 | 0.45 | 11 | 0.85 | 0.74 | 14 |
| Earnings per share after dilution, EUR | 0.50 | 0.35 | 42 | 0.45 | 12 | 0.85 | 0.74 | 14 |
| Earnings per share, EUR, moving 12-month average to the end of report period | 1.80 | 1.75 | 3 | 1.54 | 17 | |||
| Equity capital per share, EUR 11 | 17.41 | 16.54 | 5 | 15.59 | 12 | |||
| Equity capital per share after dilution, EUR | 17.41 | 16.54 | 5 | 15.54 | 12 | |||
| Market price per Series A share, EUR | 17.30 | 17.00 | 2 | 14.60 | 18 | |||
| Market price per Series B share, EUR | 16.85 | 15.70 | 7 | 14.55 | 16 | |||
| Number of shares outstanding, 000s | 15,586 | 15,586 | 0 | 15,525 | 0 | |||
| Number of shares outstanding, after dilution, 000s | 15,599 | 15,600 | 0 | 15,595 | 0 | |||
| Working hours re-calculated to full-time equivalent positions | 744 | 720 | 3 | 702 | 6 | 734 | 694 | 6 |
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 / Lending to the public 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 covered bonds 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 2020, which is enclosed with this stock exchange release. The Bank`s Half-Year Financial Report for the period January – June 2020 is attached to this release in PDF format and is also available on the company’s web site at
Mariehamn, July 17, 2020
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
Attachment
