Stock Exchange Release
Aktia Bank Plc’s Half-year report January–June 2020: Strong recovery following a spring hit by the coronavirus
In brief
- Continued organic growth in net interest income
- The market recovered after the steep decline in March, which contributed to positive value changes. Together with increased net subscriptions this led to a significant improvement in assets under management during the second quarter
- Increased use of digital banking services among customers
- Liquidity and capital adequacy remained strong
Outlook 2020 (updated)
Aktia Group’s results for 2020 is still very much dependent on how a possible new escalation of the COVID-19 pandemic will affect market values, customer behaviour and impairment levels during the end of the year. The visibility for 2020 is therefore very poor. Aktia is for the moment suspending its outlook for the operating profit 2020.
Despite the weak result due to the coronavirus during the first half of the year, the financial performance is expected to be stable during the second half of the year, provided market and social conditions are stable:
- Continued growth in net interest income. The recovery in commission income from especially fund and asset management is dependent on changes in market values.
- Net income from life insurance is still very much dependent on changes in market values.
- Provisions for potential credit losses are expected to continue on a moderate level during the second half of the year at the same time as Aktia’s liquidity and capital adequacy is still strong.
The first six months of 2020 were extremely exceptional for all of us. This was the case also for us at Aktia. During the corona crisis at times nearly 80% of Aktia’s extremely skilled professionals worked from home and sought new solutions to help our customers. I want to sincerely thank them all for this. The coronavirus hit many households hard. Aktia launched therefore a campaign allowing instalment-free periods free of charge. The campaign period extended to the end of May during which more than 11,000 private customers were allowed an instalment-free period.
The main part of our customer meetings was also carried out remotely. The use of digital banking services grew enormously during the spring, and for example the number of digital signatures increased explosively. It was pleasant to see that even those customers who haven’t previously used digital banking services felt that the services were good and functional. During the second quarter we carried out a pilot for the automation of housing loan offers and a portfolio application for asset management aimed at Private Banking customers, and a new chatbot service for daily banking services was introduced. I am totally convinced that the exceptional spring increased the importance of digital banking services to a new level and opened up also many new opportunities for banking transactions for the future.
Strong result improvement from the first quarter
The coronavirus situation in
The comparable total operating income for the second quarter amounted to
Net income from life insurance recovered after the drop at the beginning of the year supported by the market and amounted to
Comparable total operating expenses amounted to
In connection with the report for the first quarter we announced that we as a conservative lender have not identified significant individual risk sectors or risk concentrations in our loan book, which to a larger extent would be affected by the difficult situation. This is still the case. The allowance for model-based credit loss (ECL) increased by
Fortunately, the coronavirus situation in
Key figures
(EUR million) | 2Q2020 | 2Q2019 | ∆ % | Jan- | Jan- | ∆ % | 1Q2020 | ∆ % | 2019 |
Net interest income | 20.1 | 19.2 | 5% | 39.8 | 38.7 | 3% | 19.7 | 2% | 77.6 |
Net commission income | 22.9 | 24.8 | -8% | 48.1 | 47.9 | 0% | 25.2 | -9% | 99.1 |
Net income from life insurance | 10.1 | 6.6 | 53% | 4.9 | 14.9 | -67% | -5.2 | - | 30.0 |
Total operating income | 54.8 | 60.6 | -10% | 94.7 | 113.3 | -16% | 39.9 | 37% | 221.4 |
Operating expenses | -36.3 | -35.0 | 4% | -71.9 | -71.1 | 1% | -35.6 | 2% | -143.9 |
Impairment of credits and other commitments | -1.8 | -1.4 | 24% | -3.2 | -2.5 | 27% | -1.4 | 25% | -4.5 |
Operating profit | 16.3 | 24.2 | -32% | 19.1 | 41.4 | -54% | 2.8 | 488% | 74.8 |
Comparable operating income1 | 54.8 | 50.6 | 8% | 94.7 | 103.2 | -8% | 39.9 | 37% | 211.4 |
Comparable operating expenses1 | -36.1 | -34.9 | 3% | -71.7 | -71.0 | 1% | -35.6 | 1% | -140.4 |
Comparable operating profit1 | 16.5 | 14.3 | 16% | 19.3 | 31.4 | -39% | 2.8 | 495% | 68.2 |
Cost-to-income ratio | 0.66 | 0.58 | 14% | 0.76 | 0.63 | 21% | 0.89 | -26% | 0.65 |
Comparable cost-to-income ratio1 | 0.66 | 0.69 | -4% | 0.76 | 0.69 | 10% | 0.89 | -26% | 0.66 |
Earnings per share (EPS), EUR | 0.19 | 0.30 | -37% | 0.22 | 0.50 | -57% | 0.03 | 533% | 0.90 |
Comparable earnings per share (EPS), EUR1 | 0.19 | 0.16 | 19% | 0.22 | 0.36 | -39% | 0.03 | 533% | 0.79 |
Return on equity (ROE), % | 8.4 | 13.7 | -39% | 4.9 | 11.8 | -59% | 1.4 | 521% | 10.3 |
Comparable return on equity (ROE), %1 | 8.5 | 7.2 | 19% | 4.9 | 8.4 | -42% | 1.4 | 529% | 9.1 |
Common Equity Tier 1 capital ratio (CET1), %2 | 15.7 | 16.5 | -5% | 15.7 | 16.5 | -5% | 15.9 | -1% | 14.7 |
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
For more information:
Lotta Borgström, Director, Investor Relations and Communications, tel. +358 10 247 6838, ir (at) aktia.fi
Distribution:
Central media
www.aktia.com
Aktia is a Finnish asset manager, bank and life insurer that has been creating wealth and wellbeing from one generation to the next for 200 years. We serve our customers in digital channels everywhere and face-to-face in our offices in the Helsinki,
Attachment
- Aktia Bank Plc_2Q 2020
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