Aktia Bank Plc’s Interim Report January–March 2023: Aktia’s net interest income increased strongly
11 Maio 2023 - 2:00AM
Aktia Bank Plc’s Interim Report January–March 2023: Aktia’s net
interest income increased strongly
Aktia Bank PlcStock Exchange Release11 May 2023 at 8.00 a.m.
Aktia Bank Plc’s Interim Report
January–March
2023:
Aktia’s net interest income increased strongly
The quarter in
short
- Net interest income grew by 27% to
EUR 31.8 (25.1) million from the previous year. The strong growth
is mainly due to the increase in interest income in lending.
- Net commission income remained
approximately at the previous year’s level at EUR 30.3 (31.3)
million. The assets under management (AuM) increased from the end
of the year to EUR 13.8 (13.5) billion.
- Net income from life insurance
amounted to EUR 7.2 (21.4) million. The recalculated comparative
figures for 2022 according to the new accounting standard IFRS 17
include considerable positive market valuations and thus make the
comparison significantly more difficult.
- The business developed according to
the company’s expectations, but do to the accounting standard
change (IFRS 17), the comparable operating profit decreased to EUR
23.6 (35.6) million.
- The costs increased somewhat due to
inflation and a higher estimated cost for the stability fee than
last year.
- Credit loss provisions remained at a
moderate level at EUR -0.9 million.
- The CET1 ratio, which describes
Aktia's capital adequacy, increased to 11.1 (10.8) % from the
year-end.
Outlook 2023
(unchanged)
Aktia's comparable operating profit for 2023 is expected to be
clearly higher than the EUR 65.2 million reported for 2022 (under
the accounting standard previously applied for the life insurance
business).
The outlook has been prepared based on the following
expectations:
- Net interest income is expected to be significantly higher than
in 2022.
- Net commission income is expected to increase slightly in
2023.
- The life insurance business is expected to develop stably.
However, the result is affected by changes in market values. The
recalculated result for 2022 according to the new accounting
standard IFRS 17 is exceptionally high due to accounting technical
changes.
- Operating expenses are expected to be at the same level as
2022.
- Credit loss provisions are expected to be at the same level as
2022.
Juha
Hammerén,
Interim CEO:
The first quarter of 2023 was strong for Aktia, which pleases me
especially after the challenging previous year. Net interest income
grew by 27%, which is mainly explained by higher interest income
due to the increase in interest rates. The increase also well
exceeded the increase in funding expenses.
Provisions for potential credit losses were very moderate during
the first quarter and the quality of Aktia's loan book remained
good. Due to the general market uncertainty, the housing market
remained rather inactive, but in the corporate customer business
lending continued to increase. The average margin for the entire
loan book continued to rise. The sales and interest towards the
Finnair Visa Credit card, developed in cooperation between Aktia
and Finnair, were strong also outside our standard customer base,
which I am particularly pleased about.
The net commission income development was stable during the
beginning of the year and close to last year's level, although
Assets under Management, at EUR 13.8 billion, understandably did
not reach the level of the previous year’s first quarter. The gross
sales within Asset Management in the quarter were good, with net
subscriptions amounting to EUR 131 million.
There was a great interest in structured products in particular,
and their sales reached record levels, which increased the net
commission income. In cooperation with Taaleri, Aktia launched the
Article 9 fund SolarWind III at the beginning of the year, which
strongly supports the green transition in the energy economy. Sales
have started well, and the fund is an important complement to our
range of responsible investment products. Our determined work to
improve the customer experience also began to bear fruit – customer
satisfaction in Private Banking improved significantly.
New accounting
standard makes comparing the net income from life insurance
more difficult
The life insurance business continued its stable development and
the sales of risk life insurances in particular continued to grow.
However, net income from life insurance was below the previous
year's comparative figures, adjusted according to the IFRS 17
accounting standard, which were exceptionally high due to the rise
in interest rates at the beginning of 2022. This makes comparisons
considerably more difficult. The IFRS 17 accounting standard was
introduced on 1 January 2023, which greatly affected the reporting
and comparative figures of Aktia's life insurance business. Aktia
published the revised figures in a stock exchange bulletin on 8 May
2023.
It should also be noted that in order to increase transparency,
Aktia now for the first time reports Asset Management and Life
Insurance as separate, independent segments - not as one combined
entity.
The cost development in the past quarter was moderate, but the
high inflation was particularly reflected in the increased IT
costs, which mainly consisted of services purchased.
Aktia's comparable operating profit in the first quarter
amounted to EUR 23.6 million, which due to the new calculation of
net income from life insurance was notably lower compared to the
reference period (35.6). However, the transition to the IFRS 17
accounting standard makes the comparison significantly more
difficult and it should be noted that recalculated comparative
figures for net income from life insurance and thus for the
comparable operating profit are exceptionally high. The comparable
operating profit during the first quarter of last year according to
the accounting standard used at the time amounted to EUR 13.3
million.
I am very pleased with Aktia's first quarter. All income
categories developed in line with our expectations, which gives us
a good premise for the year ahead. The quality of Aktia's loan book
has also remained stable. However, the general economic uncertainty
continues and there is no immediate relief in sight. We want to
help our customers think further in their finances also in
economically more challenging times.
Key figures
(EUR million) |
1Q/2023 |
1Q/2022 |
∆ % |
2022 |
4Q/2022 |
∆ % |
3Q/2022 |
2Q/2022 |
Net interest income |
31.8 |
25.1 |
27% |
99.2 |
24.2 |
31% |
24.0 |
25.8 |
Net commission income |
30.3 |
31.3 |
-3% |
122.0 |
29.1 |
4% |
29.9 |
31.6 |
Net income from life insurance |
7.2 |
21.4 |
-67% |
79.2 |
3.3 |
116% |
19.6 |
34.9 |
Total operating income |
70.3 |
78.7 |
-11% |
302.9 |
58.2 |
21% |
72.4 |
93.7 |
Operating expenses |
-47.1 |
-43.3 |
9% |
-169.4 |
-44.1 |
7% |
-40.3 |
-41.8 |
Impairment of credits and other commitments |
-0.9 |
0.3 |
- |
-10.2 |
-7.1 |
-87% |
-1.0 |
-2.4 |
Operating profit |
22.2 |
35.8 |
-38% |
123.5 |
6.9 |
221% |
31.1 |
49.7 |
Comparable operating income1 |
70.3 |
78.5 |
-10% |
302.8 |
58.2 |
21% |
72.4 |
93.7 |
Comparable operating expenses1 |
-45.8 |
-43.3 |
6% |
-168.1 |
-42.7 |
7% |
-40.3 |
-41.8 |
Comparable operating profit1 |
23.6 |
35.6 |
-34% |
124.7 |
8.3 |
183% |
31.1 |
49.7 |
Cost-to-income ratio |
0.67 |
0.55 |
22% |
0.56 |
0.76 |
-12% |
0.56 |
0.45 |
Comparable cost-to-income ratio1 |
0.65 |
0.55 |
18% |
0.56 |
0.73 |
-11% |
0.56 |
0.45 |
Earnings per share (EPS), EUR |
0.25 |
0.40 |
-38% |
1.37 |
0.07 |
238% |
0.34 |
0.55 |
Comparable earnings per share (EPS), EUR1 |
0.27 |
0.40 |
-33% |
1.38 |
0.09 |
194% |
0.34 |
0.55 |
Return on equity (ROE), % |
12.2 |
19.9 |
-38% |
17.0 |
3.7 |
229% |
17.6 |
28.0 |
Comparable return on equity (ROE), %1 |
13.0 |
19.8 |
-34% |
17.2 |
4.5 |
188% |
17.6 |
28.0 |
Common Equity Tier 1 capital ratio (CET1), %2 |
11.1 |
10.6 |
4% |
10.8 |
10.8 |
2% |
10.6 |
10.4 |
1) Alternative performance measures2) At the end of the
period
Reference periods 2022 have been recalculated according to the
new IFRS 17 standard for insurance contracts.
Webcast from the results conference
A live webcast from the results event will take place on 11 May
2023 at 10.30 a.m. Interim CEO Juha Hammarén and CFO Outi
Henriksson will present the results. The event is held in English
and can be seen live at https://aktia.videosync.fi/2023-q1-results.
A recording of the webcast will be available at www.aktia.com after
the event.
AKTIA BANK PLC
For more information: Outi Henriksson, CFO, tel. +358
10 247 6236Lotta Borgström, Director, Investor Relations and
Communications, tel. +358 10 247 6838, lotta.borgstrom (at)
aktia.fi
Distribution:Nasdaq Helsinki LtdCentral mediawww.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, Turku,
Tampere, Vaasa and Oulu regions. Our award-winning asset management
business sells investment funds internationally. We employ
approximately 900 people around Finland. Aktia's assets under
management (AuM) on 31 December 2022 amounted to EUR 13.5 billion,
and the balance sheet total was EUR 12.4 billion. Aktia's shares
are listed on Nasdaq Helsinki Ltd (AKTIA). aktia.com.
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