Aktia Bank Plc Financial Statement January-December 2022: Changes in the operating environment marked Aktia’s year 2022
February 17 2023 - 1:00AM
Aktia Bank Plc Financial Statement January-December 2022: Changes
in the operating environment marked Aktia’s year 2022
Aktia Bank PlcStock Exchange Release17 February 2023 at 8.00
a.m.
Aktia Bank Plc Financial Statement January-December
2022: Changes in the operating environment marked Aktia’s year
2022
The quarter in short
- Interest income from lending grew strongly towards the end of
the year.
- Net subscriptions were negative despite the strong new sales in
asset management.
- Expenses were at the same level as the previous quarters.
- The calibration of the ECL model (Expected Credit Loss), driven
by the regulation, increased the provisions for potential future
credit losses. The quality of the credit portfolio remained
solid.
The year 2022 in short
- Interest income began to grow strongly as interest rates
increased, however higher financing and hedging costs weighed down
net interest income.
- The demand for mortgage loans slowed down, but the demand for
corporate loans remained strong. Margin development was good.
- The volatile investment market weighed down assets under
management, net subscriptions for the full year amounted to EUR -69
million.
- In particular, higher interest rates weighed down value changes
in the life insurance portfolio and the net income from life
insurance, while life insurance business continued to perform
well.
- International distribution of Aktia investment products
increased – Funds from Aktia’s portfolio management are now sold in
17 different countries.
Outlook for 2023
Aktia's comparable operating profit in 2023 is expected to be
clearly higher than in 2022.
Dividend
Aktia's Board of Directors proposes, in accordance with the
company's dividend policy, that a dividend of EUR 0.43 per share be
paid for 2022, which constitutes 60% of the profit for the
reporting period.
Mikko Ayub, CEO:
In 2022, Aktia's market environment changed significantly. The
Russian invasion of Ukraine, which began early in the year, was
part of the reason why the central banks tightened their monetary
policy in order to curb inflation. After a pause of many years,
interest rates started rising again, which increased Aktia's
interest income, but also its financing costs.
Provisions for potential future credit losses increased in the
last quarter due to calibration of the ECL model, driven by the
regulation. It is clear that a potential recession would have an
impact on customers' ability to pay, and consequently, on the
increase of credit losses. However, the demand for instalment-free
periods has not yet increased significantly, and so far customers
seem to be able to cope well with managing their loans. The
majority of Aktia's loan portfolio consists of mortgages, and a
good quality credit portfolio is clearly beneficial to us – Aktia
continues to be a responsible creditor.
However, last year also brought us business-related challenges.
The uncertain investment environment caused a market downturn
during the year, weighing down Aktia's assets under management. The
higher interest rates decreased the net income from life insurance
through changes in the value of the life insurance portfolio, which
caused volatility in Aktia’s result. The life insurance business as
such continued to develop well and the sales of risk life
insurances increased in particular.
New investment products in 2022, such as the UI-Aktia
Sustainable Corporate Bond fund, a dark green fund in accordance
with Article 9 in the EU Sustainable Finance Disclosure Regulation,
substantially increased sales: in December, the Fund's
subscriptions amounted to EUR 100 million. Moreover, the rapid
expansion of international distribution channels gives us the
possibility to reach a larger customer base. Funds from Aktia’s
portfolio management are now sold in 17 different countries. The
integration of the Taaleri wealth management, acquired by Aktia in
2021, will also be completed in 2023, as we stated in connection
with the acquisition. Now we have all the premises to fully
implement the growth strategy for Aktia asset
management.
We continue to rely on our strategy of becoming the
leading wealth manager bank
Aktia's comparable operating profit in 2022 was EUR 65.2 (87.4)
million, thus clearly lower than the previous year. Although the
operating environment had a major impact on performance
development, we must continue our determined efforts to develop our
own activities. The net interest income improved especially towards
December and the development for the start of this year looks
promising: the growth is expected to continue this year with the
annual repricing of mortgage loans. The effect of the interest rate
hedges made in 2022 will also start to contribute positively in the
net interest income.
Cost management is one of the main objectives for this year, and
here, the inflation brings its own additional challenges. This year
holds a lot of question marks in terms of both the investment
market and the global political situation. We must therefore
maintain a high response capability in case of various disturbing
factors.
Aktia’s operations continue to rely heavily on our strategy of
becoming the leading wealth manager bank. Together, Asset
Management, Banking and Life Insurance form a solid foundation for
our work. An excellent employee and customer experience, the best
wealth management, and customers who are willing to increase their
wealth are the cornerstones of our strategy. An increase in
individuals’ wealth through the Aktia Wealth Plan benefits our
customers and thus the Finnish society as a whole and makes our
work meaningful.
Key figures
(EUR million) |
Q4/2022 |
Q4/2021 |
∆% |
2022 |
2021 |
∆% |
Q3/2022 |
∆% |
Q2/2022 |
Q1/2022 |
Net interest income |
24.2 |
24.1 |
0% |
99.2 |
96.2 |
3% |
24.0 |
1% |
25.8 |
25.1 |
Net commission income |
29.1 |
33.7 |
-14% |
122.0 |
124.0 |
-2% |
29.9 |
-3% |
31.6 |
31.3 |
Net income from life insurance |
12.7 |
7.6 |
68% |
30.5 |
37.7 |
-19% |
3.4 |
276% |
12.7 |
1.8 |
Total operating income |
67.5 |
65.5 |
3% |
254.3 |
263.8 |
-4% |
56.2 |
20% |
71.6 |
59.0 |
Operating expenses |
-46.9 |
-45.2 |
4% |
-180.3 |
-174.4 |
3% |
-42.8 |
9% |
-44.7 |
-45.9 |
Impairment of credits and other commitments |
-7.1 |
0.1 |
- |
-10.2 |
-4.5 |
127% |
-1.0 |
-613% |
-2.4 |
0.3 |
Operating profit |
13.4 |
20.3 |
-34% |
64.0 |
84.6 |
-24% |
12.3 |
9% |
24.7 |
13.5 |
Comparable operating income1 |
67.5 |
65.5 |
3% |
254.1 |
263.2 |
-3% |
56.2 |
20% |
71.6 |
58.8 |
Comparable operating expenses1 |
-45.5 |
-44.9 |
1% |
-179.0 |
-171.1 |
5% |
-42.8 |
6% |
-44.7 |
-45.9 |
Comparable operating
profit1 |
14.8 |
20.7 |
-28% |
65.2 |
87.4 |
-25% |
12.3 |
20% |
24.7 |
13.3 |
Cost-to-income ratio |
0.69 |
0.69 |
1% |
0.71 |
0.66 |
7% |
0.76 |
-9% |
0.62 |
0.78 |
Comparable cost-to-income ratio1 |
0.67 |
0.69 |
-2% |
0.70 |
0.65 |
8% |
0.76 |
-11% |
0.62 |
0.78 |
Earnings per share (EPS), EUR |
0.15 |
0.23 |
-34% |
0.72 |
0.95 |
-24% |
0.14 |
8% |
0.28 |
0.15 |
Comparable earnings per share (EPS), EUR1 |
0.17 |
0.23 |
-30% |
0.73 |
0.98 |
-25% |
0.14 |
19% |
0.28 |
0.15 |
Return on equity (ROE), % |
6.8 |
9.5 |
-28% |
7.8 |
10.0 |
-22% |
6.4 |
7% |
12.3 |
6.5 |
Comparable return on equity (ROE), %1 |
7.5 |
9.6 |
-22% |
8.0 |
10.3 |
-23% |
6.4 |
18% |
12.3 |
6.5 |
Common Equity Tier 1 capital ratio (CET1), %2 |
10.8 |
11.2 |
-3% |
10.8 |
11.2 |
-3% |
10.6 |
2% |
10.4 |
10.6 |
Dividend per share (proposal from Board Directors), EUR |
|
|
|
0.43 |
0.56 |
-23% |
|
|
|
|
1) Alternative performance measures2) At the end of the
period
Webcast from the results event
A live webcast from the results event will take place on 17
Februrary 2023 at 10.30 a.m. CEO Mikko Ayub and CFO Outi Henriksson
will present the results. The event is held in English and can be
seen live at https://aktia.videosync.fi/2022-q4-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.
- Aktia Bank Plc Financial Statement January-December 2022
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