Aktia Bank plc Interim Report for the Bank Group 1 January - 30 June 2009
Aktia Bank plc
Interim report
20.8.2009 at 10.00
Not for release or distribution in the United States, Australia, Canada or Japan
Aktia Bank plc Interim Report for the Bank Group 1 January - 30 June 2009
Activity of the report period
Profit
The Bank Group's operating profit for continuing operations during the first six
months was EUR 24.5 million. Profit after tax for the period was EUR 18.3
million.
The Financial Supervisory Authority announced on 28 April 2009 that it approved
Aktia Bank plc's sale of its shares in Aktia Life Insurance to the Group's
parent company Aktia plc. The transaction did not affect the operative business
of Aktia Life Insurance. The contract price corresponded to the reported net
asset value of the life insurance company which stood at EUR 45.5 million on 28
February 2009. Aktia Life Insurance is reported as a discontinued operation in
the Bank Group.
The banking business posted a profit of EUR 40.8 million before write-downs.
Write-downs on credits amounted to EUR 17.5 million.
Asset management suffered as a result of the situation in the investment market
and returned an operating loss of EUR 0.1 million.
Income
The Bank Group's total income amounted to EUR 96.9 million, EUR 71.7 million of
which was net interest income. The derivatives used by Aktia to limit its
interest rate risk made a positive contribution of EUR 9.1 million during the
period.
Net commission income totalled EUR 17.7 million. Commission income from asset
management and brokering amounted to EUR 5.6 million. The brokering of funds and
insurance generated total income of EUR 8.6 million and accounted for 34% of
commission income. Card and payment services commission was EUR 5.7 million.
Total commission costs amounted to EUR 7.5 million. Among the commission costs,
commissions to savings and local cooperative banks for brokered mortgages
amounted to EUR 1.7 million.
Other operating income totalled EUR 1.6 million.
Expenses
The Bank Group's total costs were EUR 55.4 million.
Staff costs amounted to EUR 23.4 million. Other administration costs totalled
EUR 21.5 million. Among other administration costs, the largest cost items were
primarily attributed to IT which accounted for 36.55% of other administration
costs.
Total depreciation and write-downs on tangible and intangible assets amounted to
EUR 2.3 million. Other operating costs totalled EUR 8.1 million, of which the
costs of renting premises accounted for the larger share of other operating
costs.
Balance sheet and off-balance sheet commitments
The Bank Group's balance sheet total fell by 4.1% from the year-end and amounted
to EUR 9,126 million (EUR 9,520 million at 31 December 2008) at the end of the
period.
The Bank Group's total lending to the public increased by 7.3% from the year-end
to EUR 5,826 million (EUR 5,432 million at 31 December 2008). Loans to private
households accounted for EUR 4,682 million, or 80.4% of the total loan stock. Of
these loans to households, 86.4% were secured against adequate real estate
collateral (under Basel 2). Excluding the mortgages brokered by savings and
local cooperative banks which the local banks are committed to capitalise, the
Bank Group's lending totalled EUR 4,655 million.
Interest-bearing financial assets available for sale amounted to EUR 2,464
million (EUR 2,808 million at 31 December 2008). These assets mainly consist of
the banking business' liquidity reserve.
Deposits from the public and public sector entities totalled EUR 3,091 million
(EUR 3,099 million at 31 December 2008).
Outstanding certificates of deposit and bonds issued increased during the period
by 22.1% to EUR 2,587 million (EUR 2,119 million at 31 December 2008).
Off-balance sheet commitments totalled EUR 609 million (EUR 533 million at 31
December 2008).
The Bank Group's equity amounted to EUR 328 million (EUR 300 million at 31
December 2008) at the end of the reporting period. The fund at fair value for
the Group amounted to EUR 2 million (EUR -35 million at 31 December 2008).
Capital adequacy
Aktia Bank Group's capital adequacy amounted to 14.7% compared to 13.7% at the
year-end. The Tier 1 capital ratio was 9.2%.
The capital adequacy calculated in accordance with the Basel 2 rules improved
thanks to good results and positive growth in the value of financial assets. The
capital adequacy of the Bank Group remains at a good level, achieving the
capital adequacy target and clearly exceeding the limit required by the
authorities.
Rating
Aktia Bank plc's credit rating by the international credit rating agency Moody's
Investors Service has been confirmed as the best classification, P-1
(unchanged), for short-term borrowing. The credit ratings for long-term
borrowing and financial strength were the same, at A1 and C respectively (both
unchanged), all with a stable outlook.
The subsidiary Aktia Real Estate Mortgage Bank plc which issues mortgage covered
bonds secured against real estate has a Moody's credit rating of Aa1 (previously
Aaa) for all bonds as of 25 May 2009.
Valuation of financial assets
Value changes reported via the fund at fair value
Impairments in interest-bearing securities where the issuer has not announced an
inability to pay and value impairments in shares and participations which are
not deemed to be long-term or significant are reported in the fund at fair
value, which, taking cash flow hedging for the Group into consideration,
amounted to EUR 2 million after deferred tax, compared to EUR -35 million at 31
December 2008. The cash flow hedging which comprises the market value for
interest rate derivative contracts which have been acquired for the purposes of
hedging the banking business' net interest income amounted to EUR 18.2 million
(EUR 12.4 million at 31 December 2008).
Of the fund at fair value as at 30 June 2009, EUR 16 million was attributable to
the negative valuation difference of interest-bearing securities which was
mainly due to continued poor market liquidity and investors' demands for high
returns as a result of the general uncertainty in the financial markets. The
negative value changes in interest-bearing securities will not materialise
provided that the issuer does not become unable to pay or the security is cashed
in before its maturity.
Specification of the fund at fair value
--------------------------------------------------------------------------------
| EUR million | 30.6.2009 | 31.12.2008 | Change |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| Shares and participations | | | |
--------------------------------------------------------------------------------
| | Banking business | - | -0,2 | 0,2 |
--------------------------------------------------------------------------------
| | Life insurance business | - | -2,9 | 2,9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Direct interest-bearing | | | |
| securities | | | |
--------------------------------------------------------------------------------
| | Banking business | -16,3 | -26,2 | 9,9 |
--------------------------------------------------------------------------------
| | Life insurance business | - | -18,2 | 18,2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow hedging | 18,2 | 12,4 | 5,8 |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| Fund at fair value, total | 1,9 | -35,1 | 37,0 |
--------------------------------------------------------------------------------
Value changes reported via income statement
Write-downs amounted to EUR 0.4 million (EUR 4.6 million at 31 December 2008) as
a result of significant or long-term impairment of shares and share funds as
well as interest-bearing securities where the issuer has announced an inability
to pay. Of these write-downs, EUR 0.4 million was attributed to interest-bearing
securities.
Write-downs of financial assets
--------------------------------------------------------------------------------
| EUR million | 1-6 2009 | 1-12 2008 |
--------------------------------------------------------------------------------
| Interest-bearing securities | | |
--------------------------------------------------------------------------------
| | Banking business | 0,4 | 3,6 |
--------------------------------------------------------------------------------
| | Life insurance business | - | 5,1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shares and participations | | |
--------------------------------------------------------------------------------
| | Banking business | - | 1,0 |
--------------------------------------------------------------------------------
| | Life insurance business | - | 29,4 |
--------------------------------------------------------------------------------
| Total | | 0,4 | 39,2 |
--------------------------------------------------------------------------------
Write-downs of loan and guarantee claims
Write-downs based on individual examination of loan and bank guarantee claims
totalled EUR -17.8 million. Reversals of losses from previous periods amounted
to EUR 0.2 million so that the cost effect on the profit for the period was EUR
-17.5 million while the cost effect on the first quarter amounted to EUR -1.6
million.
Of the total write-downs, corporate loans accounted for EUR -16.9 million, of
which EUR -10 million can be attributed to one major customer entity whose
operating conditions have worsened considerably as a result of liquidity
problems and the declining market. The financier har shares in subsidiaries as
well as floating charges as collateral. The customer constitutes Aktia's largest
credit exposure which is not secured against real estate, shares in listed
companies or guarantees from financial institutions.
In addition to individual write-downs, group write-downs were made where there
were objective reasons to believe there was uncertainty in relation to the
repayment of claims in underlying credit portfolios. Group write-downs for
households and small companies remained unchanged and amounted to EUR 7.4
million at the end of the period.
The Bank Group's risk management
Risk exposure
The banking business includes Retail Banking (including financing company
operations), Corporate Banking, Treasury and Asset Management.
Lending-related risks within banking
There were no significant changes to the composition of the credit portfolio
during the first six months. Loans for housing purposes increased 7.9% to EUR
4,354 million and the corresponding proportion of the total credit stock rose to
74.8% (74.4% at 31 December 2008). Mortgage lending for housing purposes
totalled EUR 2,288 million (EUR 1,968 million at 31 December 2008), of which EUR
1,113 million was brokered by savings and local co-operative banks.
The proportion of the total credit stock accounted for by corporate loans fell
as planned from 14.8% at the year-end to 14.0% at the end of the period.
Lending to the general public secured against collateral objects or unsecured
within the framework of the financing companies Aktia Corporate Finance and
Aktia Card & Finance totalled EUR 78.9 million (EUR 63.2 at 31 December 2008),
representing 1.4% of total lending.
Credit stock by sector
--------------------------------------------------------------------------------
| EUR million | 30.6.2009 | 31.12.2008 | Change | Percentage |
--------------------------------------------------------------------------------
| Corporate | 820 | 804 | 16 | 14.1% |
--------------------------------------------------------------------------------
| Housing | 260 | 220 | 40 | 4.5% |
| associations | | | | |
--------------------------------------------------------------------------------
| Public sector | 12 | 12 | 0 | 0.2% |
| entities | | | | |
--------------------------------------------------------------------------------
| Non-profit | 52 | 47 | 5 | 0.9% |
| organisations | | | | |
--------------------------------------------------------------------------------
| Households | 4,682 | 4,349 | 333 | 80.4% |
--------------------------------------------------------------------------------
| Total | 5,826 | 5,432 | 394 | 100.0% |
--------------------------------------------------------------------------------
Loans with payments 1-30 days overdue increased during the period from 3.40% to
4.09% of the credit stock, including off-balance sheet guarantee commitments.
Loans with payments 31-90 days overdue increased from 0.87% to 0.94 %, totalling
approximately EUR 56 million. Non-performing loans more than 90 days overdue,
including loans for collection, totalled approximately EUR 44 million,
corresponding to 0.74% (0.48% at 31 December 2008) of the entire credit stock
plus bank guarantees.
Undischarged debts by time overdue
(EUR million)
--------------------------------------------------------------------------------
| Days | 31.3.2009 | % of the | 31.12.2008 | % of the |
| | | credit | | credit stock |
| | | stock | | |
--------------------------------------------------------------------------------
| 1-30 | 240.8 | 4.09 | 186.6 | 3.53 |
--------------------------------------------------------------------------------
| of which | 131.6 | 2.23 | 110.3 | 2.01 |
| households | | | | |
--------------------------------------------------------------------------------
| 31-90 | 55.6 | 0.94 | 47.8 | 0.90 |
--------------------------------------------------------------------------------
| of which | 47.1 | 0.8 | 34.5 | 0.63 |
| households | | | | |
--------------------------------------------------------------------------------
| 91- | 43.6 | 0.74 | 26.2 | 0.49 |
--------------------------------------------------------------------------------
| of which | 22.1 | 0.37 | 16.1 | 0.29 |
| households | | | | |
--------------------------------------------------------------------------------
The Bank Group's financing and liquidity risks
Within the banking business, financing and liquidity risks are defined as the
availability of refinancing plus the differences in maturity between assets and
liabilities. The financing and liquidity risks are dealt with at legal company
level, and there are no financing commitments between the Bank Group and the
insurance companies. The objective in the Bank Group is to be able to cover one
year's refinancing requirements using existing liquidity. Despite considerable
uncertainty in the financial markets, the liquidity status was good and this aim
was achieved.
Counterparty risks
Counterparty risks within Group
Treasury liquidity management
The banking business' liquidity portfolio - which is managed by Group Treasury -
stood at EUR 2,425 million at 30 June 2009 (EUR 2,290 at 31 December 2008).
Counterparty risks arising in relation to liquidity management operations and
entry into derivative contracts are managed through the requirement for
high-level external ratings (minimum A3 rating from Moody's or equivalent) and
the conservative allocation and active selection of investment assets as well as
the rules regarding maximum exposure per counterparty and asset category.
Of the financial assets available for sale, 52% (49% at 31 December 2008) were
investments in covered bonds, 36% (45% at 31 December 2008) were investments in
banks, 10% (3% at 31 December 2008) were investments in state-guaranteed bonds
and approximately 2% (3% at 31 December 2008) were investments in public sector
entities and companies. Of the financial assets, 1.3% did not meet the internal
rating requirements, while eight securities with a total market value of EUR 32
million were no longer eligible for refinancing with the central bank.
Rating distribution for the banking business' liquidity management operations
--------------------------------------------------------------------------------
| | 30.6.2009 | 31.12.2008 |
--------------------------------------------------------------------------------
| Aaa | 55.1% | 49.4% |
--------------------------------------------------------------------------------
| Aa1-Aa3 | 35.2% | 42.3% |
--------------------------------------------------------------------------------
| A1-A3 | 8.3% | 4.9% |
--------------------------------------------------------------------------------
| Baa1-Baa3 | 0.5% | 0.9% |
--------------------------------------------------------------------------------
| Ba1-Ba3 | 0.2% | 0.0% |
--------------------------------------------------------------------------------
| B1-B3 | 0.0% | 0.0% |
--------------------------------------------------------------------------------
| Caa1 or lower | 0.0% | 0.0% |
--------------------------------------------------------------------------------
| No rating | 0.7% | 2.5% |
--------------------------------------------------------------------------------
| Total | 100.0% | 100.0% |
--------------------------------------------------------------------------------
Market risks
The financial assets within the banking business are invested in securities with
access to market prices on an active market, and are valued in accordance with
official quoted prices. Any significant or long-term impairment of market value
compared to the acquisition price is shown in the income statement, while
interest-rate fluctuations are reported under the fund at fair value after the
deduction of deferred tax.
Market value and structural interest rate risk within the banking business
Market value interest rate risk refers to changes in value as a result of
interest rate fluctuations in financial assets available for sale. The net
change in the fund at fair value relating to market value interest rate risk
posted during the period totalled EUR +9.9 million after the deduction of
deferred tax. With an interest rate increase of one percentage point for
financial assets available for sale, the net change of the fund at fair value at
30 June 2009 would be EUR -26.9 million (EUR -27.2 million at 31 December 2008)
after the deduction of deferred tax.
Structural interest rate risk arises as a result of an imbalance between
interest rate ties and the re-pricing of assets and liabilities, and affects net
interest income. To reduce the volatility in the net interest income, structural
interest rate risk is primarily contained through the use of hedging derivative
instruments.
A parallel upward shift in the interest rate curve of one percentage point would
reduce the net interest income of the banking business for the next 12 months by
-0.9% (-5.4% at 31 December 2008) while the target for structural interest rate
risk management is a maximum of -6%. For the next 12-24 months, the net interest
income of the banking business would increase by +3.9% (-6.0% at 31 December
2008) while the target for structural interest rate risk management is a maximum
of -8%.
A parallel downward shift in the interest rate curve of one percentage point
would reduce the net interest income of the banking business for the next 12
months by -2.9% (+6.3% at 31 December 2008), while the target for structural
interest rate risk management is a maximum of -6%. For the next 12-24 months,
the net interest income of the banking business would reduce by -3.4% (+7.9% at
31 December 2008), while the target for structural interest rate risk management
is a maximum of -8%.
Operational risks
Operational risks refer to loss risks arising as a result of unclear or
incomplete instructions, activities carried out contrary to instructions,
unreliable information, deficient systems or actions taken by staff members. If
an operational risk is realised, this can result in direct or indirect financial
losses or tarnish the corporate image to the extent that the bank's credibility
in the marketplace suffers. No significant incidents were recorded during the
reporting period.
Personnel
When converted into full-time employees, the number of staff employed by the
Bank Group fell by 160 to 718 people during the first six months. The average
number of full-time employees during the first six months was 794.
Events after end of the reporting period
There are no events to report that took place after the end of the reporting
period.
Outlook for the rest of the year
The Bank Group's operating profitability during 2009 is expected to remain at a
stable level. A sustained good credit rating and the Group's strengthened
capital base are expected to enable moderate growth and refinancing even in the
current market situation.
The current economic situation causes increased loan losses. A continued
difficult financial situation could also lead to permanent reductions in the
value of individual investments that are currently deemed to be of good quality.
This would have a negative effect on the Group's result. In addition, a
requirement for higher returns among investors may lead to a general price
decrease in financial assets, which would have a negative effect on the Bank
Group's capital adequacy.
The importance of cost effectiveness will further increase in the current
economic and competitive situation.
Aktia Bank Plc - Consolidated financial statements
Aktia Bank Plc is the parent company in the Bank Group. It started its banking
business on 30 September 2008. As Aktia Bank Plc was founded and started its
operations during 2008 no comparative figures are given in the financial
statements for the bank. The annual report of for January - December 2008
encompasses the result of Aktia Bank for the period 1 October - 31 December 2008
and the results of the subsidiaries for the period 1 January - 31 December 2008.
Consolidated income statement for Bank Group
--------------------------------------------------------------------------------
| (EUR million) | 1-6 2009 | 1-6 2008 | 1-12 2008 |
--------------------------------------------------------------------------------
| Continuing operations | | | |
--------------------------------------------------------------------------------
| Net interest income | 71.7 | - | 35.5 |
--------------------------------------------------------------------------------
| Dividends | 0.1 | - | 0.2 |
--------------------------------------------------------------------------------
| Commission income | 25.2 | - | 26.0 |
--------------------------------------------------------------------------------
| Commission expenses | -7.5 | - | -14.2 |
--------------------------------------------------------------------------------
| Net commission income | 17.7 | - | 11.8 |
--------------------------------------------------------------------------------
| Net income from financial | 5.8 | - | -2.8 |
| transactions | | | |
--------------------------------------------------------------------------------
| Net income from investment | 0.0 | - | 2.9 |
| properties | | | |
--------------------------------------------------------------------------------
| Other operating income | 1.6 | - | 8.3 |
--------------------------------------------------------------------------------
| Total operating income | 96.9 | - | 55.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Staff costs | -23.4 | - | -13.9 |
--------------------------------------------------------------------------------
| Other administrative expenses | -21.5 | - | -10.3 |
--------------------------------------------------------------------------------
| Depreciation of tangible and | -2.3 | - | -1.5 |
| intangible assets | | | |
--------------------------------------------------------------------------------
| Other operating expenses | -8.1 | - | -5.7 |
--------------------------------------------------------------------------------
| Total operating expenses | -55.4 | - | -31.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Impairment and reversing items of | 0.0 | - | 0.4 |
| tangible and intangible assets | | | |
--------------------------------------------------------------------------------
| Write-downs of credits and other | -17.5 | - | -0.5 |
| commitments | | | |
--------------------------------------------------------------------------------
| Share of profit from associated | 0.5 | - | 0.2 |
| companies | | | |
--------------------------------------------------------------------------------
| Operating profit from continuing | 24.5 | - | 24.6 |
| operations | | | |
--------------------------------------------------------------------------------
| Taxes | -6.2 | - | -5.5 |
--------------------------------------------------------------------------------
| Profit for the period from | 18.3 | - | 19.1 |
| continuing operations | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Discontinued operations | | | |
--------------------------------------------------------------------------------
| Profit for the period from | -1.8 | - | -34.9 |
| discontinued operations | | | |
--------------------------------------------------------------------------------
| Profit for the period | 16.5 | - | -15.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Attributable to: | | | |
--------------------------------------------------------------------------------
| Shareholders in Aktia Bank Plc | 17.4 | - | -16.4 |
--------------------------------------------------------------------------------
| Minority interest | -0.9 | - | 0.6 |
--------------------------------------------------------------------------------
| Total | 16.5 | - | -15.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share attributable to shareholders | | |
| in Aktia Bank Plc, EUR | | |
--------------------------------------------------------------------------------
| Continuing operations | 6,407,745. | - | 6,164,833.4 |
| | 52 | | 1 |
--------------------------------------------------------------------------------
| Discontinued operations | -596,129.2 | - | -11,625,755 |
| | 7 | | .27 |
--------------------------------------------------------------------------------
| Total | 5,811,616. | - | -5,460,921. |
| | 25 | | 86 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| There is no dilution effect on | | | |
| earnings per share. | | | |
--------------------------------------------------------------------------------
Consolidated statement of comprehensive income for Bank Group
--------------------------------------------------------------------------------
| (EUR million) | 1-6 2009 | 1-6 2008 | 1-12 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Continuing operations | | | |
--------------------------------------------------------------------------------
| Profit for the period from continuing | 18.3 | - | 19.1 |
| operations | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other comprehensive income after taxes: | | | |
--------------------------------------------------------------------------------
| Change in valuation of fair value for | 10.2 | - | -29.1 |
| financial assets available for sale | | | |
--------------------------------------------------------------------------------
| Change in valuation of fair value for | 5.8 | - | 13.6 |
| cash flow hedging | | | |
--------------------------------------------------------------------------------
| Transferred to the income statement for | 0.0 | - | 1.0 |
| financial assets available for sale | | | |
--------------------------------------------------------------------------------
| Transferred to the income statement for | 0.0 | - | -0.3 |
| cash flow hedging | | | |
--------------------------------------------------------------------------------
| Total comprehensive income for the | 34.3 | - | 4.3 |
| period for continuing operations | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Discontinued operations | | | |
--------------------------------------------------------------------------------
| Profit for the period from discontinued | -1.8 | - | -34.9 |
| operations | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other comprehensive income after taxes: | | | |
--------------------------------------------------------------------------------
| Change in valuation of fair value for | -11.3 | - | -40.1 |
| financial assets available for sale | | | |
--------------------------------------------------------------------------------
| Change in valuation of fair value for | - | - | - |
| cash flow hedging | | | |
--------------------------------------------------------------------------------
| Transferred to the income statement for | 0.3 | - | 24.4 |
| financial assets available for sale | | | |
--------------------------------------------------------------------------------
| Transferred to the income statement for | - | - | - |
| cash flow hedging | | | |
--------------------------------------------------------------------------------
| Total comprehensive income for the | -12.8 | - | -50.5 |
| period for discontinued operations | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total comprehensive income for the | 21.5 | - | -46.2 |
| period | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total comprehensive income attributable | | | |
| to: | | | |
--------------------------------------------------------------------------------
| Shareholders in Aktia Bank Plc | 22.3 | - | -46.3 |
--------------------------------------------------------------------------------
| Minority interest | -0.8 | - | 0.1 |
--------------------------------------------------------------------------------
| Total | 21.5 | - | -46.2 |
--------------------------------------------------------------------------------
Consolidated balance sheet for Bank Group
--------------------------------------------------------------------------------
| (EUR million) | 30.6.2 | 31.12.20 | Change | 30.6.20 |
| | 009 | 08 | | 08 |
--------------------------------------------------------------------------------
| Assets | | | | |
--------------------------------------------------------------------------------
| Cash and balances with central banks | 284.7 | 506.3 | -43.8% | - |
--------------------------------------------------------------------------------
| Financial assets reported at fair | 3.9 | 19.5 | -79.8% | - |
| value through profit and loss | | | | |
--------------------------------------------------------------------------------
| Interest-bearing securities | 2,463. | 2,808.4 | -12.3% | - |
| | 5 | | | |
--------------------------------------------------------------------------------
| Shares and participations | 22.3 | 211.5 | -89.5% | - |
--------------------------------------------------------------------------------
| Financial assets available for sale | 2,485. | 3,019.9 | -17.7% | - |
| | 8 | | | |
--------------------------------------------------------------------------------
| Financial assets held until maturity | 30.9 | 35.9 | -13.9% | - |
--------------------------------------------------------------------------------
| Derivative instruments | 199.2 | 137.0 | 45.4% | - |
--------------------------------------------------------------------------------
| Lending to credit institutions | 165.7 | 100.5 | 64.8% | - |
--------------------------------------------------------------------------------
| Lending to the public and public | 5,826. | 5,431.6 | 7.3% | - |
| sector entities | 4 | | | |
--------------------------------------------------------------------------------
| Loans and other receivables | 5,992. | 5,532.2 | 8.3% | - |
| | 1 | | | |
--------------------------------------------------------------------------------
| Investments for unit-linked | - | 148.1 | N/A | - |
| provisions | | | | |
--------------------------------------------------------------------------------
| Investments in associated companies | 3.0 | 2.8 | 7.1% | - |
--------------------------------------------------------------------------------
| Intangible assets | 8.0 | 10.3 | -22.9% | - |
--------------------------------------------------------------------------------
| Tangible assets | 4.5 | 6.0 | -24.2% | - |
--------------------------------------------------------------------------------
| Accrued income and advance payments | 60.9 | 78.7 | -22.6% | - |
--------------------------------------------------------------------------------
| Other assets | 40.0 | 5.9 | 573.6% | - |
--------------------------------------------------------------------------------
| Total other assets | 100.9 | 84.7 | 19.2% | - |
--------------------------------------------------------------------------------
| Income tax receivables | 3.4 | 2.4 | 40.8% | - |
--------------------------------------------------------------------------------
| Deferred tax receivables | 10.1 | 14.8 | -32.2% | - |
--------------------------------------------------------------------------------
| Tax receivables | 13.4 | 17.2 | -22.1% | - |
--------------------------------------------------------------------------------
| Total assets | 9,126. | 9,519.9 | -4.1% | - |
| | 4 | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Liabilities | | | | |
--------------------------------------------------------------------------------
| Liabilities to credit institutions | 1,597. | 1,917.0 | -16.6% | - |
| | 9 | | | |
--------------------------------------------------------------------------------
| Liabilities to the public and public | 3,091. | 3,099.0 | -0.3% | - |
| sector entities | 0 | | | |
--------------------------------------------------------------------------------
| Deposits | 4,689. | 5,016.0 | -6.5% | - |
| | 0 | | | |
--------------------------------------------------------------------------------
| Financial liabilities reported at | - | 4.6 | N/A | - |
| fair value through profit and loss | | | | |
--------------------------------------------------------------------------------
| Derivative instruments | 127.7 | 84.7 | 50.7% | - |
--------------------------------------------------------------------------------
| Debt securities issued | 2,586. | 2,118.7 | 22.1% | - |
| | 6 | | | |
--------------------------------------------------------------------------------
| Subordinated liabilities | 241.7 | 246.8 | -2.1% | - |
--------------------------------------------------------------------------------
| Other liabilities to credit | 742.4 | 502.1 | 47.9% | - |
| institutions | | | | |
--------------------------------------------------------------------------------
| Other liabilities to the public and | 197.5 | 262.8 | -24.8% | - |
| public sector entities | | | | |
--------------------------------------------------------------------------------
| Other financial liabilities | 3,768. | 3,130.4 | 20.4% | - |
| | 2 | | | |
--------------------------------------------------------------------------------
| Technical provision | - | 627.6 | N/A | - |
--------------------------------------------------------------------------------
| Technical provision for unit-linked | - | 149.6 | N/A | - |
| insurances | | | | |
--------------------------------------------------------------------------------
| Accrued expenses and income received | 63.1 | 79.4 | -20.5% | - |
| in advance | | | | |
--------------------------------------------------------------------------------
| Other liabilities | 106.6 | 87.3 | 22.1% | - |
--------------------------------------------------------------------------------
| Total other liabilities | 169.7 | 166.7 | 1.8% | - |
--------------------------------------------------------------------------------
| Provisions | 0.2 | 0.0 | 562.1% | - |
--------------------------------------------------------------------------------
| Income tax liabilities | 3.5 | 2.1 | 62.3% | - |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 40.4 | 38.0 | 6.4% | - |
--------------------------------------------------------------------------------
| Tax liabilities | 43.9 | 40.1 | 9.4% | - |
--------------------------------------------------------------------------------
| Total liabilities | 8,798. | 9,219.7 | -4.6% | - |
| | 7 | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity | | | | |
--------------------------------------------------------------------------------
| Restricted equity | 164.9 | 127.9 | 28.9% | - |
--------------------------------------------------------------------------------
| Unrestricted equity | 132.7 | 147.3 | -9.9% | - |
--------------------------------------------------------------------------------
| Shareholders' share of equity | 297.6 | 275.2 | 8.1% | - |
--------------------------------------------------------------------------------
| Minority interest's share of equity | 30.2 | 24.9 | 21.0% | - |
--------------------------------------------------------------------------------
| Equity | 327.7 | 300.2 | 9.2% | - |
--------------------------------------------------------------------------------
| Total liabilities and equity | 9,126. | 9,519.9 | -4.1% | - |
| | 4 | | | |
--------------------------------------------------------------------------------
Consolidated cash flow statement for Bank Group
--------------------------------------------------------------------------------
| (EUR million) | 1-6 | 1-6 2008 | 1-12 |
| | 2009 | | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from operating activities | | | |
--------------------------------------------------------------------------------
| Operating profit *) | 24.2 | - | -23.1 |
--------------------------------------------------------------------------------
| Adjustment items not included in cash flow | 13.6 | - | 37.6 |
| for the period | | | |
--------------------------------------------------------------------------------
| Paid income taxes | -4.3 | - | -9.4 |
--------------------------------------------------------------------------------
| Cash flow from operating activities before | 33.5 | - | 5.2 |
| change in operating receivables | | | |
| and | | | |
| liabilities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Increase (-) or decrease (+) in receivables | -582.6 | - | -590.6 |
| from operating activities | | | |
--------------------------------------------------------------------------------
| Increase (+) or decrease (-) in liabilities | 313.6 | - | 645.1 |
| from operating activities | | | |
--------------------------------------------------------------------------------
| Total cash flow from operating activities | -235.4 | - | 59.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from investing activities | | | |
--------------------------------------------------------------------------------
| Financial assets held until maturity | 5.0 | - | 10.0 |
--------------------------------------------------------------------------------
| Acquisition and divestment of subsidiaries | 34.6 | - | -27.4 |
| and associated companies **) | | | |
--------------------------------------------------------------------------------
| Investments in and proceeds from sale of | -0.9 | - | 37.9 |
| tangible and intangible assets | | | |
--------------------------------------------------------------------------------
| Share issue of Aktia Real Estate Mortgage | 6.6 | - | 3.8 |
| Bank Plc to the minority | | | |
--------------------------------------------------------------------------------
| Total cash flow from investing activities | 45.3 | - | 24.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from financing activities | | | |
--------------------------------------------------------------------------------
| Subordinated liabilities | -2.4 | - | 55.3 |
--------------------------------------------------------------------------------
| Total cash flow from financing activities | -2.4 | - | 55.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Change in cash and cash equivalents | -192.5 | - | 139.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash and cash equivalents at the beginning | 512.3 | - | 20.3 |
| of the year | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents transferred in | - | - | 353.0 |
| connection with transfer of business | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at the end of the | 319.9 | - | 512.3 |
| year | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash and cash equivalents in the cash flow | | | |
| statement consist of the following items: | | | |
--------------------------------------------------------------------------------
| Cash in hand | 9.2 | - | 10.0 |
--------------------------------------------------------------------------------
| Insurance operation's cash and cash | - | - | 3.7 |
| equivalents | | | |
--------------------------------------------------------------------------------
| Bank of Finland current account | 275.5 | - | 492.6 |
--------------------------------------------------------------------------------
| Loans to credit institutions repayable on | 35.2 | - | 6.0 |
| demand | | | |
--------------------------------------------------------------------------------
| Total | 319.9 | - | 512.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Adjustment items not included in cash flow | | | |
| for the period consist of: | | | |
--------------------------------------------------------------------------------
| Write-downs of financial assets | 0.4 | - | 39.2 |
--------------------------------------------------------------------------------
| Write-downs of credits and other commitments | 17.5 | - | 0.5 |
--------------------------------------------------------------------------------
| Change in fair value | -6.6 | - | 2.5 |
--------------------------------------------------------------------------------
| Depreciation, amortisation and impairment of | 2.5 | - | 3.3 |
| tangible and intangible assets | | | |
--------------------------------------------------------------------------------
| Share of profit from associated companies | -0.2 | - | -0.1 |
--------------------------------------------------------------------------------
| Capital gains and losses from the sale of | -0.1 | - | -7.3 |
| tangible and intangible assets | | | |
--------------------------------------------------------------------------------
| Other adjustments | 0.2 | - | -0.4 |
--------------------------------------------------------------------------------
| Total | 13.6 | - | 37.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Discontinuing operations' share of cash flow | | | |
| in the Bank Group, net: | | | |
--------------------------------------------------------------------------------
| Cash flow from operating activities | -2.5 | - | 8.1 |
--------------------------------------------------------------------------------
| Cash flow from investing activities | 0.0 | - | -1.6 |
--------------------------------------------------------------------------------
| Cash flow from financing activities | - | - | - |
--------------------------------------------------------------------------------
| Total | -2.6 | - | 6.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| *) Includes operating profit from both | | | |
| continuing and discontinued operations | | | |
--------------------------------------------------------------------------------
| **) The amount for 2008 includes the additional contract price | |
| for the acquisition of Aktia Life Insurance Ltd. | |
--------------------------------------------------------------------------------
Consolidated statement of changes in equity for Bank Group
--------------------------------------------------------------------------------
| (EUR | Share | Other | Fund | Un-re | Retai | Share | Minori | Total |
| million) | capit | restr | at | stric | ned | -hold | ty | Equity |
| | al | icted | fair | ted | earni | ers' | intere | |
| | | equit | value | equit | ngs | share | st's | |
| | | y | | y | | of | share | |
| | | | | reser | | equit | of | |
| | | | | ve | | y | equity | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity as | 163.0 | 0.0 | -35.1 | 44.6 | 102.8 | 275.2 | 24.9 | 300.2 |
| at 1 | | | | | | | | |
| January | | | | | | | | |
| 2009 | | | | | | | | |
--------------------------------------------------------------------------------
| Share | | | | | | 0.0 | | 0.0 |
| issue | | | | | | | | |
--------------------------------------------------------------------------------
| Dividends | | | | | | 0.0 | | 0.0 |
| to | | | | | | | | |
| shareholde | | | | | | | | |
| rs | | | | | | | | |
--------------------------------------------------------------------------------
| Total | | 5.0 | | 17.3 | 22.3 | -0.8 | 21.5 |
| comprehensive | | | | | | | |
| income for the | | | | | | | |
| period | | | | | | | |
--------------------------------------------------------------------------------
| Other change in | | 32.1 | | -32.1 | 0.0 | 6.1 | 6.1 |
| equity | | | | | | | |
--------------------------------------------------------------------------------
| Equity as | 163.0 | 0.0 | 2.0 | 44.6 | 88.0 | 297.6 | 30.2 | 327.7 |
| at 30 June | | | | | | | | |
| 2009 | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Key figures
--------------------------------------------------------------------------------
| | 1-6 2009 | 1-3 2009 | 1-12 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share, continuing | 6.4 | 2.8 | 6.2 |
| operations, EUR million | | | |
--------------------------------------------------------------------------------
| Earnings per share, | -0.6 | -0.6 | -11.6 |
| discontinued operations, EUR | | | |
| million | | | |
--------------------------------------------------------------------------------
| Earnings per share, total, EUR | 5.8 | 2.2 | -5.5 |
| million | | | |
--------------------------------------------------------------------------------
| Equity per share, EUR million | 99.2 | 91.5 | 91.7 |
--------------------------------------------------------------------------------
| Return on equity (ROE), % | 10.5 | 8.6 | -5.2 |
--------------------------------------------------------------------------------
| Earnings per share excluding | 18.1 | -0.3 | -15.4 |
| negative goodwill recorded as | | | |
| income and including the fund | | | |
| at fair value, EUR million | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Average number of shares | 3 | 3 | 3 |
--------------------------------------------------------------------------------
| Number of shares at end of | 3 | 3 | 3 |
| period | | | |
--------------------------------------------------------------------------------
| Personnel (FTEs), average | 794 | 845 | 869 |
| number of employees from the | | | |
| beginning of the financial year | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Banking Business (incl. Private | | | |
| Banking) | | | |
--------------------------------------------------------------------------------
| Cost-to-income ratio | 0.57 | 0.68 | 0.56 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Borrowing from the public, EUR | 3,091 | 3,105 | 3,099 |
| million | | | |
--------------------------------------------------------------------------------
| Lending to the public, EUR | 5,826 | 5,599 | 5,432 |
| million | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Capital adequacy ratio, % | 14.7 | 14.2 | 13.7 |
--------------------------------------------------------------------------------
| Tier 1 capital ratio, % | 9.2 | 9.0 | 9.3 |
--------------------------------------------------------------------------------
| Risk-weighted commitments, EUR | 3,395 | 3,335 | 3,313 |
| million | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Asset Management | | | |
--------------------------------------------------------------------------------
| Mutual fund volume, EUR million | 2,927 | 2.415 | 2,490 *) |
--------------------------------------------------------------------------------
| Managed and brokered assets, | 5,083 | 4,515 | 4,538 |
| EUR million | | | |
--------------------------------------------------------------------------------
*) Including fund volume of Aktia Invest from December 2008.
Basis of calculation for key figures
--------------------------------------------------------------------------------
| Cost-to-income ratio, banking business |
--------------------------------------------------------------------------------
| Total operating expenses |
| Total operating income |
--------------------------------------------------------------------------------
| Earnings per share, EUR |
--------------------------------------------------------------------------------
| Profit for the year after taxes attributable to the shareholders of Aktia |
| Bank Plc |
| Average number of shares over the period (adjusted for share issue) |
--------------------------------------------------------------------------------
| Equity per share, EUR |
--------------------------------------------------------------------------------
| Equity attributable to the shareholders of Aktia Bank Plc |
| Number of shares at the end of the period |
--------------------------------------------------------------------------------
| Return on equity (ROE), % |
--------------------------------------------------------------------------------
| Profit for the period x 100 |
| Average equity |
--------------------------------------------------------------------------------
| Capital adequacy ratio, % |
--------------------------------------------------------------------------------
| Capital base (Tier 1 capital + Tier 2 capital) x 100 |
| Risk-weighted commitments |
| The capital base is calculated in accordance with regulation 4.3a issued by |
| the Finnish Financial Supervisory Authority. |
--------------------------------------------------------------------------------
| Tier 1 Capital ratio, % |
--------------------------------------------------------------------------------
| Tier 1 capital x 100 |
| Risk-weighted commitments |
--------------------------------------------------------------------------------
| Risk-weighted commitments |
--------------------------------------------------------------------------------
| Assets in the balance sheet plus off-balance sheet items including |
| derivatives valued and risk-weighted in accordance with the standard method |
| set out in regulation 4.3 issued by the Finnish Financial Supervisory |
| Authority. The capital requirements for operative risks have been calculated |
| and risk-weighted in accordance with regulation 4.3i issued by the Finnish |
| Financial Supervisory Authority. |
--------------------------------------------------------------------------------
Notes to the Interim Report
Note 1 Basis for preparing the interim report and important accounting
principles
Basis for preparing the interim report
The Bank Group's financial statement is prepared in accordance with
International Financial Reporting Standards (IFRS) as approved by the EU.
The interim report for the period 1 January - 30 June 2009 has been prepared in
accordance with IAS 34 “Interim Financial Reporting”. The interim financial
report does not contain all the information and notes required for an annual
report and should therefore be read together with the Group's annual report of
31 December 2008.
Aktia Bank plc's financial statement and interim reports can be downloaded from
Aktia's website at www.aktia.fi.
The interim report for the period 1 January - 30 June 2009 was approved by the
Board of Directors on 20 August 2009.
Important accounting principles
In preparing this interim report the Group has, for the most part, followed the
accounting principles applicable to the annual report of 31 December 2008.
In February 2009 Aktia Life Insurance was sold to Aktia plc. The life insurance
business is a separate segment in the Bank Group, which is why Aktia Life
Insurance is to be reported as a discontinued operation in accordance with IFRS
5 as of 2009. Figures provided as a basis for comparison have been adjusted to
correspond with 2009 reporting.
The subsidiaries Aktia Card & Finance Ab, Aktia Corporate Finance Ab and Aktia
Asset Management Oy Ab have certain redemption clauses, and they have been
transferred from minority interests to liabilities in accordance with IAS
32.25(a) as of 31 December 2008. This change in liabilities is reported in the
income statement as personnel costs in 2009.
The main principle is that value changes in interest-based investments are
reported via the fund at fair value and write-downs are reported when the
issuer's financial situation is severely impaired.
The accounting principles have also been defined more precisely with regard to
interest-bearing securities.
In addition to default, interest-bearing securities are reviewed individually to
assess the need for write-downs in the event that the price of the security has
fallen by more than 50% and the instrument rating has fallen below investment
grade (BB+, Ba1 or lower).
New accounting standards effective from 2009
IAS 1 Presentation of Financial Statements (revised)
This standard has been revised in order to provide better information for
analysing and comparing companies. From 1 January 2009, the Group publishes a
profit and loss statement and a statement of comprehensive income. The change in
the Group's equity includes transactions with owners.
IFRIC 13 Customer Loyalty Programmes
This interpretation deals with reporting on customer loyalty programmes. The
Group operates one bonus scheme, Aktia Kortbonus. This bonus scheme has already
been dealt with in the accounts in accordance with IFRIC 13 which is why the
introduction of this standard will not affect the Group's financial results or
standing. Bonus liabilities for the comparison year 2008 have been moved from
other liabilities to accruals.
Note 2 Segment report for Bank Group
--------------------------------------------------------------------------------
| Income | Banking | Asset | Life | Other | Eliminati | Total |
| statement | busines | Managem | Insuran | | ons | Group |
| | s | ent | ce | | | |
--------------------------------------------------------------------------------
| (EUR | 1- | 1- | 1- | 1- | 1- | 1- | 1-6 | 1-6 | 1-6 | 1-6 | 1-6 | 1-6 |
| million) | 6 | 6 | 6 | 6 | 6 | 6 | 200 | 200 | 200 | 200 | 200 | 200 |
| | 20 | 20 | 20 | 20 | 20 | 20 | 9 | 8 | 9 | 8 | 9 | 8 |
| | 09 | 08 | 09 | 08 | 09 | 08 | | | | | | |
--------------------------------------------------------------------------------
| Net | 68 | - | 1. | - | - | - | 1.8 | - | 0.0 | - | 71. | - |
| interest | .9 | | 0 | | | | | | | | 7 | |
| income | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Dividends | 0. | - | 0. | - | - | - | 1.3 | - | -1. | - | 0.1 | - |
| | 1 | | 0 | | | | | | 3 | | | |
--------------------------------------------------------------------------------
| Net | 11 | - | 5. | - | - | - | 1.0 | - | -0. | - | 17. | - |
| commission | .3 | | 6 | | | | | | 2 | | 7 | |
| income | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Net income | 6. | - | -0 | - | - | - | 0.0 | - | - | - | 5.8 | - |
| from | 0 | | .2 | | | | | | | | | |
| financial | | | | | | | | | | | | |
| transactio | | | | | | | | | | | | |
| ns | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Net income | 0. | - | - | - | - | - | 0.1 | - | 0.0 | - | 0.0 | - |
| from | 0 | | | | | | | | | | | |
| investment | | | | | | | | | | | | |
| properties | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Other | 3. | - | 0. | - | - | - | 0.8 | - | -3. | - | 1.6 | - |
| operating | 7 | | 1 | | | | | | 0 | | | |
| income | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Total | 90 | - | 6. | - | 0. | - | 5.0 | - | -4. | - | 96. | - |
| operating | .0 | | 4 | | 0 | | | | 5 | | 9 | |
| income | | | | | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Staff | -1 | - | -3 | - | - | - | -3. | - | 0.0 | - | -23 | - |
| costs | 6. | | .6 | | | | 5 | | | | .4 | |
| | 3 | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Other | -2 | - | -2 | - | - | - | 4.8 | - | 2.9 | - | -21 | - |
| administra | 7. | | .0 | | | | | | | | .5 | |
| tive | 2 | | | | | | | | | | | |
| expenses | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Depreciati | -1 | - | -0 | - | - | - | -0. | - | - | - | -2. | - |
| on of | .1 | | .4 | | | | 8 | | | | 3 | |
| tangible | | | | | | | | | | | | |
| and | | | | | | | | | | | | |
| intangible | | | | | | | | | | | | |
| assets | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Other | -4 | - | -0 | - | - | - | -3. | - | 0.0 | - | -8. | - |
| operating | .6 | | .4 | | | | 2 | | | | 1 | |
| expenses | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Total | -4 | - | -6 | - | 0. | - | -2. | - | 2.9 | - | -55 | - |
| operating | 9. | | .4 | | 0 | | 7 | | | | .4 | |
| expenses | 2 | | | | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Write-down | -1 | - | - | - | - | - | - | - | - | - | -17 | - |
| s of | 7. | | | | | | | | | | .5 | |
| credits | 5 | | | | | | | | | | | |
| and other | | | | | | | | | | | | |
| commitment | | | | | | | | | | | | |
| s | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Share of | - | - | - | - | - | - | - | - | 0.5 | - | 0.5 | - |
| profit | | | | | | | | | | | | |
| from | | | | | | | | | | | | |
| associated | | | | | | | | | | | | |
| companies | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Operating | 23 | - | 0. | - | 0. | - | 2.3 | - | -1. | - | 24. | - |
| profit | .3 | | 1 | | 0 | | | | 1 | | 5 | |
| from | | | | | | | | | | | | |
| continuing | | | | | | | | | | | | |
| operations | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Operating | - | - | - | - | 0. | - | - | - | -0. | - | -0. | - |
| profit for | | | | | 1 | | | | 4 | | 3 | |
| discontinu | | | | | | | | | | | | |
| ed | | | | | | | | | | | | |
| operations | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Operating | 23 | - | 0. | - | 0. | - | 2.3 | - | -1. | - | 24. | - |
| profit | .3 | | 1 | | 1 | | | | 5 | | 2 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Balance | Banking | Asset | Life | Other | Eliminati | Total |
| sheet | busines | Managem | Insuran | | ons | Group |
| | s | ent | ce | | | |
--------------------------------------------------------------------------------
| (EUR | 30 | 31 | 30 | 31 | 30 | 31 | 30. | 31. | 30. | 31. | 30. | 31. |
| million) | .6 | .1 | .6 | .1 | .6 | .1 | 6.2 | 12. | 6.2 | 12. | 6.2 | 12. |
| | .2 | 2. | .2 | 2. | .2 | 2. | 009 | 200 | 009 | 200 | 009 | 200 |
| | 00 | 20 | 00 | 20 | 00 | 20 | | 8 | | 8 | | 8 |
| | 9 | 08 | 9 | 08 | 9 | 08 | | | | | | |
--------------------------------------------------------------------------------
| Cash and | 28 | 50 | 0. | 0. | - | 13 | - | - | - | -9. | 284 | 506 |
| balances | 4. | 2. | 1 | 1 | | .4 | | | | 7 | .7 | .3 |
| with | 6 | 5 | | | | | | | | | | |
| central | | | | | | | | | | | | |
| banks | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Financial | 3. | 4. | - | - | - | 14 | - | - | - | - | 3.9 | 19. |
| assets | 9 | 5 | | | | .9 | | | | | | 5 |
| reported | | | | | | | | | | | | |
| at fair | | | | | | | | | | | | |
| value | | | | | | | | | | | | |
| through | | | | | | | | | | | | |
| profit and | | | | | | | | | | | | |
| loss | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Financial | 2, | 2, | 6. | 13 | - | 64 | 19. | 19. | -1. | -15 | 2,4 | 3,0 |
| assets | 46 | 35 | 3 | .2 | | 8. | 9 | 0 | 6 | .8 | 85. | 19. |
| available | 1. | 4. | | | | 6 | | | | | 8 | 9 |
| for sale | 2 | 9 | | | | | | | | | | |
--------------------------------------------------------------------------------
| Loans and | 5, | 5, | 23 | 17 | - | - | - | - | -3. | -5. | 5,9 | 5,5 |
| other | 97 | 52 | .5 | .6 | | | | | 0 | 7 | 92. | 32. |
| receivable | 1. | 0. | | | | | | | | | 1 | 2 |
| s | 7 | 3 | | | | | | | | | | |
--------------------------------------------------------------------------------
| Investment | - | - | - | - | - | 14 | - | - | - | - | - | 148 |
| s for | | | | | | 8. | | | | | | .1 |
| unit-linke | | | | | | 1 | | | | | | |
| d | | | | | | | | | | | | |
| provisions | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Other | 61 | 46 | 7. | 7. | - | 21 | -22 | -99 | -35 | -10 | 359 | 293 |
| assets | 6. | 5. | 3 | 2 | | .5 | 8.7 | .3 | .3 | 0.8 | .8 | .9 |
| | 5 | 3 | | | | | | | | | | |
--------------------------------------------------------------------------------
| Total | 9, | 8, | 37 | 38 | - | 84 | -20 | -80 | -39 | -13 | 9,1 | 9,5 |
| assets | 33 | 84 | .2 | .1 | | 6. | 8.8 | .3 | .9 | 2.1 | 26. | 19. |
| | 8. | 7. | | | | 6 | | | | | 4 | 9 |
| | 0 | 5 | | | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Deposits | 4, | 4, | 14 | 13 | - | - | - | - | -3. | -13 | 4,6 | 5,0 |
| | 54 | 89 | 4. | 0. | | | | | 0 | .6 | 89. | 16. |
| | 7. | 9. | 3 | 1 | | | | | | | 0 | 0 |
| | 8 | 4 | | | | | | | | | | |
--------------------------------------------------------------------------------
| Debt | 2, | 2, | - | - | - | - | - | - | -1. | -15 | 2,5 | 2,1 |
| securities | 58 | 13 | | | | | | | 6 | .3 | 86. | 18. |
| issued | 8. | 4. | | | | | | | | | 6 | 7 |
| | 2 | 1 | | | | | | | | | | |
--------------------------------------------------------------------------------
| Technical | - | - | - | - | - | 77 | - | - | - | - | - | 777 |
| provision | | | | | | 7. | | | | | | .2 |
| for life | | | | | | 2 | | | | | | |
| insurance | | | | | | | | | | | | |
| business | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Other | 1, | 1, | 6. | 15 | - | 11 | 239 | 219 | -99 | -11 | 1,5 | 1,3 |
| liabilitie | 37 | 17 | 7 | .9 | | .1 | .0 | .8 | .3 | 2.3 | 23. | 07. |
| s | 6. | 3. | | | | | | | | | 1 | 8 |
| | 7 | 2 | | | | | | | | | | |
--------------------------------------------------------------------------------
| Total | 8, | 8, | 15 | 14 | - | 78 | 239 | 219 | -10 | -14 | 8,7 | 9,2 |
| liabilitie | 51 | 20 | 1. | 6. | | 8. | .0 | .8 | 4.0 | 1.2 | 98. | 19. |
| s | 2. | 6. | 0 | 1 | | 3 | | | | | 7 | 7 |
| | 6 | 7 | | | | | | | | | | |
--------------------------------------------------------------------------------
Note 3 Derivatives and off-balance sheet commitments
Derivative instruments at 30 June 2009 (EUR million)
--------------------------------------------------------------------------------
| Hedging derivative instruments | Total, | Assets, | Liabiliti |
| | nominal | fair | es, fair |
| | amount | value | value |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Fair value hedging | | | |
--------------------------------------------------------------------------------
| Interest rate-related | 2,113.5 | 51.5 | 17.8 |
--------------------------------------------------------------------------------
| Total | 2,113.5 | 51.5 | 17.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow hedging | | | |
--------------------------------------------------------------------------------
| Interest rate-related | 960.0 | 37.2 | 1.2 |
--------------------------------------------------------------------------------
| Total | 960.0 | 37.2 | 1.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Derivative instruments valued through | | | |
| income statement for other reasons | | | |
--------------------------------------------------------------------------------
| Interest rate-related *) | 7,037.1 | 104.9 | 103.1 |
--------------------------------------------------------------------------------
| Currency-related | 191.9 | 1.9 | 1.9 |
--------------------------------------------------------------------------------
| Equity-related **) | 120.3 | 3.3 | 3.3 |
--------------------------------------------------------------------------------
| Other derivative instruments **) | 6.3 | 0.3 | 0.3 |
--------------------------------------------------------------------------------
| Total | 7,355.6 | 110.4 | 108.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total derivative instruments | | | |
--------------------------------------------------------------------------------
| Interest rate-related | 10,110.6 | 193.7 | 122.2 |
--------------------------------------------------------------------------------
| Currency-related | 191.9 | 1.9 | 1.9 |
--------------------------------------------------------------------------------
| Equity-related | 120.3 | 3.3 | 3.3 |
--------------------------------------------------------------------------------
| Other derivative instruments | 6.3 | 0.3 | 0.3 |
--------------------------------------------------------------------------------
| Total | 10,429.1 | 199.2 | 127.7 |
--------------------------------------------------------------------------------
*) Interest-linked derivatives include interest rate hedging provided for local
banks which after back-to-back hedging with third parties amounted to EUR 6,
730.6 million.
**) All equity-related and other derivative instruments relate to the hedging of
structured debt products.
Off-balance sheet commitments
--------------------------------------------------------------------------------
| (EUR million) | 30.6.20 | 31.12.20 | 30.6.200 |
| | 09 | 08 | 8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Commitments provided to a third party on | | | |
| behalf of customers | | | |
--------------------------------------------------------------------------------
| Guarantees | 58.3 | 54.8 | - |
--------------------------------------------------------------------------------
| Other commitments provided to a third party | 7.6 | 7.5 | - |
--------------------------------------------------------------------------------
| Irrevocable commitments provided on behalf | | | |
| of customers | | | |
--------------------------------------------------------------------------------
| Unused credit arrangements | 543.5 | 459.1 | - |
--------------------------------------------------------------------------------
| Other irrevocable commitments *) | - | 12.1 | - |
--------------------------------------------------------------------------------
| Off-balance sheet commitments | 609.3 | 533.5 | - |
--------------------------------------------------------------------------------
| *) Credit equivalents for derivatives are not included in off-balance sheet |
| commitments as their market values are included in the balance sheet. |
--------------------------------------------------------------------------------
Note 4 Risk exposure for Bank Group
Consolidated capital adequacy for Bank Group
--------------------------------------------------------------------------------
| Summary (EUR | | | | 30.6.200 | 31.12.20 | 30.6.200 |
| million) | | | | 9 | 08 | 8 |
--------------------------------------------------------------------------------
| Tier 1 | | | | 312.9 | 309.0 | - |
| capital | | | | | | |
--------------------------------------------------------------------------------
| Tier 2 | | | | 185.1 | 143.4 | - |
| capital | | | | | | |
--------------------------------------------------------------------------------
| Capital base | | | | 498.0 | 452.4 | - |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Risk-weighted amount for credit and | 3,122.2 | 3,040.5 | - |
| counterparty risks | | | |
--------------------------------------------------------------------------------
| Risk-weighted amount for market risks 1) | - | - | - |
--------------------------------------------------------------------------------
| Risk-weighted amount for operational risks | 272.7 | 272.7 | - |
| 2) | | | |
--------------------------------------------------------------------------------
| Total risk-weighted | | | 3,394.8 | 3,313.2 | - |
| commitments | | | | | |
--------------------------------------------------------------------------------
| Capital adequacy | | | 14.7 | 13.7 | - |
| ratio, % | | | | | |
--------------------------------------------------------------------------------
| Tier 1 capital ratio, % | 9.2 | 9.3 | - |
--------------------------------------------------------------------------------
| Minimum capital requirement | 271.6 | 265.1 | - |
--------------------------------------------------------------------------------
| Capital buffer (difference between capital | 226.4 | 187.3 | - |
| base and minimum requirement) | | | |
--------------------------------------------------------------------------------
1) No capital requirement due to minor trading book and when total of net
currency items are less than 2 % of capital base.
2) The capital requirement of 15% is calculated using the definition of average
gross income during the last three years (EUR 145.4 million) x risk-weighted
factor of 12.5.
--------------------------------------------------------------------------------
| Capital base | | | | 30.6.20 | 31.12.2 | 30.6.20 |
| (EUR million) | | | | 09 | 008 | 08 |
--------------------------------------------------------------------------------
| Share capital | | | | 163.0 | 163.0 | - |
--------------------------------------------------------------------------------
| Funds | | | | 44.6 | 44.6 | - |
--------------------------------------------------------------------------------
| Minority | | | | 30.2 | 24.9 | - |
| share | | | | | | |
--------------------------------------------------------------------------------
| Retained earnings | | | 70.7 | 93.5 | - |
--------------------------------------------------------------------------------
| Profit for the reporting period | 17.4 | 9.2 | - |
--------------------------------------------------------------------------------
| ./. provision for dividends | | -5.0 | -0.6 | - |
| to shareholders | | | | |
--------------------------------------------------------------------------------
| Total | | | | 320.8 | 334.7 | - |
--------------------------------------------------------------------------------
| ./. intangible assets | | -8.0 | -8.6 | - |
--------------------------------------------------------------------------------
| ./. shares in insurance | | - | -17.1 | - |
| companies | | | | |
--------------------------------------------------------------------------------
| Tier 1 | | | | 312.9 | 309.0 | - |
| capital | | | | | | |
--------------------------------------------------------------------------------
| Fund at fair | | | | -16.3 | -47.5 | - |
| value | | | | | | |
--------------------------------------------------------------------------------
| Other Tier 2 | | | | 45.0 | 45.0 | - |
| capital | | | | | | |
--------------------------------------------------------------------------------
| Risk | | | | 156.4 | 163.0 | - |
| debentures | | | | | | |
--------------------------------------------------------------------------------
| ./. shares in insurance | | - | -17.1 | - |
| companies | | | | |
--------------------------------------------------------------------------------
| Tier 2 | | | | 185.1 | 143.4 | - |
| capital | | | | | | |
--------------------------------------------------------------------------------
| Total capital | | | | 498.0 | 452.4 | - |
| base | | | | | | |
--------------------------------------------------------------------------------
Risk-weighted commitments, credit and counterparty risks
--------------------------------------------------------------------------------
| (EUR million) | | | | Risk-weighted commitments, |
| | | | | Basel 2 |
--------------------------------------------------------------------------------
| Risk weighting | Balanc | Off-bala | Total | 30.6.20 | 31.12.2 | 30.6.20 |
| | e | nce | | 09 | 008 | 08 |
| | assets | sheet | | | | |
| | | commitme | | | | |
| | | nts | | | | |
--------------------------------------------------------------------------------
| 0 % | 974.6 | 26.0 | 1,000.5 | - | - | - |
--------------------------------------------------------------------------------
| 10 % | 1,015. | - | 1,015.6 | 101.6 | 80.3 | - |
| | 6 | | | | | |
--------------------------------------------------------------------------------
| 20 % | 1,401. | 278.7 | 1,679.7 | 291.8 | 335.3 | - |
| | 0 | | | | | |
--------------------------------------------------------------------------------
| 35 % | 4,291. | 120.8 | 4,412.3 | 1,516.6 | 1,421.4 | - |
| | 5 | | | | | |
--------------------------------------------------------------------------------
| 50 % | 6.7 | 0.8 | 7.5 | 3.5 | 2.5 | - |
--------------------------------------------------------------------------------
| 75 % | 565.0 | 69.7 | 634.7 | 447.2 | 426.7 | - |
--------------------------------------------------------------------------------
| 100 % | 649.2 | 112.1 | 761.3 | 702.5 | 720.8 | - |
--------------------------------------------------------------------------------
| 150 % | 21.2 | 1.3 | 22.5 | 32.7 | 11.3 | - |
--------------------------------------------------------------------------------
| Total | 8,924. | 609.3 | 9,534.0 | 3,096.0 | 2,998.4 | - |
| | 6 | | | | | |
--------------------------------------------------------------------------------
| Derivatives *) | | 258.4 | 258.4 | 26.2 | 42.1 | - |
--------------------------------------------------------------------------------
| Total | 8,924. | 867.7 | 9,792.4 | 3,122.2 | 3,040.5 | - |
| | 6 | | | | | |
--------------------------------------------------------------------------------
| *) derivative agreements credit conversion factor |
--------------------------------------------------------------------------------
Risk-weighted amounts for operational risks
--------------------------------------------------------------------------------
| | Risk-weighted amount, Basel |
| | 2 |
--------------------------------------------------------------------------------
| Year | 2006 | 2007 | 2008 | 30.6.20 | 31.12.2 | 30.6.200 |
| | | | | 09 | 008 | 8 |
--------------------------------------------------------------------------------
| Gross income | 140,6 | 145,2 | 150,5 | | | |
--------------------------------------------------------------------------------
| - average 3 | | | 145,4 | | | |
| years | | | | | | |
--------------------------------------------------------------------------------
| Indicator 15 % | | | 21,8 | | | |
--------------------------------------------------------------------------------
| Capital requirement for | | 21,8 | 272,7 | 272,7 | - |
| operational risk | | | | | |
--------------------------------------------------------------------------------
Helsinki, 20 August 2009
Aktia Bank Plc
Board of Directors
Review report on the interim report of Aktia Bank P.l.c. as of 30.6.2009
To the Board of Directors of Aktia Bank p.l.c.
Introduction
We have reviewed the balance sheet as of 30.6.2009, the income statement, the
statement of changes in equity and the cash flow statement of Aktia Bank p.l.c.
for the six-month period then ended, as well as a summary of significant
accounting policies and other explanatory notes to the financial statements. The
Board of Directors and the Managing Director are responsible for the preparation
and fair presentation of this interim financial information in accordance with
the International Financial Reporting Standards (IFRS), as adopted by the EU,
and other Finnish rules and regulations governing the preparation of interim
reports. At the request of the Board of Directors we issue our opinion on the
interim report.
Scope of review
We conducted our review in accordance with the Standard on Review Engagements
2410, Review of Interim Financial Information Performed by the Independent
Auditor of the Entity. A review of interim financial information consists of
making inquiries, primarily of persons responsible for financial accounting
matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with the
standards on auditing and other generally accepted auditing practices, and
therefore the procedures performed in a review do not enable to obtain a level
of assurance that would make us aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit opinion.
Opinion
Based on our review, nothing has come to our attention that causes us to believe
that the Interim Report does not give a true and fair view of the entity's
financial position as of 30 June 2009 and the result of its operations and cash
flows for the six-month period then ended, in accordance with the International
Financial Reporting Standards (IFRS), as adopted by the EU and other applicable
rules and regulations governing interim financial reporting preparation in
Finland.
Helsinki, 20 August 2009
PricewaterhouseCoopers Oy
Authorised Public Accountants
Jan Holmberg
Authorised Public Accountant
AKTIA BANK PLC
For further information, please contact:
Jussi Laitinen, CEO, Tel. +358 10 247 6210
Stefan Björkman, CFO, Tel. +358 10 247 6595
From:
Malin Pettersson
Head of Communications
Tel. +358 10 247 6369
Distribution:
Nasdaq OMX Helsinki Ltd
News Media
www.aktia.fi
