Aktia plc's Accounts Announcement 1 January - 31 December 2009
AKTIA OYJ
STOCK EXCHANGE RELEASE
Accounts Announcement
February 15, 2010 at 8 a.m.
Aktia plc's
Accounts Announcement
1 January - 31 December 2009
Good profitability in 2009
- Operating profit for 2009 increased to EUR 47.0 million (EUR 6.6 million).
Earnings per share was EUR 0.52 (0.09).
- The Board of Directors is proposing a dividend of EUR 0.24 (EUR 0.15) per
share.
- Aktia Bank plc's credit rating by the international credit rating agency
Moody's Investors Service remained at the classification, P-1. The credit rating
for long-term borrowing is A1 and that for financial strength C. All ratings
have a stable outlook.
- Aktia series A and R shares were listed on the Nasdaq OMX Helsinki exchange on
29 September 2009. The market value of the Aktia Group was approximately EUR 550
million at the end of 2009.
- Aktia expects operating profit for 2010 to be on the same level as in 2009.
October - December 2009
- Operating profit for October - December 2009 amounted to EUR 2.6 million (EUR
-30.7 million). Earnings per share was EUR 0.02 (-0.38). Operating profit is
adversely affected by a cost of EUR 9.2 million due to a calculation error in
the division of fair values of options that are partly reported via income
statement and partly via the fund at fair value. The fund at fair value will
increase correspondingly.
- Net interest income increased 49.5% to EUR 39.8 million (EUR 26.7 million).
Net income for life insurance was EUR 3.2 million (EUR -42.9 million). Loan
write-downs were lower than in the previous quarters, amounting to EUR 5.5
million (EUR 0.4 million).
CEO's comments
“Thanks to active managing of interest rate risks and a conservative investment
strategy we were able to report good operating profit. In accordance with Group
strategy, Aktia will in 2010 be focusing on stronger customer relations and
development of Internet services.”
Jussi Laitinen
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| (EUR million) | 10-12/ | 10-12/ | Change | 1-12/20 | 1-12/20 | Change |
| | 2009 | 2008 | | 09 | 08 | |
--------------------------------------------------------------------------------
| Net interest income | 39.8 | 26.7 | 49.5% | 152.2 | 101.0 | 50.8% |
--------------------------------------------------------------------------------
| Total operating | 51.4 | 1.0 | - | 233.1 | 127.2 | 83.2% |
| income | | | | | | |
--------------------------------------------------------------------------------
| Operating profit | 8.0 | -30.3 | - | 78.7 | 7.3 | 976.5% |
| before write down | | | | | | |
| on credits | | | | | | |
--------------------------------------------------------------------------------
| Write-downs on | -5.5 | -0.4 | - | -31.7 | -0.7 | - |
| credits and other | | | | | | |
| commitments | | | | | | |
--------------------------------------------------------------------------------
| Operating profit | 2.6 | -30.7 | - | 47.0 | 6.6 | 611.3% |
--------------------------------------------------------------------------------
| Cost-to-income | 0.66 | 0.61 | -8.2% | 0.57 | 0.65 | -12.3% |
| ratio | | | | | | |
--------------------------------------------------------------------------------
| Earnings per share | 0.02 | -0.38 | - | 0.52 | 0.09 | 500.3% |
| (EPS), EUR | | | | | | |
--------------------------------------------------------------------------------
| Equity per share | - | - | - | 6.52 | 4.85 | 34.5% |
| (NAV), EUR | | | | | | |
--------------------------------------------------------------------------------
| Return on equity | 1.2 | -31.1 | - | 8.7 | 1.8 | 382.4% |
| (ROE),% | | | | | | |
--------------------------------------------------------------------------------
| Capital adequacy | - | - | - | 15.9 | 13.7 | 16.8% |
| ratio,% | | | | | | |
--------------------------------------------------------------------------------
| Tier 1 capital | - | - | - | 9.5 | 9.3 | 2.2% |
| ratio,% | | | | | | |
--------------------------------------------------------------------------------
| Write down on | - | - | - | 0.51 | 0.01 | - |
| credits/total | | | | | | |
| credit stock | | | | | | |
--------------------------------------------------------------------------------
| Dividend per share | | | | 0.24 | 0.15 | 60.0% |
| *) | | | | | | |
--------------------------------------------------------------------------------
| *) Board proposal | | | | | | |
| of dividend 2009 | | | | | | |
--------------------------------------------------------------------------------
Profit for October - December 2009
The Group's operating profit in the fourth quarter was EUR 2.6 million (EUR
-30.7 million). Operating profit is adversely affected by a cost of EUR 9.2
million due to a calculation error in the division of fair values of options
that are partly reported via income statement and partly via the fund at fair
value. The fund at fair value will increase correspondingly.
Income
During October - December the Group's total income increased to EUR 51.4 million
(EUR 1.0 million). Net interest income increased to EUR 39.8 million (EUR 26.7
million). Net income for life insurance was EUR 3.2 million (EUR -42.9 million)
and that for non-life insurance EUR 1.5 million (-). Net commission income
increased to EUR 14.5 million (EUR 9.3 million), EUR 0.9 million (-) of which
was the contribution from Aktia Invest. Income from the real estate agency
business increased to EUR 2.2 million (EUR 1.2 million) between October and
December
Expenditure
During October - December, costs amounted to EUR 42.7 million (EUR 31.0
million), an increase of 37.7%. This increase is primarily due to the new
businesses, Aktia Non-Life Insurance and Aktia Invest, together with higher
rents.
As a result of the staff restructuring in the non-life insurance company,
additional costs of EUR 1.1 million have been reported.
Group costs that are allocated to the segments are reported here as Group's
common costs. These amounted to EUR 9.7 million (EUR 5.8 million) for October -
December.
Segment overview October-December 2009
--------------------------------------------------------------------------------
| (EUR million) | 10-12/ 2009 | 10-12/ 2008 | Change |
--------------------------------------------------------------------------------
| Banking business | 19.6 | 11.4 | 72.2 % |
--------------------------------------------------------------------------------
| Asset Management | 1.4 | -0.1 | - |
--------------------------------------------------------------------------------
| Life Insurance | 0.0 | -46.4 | - |
--------------------------------------------------------------------------------
| Non-life Insurance | -4.5 | - | - |
--------------------------------------------------------------------------------
| Miscellaneous | -4.7 | 9.0 | - |
--------------------------------------------------------------------------------
| The Group's | -9.7 | -5.8 | 67.4 % |
| common | | | |
| costs | | | |
--------------------------------------------------------------------------------
| Eliminations | 0.5 | 1.2 | -59.5 % |
--------------------------------------------------------------------------------
| Total | 2.6 | -30.7 | - |
--------------------------------------------------------------------------------
The operating profit for the segment banking business, before the Group's common
costs, was EUR 19.6 million (EUR 11.4 million). Net interest income increased by
62.5% to EUR 38.8 million (EUR 23.9 million). Loans totalling EUR 5.1 million
(EUR 0.4 million) were written down, which is a much lower figure than in the
second and third quarters of 2009.
The segment asset management did relatively well. Operating profit before the
Group's common costs improved to EUR 1.4 million (EUR -0.1 million) and the
market share of mutual funds increased to 7.0% (6.0%).
A conservative investment policy resulted in the life insurance business
contributing 0.0 (EUR -46.4 million) to the Group's operating profit. Profit for
the comparative period in 2008 contained significant write-downs on investments.
Non-life insurance contributed EUR -4.5 million (-) to the Group's operating
profit. Profit from the non-life insurance business was adversely affected by an
unusually large number of personal injury claims covered by motor liability
insurance. The non-life insurance company's write-downs for outstanding premiums
(credit losses) amounted to EUR 0.3 million (-).
Press and Analysts' Conference 15 February 2010 at 11 - 12 a.m.
Aktia's CEO Jussi Laitinen and Deputy Managing Director, CFO Stefan Björkman
present the report and answer questions. The presentation will be available at
www.aktia.fi.
The conference is held at Aktia's Head Office, Mannerheimintie 14 A, 7th floor.
Activity in 2009
- The Group's operating profit for 2009 was EUR 47.0 million (EUR 6.6 million).
- The Group's cost to income ratio for 2009 was 0.57 (0.65).
- The Group's profit was EUR 34.0 million (EUR 5.8 million).
- Profit per share was EUR 0.52 (EUR 0.09).
- Equity per share (net asset value) was EUR 6.52 (EUR 4.85).
- The Tier 1 capital ratio was 9.5 (9.3) and the capital adequacy ratio 15.9
(13.7).
The general economic situation
Interest rates were at an exceptionally low level throughout 2009 and yield
curves were steep. Despite the low interest rates and the steep yield curves,
Aktia was able to report strong net interest income, thanks to successful risk
management strategies.
The market's access to liquidity was supported by an injection of capital from
public authorities and central banks with the aim of steadying the financial
markets. Aktia's liquidity was supported by stable deposits and bond issues by
the Mortgage Bank, and the bank did not therefore have to take advantage of
assistance from the central bank. Competition for household deposits sharpened
considerably in 2009 and Aktia largely maintained its market shares.
During 2009, valuation levels for investments recovered, which was also
reflected in favourable development among Aktia's financial assets.
The acute financial crisis that began in the autumn of 2008 resulted in a
generally higher level of loan write-downs, particularly during the second and
third quarters of 2009. The small and medium sized companies among Aktia's
corporate customers were particularly exposed, as were companies in the
construction sector whose activities fell dramatically. By the end of 2009,
signs of recovery were becoming apparent.
The financial crisis has resulted in many new initiatives for regulating banking
and insurance businesses, which has brought about uncertainty concerning future
capital requirements.
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| Key figures | 2009 | 2008 |
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| GDP growth | | |
--------------------------------------------------------------------------------
| World | -1.3* | 3.7 |
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| EU | -3.8* | 0.9 |
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| Finland | -7.5* | 0.9 |
--------------------------------------------------------------------------------
| Consumer price index | | |
--------------------------------------------------------------------------------
| EU | 0.3* | 3.3 |
--------------------------------------------------------------------------------
| Finland | 0.1* | 4.0 |
--------------------------------------------------------------------------------
| Other key ratios | | |
--------------------------------------------------------------------------------
| Development of real value of | -0.3 | -2.5 |
| housing in Finland | | |
--------------------------------------------------------------------------------
| OMX Helsinki Cap | 28.3 | -49.5 |
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| Interest rates | | |
--------------------------------------------------------------------------------
| ECB | 1.00 | 4.25 |
--------------------------------------------------------------------------------
| Euribor 12 months | 1.30 | 1.10 |
--------------------------------------------------------------------------------
| Euribor 3 months | 0.70 | 4.50 |
--------------------------------------------------------------------------------
| Unemployment in Finland | 8.4* | 6.4 |
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| * Aktia's chief economist's prognosis |
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Income
The Group's total income increased by 83.2% between January and December to EUR
233.1 million (EUR 127.2 million).
Net interest income rose in 2009 by 50.8% to EUR 152.2 million (EUR 101.0
million). The positive impact of managing interest rate risk and the
exceptionally steep decline of interest rates have made a significant
contribution to the net interest income. As interest rate risks are managed with
an average perspective of three years, the positive outcome for 2009 can be
characterised as temporary. The derivatives used by Aktia Bank to limit its
interest rate risk improved net interest income to EUR 33.6 million (EUR -8.3
million). Aktia gained from its good liquidity position in the unstable
situation on the financial markets. Net interest income from lending to and
borrowing from customers was stable.
Net commission income increased by 12.9% to EUR 46.3 million (EUR 41.0 million).
Commission income from funds, asset management and brokering increased to EUR
28.1 million (EUR 20.8 million). Card and payment services commissions rose to
EUR 11.5 million (EUR 11.0 million).
The real estate agency business improved significantly during the last months of
2009 and income rose by 13.9% to EUR 8.1 million (EUR 7.1 million).
Net income from life insurance amounted to EUR 14.0 million (EUR -33.8 million).
This increase primarily comes from a clear improvement in net investment income.
Aktia Non-Life Insurance, consolidated in the Aktia Group since 1 January 2009,
reported a net income of EUR 15.2 million (-) from non-life insurance. Net
income from the insurance business includes insurance premium income, net income
from investment activities, insurance claims paid and the change in provisions.
The non-life insurance company's combined ratio was 119%.
Other income reduced by EUR 13.6 million to EUR 5.4 million (EUR 19.0 million).
Expenditure
The Group's operating costs increased in 2009 by 27.5% to EUR 154.2 million (EUR
120.9 million).
Rents amounted to EUR 9.4 million (EUR 5.4 million).Personnel costs increased by
30.7% to EUR 79.2 million (EUR 60.6 million) for the year.
Other administration costs increased by 16.6% to EUR 44.8 million (EUR 38.4
million). Total depreciation and write-downs on tangible and intangible assets
was EUR 6.9 million (EUR 5.7 million).
Other operating costs amounted to EUR 23.4 million (EUR 16.2 million) in 2009.
The changes are primarily due to the new businesses, Aktia Non-Life Insurance
and Aktia Invest, advisory fees connected with the listing on the Stock
Exchange, higher requirements concerning deposit securities and increased rents.
Balance sheet and off-balance sheet commitments
The Group's balance sheet total increased by 10.6% over the period and amounted
to EUR 10,556 million (EUR 9,540 million at 31 December 2008). This increase in
the balance sheet total is largely due to growth in the mortgage stock and the
financial assets within the banking business.
The Group's total lending to the public amounted to EUR 6,061 million (EUR 5,426
million) at the end of the year, representing an increase of EUR 635 million
(11.7%). Excluding the mortgages brokered by savings and local cooperative banks
that the local banks are committed to capitalise, the Group's lending increased
by EUR 348 million (7.9%) from the year-end. Loans to private households
accounted for EUR 4,924 million or 81.2%. 86.2% of Aktia's loans to private
households were secured against adequate real estate collateral under Basel 2
rules.
12.9% of Aktia's loan stock was corporate loans and 4.8% loans to housing
associations.
The housing loan stock totalled EUR 4,598 million (EUR 4,036 million), of which
mortgages granted by Aktia Real Estate Mortgage Bank plc made up EUR 2,498
million (EUR 1,968 million). In all, housing loans increased by 13.9%. New
corporate lending continued to be moderate. Loans to companies reduced by 2.7%
from the beginning of the year, totalling EUR 782 million (EUR 804 million).
Loans granted to housing associations increased by 31.3% during the period to
EUR 289 million (EUR 220 million).
Interest-bearing financial assets available for sale increased by 16.7% to EUR
3,277 million (EUR 2,808 million). These assets mainly consist of the banking
business' liquidity reserve.
Total deposits from the public, associations and credit institutions fell by
5.2% to EUR 4,754 million (EUR 5,015 million), of which, borrowing from the
public and public sector entities fell by 2.2% from the year end, totalling EUR
3,029 million (EUR 3,098 million). Other refinancing increased by 29.2% to EUR
4,046 million (EUR 3,130 million). This growth is largely due to an increase in
debt securities issued and repurchase agreements.
Aktia Real Estate Mortgage Bank plc issued three covered bonds in 2009. In
February, a bond of EUR 125 million was issued with a floating interest rate and
three-year maturity. A second bond was issued in June worth EUR 600 million with
a fixed interest rate and five-year maturity. A third bond was issued in October
worth EUR 150 million with a fixed interest rate and a maturity of approx. 3
years. Outstanding Aktia Bank certificates of deposit amounted to EUR 295
million at the end of the year and bonds issued by the Group EUR 2,453 million,
which represents an increase of EUR 596 million during the year. Aktia Bank also
issued new subordinated debts and index-linked loans with a total value of EUR
89 million.
Life insurance provisions amounted to EUR 805 million (EUR 777 million) EUR 210
million (EUR 150 million) of which unit-linked.
Non-life insurance provisions stood at EUR 119 million (EUR 110 million at 1
January 2009), including EUR 10 million (EUR 12 million at 1 January 2009) for
valuation of provisions at fair value on acquisition.
Off-balance sheet commitments increased by EUR 47 million from the year-end and
amounted to EUR 575 million (EUR 529 million). This increase was largely due to
growth in unused credit facilities (loan promises and limits) and high liquidity
commitments with the local banks.
Aktia Group's equity amounted to EUR 466 million (EUR 317 million) at the end of
the period. The Group's fund at fair value amounted to EUR 43 million (EUR -36
million) and showed an improvement of EUR 80 million from the beginning of the
year.
Segment overview
Aktia plc's division into business segments was changed 1 January 2009 so that
the segments Retail Banking and Corporate Banking & Treasury are combined into a
segment entitled Banking Business also including real estate agencies. The other
segments are Asset Management, Life Insurance, Non-Life Insurance and
Miscellaneous. The Miscellaneous segment includes Group administration, certain
administrative functions and return on equity.
Comparative figures for 2008 relating to the new segmentation were published on
8 April 2009.
Operating profit before common costs
--------------------------------------------------------------------------------
| (EUR million) | 1-12 2009 | 1-12 2008 | Change |
--------------------------------------------------------------------------------
| Banking business | 84.9 | 54.6 | 55.5 % |
--------------------------------------------------------------------------------
| Asset Management | 3.6 | 4.4 | -17.1 % |
--------------------------------------------------------------------------------
| Life Insurance | 4.0 | -47.4 | - |
--------------------------------------------------------------------------------
| Non-life Insurance | -6.0 | - | - |
--------------------------------------------------------------------------------
| Miscellaneous | -2.0 | 20.3 | - |
--------------------------------------------------------------------------------
| The Group's common costs | -35.4 | -24.9 | 42.2 % |
--------------------------------------------------------------------------------
| Eliminations | -2.3 | -0.4 | 490.1 % |
--------------------------------------------------------------------------------
| Total | 47.0 | 6.6 | 611.3 % |
--------------------------------------------------------------------------------
Banking business
The operating profit of the banking business before allocation of the Group's
common costs increased over the year to EUR 84.9 million (EUR 54.6 million). The
banking business' share of the Group's common costs was EUR 29.3 million (EUR
23.5 million).
Operating income totalled EUR 193.7 million (EUR 124.2 million). This
improvement is mainly attributable to net interest income which increased to EUR
146.9 million (EUR 93.6 million). The banking business' cost-to-income ratio
correspondingly improved to 0.57 (0.65).
Net commission income totalled EUR 33.7 million (EUR 29.4 million) for 2009.
Operating expenses rose to EUR 107.3 million (EUR 92.4 million). The increase in
costs includes an increased payment to the Deposit Guarantee Fund as well as
increased rents as a result of selling off office premises during 2008.
Sales activities are supported by the Aktia Dialogue concept whereby customers'
needs are mapped out and Aktia's whole service portfolio is presented. During
2009, 20,000 Dialogues were carried out, which is expected to increase the
number of total customers in 2010.
Aktia's lending to private households, including the mortgages brokered by
Aktia, increased by 9.3% to EUR 3,658 million (EUR 3,346 million). Mortgage
loans brokered by Aktia amounted to EUR 1,305 million (EUR 1,058 million). In
addition, the savings and local co-operative banks brokered mortgages amounting
to EUR 1,267 million (EUR 997 million). Aktia's market share in housing loans to
households amounted to 4.23%.
The average lending margin for new housing loans was 1.03% (0.60) in December,
which will have a positive impact on the net interest income in the longer term.
Total savings by households increased by 7.3% from the beginning of the year,
totalling EUR 3,113 million (EUR 2,900 million). Of these, deposits were EUR
2,372 million (EUR 2,368 million) and savings in mutual funds stood at EUR 741
million (EUR 532 million).
Aktia Real Estate Mortgage Bank plc showed continued growth. The total credit
stock grew by 27.2% to EUR 2,636 million. Of the credit stock, 51.1% was
brokered by Aktia's branch offices and 48.9% by savings and local co-operative
banks.
The operating profit of the real estate agency business developed favourably and
amounted to EUR 0.9 million (EUR -1.1 million), mainly as a result of cost
adjustment and more activity on the market during the second half of the year.
Asset Management
Operating profit for Aktia's asset management business, before allocation of
common costs, fell during the year to EUR 3.6 million (EUR 4.4 million). Asset
management's share of the Group's common costs was EUR 2.7 million (EUR 1.2
million).
The operating profit for the period included non-recurring items, mainly capital
losses of approximately EUR 0.5 million.
Aktia provides a wide and competitive range of services on the capital market,
for both private individuals and institutions. Managed assets developed
favourably during 2009. The Asset Management segment continued to focus on
private banking operations and institutional investors.
Operating income, i.e. income after reversals to the Group's other units and
business partners, was EUR 15.6 million (EUR 12.5 million). Operating costs
increased by EUR 5.5 million to EUR 14.7 million, of which personnel costs made
up EUR 8.1 million (EUR 4.8 million). This is largely due to greater investment
of resources in the private banking business and institutional investment
activities.
The volume of funds managed and brokered by Aktia was EUR 3,786 million (EUR
2,490 million). Aktia's market share was 7.0% (6.0%) at the end of the period -
this includes the share of brokered funds. The total market is based on
information from the Finnish Association of Mutual Funds.
The assets managed by Aktia Asset Management and Aktia Invest increased, thanks
to an upswing in the markets, and totalled EUR 5,996 million (EUR 4,539
million). Assets managed by Aktia Invest amounted to EUR 2,100 million (-). The
customer assets of Private Banking totalled EUR 926 million (EUR 738 million).
The number of customers in Private Banking increased by approximately 13% in
2009.
Life Insurance
The contribution of the life insurance business to the Group's operating profit
was EUR 2.7 million (EUR -47.7 million). Life insurance business' share of the
Group's common costs amounted to EUR 1.4 million (EUR 0.2 million).
The segment's operating result for both the previous year and the reported
period include non-recurring items that make comparison difficult. Such items
include write-downs of the investment portfolio, changes in the discount rate
for the interest-based provisions and capital gains from real estate holding
divestments in 2008. At Group level, these non-recurring items amounted to EUR
-4.3 million (EUR -14.1 million) between January - December.
Premium income was EUR 80.5 million (EUR 91.0 million). A strategic line has
been drawn so that all new sales are directed against the unit link and risk
insurance contributes to lower volumes of new sales. The decrease in premium
income is mainly due to the fact that the sales of single premium policies were
low until autumn 2009. In contrast, premium volumes from unit-linked pension
insurance schemes and risk insurance policies developed favourably and
increased. Of the premium volume for savings and investment-linked insurance and
pension insurance, unit-linked insurance accounted for around 62%. At the end of
the year, Aktia launched a new insurance product, the capitalisation agreement.
The Aktia Capitalisation Agreement is a time investment-linked insurance policy,
in the context of which the customer can choose different investment
instruments.
Insurance claims and benefits totalled EUR 79.8 million (EUR 86.7 million). The
decrease in insurance claims paid resulted primarily from a sharp fall in the
surrender of single-premium policies during the second half of the year. In
contrast, claims paid for pensions and health insurance increased. The loss
ratio for risk insurance remained at a good level, 79% (81%).
Operating costs, including the Group's common costs, totalled EUR 13.3 million
(EUR 13.4 million). Within the life insurance business, steps to streamline
operations have continued, as has work to improve cost efficiency. Despite the
additional expenses brought about by the modified principles for allocating the
Group's administration expenses, expenses for the year are at the same level as
the year before. The cost ratio stood at 100.7% compared to 99.0% for the year
before. The sales organisation of the life insurance segment has been
transferred to Aktia Non-Life Insurance and the streamlining measures taken have
brought about certain non-recurring costs. The coordination of sales
distribution is expected to bring cost benefits going forward from 2010.
The return on the company's investments based on market value was 5.6% (-9.5%).
To enable stable returns on investment in the long term and to fulfil the
upcoming solvency requirements, the risks in the investment portfolio have been
reduced and portfolio reallocation continued. The restructuring of the
investment portfolio has brought about both capital gains and losses in the form
of write-downs. Net income from investment business includes write-downs of
approximately EUR 22 million of financial assets.
Provisions totalled EUR 805 million (EUR 777 million), of which provisions for
unit-linked insurance policies represented 26% (19%). Unit-linked provisions
amounted to EUR 210 million (EUR 150 million) and interest-linked provisions
amounted to EUR 595 million (EUR 628 million). During the first and second
quarter 2009, the discount rate for certain elements of these provisions was
increased and the average discount rate for all interest-bearing provisions was
3.6%. This increase reduced provisions by EUR 19.3 million and has a positive
impact on the profit for the year. Customers with interest-linked policies who
are entitled to additional benefits shall receive for 2009 a return comprising
the calculation rate and customer payment that varies between 2.8% and 4.5%.
More information on the company's customer payment policy can be found on
Aktia's website at www.aktia.fi.
The company's solvency improved and amounted to 14.4% compared to 8.5% at the
year-end.
Non-Life Insurance
The contribution of the non-life insurance business to the Group's operating
profit for 2009 was EUR -7.7 million. Non-life insurance business' share of the
Group's common costs amounted to EUR 1.7 million (-).
Aktia Non-Life Insurance was merged with Aktia plc on 1 January 2009. In 2008
and in previous years, the company has applied Finnish accounting principles
(FAS). In conjunction with the merger, the company has, for consolidation
reasons, started applying IFRS reporting principles. An opening balance
according to IFRS was prepared as at 1 January 2009. The company's opening
balance according to IFRS includes equity amounting to EUR 32 million, technical
provisions amounting to EUR 99 million, while the balance sheet total stood at
EUR 155 million.
Insurance premium income for Aktia Non-Life Insurance increased by approximately
4% on the corresponding period last year. This increase is above the average
growth in the market and is attributable to both private and corporate
customers. Premium income before the reinsurers' share was EUR 66.3 million.
Premium income for the period after the reinsurers' share and change of premium
liabilities amounted to EUR 60.6 million. Claims expenditure amounted to a total
of EUR 50.1 million.
The operating costs totalled EUR 21.7 million. This includes a total of EUR 0.9
million of non-recurring costs for the codetermination negotiations concluded
during the fourth quarter. Write-downs on outstanding premiums (loan losses) for
the period totalled EUR 0.7 million. The total cost ratio for 2009 was 119.0%.
Restructuring costs, increased costs from the Group and a higher level of
claims, primarily personal injury claims covered by motor liability insurance,
contributed to a marked increase in the total cost ratio during the fourth
quarter.
Net income from investment business amounted to EUR 3.8 million. The result from
investment business was adversely affected by net capital losses totalling EUR
-1.2 million which resulted from consciously reducing the level of risk in the
investment portfolio and selling off all the company's equity investments during
the first quarter. The return on the company's investments based on market value
was 1.5%.
Of the non-life insurance business' total provisions of EUR 110 million (EUR 99
million at 1 January 2009), the actual provisions for paying claim benefits
stood at EUR 89 million (EUR 79 million at 1 January 2009). The market value of
the company's investment portfolio was EUR 129 million (EUR 131 million at 1
January 2009) and the company's risk carrying capacity was 72.4% (90.3% at 1
January 2009).
The integration of Aktia Non-Life Insurance's distribution channels into Aktia's
branch office network has increased customer activity particularly in the
private customer sector.
Miscellaneous
The operating profit of the Miscellaneous segment was EUR -2.0 million (EUR 20.3
million) during 2009. During 2008 much of Aktia's real estate holdings were
disposed of which generated capital gains. In conjunction with this divestment,
rental incomes also reduced during 2009.
Capital adequacy and solvency
The Bank Group's capital adequacy amounted to 15.9% compared to 13.7% last year.
The Tier 1 capital ratio was 9.5% (9.3%). The year's results and higher
valuations of financial assets strengthened capital adequacy.
During the first quarter of 2009, Aktia Bank sold all its shares in Aktia Life
Insurance to the Group's parent company. This improved the Bank Group's capital
adequacy by 1.1 percentage points. The Bank Group's capital adequacy remained at
a good level, exceeding both the capital adequacy targets set internally and the
regulatory requirements.
The non-life insurance company's working capital amounted to EUR 86.3 million
(EUR 50.4 million), where the minimum requirement is EUR 34.0 million (EUR 34.2
million). Solvency amounted to 14.4 (8.5)%.
The non-life insurance company's working capital amounted to EUR 18.4 million
(EUR 22.7 million at 1 January 2009), where the minimum requirement is EUR 13.1
million. Solvency capital was EUR 43.6 million (54.1% at 1 January 2009) and a
risk carrying capacity of 72.4% (90.3% at 1 January 2009) was reported.
Capital adequacy for the conglomerate amounted to 157.4% (135.2%). The statutory
minimum stipulated in the Act on the Supervision of Financial and Insurance
Conglomerates is 100%.
Rating
Aktia Bank plc's credit rating by the international credit rating agency Moody's
Investors Service remained at the best classification, P-1, for short-term
borrowing as at 6 January 2010. The credit rating for long-term borrowing is A1
and that for financial strength C. All ratings have a stable outlook.
See http://www.aktia.fi/aktia_bank/rating
The covered bonds issued by subsidiary Aktia Real Estate Mortgage Bank plc have
a Moody's credit rating of Aa1.
Valuation of financial assets
Value changes reported via income statement
For shares and participations, a value impairment is reported in the income
statement where the value change has been announced as significant or long-term
and, in the case of interest-bearing securities, where the issuer has announced
an inability to pay. For interest-bearing securities, previous write-downs are
reversed in the income statement and for shares and participations in the fund
at fair value.
During the year, write-downs totalled EUR 24.0 million (EUR 39.2 million) and
EUR 1.6 million in the fourth quarter.
Of these write-downs, EUR 9.6 million (EUR 29.4 million) can be attributed to
shares and participations in the investment portfolio of the life insurance
company and EUR 14.4 million (EUR 8.8 million) to interest-bearing securities,
of which EUR 0.4 million (EUR 3.6 million) was related to the bank's liquidity
portfolio. The share risk in the life insurance company's investment portfolio
has been deliberately reduced and direct shareholdings amounted to EUR 0.2
million (EUR 37.8 million) at the end of the year. No write-downs have been
implemented within the non-life insurance company's investment portfolio during
the year.
Write-downs on financial assets
--------------------------------------------------------------------------------
| EUR million | 1-12 2009 | 1-12 2008 |
--------------------------------------------------------------------------------
| Interest-bearing securities | | |
--------------------------------------------------------------------------------
| Banking business | 0.4 | 3.6 |
--------------------------------------------------------------------------------
| Life Insurance business | 14.0 | 5.1 |
--------------------------------------------------------------------------------
| Non-life insurance business | - | - |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shares and participations | | |
--------------------------------------------------------------------------------
| Banking business | - | 1.0 |
--------------------------------------------------------------------------------
| Life Insurance business | 9.6 | 29.4 |
--------------------------------------------------------------------------------
| Non-life insurance business | - | - |
--------------------------------------------------------------------------------
| Total | 24.0 | 39.2 |
--------------------------------------------------------------------------------
Value changes reported via the fund at fair value
A value impairment that is not reported in the income statement or an increase
in the value of financial assets that has not been realised is reported via the
fund at fair value. Taking cash flow hedging for the Group into consideration,
the fund at fair value amounted to EUR 43.3 million after deferred tax compared
to EUR -36.4 million as 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 21.4 million (EUR 12.4 million).
Specification of the fund at fair value
--------------------------------------------------------------------------------
| EUR million | 31.12.2009 | 31.12.2008 | Change |
--------------------------------------------------------------------------------
| Shares and | | | |
| participations | | | |
--------------------------------------------------------------------------------
| Banking business | 3.7 | -1.5 | 5.2 |
--------------------------------------------------------------------------------
| Life insurance | 0.2 | -2.9 | 3.1 |
| business | | | |
--------------------------------------------------------------------------------
| Non-Life insurance | -0.2 | - | -0.2 |
| business | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Direct | | | |
| interest-bearing | | | |
| securities | | | |
--------------------------------------------------------------------------------
| Banking business | 13.3 | -26.3 | 39.5 |
--------------------------------------------------------------------------------
| Life insurance | 5.6 | -18.2 | 23.8 |
| business | | | |
--------------------------------------------------------------------------------
| Non-Life insurance | -0.8 | - | -0.8 |
| business | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow hedging | 21.4 | 12.4 | 9.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Fund at fair value, | 43.3 | -36.4 | 79.7 |
| total | | | |
--------------------------------------------------------------------------------
Write-downs of loan and guarantee claims
In 2009, the financial crisis translated into a downturn in the economy, which
led to write-downs primarily on corporate loans. In total, write-downs based on
individual examination amounted to EUR -33.1 million (EUR -1.2 million).
Reversals of previous write-downs came to EUR 2.1 million (EUR 0.5 million) so
that the cost effect on the profit for the period was EUR -31.1 million (EUR
-0.7 million). Write-downs during the fourth quarter totalled EUR -6.6 million.
Of write-downs with impact on costs, EUR -29.9 million was accounted for by
corporate loans, which corresponds to 3.8% (0.02%) of the total corporate
lending. Write-downs with impact on costs of household loans amounted to EUR
-1.1 million, EUR -0.7 million of which was accounted for by unsecured consumer
loans. The year's write-downs with impact on costs of household loans was
equivalent to 0.02% (0.01%) of total lending to households. Total write-downs
with cost impact for the year amounted to 0.51% (0.01%) of total lending.
In addition to individual write-downs, group write-downs were made for
households and small companies, 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 Group's risk management
Risk exposure
The banking business includes Retail Banking and the financing companies,
Corporate Banking, Treasury and Asset Management. Life insurance business is
carried out by Aktia Life Insurance, and non-life insurance business by Aktia
Non-Life Insurance.
Lending-related risks within banking
The credit stock maintained good quality despite the downturn in the economy.
The credit stock increased over the year by EUR 635 million or 11.7%, totalling
EUR 6,061 million (EUR 5,426 million) at the year-end. As planned, this increase
mainly occurred within household financing and households' share of the total
credit stock amounted to EUR 4,924 million or 81.2% or 86.0% when combined with
housing associations at the end of year. Of these loans to households, 86.2%
(86.2%) are secured against adequate real estate collateral in accordance with
Basel 2. The housing credit stock totalled EUR 4,598 million (EUR 4,036
million), of which mortgages granted by Aktia Real Estate Mortgage Bank plc made
up EUR 2,498 million (EUR 1,968 million). In all, housing loans increased by
13.9% over the year.
New lending to companies remained moderate and corporate loans fell by 2.7% from
the beginning of the year, totalling EUR 782 million (EUR 804 million). The
proportion of the total credit stock accounted for by corporate loans fell as
planned to 12.9%
Lending to the general public secured by collateral objects or unsecured within
the framework of the financing companies Aktia Corporate Finance and Aktia Card
& Finance totalled EUR 84.8 million (EUR 63.0 million), representing 1.4% of
total lending.
Credit stock by sector
--------------------------------------------------------------------------------
| EUR million | 31.12.2009 | 31.12.2008 | Change | Percentage |
--------------------------------------------------------------------------------
| Corporate | 782 | 804 | -22 | 12.9 |
--------------------------------------------------------------------------------
| Housing | 289 | 220 | 69 | 4.8 |
| associations | | | | |
--------------------------------------------------------------------------------
| Public sector | 10 | 12 | -2 | 0.2 |
| entities | | | | |
--------------------------------------------------------------------------------
| Non-profit | 55 | 47 | 9 | 0.9 |
| organisations | | | | |
--------------------------------------------------------------------------------
| Households | 4,924 | 4,343 | 581 | 81.2 |
--------------------------------------------------------------------------------
| Total | 6,061 | 5,426 | 635 | 100.0 |
--------------------------------------------------------------------------------
Loans with payments 1-30 days overdue fell during the year from 3.40% to 2.97%
of the credit stock, including off-balance sheet guarantee commitments. Loans
with payments 31-90 days overdue fell from 0.87% to 0.76%, totalling EUR 46
million. Non-performing loans more than 90 days overdue, including claims on
bankrupt companies and loans for collection, totalled EUR 34 million,
corresponding to 0.56% (0.48%) of the entire credit stock plus bank guarantees.
Undischarged debts by time overdue (EUR million)
--------------------------------------------------------------------------------
| Days | 31.12.2009 | % of the | 31.12.2008 | % of the |
| | | credit stock | | credit stock |
--------------------------------------------------------------------------------
| 1-30 | 181 | 2.97 | 187 | 3.40 |
--------------------------------------------------------------------------------
| of which | 114 | 1.86 | 110 | 2.01 |
| households | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 31-89 | 46 | 0.76 | 48 | 0.87 |
--------------------------------------------------------------------------------
| of which | 37 | 0.61 | 34 | 0.63 |
| households | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 90- | 34 | 0.56 | 26 | 0.48 |
--------------------------------------------------------------------------------
| of which | 18 | 0.30 | 16 | 0.29 |
| households | | | | |
--------------------------------------------------------------------------------
Credits past due but not impaired (EUR million)
--------------------------------------------------------------------------------
| | 31.12.2009 | 31.12.2008 |
--------------------------------------------------------------------------------
| Days | Book | % of the | Fair | Book | % of the | Fair |
| | value | credit | value of | value | credit | value of |
| | | stock | collater | | stock | collatera |
| | | | al | | | l |
--------------------------------------------------------------------------------
| 1-30 | 181.3 | 2.99 | 166.0 | 185.5 | 3.42 | 166.6 |
--------------------------------------------------------------------------------
| 31-89 | 46.1 | 0.76 | 44.1 | 47.5 | 0.88 | 45.4 |
--------------------------------------------------------------------------------
| 90- | 30.4 | 0.50 | 27.4 | 25.4 | 0.47 | 19.3 |
--------------------------------------------------------------------------------
The Group's financing and liquidity risks
The financing and liquidity risks are dealt with at legal company level, and
there are no financing commitments between the Bank Group (Aktia Bank plc and
its subsidiaries) and the insurance companies.
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 objective in the Bank Group is to be able to cover one year's
refinancing requirements using existing liquidity. The liquidity status has been
stable despite continued financial uncertainty and at the year-end financial
assets were at a level that meets refinancing requirements for approximately 16
months.
Within the life insurance business, liquidity risks are defined as the
availability of financing for paying out claims, savings sums and surrenders,
and pensions. The need for liquidity is satisfied mainly through the inward flow
of cash and a portfolio of investment certificates which has been adapted in
line with varying needs. Any unforeseen significant need for liquidity is taken
care of through the liquid portfolio (primarily bonds).
Within the non-life insurance business, liquidity risks are defined as the
availability of financing for paying out claims and depend on the number of
claims and their scale. Liquidity risks are managed through the inward flow of
cash plus an adapted portfolio of bank deposits, investment certificates and
government bonds.
Counterparty risks
Counterparty risks within Group Treasury's liquidity management operations
The banking business' liquidity portfolio, which comprises interest-bearing
securities and is managed by Group Treasury, stood at EUR 2,615 million (EUR
2,290 million) as at 31 December 2009. Only the most solid international banks
are accepted as counterparties. In addition, maximum exposure limits have been
established for each counterparty and asset type. Individual investment
decisions are made in accordance with an investment plan in place and are based
on careful assessment of the counterparty.
Counterparty risks arising in relation to liquidity management and entry into
derivative contracts are managed through conservative allocation and the
requirement for high-level external ratings (minimum A3 rating from Moody's or
equivalent). Counterparty risks in derivative trading are managed through the
requirement for a CSA agreement.
Of the financial assets available for sale, 55% (49%) were investments in
covered bonds, 29% (45%) were investments in banks, 10% (3%) were investments in
state-guaranteed bonds and approximately 6% (3%) were investments in public
sector entities and companies. Of these financial assets, 1.7% (0.9%) did not
meet the internal rating requirements. As a result of a reduced credit rating,
four security assets with a total market value of EUR 18 million were no longer
eligible for refinancing with the central bank. Other securities that are not
eligible for refinancing and are unrated, totalled EUR 27 million.
During the period, write-downs totalling EUR -0.4 million were realised as a
result of the issuer announcing its inability to pay.
Rating distribution for banking business
--------------------------------------------------------------------------------
| | 31.12.2009 | 31.12.2008 |
--------------------------------------------------------------------------------
| EUR million | 2 615 | 2 290 |
--------------------------------------------------------------------------------
| Aaa | 55.1 % | 49.4 % |
--------------------------------------------------------------------------------
| Aa1-Aa3 | 29.6 % | 42.3 % |
--------------------------------------------------------------------------------
| A1-A3 | 11.6 % | 4.9 % |
--------------------------------------------------------------------------------
| Baa1-Baa3 | 0.6 % | 0.9 % |
--------------------------------------------------------------------------------
| Ba1-Ba3 | 0.2 % | 0.0 % |
--------------------------------------------------------------------------------
| B1-B3 | 0.0 % | 0.0 % |
--------------------------------------------------------------------------------
| Caa1 or lower | 0.0 % | 0.0 % |
--------------------------------------------------------------------------------
| No rating | 2.9 % | 2.5 %* |
--------------------------------------------------------------------------------
| Total | 100.0 % | 100.0 % |
--------------------------------------------------------------------------------
*) Of which 1.9% municipalities at 31 December 2009 and 0.2% at 31 December
2008.
Counterparty risks in the life insurance business
The life insurance company's direct interest rate investment increased as a
result of continued reallocation with the aim of reducing the investment risks
and neutralising interest rate risks in the provisions. Interest rate
investments amounted to EUR 570 million (EUR 449 million) at the end of the
year. Counterparty risks arising in connection with the life insurance company's
investments are managed by the requirement for at least an “Investment grade”
external rating (rating class Baa3 from Moody's or equivalent) and by rules
concerning the maximal exposure for each counterparty and asset category.
At the end of 2009, 47% (48%) of the direct interest rate investments were
receivables from public sector entities, 23% (20%) were receivables from
companies and 30% (32%) were receivables from banks and covered bonds.
1.7% of the direct interest rate investments did not meet the internal rating
requirements at the end of the period.
During the period, write-downs totalling EUR -14.1 million were realised as a
result of the issuer announcing its inability to pay.
Rating distribution for life insurance business
--------------------------------------------------------------------------------
| | 31.12.2009 | 31.12.2008 |
--------------------------------------------------------------------------------
| EUR million | 570 | 449 |
--------------------------------------------------------------------------------
| Aaa | 52.5 % | 53.7 % |
--------------------------------------------------------------------------------
| Aa1-Aa3 | 12.2 % | 17.3 % |
--------------------------------------------------------------------------------
| A1-A3 | 18.3 % | 14.8 % |
--------------------------------------------------------------------------------
| Baa1-Baa3 | 11.4 % | 5.7 % |
--------------------------------------------------------------------------------
| Ba1-Ba3 | 1.4 % | 0.8 % |
--------------------------------------------------------------------------------
| B1-B3 | 0.0 % | 0.2 % |
--------------------------------------------------------------------------------
| Caa1 or lower | 0.3 % | 0.0 % |
--------------------------------------------------------------------------------
| No rating | 3.9 % | 7.6 % |
--------------------------------------------------------------------------------
| Total | 100.0 % | 100.0 % |
--------------------------------------------------------------------------------
Counterparty risks in the non-life insurance business
A conservative investment policy is observed in the non-life insurance business.
The non-life insurance company's direct interest rate investments increased as a
result of continued reallocation with the aim of reducing the investment risks
and totalled EUR 104 million (EUR 73 million) at the end of 2009.
At the end of the year, 64% (80%) of the direct interest rate investments were
receivables from public sector entities, 10% (4%) were receivables from
companies and 26% (16%) were receivables from banks and covered bonds.
During the period no write-downs were realised as a result of issuers announcing
an inability to pay.
Rating distribution for non-life insurance business
--------------------------------------------------------------------------------
| | 31.12.2009 | 1.1.2009 |
--------------------------------------------------------------------------------
| EUR million | 104 | 74 |
--------------------------------------------------------------------------------
| Aaa | 58.4% | 65.2% |
--------------------------------------------------------------------------------
| Aa1-Aa3 | 16.7% | 23.3% |
--------------------------------------------------------------------------------
| A1-A3 | 12.5% | 10.1% |
--------------------------------------------------------------------------------
| Baa1-Baa3 | 11.4% | 0.0% |
--------------------------------------------------------------------------------
| Ba1-Ba3 | 0.5% | 0.0% |
--------------------------------------------------------------------------------
| B1-B3 | 0.0% | 0.0% |
--------------------------------------------------------------------------------
| Caa1 or lower | 0.0% | 0.0% |
--------------------------------------------------------------------------------
| No rating | 0.4% | 1.4% |
--------------------------------------------------------------------------------
| Total | 100.0% | 100.0% |
--------------------------------------------------------------------------------
Market valuation of financial assets
Aktia pursues no trading activities. Both the financial assets within the
banking business and the investment assets within the life and non-life
insurance businesses 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.
Structural interest rate risk in the banking business
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. Hedging derivative instruments and investments within the
liquidity portfolio are exploited to reduce the volatility in net interest
income.
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
-4.3% (-5.4%) while the target for structural interest rate risk management is a
maximum of -7%. For the next 12-24 months, the net interest income of the
banking business would fall by -5.3% (-6.0%), where 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 increase the net interest income of the banking business for the next 12
months by +3.0% (+6.3%), while the target for structural interest rate risk
management is a maximum of -7%. For the next 12-24 months, the net interest
income of the banking business would increase by +6.0% (+7.9%), where the target
for structural interest rate risk management is a maximum of -8%.
Market value interest rate risk in the banking business
Market value interest rate risk refers to changes in value of financial assets
available for sale as a result of interest rate fluctuations or changes in
credit, interest rate or spread risks. The size, maturity and risk level of the
liquidity portfolio is restricted as a result of capital allocation limits and
limits for entering into repurchase agreements.
The net change in the fund at fair value relating to market value interest rate
risk posted during the period and credit and spread risk was positive and
totalled EUR 39.5 million after the deduction of deferred tax. At the year-end,
the valuation difference in interest-bearing securities was positive at EUR 13.3
million (EUR -26.3 million).
Other market risks in the banking business and Aktia plc
No equity trading or investments in real estate are carried out by the banking
business or in the parent company.
At the end of the period, remaining real estate assets totalled EUR 3.4 million
(EUR 3.6 million). The investments in shares which are necessary or strategic to
the business totalled EUR 30.6 million (EUR 21.9 million). At the end of the
period, the fund at fair value related to the above strategic share investments
amounted to EUR 3.7 million (EUR -1.5 million) after the deduction of deferred
tax.
Investment risks in the life insurance business
The policyholder bears the investment risk of the investments that provide cover
for unit-linked insurance policies. These investments are valuated on an ongoing
basis at fair value and any changes in value are posted to provisions for
unit-linked insurance policies.
The investment portfolio covering technical provisions is measured on an ongoing
basis at market value. During the reporting period write-downs affecting profit
were posted which were attributable to shares and participations totalling EUR
-9.6 million. The net change in the fund at fair value for shares after
acquisition eliminations posted during the period totalled EUR 3.1 million after
the deduction of deferred tax.
Equity investments have been reduced during the year and amounted to EUR 0.2
million (EUR 38 million) at the end of the period.
The risks in the investment portfolio, such as credit risks, interest rate
risks, currency risks, share risks and real estate risks, are measured and
contained using different stress models including a VaR (Value at Risk) model,
assuming maximum loss for 12 months and applying a probability level of 97.5%.
Allocation of holdings in the life insurance company's investment portfolio
--------------------------------------------------------------------------------
| EUR million | 31.12.2009 | 31.12.2008 |
--------------------------------------------------------------------------------
| Shares | 0.3 | 0.0% | 37.8 | 5.5% |
--------------------------------------------------------------------------------
| Bonds | 609.7 | 88.0% | 480.6 | 69.4% |
--------------------------------------------------------------------------------
| Money market | 24.0 | 3.5% | 85.3 | 12.3% |
--------------------------------------------------------------------------------
| Real estate | 38.0 | 5.5% | 42.8 | 6.2% |
--------------------------------------------------------------------------------
| Other | 20.7 | 3.0% | 46.1 | 6.6% |
--------------------------------------------------------------------------------
| Total | 692.6 | 100.0% | 692.6 | 100.0% |
--------------------------------------------------------------------------------
Underwriting risks in the life insurance business
Underwriting risks occur where future claim payments become higher than
expected. Taking into account the provision of reinsurance cover, the insurance
business has been relatively stable. The provision of reinsurance cover for
different insurance portfolios reduces the volatility of financial results and
eliminates risks that could affect the company's future business opportunities.
Investment risks in the non-life insurance business
The investment portfolio covering technical provisions is measured on an ongoing
basis at market value. In order to further reduce the level of risk in the
investment portfolio, all listed share holdings were sold off during the
reporting period.
During the period no write-downs affecting profit were posted that were
attributable to shares and participations.
The net change in the fund at fair value for shares after acquisition
eliminations posted during the period totalled EUR -0.2 million after the
deduction of deferred tax.
The decision was taken not to take share risks in the investment business of the
non-life insurance company until further notice.
Allocation of holdings in the non-life insurance company's investment portfolio
--------------------------------------------------------------------------------
| EUR million | 31.12.2009 | 1.1.2009 |
--------------------------------------------------------------------------------
| Shares | 0.0 | 0.0% | 20.6 | 14.7% |
--------------------------------------------------------------------------------
| Bonds | 105.9 | 74.4% | 79.3 | 56.6% |
--------------------------------------------------------------------------------
| Money market | 6.3 | 4.4% | 8.0 | 5.7% |
--------------------------------------------------------------------------------
| Real estate | 28.2 | 19.8% | 29.1 | 20.8% |
--------------------------------------------------------------------------------
| Other | 2.0 | 1.4% | 3.0 | 2.1% |
--------------------------------------------------------------------------------
| Total | 142.4 | 100.0% | 140.1 | 100.0% |
--------------------------------------------------------------------------------
Underwriting risks in the non-life insurance business
Underwriting risks occur where future claim payments become higher than
expected. Taking into account the provision of reinsurance cover, the insurance
business has been relatively stable. The provision of reinsurance cover for
different insurance portfolios reduces the volatility of financial results and
eliminates risks that could affect the company's future business opportunities.
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 events regarded as operational risk causing significant financial losses
occurred in 2009.
Events concerning close relations
Close relations refers to key personnel in management positions, Aktia plc's
Board of Supervisors, members of the Board of Directors, and executive
management (Managing Director and Deputy Managing Directors). Close relations
also includes close family members of key personnel mentioned above as well as
companies where key personnel in management positions exercise control or
influence (more than 20% of share capital).
No significant changes concerning close relations occurred during the period.
Personnel
Converted into full-time employees, the number of people employed by the Group
increased by 155 people to 1,207 (1,052). The average number of full-time
employees during the year was 1,213 (1,009). Including Aktia Non-Life Insurance,
consolidated in the Aktia Group from 1 January 2009, the number of people
employed by the Group at the beginning of the year amounted to 1,262 full-time
employees. This number had reduced by 55 at the end of December.
Aktia Non-Life Insurance initiated codetermination negotiations on 24 August
2009 concerning measures to improve efficiency for financial and
production-related reasons and embarked on reorganising operations.
As a result of the negotiations, which were concluded in October, Aktia Non-Life
Insurance Ltd decided to terminate the employment of a total of 19 people. As a
result of other arrangements, the staff was reduced by 11. The savings made in
this respect from 2010 onwards are expected to amount to approximately EUR 2
million p.a.
Personnel fund and management's incentive programme for 2009
For 2009 a maximum profit-sharing provision for Aktia's personnel fund is
expected. The profit-sharing amounts to EUR 2.4 million. The CEO and other
members of the Group's Executive Committee are also members of the Group's
personnel fund.
A bonus system has been set up for the CEO and the other members of the Group's
Executive Committee, which is based on the Group's financial results and
annually defined targets at company and individual level. The individual bonus
to the Executive Committee members cannot exceed the equivalent of three months'
salary each year.
For 2009, the Executive Committee is also included in a share-based incentive
scheme that offers the members of the Executive Committee the opportunity to
subscribe for a maximum of 59,000 shares. The outcome is dependent on separate
targets whose performance conditions have been decided on by the Board of
Directors. The share-based incentive scheme increased staff costs by EUR 0.2
million during the period.
Changes in the Board of Directors and Executive Committee
In keeping with the articles of association in force, the Board of Directors is
elected for the following financial year by the Board of Supervisors in
December. At its meeting of 10 December 2009, Aktia plc's Board of Supervisors
appointed the Board's Vice Chairman Dag Wallgren as the new Chairman of the
Board of Directors. In addition, Nils Lampi was appointed as a new member of the
Board of Directors. Chairman of the Board of Directors Kaj-Gustaf Bergh had
requested not to be reelected. Nils Lampi B.Sc. (Econ) was born in 1948 and
lives in Mariehamn. He has been CEO of Wiklöf Holding Ltd since 1992.
Board member Lars-Olof Hammarén left his position on the Board due to the age
limit set down in the articles of association. Other Board members were
re-elected, with Board member Nina Wilkman being appointed as the new Vice Chair
of the Board. All appointments as Board members are for the term 1 January - 31
December 2010.
In relation to the Stock Exchange listing, Aktia's Board of Directors decided to
propose that a nomination committee be set up for the 2010 ordinary AGM tasked
with putting forward proposals prior to the company's ordinary AGM on the
appointment of members to the Board of Supervisors and auditors for Aktia as
well as the fees for these. According to the proposal, the nomination committee
would comprise of representatives from the three largest shareholders as well as
the chairman of the Board of Supervisors as an expert member. The three
shareholders holding the largest percentages of Aktia shares on 1 November in
the year before the AGM would have the right to appoint a representative for the
nomination committee.
With effect from 1 December 2009, Barbro Karhulahti, LL.M., was appointed as
member of Aktia plc's Executive Committee with responsibility for operations in
Tampere, Oulu and Eastern Uusimaa.
Director Merja Sergelius left her role as member of the Executive Committee.
Merja Sergelius will continue to work for Aktia as a banking director with
responsibility for the Helsinki Central group of branch offices.
Aktia's Executive Committee comprises CEO Jussi Laitinen, Deputy Managing
Director Jarl Sved, Deputy Managing Director Stefan Björkman, Deputy Managing
Director Robert Sergelius, Director Barbro Karhulahti, Director Taru Narvanmaa,
Director Anders Nordman, Director Gösta Råholm and Director Olav Uppgård and
Marit Leinonen, the staff representative.
Share capital and ownership
At the end of September 2009, the paid-up share capital of Aktia plc as entered
in the Finnish Trade Register was EUR 93,873,816, divided into 46,936,908 series
A shares and 20,050,850 series R shares. Of the merger compensation related to
the merger with Veritas Non-Life Insurance of 6,800,000 shares, a further 19,887
new series A shares were registered on book-entry accounts during the October -
December period. The number of shareholders at the end of the period was 49,714.
The inspection and registration of outstanding shares continues. Aktia estimates
that the final number of shareholders might reach approximately 70,000. The
number of unregistered shares at year-end was 1,010,697.
Aktia's holding of treasury shares amounted to 536,288 shares, corresponding to
0.8% of all shares.
At an Extraordinary General Meeting of 21 December 2006, the Board of Directors
was authorised to issue a maximum of 1,000,000 shares in order to create a
share-based incentive scheme for key personnel in the Group. On 30 March 2009,
on the basis of the authorisations given, the Board of Aktia plc implemented a
directed share issue to designated persons in the company's executive
management. In the issue, 12,490 new series A shares were issued at a
subscription price of EUR 6.00 per share. The new shares in Aktia plc were
registered in the Trade Register on 29 May 2009.
The shareholders Helsinki Savings Bank Foundation, the Life Annuity Institution
Hereditas and Veritas Pension Insurance Company have also informed Aktia that
they will put forward proposals for appointments to the Board of Supervisors and
auditors as well as fees for these for the term that starts after Aktia's 2010
AGM.
The total number of voting rights owned by Pension Insurance Company Veritas did
on 23 December 2009 rise above one tenth to 10.49% of voting rights. Pension
Insurance Company Veritas holds 9.60% of Aktia plc's stocks.
--------------------------------------------------------------------------------
| Largest 20 | A | R | Shares | of | Votes | Of | Change |
| owners | shares | shares | | share | | votes | |
| Ownership | | | | s % | | % | |
| per 31 | | | | | | | |
| December | | | | | | | |
| 2009 | | | | | | | |
--------------------------------------------------------------------------------
| Helsinki | 7,604, | 3,802, | 11,406, | 17.03 | 83,645,0 | 18.67 | - |
| Savings | 111 | 048 | 159 | | 71 | | |
| Bank | | | | | | | |
| Foundation | | | | | | | |
| * | | | | | | | |
--------------------------------------------------------------------------------
| Life | 4,428, | 2,077, | 6,505,2 | 9.71 | 45,970,2 | 10.26 | 273,902 |
| Annuity | 114 | 106 | 20 | | 34 | | |
| Institution | | | | | | | |
| Hereditas* | | | | | | | |
--------------------------------------------------------------------------------
| Pension | 4,297, | 2,134, | 6,431,8 | 9.60 | 46,985,4 | 10.49 | 368,674 |
| Insurance | 469 | 397 | 66 | | 09 | | |
| Company | | | | | | | |
| Veritas | | | | | | | |
--------------------------------------------------------------------------------
| Espoo-Kauni | 2,346, | 1,183, | 3,529,8 | 5.27 | 26,012,4 | 5.81 | 10,000 |
| ainen | 585 | 292 | 77 | | 25 | | |
| Savings | | | | | | | |
| Bank | | | | | | | |
| Foundation* | | | | | | | |
--------------------------------------------------------------------------------
| Oy Hammarén | 1,890, | 945,00 | 2,835,0 | 4.23 | 20,790,0 | 4.64 | - |
| & Co Ab | 000 | 0 | 00 | | 00 | | |
--------------------------------------------------------------------------------
| Svenska | 1,681, | 789,22 | 2,471,0 | 3.69 | 17,466,3 | 3.90 | 103,328 |
| Litteraturs | 786 | 9 | 15 | | 66 | | |
| ällskapet i | | | | | | | |
| Finland rf* | | | | | | | |
--------------------------------------------------------------------------------
| Vantaa | 1,514, | 833,01 | 2,347,9 | 3.50 | 18,175,1 | 4.06 | -80,000 |
| Savings | 900 | 2 | 12 | | 40 | | |
| Bank | | | | | | | |
| Foundation | | | | | | | |
| * | | | | | | | |
--------------------------------------------------------------------------------
| Åbo Academy | 1,495, | 751,00 | 2,246,6 | 3.35 | 16,515,6 | 3.69 | 293,640 |
| Foundation* | 640 | 0 | 40 | | 40 | | |
--------------------------------------------------------------------------------
| Porvoo | 1,303, | 651,52 | 1,954,5 | 2.92 | 14,333,5 | 3.20 | - |
| Savings | 050 | 5 | 75 | | 50 | | |
| Bank | | | | | | | |
| Foundation | | | | | | | |
| * | | | | | | | |
--------------------------------------------------------------------------------
| Aktia | 978,52 | 547,26 | 1,525,7 | 2.28 | 11,923,7 | 2.66 | 10,000 |
| Foundation | 5 | 2 | 87 | | 65 | | |
| in Vaasa* | | | | | | | |
--------------------------------------------------------------------------------
| Kirkkonummi | 876,52 | 438,26 | 1,314,7 | 1.96 | 9,641,80 | 2.15 | - |
| Savings | 9 | 4 | 93 | | 9 | | |
| Bank | | | | | | | |
| Foundation | | | | | | | |
| * | | | | | | | |
--------------------------------------------------------------------------------
| Karjaa-Pohj | 787,35 | 393,67 | 1,181,0 | 1.76 | 8,660,85 | 1.93 | - |
| a Savings | 0 | 5 | 25 | | 0 | | |
| Bank | | | | | | | |
| Foundation | | | | | | | |
| * | | | | | | | |
--------------------------------------------------------------------------------
| Föreningen | 670,04 | 377,95 | 1,047,9 | 1.56 | 8,229,06 | 1.84 | 95,109 |
| Konstsamfun | 0 | 1 | 91 | | 0 | | |
| det rf* | | | | | | | |
--------------------------------------------------------------------------------
| Inkoo | 646,23 | 323,11 | 969,354 | 1.45 | 7,108,59 | 1.59 | - |
| Savings | 6 | 8 | | | 6 | | |
| Bank | | | | | | | |
| Foundation | | | | | | | |
| * | | | | | | | |
--------------------------------------------------------------------------------
| Ab Kelonia | 549,41 | 308,66 | 858,079 | 1.28 | 6,722,65 | 1.50 | -56 |
| Oy* | 7 | 2 | | | 7 | | ,838 |
--------------------------------------------------------------------------------
| Sipoo | 462,00 | 232,00 | 694,003 | 1.04 | 5,102,02 | 1.14 | 1,000 |
| Savings | 2 | 1 | | | 2 | | |
| Bank | | | | | | | |
| Foundation | | | | | | | |
| * | | | | | | | |
--------------------------------------------------------------------------------
| Siuntio | 454,37 | 227,18 | 681,565 | 1.02 | 4,998,13 | 1.12 | - |
| Savings | 7 | 8 | | | 7 | | |
| Bank | | | | | | | |
| Foundation* | | | | | | | |
--------------------------------------------------------------------------------
| Svenska | 419,40 | 207,37 | 626,782 | 0.94 | 4,566,90 | 1.02 | 4,657 |
| folkskolans | 7 | 5 | | | 7 | | |
| vänner rf* | | | | | | | |
--------------------------------------------------------------------------------
| Aktia Abp | 357,52 | 178,76 | 536,288 | 0.80 | 3,932,76 | 0.88 | 536,288 |
| | 6 | 2 | | | 6 | | |
--------------------------------------------------------------------------------
| Malax Aktia | 338,50 | 177,60 | 516,100 | 0.77 | 3,890,50 | 0.87 | - |
| Savings | 0 | 0 | | | 0 | | |
| Bank | | | | | | | |
| Foundation | | | | | | | |
| * | | | | | | | |
--------------------------------------------------------------------------------
| 20 largest | 33,101 | 16,578 | 49,680, | 74.16 | 364,670, | 81.41 | 1,559,7 |
| owners in | ,564 | ,467 | 031 | | 904 | | 60 |
| total | | | | | | | |
--------------------------------------------------------------------------------
| Others | 13,835 | 3,472, | 17,307, | 25.84 | 83,283,0 | 18.59 | |
| | ,344 | 383 | 727 | | 04 | | |
--------------------------------------------------------------------------------
| Total | 46,936 | 20,050 | 66,987, | 100.0 | 447,953, | 100.0 | |
| | ,908 | ,850 | 758 | 0 | 908 | 0 | |
--------------------------------------------------------------------------------
*) Part in shareholders' agreement concerning the parties' mutual pre-emptive
right to R shares. This agreement covers 69% of R shares and 21% of the total
number of shares.
Unidentified owners amounted to 21,572 as at 31 December 2009 with holdings of
1,010,697 shares.
Share
Aktia plc's series A and R shares were listed on the NASDAQ OMX Helsinki
exchange on 29 September 2009. The aim of the listing is to increase the
opportunities of shareholders to trade in Aktia shares and enable effective
pricing. The closing price of A shares on the first day of trading was 9.08 and
9.50 for R shares.
Aktia's trading codes are AKTAV for A series shares and AKTRV for R series
shares. Aktia shares are classified as belonging to the ‘Finance, regional
banks' sector in keeping with the GICS index.
As at 31 December 2009, the last day of trading, the closing price for an A
series share was EUR 7.85 and for an R series share was EUR 9.06, indicating a
market value of approx. EUR 550 million for Aktia. Since the stock market
listing, the return on Aktia A series shares has been -13.55% and -4.63% for R
shares.
--------------------------------------------------------------------------------
| Share price development 29.9 - 31.12.2009 | Yield |
--------------------------------------------------------------------------------
| Aktia A | -13.55 % |
--------------------------------------------------------------------------------
| Aktia R | -4.63 % |
--------------------------------------------------------------------------------
| OMX Nordic Banks | 0.90 % |
--------------------------------------------------------------------------------
| OMX Nordic Financials | 1.53 % |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Share information | A share | R share |
--------------------------------------------------------------------------------
| Votes /share | 1 | 20 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Market data | A share | R share |
--------------------------------------------------------------------------------
| Market | NASDAQ OMX Helsinki | NASDAQ OMX Helsinki |
--------------------------------------------------------------------------------
| Listed | 29.9.2009 | 29.9.2009 |
--------------------------------------------------------------------------------
| ISIN | FI0009004733 | FI0009015911 |
--------------------------------------------------------------------------------
| Code | AKTAV (OMX) | AKTRV (OMX) |
--------------------------------------------------------------------------------
| List | OMXH Mid Caps | OMXH Mid Caps |
--------------------------------------------------------------------------------
| Sector | Regional Banks | Regional Banks |
--------------------------------------------------------------------------------
| Sector ID | 40101015 | 40101015 |
--------------------------------------------------------------------------------
| Number of shares | 46,936,908 | 20,050,850 |
--------------------------------------------------------------------------------
In 2009, the average daily turnover of A shares was EUR 226,141 or 27,005
shares. The average daily turnover of R shares in 2009 was EUR 67,903 or 7,245
shares.
Aktia has entered into a market-making or LP (liquidity providing) agreement
with Handelsbanken in order to improve the liquidity in A shares, which should
encourage transactions by small shareholders. The agreement entered into force
on 4 January 2010.
--------------------------------------------------------------------------------
| | 2009 | 2008 |
--------------------------------------------------------------------------------
| Earnings per share (EPS) | 0.52 | 0.09 |
--------------------------------------------------------------------------------
| Dividend per share* | 0.24 | 0.15 |
--------------------------------------------------------------------------------
| Payout ratio, % | 46.2 | 166.7 |
--------------------------------------------------------------------------------
| Dividend growth, % | 60.0 | -54.5 |
--------------------------------------------------------------------------------
| Yield (dividend/A-share), % | 3.06 | - |
--------------------------------------------------------------------------------
| Closing price 31.12 Class A | 7.85 | - |
--------------------------------------------------------------------------------
| Closing price 31.12 Class R | 9.06 | - |
--------------------------------------------------------------------------------
| Year high, Class A | 10.20 | - |
--------------------------------------------------------------------------------
| Year low, Class A | 7.78 | - |
--------------------------------------------------------------------------------
| Year high, Class R | 11.45 | - |
--------------------------------------------------------------------------------
| Year low, Class R | 9.13 | - |
--------------------------------------------------------------------------------
| Share price development, Class A, % | -13.6 | - |
--------------------------------------------------------------------------------
| Share price development, Class R, % | -4.6 | - |
--------------------------------------------------------------------------------
| Equity per share (NAV), EUR | 6.52 | 4.85 |
--------------------------------------------------------------------------------
| Closing 31.12.2009 Class A /NAV | 1.20 | - |
--------------------------------------------------------------------------------
| Closing 31.12.2009 Class R /NAV | 1.39 | - |
--------------------------------------------------------------------------------
| Average daily turnover on Helsinki Nasdaq | 226,141 | - |
| OMX, Class A | | |
--------------------------------------------------------------------------------
| Average daily turnover on Helsinki Nasdaq | 67,903 | - |
| OMX, Class R | | |
--------------------------------------------------------------------------------
| Average daily volume on Helsinki Nasdaq | 27,005 | - |
| OMX, Class A | | |
--------------------------------------------------------------------------------
| Average daily volume on Helsinki Nasdaq | 7,245 | - |
| OMX, Class R | | |
--------------------------------------------------------------------------------
| P/E ratio Class A | 15.10 | - |
--------------------------------------------------------------------------------
| P/E ratio, Class R | 17.42 | |
--------------------------------------------------------------------------------
| Market capitalisation, EUR million | 550 | - |
--------------------------------------------------------------------------------
| No of shares 31.12, A-shares | 46,936,908 | 40,124,418 |
--------------------------------------------------------------------------------
| No of shares 31.12, R-shares | 20,050,850 | 20,050,850 |
--------------------------------------------------------------------------------
| No of shares in total 31.12, A and | 66,987,758 | 60,175,268 |
| R-shares | | |
--------------------------------------------------------------------------------
| *2009 Board proposal to the AGM |
--------------------------------------------------------------------------------
Changes in Group structure
The merger of Veritas Mutual Non-Life Insurance Company with Aktia plc was
implemented in accordance with the merger plan approved by both companies'
Annual General Meetings and registered in the Trade Register on 1 January 2009.
The non-life insurance company has continued its business in the Aktia Group
under the name Aktia Non-Life Insurance Company Ltd.
The Financial Supervisory Authority announced on 28 April 2009 that it had
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 operational
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. The effect of the transaction was eliminated at
Group level.
During the autumn the merger of Aktia's real estate agency business took place.
With effect from 1 January 2010, the business will operate as Aktia
Fastighetsförmedling Ab and Magnus Nyman, AFM Ab.
Events after the end of the reporting period
The number of Aktia's shares owned by Life Annuity Institution Hereditas did on
26 January 2010 rise above one tenth to 10.02%. Life Annuity Institution
Hereditas' holding of voting rights in Aktia plc is 10.26%.
On 12 February 2010, Aktia gave an announcement that the operating profit for
the fourth quarter 2009 is adversely affected by a cost of EUR 9.2 million due
to a calculation error in the division of fair values of options that are partly
reported via income statement and partly via the fund at fair value.
Board of Director's proposals for the 2010 AGM
The Board of Directors will propose to the AGM on 25 March 2010 a dividend of
EUR 0.24 per share for the period 1 January - 31 December 2009, which
corresponds to a dividend ratio of 46.2% on the year's profit. The proposed
dividend amounts to a total of EUR 16.1 million (EUR 10.0 million).
The proposed record date for the dividend will be 30 March 2010 and the dividend
will be paid out on 8 April 2010.
The report by the Board of Directors, financial statements, corporate governance
report and annual report will be published on 4 March 2010 and the printed
annual report during week 12.
--------------------------------------------------------------------------------
| Calender 2010 | |
--------------------------------------------------------------------------------
| Financial Statements | 4 March |
--------------------------------------------------------------------------------
| Annual report | 4 March |
--------------------------------------------------------------------------------
| Corporate Governance statement | 4 March |
--------------------------------------------------------------------------------
| Printed annual report | week 12 |
--------------------------------------------------------------------------------
| Annual General Meeting | 25 March |
--------------------------------------------------------------------------------
| Interim report January-March 2010 | 7 May |
--------------------------------------------------------------------------------
| Interim report April-June 2010 | 12 August |
--------------------------------------------------------------------------------
| Interim report July-September 2010 | 4 November |
--------------------------------------------------------------------------------
Outlook and risks for 2010
Aktia expects the Group's operating profit for 2010 to be on the same level as
in 2009.
In 2010, Aktia's focus will be on strengthening customer relations, increasing
sales, developing Internet services, managing costs, risks and capital in order
to strengthen profitability. Aktia is endeavouring to grow above the market,
particularly in the sectors of retail customers and small companies.
Aktia's financial results are affected by many factors, the most important of
which are the general economic situation, fluctuations in share prices, interest
rates and exchange rates and the competitive situation. Changes in these factors
can have an impact on demand for banking, insurance, real estate agency and
asset management services.
Changes in interest rates, yield curves and credit margins are hard to predict
and can affect Aktia's interest rate margins and therefore profitability. Aktia
pursues to effectively manage interest rate risks.
Any future write-downs of loans in Aktia's loan portfolio could be due to many
factors, the most important of which are the general economic situation,
interest rate levels, the level of unemployment and changes in house prices.
Aktia expects write-downs on credits to be lower than in 2009.
The availability of liquidity on the money markets is of important for Aktia's
refinancing activities. Like other banks, Aktia relies on deposits from
households in order to service some of its liquidity needs.
The market value of Aktia's financial and other assets can change as a result
of, among other things, a requirement for higher returns among investors.
The financial crisis has resulted in many new initiatives for regulating banking
and insurance businesses, which has brought about uncertainty concerning future
capital requirements. A change in capital requirements could actualise both
capitalisation needs and need for changes in Aktia Group's structure.
Key figures
--------------------------------------------------------------------------------
| EUR million | 1-12/2 | 1-12/2 | Change | 1-9/20 | 1-6/20 | 1-3/200 |
| | 009 | 008 | | 09 | 09 | 9 |
--------------------------------------------------------------------------------
| Earnings per share | 0.52 | 0.09 | 500.3 | 0.50 | 0.26 | 0.11 |
| (EPS), EUR | | | % | | | |
--------------------------------------------------------------------------------
| Equity per share | 6.52 | 4.85 | 34.5 % | 6.51 | 5.51 | 4.83 |
| (NAV), EUR | | | | | | |
--------------------------------------------------------------------------------
| Return on equity | 8.7 | 1.8 | 382.4 | 11.1 | 9.2 | 8.7 |
| (ROE), % | | | % | | | |
--------------------------------------------------------------------------------
| Earnings per share | 1.71 | -0.22 | - | 1.70 | 0.70 | 0.02 |
| excluding negative | | | | | | |
| goodwill recorded as | | | | | | |
| income and including | | | | | | |
| the fund at fair | | | | | | |
| value, EUR | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Capital adequacy | 157.4 | 135.2 | 16.4 % | 156.9 | 144.2 | 133.1 |
| ratio, % | | | | | | |
| (conglomerate) | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Average number of | 66.4 | 60.2 | 10.4 % | 66.4 | 66.4 | 66.4 |
| shares, million | | | | | | |
--------------------------------------------------------------------------------
| Number of shares at | 66.5 | 60.2 | 10.4 % | 66.5 | 66.5 | 66.4 |
| the end of the | | | | | | |
| period, million | | | | | | |
--------------------------------------------------------------------------------
| Personnel (FTEs), | 1,213 | 1,009 | 20.2 % | 1,212 | 1,213 | 1,204 |
| average number of | | | | | | |
| employees from the | | | | | | |
| beginning of the | | | | | | |
| financial year | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Banking Business | | | | | | |
| (incl. Private | | | | | | |
| Banking) | | | | | | |
--------------------------------------------------------------------------------
| Cost-to-income ratio | 0.57 | 0.65 | -12.3 | 0.54 | 0.57 | 0.70 |
| | | | % | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Borrowing from the | 3,029. | 3,098. | -2.2 % | 3,082. | 3,079. | 3,087.9 |
| public, EUR million | 2 | 3 | | 0 | 9 | |
--------------------------------------------------------------------------------
| Lending to the | 6,060. | 5,425. | 11.7 % | 5,946. | 5,820. | 5,592.5 |
| public, EUR million | 8 | 7 | | 4 | 0 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Capital adequacy | 15.9 | 13.7 | 16.8 % | 15.7 | 14.7 | 14.2 |
| ratio, % | | | | | | |
--------------------------------------------------------------------------------
| Tier 1 capital ratio, | 9.5 | 9.3 | 2.2 % | 9.3 | 9.2 | 9.0 |
| % | | | | | | |
--------------------------------------------------------------------------------
| Risk-weighted | 3,460. | 3,313. | 4.4 % | 3,493. | 3,394. | 3,335.5 |
| commitments, EUR | 2 | 2 | | 4 | 8 | |
| million | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Asset Management | | | | | | |
--------------------------------------------------------------------------------
| Mutual fund volume, | 3,786. | 2,489. | 52.1 % | 3,488. | 2,927. | 2,415.2 |
| EUR million *) | 2 | 8 | | 0 | 4 | |
--------------------------------------------------------------------------------
| Managed and brokered | 5,995. | 4,539. | 32.1 % | 5,680. | 5,082. | 4,515.0 |
| assets, EUR million | 6 | 3 | | 5 | 9 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Life Insurance | | | | | | |
--------------------------------------------------------------------------------
| Premium income before | 80.9 | 91.4 | -11.4 | 53.7 | 36.0 | 20.6 |
| reinsurers' share, | | | % | | | |
| EUR million | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Expense ratio, % | 100.7 | 99.0 | 1.7 % | 101.5 | 106.3 | 115.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Working capital, EUR | 86.3 | 50.4 | 71.3 % | 85.0 | 65.6 | 40.0 |
| million | | | | | | |
--------------------------------------------------------------------------------
| Solvency ratio, % | 14.4 | 8.5 | 69.4 % | 14.2 | 11.2 | 7.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Investments at fair | 867.7 | 804.6 | 7.8 % | 849.7 | 813.1 | 774.8 |
| value, EUR million | | | | | | |
--------------------------------------------------------------------------------
| Technical provisions | 595.0 | 627.6 | -5.2 % | 596.6 | 599.1 | 614.5 |
| for interest-linked | | | | | | |
| policies, EUR million | | | | | | |
--------------------------------------------------------------------------------
| Technical provisions | 210.1 | 149.6 | 40.5 % | 190.5 | 168.6 | 146.5 |
| for unit-linked | | | | | | |
| policies, EUR million | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-Life Insurance | | | | | | |
--------------------------------------------------------------------------------
| Premium income before | 66.3 | - | - | 54.3 | 44.0 | 28.8 |
| reinsurers' share, | | | | | | |
| EUR million | | | | | | |
--------------------------------------------------------------------------------
| Premium income, EUR | 60.6 | - | - | 27.1 | 29.3 | 13.9 |
| million | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating cost | 27.9 | - | - | 26.6 | 26.1 | 28.9 |
| percentage, % | | | | | | |
--------------------------------------------------------------------------------
| Loss ratio, % | 91.1 | - | - | 85.8 | 88.2 | 93.5 |
--------------------------------------------------------------------------------
| Combined ratio, % | 119.0 | - | - | 112.3 | 114.3 | 122.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Technical provisions | 119.3 | - | - | 110.9 | 116.8 | 114.7 |
| before reinsurers' | | | | | | |
| share, EUR million | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Solvency capital, EUR | 43.6 | - | - | 50.2 | 46.9 | 48.0 |
| million | | | | | | |
--------------------------------------------------------------------------------
| Solvency ratio of | 41.8 | - | - | 47.7 | 42.6 | 43.7 |
| technical provisions, | | | | | | |
| % | | | | | | |
--------------------------------------------------------------------------------
| Solvency percentage | 72.4 | - | - | 83.6 | 78.9 | 80.8 |
| (risk carrying | | | | | | |
| capacity), % | | | | | | |
--------------------------------------------------------------------------------
*) Including fund volume of Aktia Invest from December 2008.
Basis of calculation for key figures
--------------------------------------------------------------------------------
| Earnings/share, EUR |
--------------------------------------------------------------------------------
| Profit for the period after taxes attributable to the shareholders of Aktia |
| plc |
--------------------------------------------------------------------------------
| Average number of shares over the reporting period (adjusted for new issue). |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity per share, EUR |
--------------------------------------------------------------------------------
| Equity attributable to the shareholders of Aktia plc |
--------------------------------------------------------------------------------
| Number of shares at the en of the period. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Return on equity (ROE), % |
--------------------------------------------------------------------------------
| Profit for the period (on annual basis) x 100 |
--------------------------------------------------------------------------------
| Average equity |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Capital adequacy ratio, % (finance and insurance conglomerate) |
--------------------------------------------------------------------------------
| The total capital base of the conglomerate (equity including sector-specific |
| assets and deductions) x 100 |
--------------------------------------------------------------------------------
| Minimum requirement for the conglomerate's own assets (credit institution + |
| insurance business) |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| The capital base of the conglomerate is regulated by section 3 of the act |
| governing financial and insurance conglomerates and its related decree. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Banking business cost/income ratio |
--------------------------------------------------------------------------------
| Total operating expenses |
--------------------------------------------------------------------------------
| Total operating income |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Banking business risk-weighted commitments |
--------------------------------------------------------------------------------
| Total assets in the balance sheet and off-balance sheet items, including |
| derivatives valued and risk-weighted in accordance with |
| regulation 4.3 |
| issued by the Finnish Financial Supervision Authority. |
| The capital requirements for operational risks have been calculated and |
| risk-weighted in accordance with regulation 4.3i issued by the Finnish |
| Financial Supervision Authority. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Capital adequacy ratio, % (banking business) |
--------------------------------------------------------------------------------
| 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 Supervision Authority. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Banking business capital adequacy ratio, % |
--------------------------------------------------------------------------------
| Tier 1 capital x 100 |
--------------------------------------------------------------------------------
| Risk-weighted commitments |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Life insurance business expense ratio, % |
--------------------------------------------------------------------------------
| (Operating costs + cost of claims paid) x 100 |
--------------------------------------------------------------------------------
| Total expense loadings |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total expense loadings are items which, according to actuarial calculations, |
| should cover the costs. The operating costs do not include the re-insurers' |
| commission. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Life insurance business solvency ratio, % |
--------------------------------------------------------------------------------
| Solvency capital |
| X 100 |
--------------------------------------------------------------------------------
| Technical provisions - equalisation provision - 75% of provisions for |
| unit-linked insurance |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| The technical provision is calculated after deduction of the re-insurers' |
| share. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-life insurance combined ratio, % |
--------------------------------------------------------------------------------
| Loss ratio (excl. discounting of pension provisions) + expense ratio |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Loss ratio = Claims incurred and cost for claims handling x 100 |
--------------------------------------------------------------------------------
| Premiums earned |
--------------------------------------------------------------------------------
| Expense ratio = Operating costs excl. cost for claims handling x 100 |
--------------------------------------------------------------------------------
| Premiums earned |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-life insurance key figures for loss ratio and expense ratio are |
| calculated based on costs according to function. Thus they can not be |
| calculated directly from the Group's/segment's income statement. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-life insurance solvency ratio, %, of technical provisions |
--------------------------------------------------------------------------------
| Solvency capital X 100 |
--------------------------------------------------------------------------------
| Technical provisions after reinsurers' share - equalisation provision |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-life insurance solvency ratio, % (risk carrying capacity) |
--------------------------------------------------------------------------------
| Solvency capital X 100 |
--------------------------------------------------------------------------------
| Premiums earned for from the latest 12 months |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| The insurance businesses' key figures for solvency are calculated based on |
| regulations issued by the Finnish Financial Supervisory |
| Authority. |
--------------------------------------------------------------------------------
Aktia plc - consolidated financial statements 2009
Consolidated income sheet
--------------------------------------------------------------------------------
| (EUR million) | 1-12/2009 | 1-12/2008 | Change |
--------------------------------------------------------------------------------
| Net interest income | 152.2 | 101.0 | 50.8% |
--------------------------------------------------------------------------------
| Dividends | 0.6 | 1.4 | -56.5% |
--------------------------------------------------------------------------------
| Commission income | 60.7 | 48.7 | 24.5% |
--------------------------------------------------------------------------------
| Commission expenses | -14.3 | -7.7 | 86.0% |
--------------------------------------------------------------------------------
| Net commission income | 46.3 | 41.0 | 12.9% |
--------------------------------------------------------------------------------
| Net income from life-insurance | 14.0 | -33.8 | - |
--------------------------------------------------------------------------------
| Net income from non-life insurance | 15.2 | - | - |
--------------------------------------------------------------------------------
| Net income from financial transactions | 0.8 | -3.4 | - |
--------------------------------------------------------------------------------
| Net income from investment properties | 0.4 | 6.0 | -93.2% |
--------------------------------------------------------------------------------
| Other operating income | 3.6 | 15.0 | -76.2% |
--------------------------------------------------------------------------------
| Total operating income | 233.1 | 127.2 | 83.2% |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Staff costs | -79.2 | -60.6 | 30.7% |
--------------------------------------------------------------------------------
| Other administrative expenses | -44.8 | -38.4 | 16.6% |
--------------------------------------------------------------------------------
| Negative goodwill recorded as income | 0.1 | - | - |
--------------------------------------------------------------------------------
| Depreciation of tangible and intangible | -6.9 | -5.7 | 21.2% |
| assets | | | |
--------------------------------------------------------------------------------
| Other operating expenses | -23.4 | -16.2 | 44.7% |
--------------------------------------------------------------------------------
| Total operating expenses | -154.2 | -120.9 | 27.5% |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Impairment and reversal of impairment | -0.6 | 0.7 | - |
| on tangible and intangible assets | | | |
--------------------------------------------------------------------------------
| Write-downs on credits and other | -31.7 | -0.7 | - |
| commitments | | | |
--------------------------------------------------------------------------------
| Share of profit from associated | 0.3 | 0.2 | 38.8% |
| companies | | | |
--------------------------------------------------------------------------------
| Operating profit | 47.0 | 6.6 | 611.3% |
--------------------------------------------------------------------------------
| Taxes | -13.0 | -0.8 | - |
--------------------------------------------------------------------------------
| Profit for the reporting period | 34.0 | 5.8 | 486.7% |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Attributable to: | | | |
--------------------------------------------------------------------------------
| Shareholders in Aktia plc | 34.3 | 5.2 | 563.0% |
--------------------------------------------------------------------------------
| Minority interest | -0.3 | 0.6 | - |
--------------------------------------------------------------------------------
| Total | 34.0 | 5.8 | 486.7% |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share (EPS), EUR | 0.52 | 0.09 | 500.3% |
--------------------------------------------------------------------------------
| Earnings per share, EUR, after dilution | 0.52 | 0.09 | 500.3% |
--------------------------------------------------------------------------------
Consolidated comprehensive income
--------------------------------------------------------------------------------
| (EUR million) | 2009 | 2008 | Change |
--------------------------------------------------------------------------------
| Profit for the reporting period | 34.0 | 5.8 | 486.7 % |
--------------------------------------------------------------------------------
| Other comprehensive income after | | | |
| taxes: | | | |
--------------------------------------------------------------------------------
| Change in valuation of fair value for | 51.8 | -57.7 | - |
| financial assets available for sale | | | |
--------------------------------------------------------------------------------
| Change in valuation of fair value for | 9.0 | 13.6 | -33.4 % |
| cash flow hedging | | | |
--------------------------------------------------------------------------------
| Transferred to the income statement | 19.2 | 25.4 | -24.4 % |
| for financial assets available for | | | |
| sale | | | |
--------------------------------------------------------------------------------
| Transferred to the income statement | - | -0.3 | - |
| for cash flow hedging | | | |
--------------------------------------------------------------------------------
| Total comprehensive income for the | 114.1 | -13.1 | - |
| period | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total comprehensive income | | | |
| attributable to: | | | |
--------------------------------------------------------------------------------
| Shareholders in Aktia plc | 114.0 | -13.2 | - |
--------------------------------------------------------------------------------
| Minority interest | 0.2 | 0.1 | 92.2 % |
--------------------------------------------------------------------------------
| Total | 114.1 | -13.1 | - |
--------------------------------------------------------------------------------
Consolidated balance sheet
--------------------------------------------------------------------------------
| (EUR million) | 31.12.200 | 31.12.200 | Change |
| | 9 | 8 | |
--------------------------------------------------------------------------------
| Assets | | | |
--------------------------------------------------------------------------------
| Cash and balances with central banks | 341.0 | 506.3 | -32.7 % |
--------------------------------------------------------------------------------
| Financial assets reported at fair value | 22.5 | 19.5 | 15.2 % |
| via the income statement | | | |
--------------------------------------------------------------------------------
| Interest-bearing securities | 3,277.3 | 2,808.5 | 16.7 % |
--------------------------------------------------------------------------------
| Shares and participations | 155.6 | 228.9 | -32.0 % |
--------------------------------------------------------------------------------
| Financial assets available for sale | 3,433.0 | 3,037.3 | 13.0 % |
--------------------------------------------------------------------------------
| Financial assets held until maturity | 27.9 | 35.9 | -22.3 % |
--------------------------------------------------------------------------------
| Derivative instruments | 210.0 | 137.0 | 53.2 % |
--------------------------------------------------------------------------------
| Lending to credit institutions | 80.7 | 100.5 | -19.7 % |
--------------------------------------------------------------------------------
| Lending to the public and public sector | 6,060.8 | 5,425.7 | 11.7 % |
| entities | | | |
--------------------------------------------------------------------------------
| Loans and other receivables | 6,141.6 | 5,526.2 | 11.1 % |
--------------------------------------------------------------------------------
| Investments for unit-linked provisions | 208.9 | 148.1 | 41.0 % |
--------------------------------------------------------------------------------
| Investments in associated companies | 4.5 | 4.5 | 0.7 % |
--------------------------------------------------------------------------------
| Intangible assets | 12.4 | 10.4 | 19.4 % |
--------------------------------------------------------------------------------
| Investment properties | 26.9 | 3.6 | 641.8 % |
--------------------------------------------------------------------------------
| Other tangible assets | 8.1 | 6.1 | 31.7 % |
--------------------------------------------------------------------------------
| Accrued income and advance payments | 80.3 | 79.1 | 1.4 % |
--------------------------------------------------------------------------------
| Other assets | 31.4 | 7.2 | 336.4 % |
--------------------------------------------------------------------------------
| Total other assets | 111.6 | 86.3 | 29.3 % |
--------------------------------------------------------------------------------
| Income tax receivables | 0.8 | 2.4 | -66.2 % |
--------------------------------------------------------------------------------
| Deferred tax receivables | 6.0 | 15.6 | -61.3 % |
--------------------------------------------------------------------------------
| Tax receivables | 6.8 | 18.0 | -62.0 % |
--------------------------------------------------------------------------------
| Assets classified as held for sale | 0.8 | 0.8 | 0.0 % |
--------------------------------------------------------------------------------
| Total assets | 10,555.8 | 9,540.1 | 10.6 % |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Liabilities | | | |
--------------------------------------------------------------------------------
| Liabilities to credit institutions | 1,724.4 | 1,916.9 | -10.0 % |
--------------------------------------------------------------------------------
| Liabilities to the public and public | 3,029.2 | 3,098.3 | -2.2 % |
| sector entities | | | |
--------------------------------------------------------------------------------
| Deposits | 4,753.6 | 5,015.3 | -5.2 % |
--------------------------------------------------------------------------------
| Financial liabilities reported at fair | - | 4.6 | - |
| value via the income statement | | | |
--------------------------------------------------------------------------------
| Derivative instruments | 132.2 | 84.7 | 56.0 % |
--------------------------------------------------------------------------------
| Debt securities issued | 2,747.9 | 2,118.7 | 29.7 % |
--------------------------------------------------------------------------------
| Subordinated liabilities | 252.5 | 246.9 | 2.3 % |
--------------------------------------------------------------------------------
| Other liabilities to credit | 968.2 | 502.1 | 92.8 % |
| institutions | | | |
--------------------------------------------------------------------------------
| Other liabilities to the public and | 77.3 | 262.8 | -70.6 % |
| public sector entities | | | |
--------------------------------------------------------------------------------
| Other financial liabilities | 4,045.9 | 3,130.5 | 29.2 % |
--------------------------------------------------------------------------------
| Provisions for interest-related | 595.0 | 627.6 | -5.2 % |
| insurances | | | |
--------------------------------------------------------------------------------
| Technical provisions for unit-linked | 210.1 | 149.6 | 40.5 % |
| insurances | | | |
--------------------------------------------------------------------------------
| Technical provisions for non-life | 119.3 | - | - |
| insurances | | | |
--------------------------------------------------------------------------------
| Technical provisions | 924.4 | 777.2 | 18.9 % |
--------------------------------------------------------------------------------
| Accrued expenses and income received in | 71.9 | 81.2 | -11.4 % |
| advance | | | |
--------------------------------------------------------------------------------
| Other liabilities | 91.5 | 87.8 | 4.2 % |
--------------------------------------------------------------------------------
| Total other liabilities | 163.4 | 169.0 | -3.3 % |
--------------------------------------------------------------------------------
| Provisions | 0.8 | 0.9 | -13.8 % |
--------------------------------------------------------------------------------
| Income tax liability | 19.2 | 3.0 | 548.4 % |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 49.9 | 38.0 | 31.5 % |
--------------------------------------------------------------------------------
| Tax liabilities | 69.1 | 40.9 | 68.9 % |
--------------------------------------------------------------------------------
| Liabilities for assets classified as | 0.2 | 0.2 | 0.0 % |
| held for sale | | | |
--------------------------------------------------------------------------------
| Total liabilities | 10,089.7 | 9,223.3 | 9.4 % |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity | | | |
--------------------------------------------------------------------------------
| Restricted equity | 147.6 | 54.3 | 172.0 % |
--------------------------------------------------------------------------------
| Unrestricted equity | 285.8 | 237.5 | 20.3 % |
--------------------------------------------------------------------------------
| Shareholders' share of equity | 433.4 | 291.8 | 48.5 % |
--------------------------------------------------------------------------------
| Minority interest's share of equity | 32.7 | 25.0 | 31.1 % |
--------------------------------------------------------------------------------
| Equity | 466.2 | 316.8 | 47.2 % |
--------------------------------------------------------------------------------
| Total liabilities and equity | 10,555.8 | 9,540.1 | 10.6 % |
--------------------------------------------------------------------------------
Consolidated cash flow statement
--------------------------------------------------------------------------------
| (EUR million) | 2009 | 2008 |
--------------------------------------------------------------------------------
| Cash flow from operating activities | | |
--------------------------------------------------------------------------------
| Operating profit | 47.0 | 6.6 |
--------------------------------------------------------------------------------
| Adjustment items not included in cash flow for the | 43.8 | 34.2 |
| period | | |
--------------------------------------------------------------------------------
| Paid income taxes | -12.4 | -16.1 |
--------------------------------------------------------------------------------
| Cash flow from operating activities before change in | 78.4 | 24.7 |
| operating receivables and liabilities | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Increase (-) or decrease (+) in receivables from | -919.1 | -1,331.0 |
| operating activities | | |
--------------------------------------------------------------------------------
| Increase (+) or decrease (-) in liabilities from | 654.0 | 1,515.0 |
| operating activities | | |
--------------------------------------------------------------------------------
| Total cash flow from operating activities | -186.7 | 208.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from investing activities | | |
--------------------------------------------------------------------------------
| Financial assets held until maturity | 8.0 | 10.0 |
--------------------------------------------------------------------------------
| Investments in group companies and associated | 16.3 | -28.2 |
| companies *) | | |
--------------------------------------------------------------------------------
| Proceeds from sale of group companies and associated | 0.0 | - |
| companies | | |
--------------------------------------------------------------------------------
| Investment in tangible and intangible assets | -6.7 | -24.4 |
--------------------------------------------------------------------------------
| Disposal of tangible and intangible assets | 2.0 | 66.3 |
--------------------------------------------------------------------------------
| Share issue of Aktia Real Estate Mortgage Bank Plc | 8.9 | 3.8 |
| to the minority | | |
--------------------------------------------------------------------------------
| Total cash flow from investing activities | 28.6 | 27.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from financing activities | | |
--------------------------------------------------------------------------------
| Subordinated liabilities | 6.4 | 55.3 |
--------------------------------------------------------------------------------
| Increase in share capital | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Increase in unrestricted equity reserve | 0.0 | 0.1 |
--------------------------------------------------------------------------------
| Paid dividends | -10.0 | -20.1 |
--------------------------------------------------------------------------------
| Total cash flow from financing activities | -3.6 | 35.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Change in cash and cash equivalents | -161.7 | 271.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash and cash equivalents at the beginning of the | 512.4 | 240.8 |
| year | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at the end of the year | 350.7 | 512.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash and cash equivalents in the cash flow statement | | |
| consist of the following items: | | |
--------------------------------------------------------------------------------
| Cash in hand | 10.0 | 10.0 |
--------------------------------------------------------------------------------
| Insurance operation's cash and bank | 4.5 | 3.7 |
--------------------------------------------------------------------------------
| Bank of Finland current account | 326.5 | 492.6 |
--------------------------------------------------------------------------------
| Repayable on demand claims on credit institutions | 9.7 | 6.0 |
--------------------------------------------------------------------------------
| Total | 350.7 | 512.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Impairment of financial assets available for sale | 24.0 | 39.2 |
--------------------------------------------------------------------------------
| Write-downs on credits and other commitments | 31.7 | 0.7 |
--------------------------------------------------------------------------------
| Change in fair values | -19.2 | 2.0 |
--------------------------------------------------------------------------------
| Depreciation and impairment of intangible and | 7.7 | 6.0 |
| tangible assets | | |
--------------------------------------------------------------------------------
| Share of profit from associated companies | 0.0 | -0.2 |
--------------------------------------------------------------------------------
| Sales gains and losses from intangible and tangible | -0.5 | -12.5 |
| assets | | |
--------------------------------------------------------------------------------
| Negative goodwill recorded as income | -0.1 | - |
--------------------------------------------------------------------------------
| Other adjustments | 0.2 | -1.0 |
--------------------------------------------------------------------------------
| Total | 43.8 | 34.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
*) The figures for 2008 include additional purchase price for the acquisition of
Aktia Life Insurance
Change in Aktia Group's equity
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| | Share | Other | Fund at | Unrestricte |
| | capital | restricted | fair | d equity |
| | | equity | value | reserve |
--------------------------------------------------------------------------------
| (EUR million) | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity as at 1January 2008 | 80,2 | 10,0 | -18,0 | 45,3 |
--------------------------------------------------------------------------------
| Share issue | 0,0 | | | |
--------------------------------------------------------------------------------
| Acquisation of own shares | | | | |
--------------------------------------------------------------------------------
| Dividens to shareholders | | | | |
--------------------------------------------------------------------------------
| Total comprehensive income | | | -18,9 | |
| for the period | | | | |
--------------------------------------------------------------------------------
| Other change in equity | | 0,4 | 0,5 | 0,1 |
--------------------------------------------------------------------------------
| Equity as at 30 December | 80,2 | 10,4 | -36,4 | 45,4 |
| 2008 | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| | Retaine | Shareholder | Minority | Total |
| | d | s' share | interest' | equity |
| | earning | of equity | s share | |
| | s | | of equity | |
--------------------------------------------------------------------------------
| (EUR million) | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity as at 1January 2008 | 207,0 | 324,5 | 14,5 | 339,0 |
--------------------------------------------------------------------------------
| Share issue | | 0,0 | | 0,0 |
--------------------------------------------------------------------------------
| Acquisation of own shares | | 0,0 | | 0,0 |
--------------------------------------------------------------------------------
| Dividens to shareholders | -20,1 | -20,1 | | -20,1 |
--------------------------------------------------------------------------------
| Total comprehensive income | 5,7 | -13,2 | 0,1 | -13,1 |
| for the period | | | | |
--------------------------------------------------------------------------------
| Other change in equity | -0,6 | 0,5 | 10,4 | 10,9 |
--------------------------------------------------------------------------------
| Equity as at 30 December | 192,1 | 291,8 | 25,0 | 316,8 |
| 2008 | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| (EUR million) | Share | Other | Fund at | Unrestricte |
| | capital | restricted | fair | d equity |
| | | equity | value | reserve |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity as at 1January 2009 | 80,2 | 10,4 | -36,4 | 45,4 |
--------------------------------------------------------------------------------
| Share issue | 13,6 | | | 27,2 |
--------------------------------------------------------------------------------
| Acquisation of own shares | | | | |
--------------------------------------------------------------------------------
| Dividens to shareholders | | | | |
--------------------------------------------------------------------------------
| Total comprehensive income | | | 80,1 | |
| for the period | | | | |
--------------------------------------------------------------------------------
| Other change in equity | | 0,0 | -0,4 | |
--------------------------------------------------------------------------------
| Equity as at 30 December | 93,9 | 10,4 | 43,3 | 72,7 |
| 2009 | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| | Retaine | Shareholder | Minority | Total |
| | d | s' share of | interest' | equity |
| | earning | equity | s share | |
| | s | | of equity | |
--------------------------------------------------------------------------------
| (EUR million) | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity as at 1January 2009 | 192,1 | 291,8 | 25,0 | 316,8 |
--------------------------------------------------------------------------------
| Share issue | | 40,9 | | 40,9 |
--------------------------------------------------------------------------------
| Acquisation of own shares | -3,2 | -3,2 | | -3,2 |
--------------------------------------------------------------------------------
| Dividens to shareholders | -10,0 | -10,0 | | -10,0 |
--------------------------------------------------------------------------------
| Total comprehensive income | 33,8 | 114,0 | 0,2 | 114,1 |
| for the period | | | | |
--------------------------------------------------------------------------------
| Other change in equity | 0,5 | 0,1 | 7,6 | 7,6 |
--------------------------------------------------------------------------------
| Equity as at 30 December | 213,2 | 433,4 | 32,7 | 466,2 |
| 2009 | | | | |
--------------------------------------------------------------------------------
In connection with the acquisition of Veritas Mutual Non-Life Insurance on 1
January 2009, merger compensation of 6,800,000 A shares was paid at a nominal
value of EUR 2.00 per share and at a price of EUR 6.00 per share. Of this
compensation, EUR 13.6 million was attributed to share capital and EUR 27.2
million to the unrestricted equity fund. The company has continued its
operations in the Aktia Group under the name Aktia Non-Life Insurance Ltd.
As a result of the Extraordinary General Meeting of 21 December 2006, the Board
of Directors is authorised to issue shares to key personnel in the Group for
incentive reasons. On the basis of the authorisations given, the Board of Aktia
plc resolved on 30 March 2009 to implement a directed share issue to designated
persons in the company's executive management. Within the context of the issue,
12,490 new A shares were issued at a subscription price of EUR 6.00 per share
and a nominal value of EUR 2.00 per share. Of the EUR 74,940 remuneration, EUR
24,980 was attributed to share capital and EUR 49,960 to the unrestricted equity
fund.
Quarterly trends in the Group
--------------------------------------------------------------------------------
| (EUR million) | 10-12 | 7-9/ | 4-6/ | 1-3/2 | 10-12/ | 7-9/2 | 4-6/2 | 1-3/2 |
| | /2009 | 2009 | 2009 | 009 | 2008 | 008 | 008 | 008 |
--------------------------------------------------------------------------------
| Net interest | 39.8 | 40.5 | 39.4 | 32.5 | 26.7 | 25.2 | 25.3 | 23.9 |
| income | | | | | | | | |
--------------------------------------------------------------------------------
| Dividends | 0.0 | 0.0 | 0.5 | 0.1 | 0.1 | 0.0 | 1.3 | 0.1 |
--------------------------------------------------------------------------------
| Net | 14.5 | 11.3 | 11.0 | 9.5 | 9.3 | 9.4 | 11.8 | 10.6 |
| commission | | | | | | | | |
| income | | | | | | | | |
--------------------------------------------------------------------------------
| Net income | 3.2 | 3.8 | 1.7 | 5.4 | -42.9 | -2.0 | 5.1 | 6.0 |
| from | | | | | | | | |
| life-insuranc | | | | | | | | |
| e | | | | | | | | |
--------------------------------------------------------------------------------
| Net income | 1.5 | 6.3 | 5.5 | 2.0 | - | - | - | - |
| from non-life | | | | | | | | |
| insurance | | | | | | | | |
--------------------------------------------------------------------------------
| Net income | -8.2 | 3.7 | 5.7 | -0.4 | -3.2 | -3.0 | 1.7 | 1.2 |
| from | | | | | | | | |
| financial | | | | | | | | |
| transactions | | | | | | | | |
--------------------------------------------------------------------------------
| Net income | 0.1 | 0.1 | 0.1 | 0.1 | 3.1 | 1.3 | 0.4 | 1.3 |
| from | | | | | | | | |
| investment | | | | | | | | |
| properties | | | | | | | | |
--------------------------------------------------------------------------------
| Other | 0.5 | 1.2 | 1.0 | 0.8 | 8.0 | 3.0 | 2.1 | 1.8 |
| operating | | | | | | | | |
| income | | | | | | | | |
--------------------------------------------------------------------------------
| Total | 51.4 | 66.8 | 65.0 | 50.0 | 1.0 | 33.9 | 47.6 | 44.8 |
| operating | | | | | | | | |
| income | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Staff costs | -21.8 | -18. | -18. | -20.3 | -15.2 | -12.7 | -16.7 | -16.0 |
| | | 3 | 9 | | | | | |
--------------------------------------------------------------------------------
| Other | -12.9 | -9.5 | -11. | -10.7 | -10.1 | -8.8 | -10.2 | -9.3 |
| administrativ | | | 6 | | | | | |
| e expenses | | | | | | | | |
--------------------------------------------------------------------------------
| Negative | - | - | - | 0.1 | - | - | - | 0.0 |
| goodwill | | | | | | | | |
| recorded as | | | | | | | | |
| income | | | | | | | | |
--------------------------------------------------------------------------------
| Depreciation | -1.6 | -1.8 | -1.7 | -1.8 | -1.3 | -1.6 | -1.5 | -1.3 |
| of tangible | | | | | | | | |
| and | | | | | | | | |
| intangible | | | | | | | | |
| assets | | | | | | | | |
--------------------------------------------------------------------------------
| Other | -6.4 | -6.5 | -5.2 | -5.4 | -4.4 | -3.6 | -4.4 | -3.7 |
| operating | | | | | | | | |
| expenses | | | | | | | | |
--------------------------------------------------------------------------------
| Total | -42.7 | -36. | -37. | -38.0 | -31.0 | -26.7 | -32.9 | -30.3 |
| operating | | 1 | 4 | | | | | |
| expenses | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Impairment | -0.3 | - | -0.2 | 0.0 | -0.3 | 0.3 | 0.8 | - |
| and reversal | | | | | | | | |
| of impairment | | | | | | | | |
| on tangible | | | | | | | | |
| and | | | | | | | | |
| intangible | | | | | | | | |
| assets | | | | | | | | |
--------------------------------------------------------------------------------
| Write-downs | -5.5 | -8.5 | -16. | -1.6 | -0.4 | -0.3 | 0.0 | 0.0 |
| on credits | | | 2 | | | | | |
| and other | | | | | | | | |
| commitments | | | | | | | | |
--------------------------------------------------------------------------------
| Share of | -0.4 | 0.1 | 0.5 | 0.0 | 0.0 | 0.3 | 0.1 | -0.2 |
| profit from | | | | | | | | |
| associated | | | | | | | | |
| companies | | | | | | | | |
--------------------------------------------------------------------------------
| Operating | 2.6 | 22.4 | 11.7 | 10.3 | -30.7 | 7.4 | 15.7 | 14.2 |
| profit | | | | | | | | |
--------------------------------------------------------------------------------
Notes to the accounts announcement
Note 1 Basis for preparing interim reports and important accounting principles
Basis for preparing the interim report
Aktia plc's consolidated 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 - 31 December 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.
Balance sheet figures are mainly given in EUR million.
Aktia plc's financial statement and interim reports are available on Aktia's
website www.aktia.fi.
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.
The presentation of the profit and loss account has changed so that the net
income from insurance business including insurance premium income, net income
from investment activities, claims paid out and change in provisions is reported
as net income under operating income. This net amount is shown separately for
the life insurance business (Net income for life insurance) and for the non-life
insurance business (Net income for non-life insurance).
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 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 apply 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. In accordance with the revised IAS, the Group
publishes a consolidated income sheet and a statement of comprehensive income as
well as a specification of changes in the Group's equity. The comprehensive
result includes changes in not owner-related items within equity, while the
change in the Group's equity includes transactions with owners. The consolidated
balance sheet is presented in order of liquidity.
IFRIC 13 Customer Loyalty Programmes
This interpretation deals with reporting on customer loyalty programmes. The
Group operates one bonus scheme, Aktia Bonus, which is going to be closed. 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.
IFRS 7 Financial instruments: information (revised)
This standard has been revised in order to provide better information concerning
the bases for valuation at fair value and liquidity risks related to financial
instruments. The consolidated accounts have been completed in accordance with
extended requirements entered into force.
Note 2 Segment reporting
Segment
From 1 January 2009, the reported segments are Banking Business, Asset
Management, Life Insurance, Non-Life Insurance and Miscellaneous. Comparative
figures for 2008 relating to the new segmentation were published on 8 April
2009.
The Banking Business segment includes Aktia Bank plc's branch office operation,
corporate banking and treasury as well as subsidiaries Aktia Real Estate
Mortgage Bank plc, Aktia Card & Finance Ab, Aktia Corporate Finance Ab and the
real estate agencies. Asset Management includes Aktia Bank plc's private bank in
Helsinki and the subsidiaries Aktia Fund Management Ltd and Aktia Asset
Management Oy Ab. Life Insurance includes Aktia Life Insurance Ltd. Non-Life
Insurance includes Aktia Non-Life Insurance Company Ltd. Miscellaneous includes
Group management in Aktia plc and certain administrative functions in Aktia Bank
plc that are not allocated to the various business areas. This business area
also includes Vasp-Invest Ab.
Allocation principles
Net interest income in the various segments, especially in Banking Business,
includes the margins on volumes of borrowing and lending. Reference interest
rates for borrowing and lending and the interest rate risk that arises because
of new pricing being out of step are transferred to Treasury in accordance with
the Group's internal pricing. Treasury assumes responsibility for the Group's
interest rate risk, liquidity and balance protection measures for which
management has issued authority. The various business areas receive, or are
charged with, internal interest based on the average surplus or deficit in
liquidity during the period. The costs of central support functions are
allocated to the segments in accordance with various allocation rules. Until
further notice, Aktia is not allocating equity to the various segments.
Miscellaneous consists of any items in the income statement and balance sheet
that are not allocated to the various segments. Internal Group transactions
between legal entities are eliminated and reported within each segment if the
legal entities are in the same segment. Internal Group transactions between
legal entities in different segments are included in the eliminations. The share
of profits in associated undertakings and the minority interest's share are
included in the eliminations.
Group segment report
--------------------------------------------------------------------------------
| Income statement | Banking | | Asset | |
| | Business | | Managemen | |
| | | | t | |
--------------------------------------------------------------------------------
| (EUR million) | 1-12/2009 | 1-12/200 | 1-12/2009 | 1-12/2008 |
| | | 8 | | |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| Net interest income | 146,9 | 93,6 | 2,6 | 1,8 |
--------------------------------------------------------------------------------
| Dividends | 0,1 | 0,3 | 0,0 | 0,1 |
--------------------------------------------------------------------------------
| Net commission income | 33,7 | 29,4 | 13,2 | 11,1 |
--------------------------------------------------------------------------------
| Net income from | - | - | - | - |
| life-insurance | | | | |
--------------------------------------------------------------------------------
| Net income from non-life | - | - | - | - |
| insurance | | | | |
--------------------------------------------------------------------------------
| Net income from financial | 3,1 | -2,9 | -0,2 | -0,6 |
| transactions | | | | |
--------------------------------------------------------------------------------
| Net income from investment | 0,0 | 0,1 | - | - |
| properties | | | | |
--------------------------------------------------------------------------------
| Other operating income | 9,9 | 3,7 | 0,1 | 0,1 |
--------------------------------------------------------------------------------
| Total operating income | 193,7 | 124,2 | 15,6 | 12,5 |
--------------------------------------------------------------------------------
| Staff costs | -36,0 | -34,7 | -8,1 | -4,8 |
--------------------------------------------------------------------------------
| Other administrative expenses | -57,3 | -46,8 | -4,9 | -3,5 |
--------------------------------------------------------------------------------
| Negative goodwill recorded as | - | - | - | - |
| income | | | | |
--------------------------------------------------------------------------------
| Depreciation of tangible and | | | | |
--------------------------------------------------------------------------------
| intangible assets | -2,3 | -2,0 | -0,8 | -0,4 |
--------------------------------------------------------------------------------
| Other operating expenses | -11,6 | -9,0 | -1,0 | -0,6 |
--------------------------------------------------------------------------------
| Total operating expenses | -107,3 | -92,4 | -14,7 | -9,3 |
--------------------------------------------------------------------------------
| Impariment and reversing | | | | |
| items | | | | |
--------------------------------------------------------------------------------
| of tangible and intangible | | | | |
--------------------------------------------------------------------------------
| assets | - | - | - | - |
--------------------------------------------------------------------------------
| Write-downs on credits and | | | | |
| other | | | | |
--------------------------------------------------------------------------------
| commitments | -31,0 | -0,7 | - | - |
--------------------------------------------------------------------------------
| Share of profit from | - | - | - | - |
| associated companies | | | | |
--------------------------------------------------------------------------------
| Operating profit | 55,4 | 31,1 | 0,9 | 3,2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Income statement | Life | | Non-Life | |
| | Insurance | | Insurance | |
| | | | | |
--------------------------------------------------------------------------------
| (EUR million) | 1-12/2009 | 1-12/200 | 1-12/2009 | 1-12/2008 |
| | | 8 | | |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| Net interest income | - | - | - | - |
--------------------------------------------------------------------------------
| Dividends | - | - | - | - |
--------------------------------------------------------------------------------
| Net commission income | - | - | - | - |
--------------------------------------------------------------------------------
| Net income from | 22,2 | 27,8 | - | - |
| life-insurance | | | | |
--------------------------------------------------------------------------------
| Net income from non-life | - | - | 14,3 | - |
| insurance | | | | |
--------------------------------------------------------------------------------
| Net income from financial | - | - | - | - |
| transactions | | | | |
--------------------------------------------------------------------------------
| Net income from investment | - | - | - | - |
| properties | | | | |
--------------------------------------------------------------------------------
| Other operating income | - | - | 0,4 | - |
--------------------------------------------------------------------------------
| Total operating income | 22,2 | 27,8 | 14,7 | - |
--------------------------------------------------------------------------------
| Staff costs | -5,5 | -7,1 | -13,7 | - |
--------------------------------------------------------------------------------
| Other administrative expenses | -7,4 | -5,8 | -7,0 | - |
--------------------------------------------------------------------------------
| Negative goodwill recorded as | - | - | - | - |
| income | | | | |
--------------------------------------------------------------------------------
| Depreciation of tangible and | | | | |
--------------------------------------------------------------------------------
| intangible assets | -0,4 | -0,4 | -0,6 | - |
--------------------------------------------------------------------------------
| Other operating expenses | - | - | -0,5 | - |
--------------------------------------------------------------------------------
| Total operating expenses | -13,3 | -13,4 | -21,7 | - |
--------------------------------------------------------------------------------
| Impariment and reversing | | | | |
| items | | | | |
--------------------------------------------------------------------------------
| of tangible and intangible | | | | |
--------------------------------------------------------------------------------
| assets | - | - | - | - |
--------------------------------------------------------------------------------
| Write-downs on credits and | | | | |
| other | | | | |
--------------------------------------------------------------------------------
| commitments | - | - | -0,7 | - |
--------------------------------------------------------------------------------
| Share of profit from | - | - | - | - |
| associated companies | | | | |
--------------------------------------------------------------------------------
| Operating profit | 8,9 | 14,4 | -7,7 | - |
--------------------------------------------------------------------------------
| Contribution of insurance | 2,7 | -47,7 | -7,7 | - |
| businesses to the Groups' | | | | |
| operating profit | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Income statement | Miscellan | | Eliminati | |
| | eous | | ons | |
--------------------------------------------------------------------------------
| (EUR million) | 1-12/2009 | 1-12/200 | 1-12/2009 | 1-12/2008 |
| | | 8 | | |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| Net interest income | 2,0 | 5,1 | 0,8 | 0,6 |
--------------------------------------------------------------------------------
| Dividends | 1,8 | 2,3 | -1,4 | -1,4 |
--------------------------------------------------------------------------------
| Net commission income | 8,4 | 3,3 | -8,9 | -2,8 |
--------------------------------------------------------------------------------
| Net income from | - | - | -8,2 | -61,6 |
| life-insurance | | | | |
--------------------------------------------------------------------------------
| Net income from non-life | - | - | 0,8 | - |
| insurance | | | | |
--------------------------------------------------------------------------------
| Net income from financial | -3,5 | 0,1 | 1,5 | - |
| transactions | | | | |
--------------------------------------------------------------------------------
| Net income from investment | 0,5 | 6,2 | -0,1 | -0,2 |
| properties | | | | |
--------------------------------------------------------------------------------
| Other operating income | 3,0 | 12,4 | -9,8 | -1,2 |
--------------------------------------------------------------------------------
| Total operating income | 12,2 | 29,3 | -25,2 | -66,6 |
--------------------------------------------------------------------------------
| Staff costs | -16,0 | -12,9 | -0,1 | -1,2 |
--------------------------------------------------------------------------------
| Other administrative expenses | 14,1 | 11,3 | 17,7 | 6,4 |
--------------------------------------------------------------------------------
| Negative goodwill recorded as | - | - | 0,1 | - |
| income | | | | |
--------------------------------------------------------------------------------
| Depreciation of tangible and | | | | |
--------------------------------------------------------------------------------
| intangible assets | -2,1 | -1,6 | -0,7 | -1,3 |
--------------------------------------------------------------------------------
| Other operating expenses | -10,1 | -6,9 | -0,2 | 0,2 |
--------------------------------------------------------------------------------
| Total operating expenses | -14,1 | -10,0 | 16,9 | 4,2 |
--------------------------------------------------------------------------------
| Impariment and reversing | | | | |
| items | | | | |
--------------------------------------------------------------------------------
| of tangible and intangible | | | | |
--------------------------------------------------------------------------------
| assets | - | 1,0 | -0,6 | -0,3 |
--------------------------------------------------------------------------------
| Write-downs on credits and | | | | |
| other | | | | |
--------------------------------------------------------------------------------
| commitments | -0,1 | - | - | - |
--------------------------------------------------------------------------------
| Share of profit from | - | - | 0,3 | 0,2 |
| associated companies | | | | |
--------------------------------------------------------------------------------
| Operating profit | -2,0 | 20,3 | -8,5 | -62,5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Income statement | Total | | | |
| | Group | | | |
| | | | | |
--------------------------------------------------------------------------------
| (EUR million) | 1-12/2009 | 1-12/200 | | |
| | | 8 | | |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| Net interest income | 152,2 | 101,0 | | |
--------------------------------------------------------------------------------
| Dividends | 0,6 | 1,4 | | |
--------------------------------------------------------------------------------
| Net commission income | 46,3 | 41,0 | | |
--------------------------------------------------------------------------------
| Net income from | 14,0 | -33,8 | | |
| life-insurance | | | | |
--------------------------------------------------------------------------------
| Net income from non-life | 15,2 | - | | |
| insurance | | | | |
--------------------------------------------------------------------------------
| Net income from financial | 0,8 | -3,4 | | |
| transactions | | | | |
--------------------------------------------------------------------------------
| Net income from investment | 0,4 | 6,0 | | |
| properties | | | | |
--------------------------------------------------------------------------------
| Other operating income | 3,6 | 15,0 | | |
--------------------------------------------------------------------------------
| Total operating income | 233,1 | 127,2 | | |
--------------------------------------------------------------------------------
| Staff costs | -79,2 | -60,6 | | |
--------------------------------------------------------------------------------
| Other administrative expenses | -44,8 | -38,4 | | |
--------------------------------------------------------------------------------
| Negative goodwill recorded as | 0,1 | - | | |
| income | | | | |
--------------------------------------------------------------------------------
| Depreciation of tangible and | | | | |
--------------------------------------------------------------------------------
| intangible assets | -6,9 | -5,7 | | |
--------------------------------------------------------------------------------
| Other operating expenses | -23,4 | -16,2 | | |
--------------------------------------------------------------------------------
| Total operating expenses | -154,2 | -120,9 | | |
--------------------------------------------------------------------------------
| Impariment and reversing | | | | |
| items | | | | |
--------------------------------------------------------------------------------
| of tangible and intangible | | | | |
--------------------------------------------------------------------------------
| assets | -0,6 | 0,7 | | |
--------------------------------------------------------------------------------
| Write-downs on credits and | | | | |
| other | | | | |
--------------------------------------------------------------------------------
| commitments | -31,7 | -0,7 | | |
--------------------------------------------------------------------------------
| Share of profit from | 0,3 | 0,2 | | |
| associated companies | | | | |
--------------------------------------------------------------------------------
| Operating profit | 47,0 | 6,6 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Balance sheet | Banking | | Asset | |
| | Business | | Managemen | |
| | | | t | |
--------------------------------------------------------------------------------
| (EUR million) | 31.12.200 | 31.12.20 | 31.12.200 | 31.12.200 |
| | 9 | 08 | 9 | 8 |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| Cash and balances with | 336,4 | 502,5 | 0,1 | 0,1 |
| central banks | | | | |
--------------------------------------------------------------------------------
| Financial assets reported at | | | | |
| fair value | | | | |
--------------------------------------------------------------------------------
| through profit and loss | 3,6 | 4,5 | - | - |
--------------------------------------------------------------------------------
| Financial assets available | 2 655,8 | 2 355,0 | 7,3 | 13,2 |
| for sale | | | | |
--------------------------------------------------------------------------------
| Loans and other receivables | 6 173,7 | 5 520,2 | 34,4 | 17,6 |
--------------------------------------------------------------------------------
| Investments for unit-linked | - | - | - | - |
| provisions | | | | |
--------------------------------------------------------------------------------
| Other assets | 662,9 | 465,9 | 5,0 | 7,2 |
--------------------------------------------------------------------------------
| Total assets | 9 832,4 | 8 848,1 | 46,8 | 38,1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Deposits | 4 607,1 | 4 898,8 | 154,7 | 130,1 |
--------------------------------------------------------------------------------
| Debt securities issued | 2 758,1 | 2 134,1 | - | - |
--------------------------------------------------------------------------------
| Technical provision for | - | - | - | - |
| insurance business | | | | |
--------------------------------------------------------------------------------
| Other liabilities | 1 508,7 | 1 174,5 | 6,7 | 15,9 |
--------------------------------------------------------------------------------
| Total liabilities | 8 874,0 | 8 207,4 | 161,4 | 146,1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Balance sheet | Life | | Non-Life | |
| | Insurance | | Insurance | |
| | | | | |
--------------------------------------------------------------------------------
| (EUR million) | 31.12.200 | 31.12.20 | 31.12.200 | 31.12.200 |
| | 9 | 08 | 9 | 8 |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| Cash and balances with | 3,1 | 13,4 | 5,6 | - |
| central banks | | | | |
--------------------------------------------------------------------------------
| Financial assets reported at | | | | |
| fair value | | | | |
--------------------------------------------------------------------------------
| through profit and loss | 10,4 | 14,9 | 8,4 | - |
--------------------------------------------------------------------------------
| Financial assets available | 664,9 | 648,6 | 101,1 | - |
| for sale | | | | |
--------------------------------------------------------------------------------
| Loans and other receivables | - | - | - | - |
--------------------------------------------------------------------------------
| Investments for unit-linked | 208,9 | 148,1 | - | - |
| provisions | | | | |
--------------------------------------------------------------------------------
| Other assets | 19,4 | 21,5 | 38,5 | - |
--------------------------------------------------------------------------------
| Total assets | 906,6 | 846,6 | 153,6 | - |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Deposits | - | - | - | - |
--------------------------------------------------------------------------------
| Debt securities issued | - | - | - | - |
--------------------------------------------------------------------------------
| Technical provision for | 805,1 | 777,2 | 109,7 | - |
| insurance business | | | | |
--------------------------------------------------------------------------------
| Other liabilities | 14,1 | 11,1 | 19,6 | - |
--------------------------------------------------------------------------------
| Total liabilities | 819,2 | 788,3 | 129,4 | - |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Balance sheet | Miscella | | Eliminat | |
| | neous | | ions | |
--------------------------------------------------------------------------------
| (EUR million) | 31.12.200 | 31.12.20 | 31.12.200 | 31.12.200 |
| | 9 | 08 | 9 | 8 |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| Cash and balances with | - | - | -4,3 | -9,7 |
| central banks | | | | |
--------------------------------------------------------------------------------
| Financial assets reported at | | | | |
| fair value | | | | |
--------------------------------------------------------------------------------
| through profit and loss | - | - | - | - |
--------------------------------------------------------------------------------
| Financial assets available | 30,0 | 37,0 | -26,1 | -16,4 |
| for sale | | | | |
--------------------------------------------------------------------------------
| Loans and other receivables | 0,1 | 0,1 | -66,6 | -11,7 |
--------------------------------------------------------------------------------
| Investments for unit-linked | - | - | - | - |
| provisions | | | | |
--------------------------------------------------------------------------------
| Other assets | 20,7 | 120,4 | -337,3 | -312,3 |
--------------------------------------------------------------------------------
| Total assets | 50,7 | 157,4 | -434,2 | -350,2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Deposits | 2,2 | 1,6 | -10,4 | -15,2 |
--------------------------------------------------------------------------------
| Debt securities issued | - | - | -10,2 | -15,3 |
--------------------------------------------------------------------------------
| Technical provision for | - | - | 9,6 | - |
| insurance business | | | | |
--------------------------------------------------------------------------------
| Other liabilities | 258,8 | 228,0 | -144,3 | -117,4 |
--------------------------------------------------------------------------------
| Total liabilities | 261,0 | 229,6 | -155,3 | -148,0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Balance sheet | Total | | | |
| | Group | | | |
| | | | | |
--------------------------------------------------------------------------------
| (EUR million) | 31.12.200 | 31.12.20 | | |
| | 9 | 08 | | |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| Cash and balances with | 341,0 | 506,3 | | |
| central banks | | | | |
--------------------------------------------------------------------------------
| Financial assets reported at | | | | |
| fair value | | | | |
--------------------------------------------------------------------------------
| through profit and loss | 22,5 | 19,5 | | |
--------------------------------------------------------------------------------
| Financial assets available | 3 433,0 | 3 037,3 | | |
| for sale | | | | |
--------------------------------------------------------------------------------
| Loans and other receivables | 6 141,6 | 5 526,2 | | |
--------------------------------------------------------------------------------
| Investments for unit-linked | 208,9 | 148,1 | | |
| provisions | | | | |
--------------------------------------------------------------------------------
| Other assets | 409,0 | 302,6 | | |
--------------------------------------------------------------------------------
| Total assets | 10 555,8 | 9 540,1 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Deposits | 4 753,6 | 5 015,3 | | |
--------------------------------------------------------------------------------
| Debt securities issued | 2 747,9 | 2 118,7 | | |
--------------------------------------------------------------------------------
| Technical provision for | 924,4 | 777,2 | | |
| insurance business | | | | |
--------------------------------------------------------------------------------
| Other liabilities | 1 663,7 | 1 312,1 | | |
--------------------------------------------------------------------------------
| Total liabilities | 10 089,7 | 9 223,3 | | |
--------------------------------------------------------------------------------
Note 3 Derivatives and off-balance sheet commitments
--------------------------------------------------------------------------------
| Hedging derivative instruments (EUR | | | |
| million) | | | |
--------------------------------------------------------------------------------
| 31.12.2009 | Total | Assets, | Liabiliti |
| | nominal | fair | es, fair |
| | amount | value | value |
--------------------------------------------------------------------------------
| Fair value hedging | | | |
--------------------------------------------------------------------------------
| Interest rate-related | 2,627.5 | 56.8 | 21.5 |
--------------------------------------------------------------------------------
| Total | 2,627.5 | 56.8 | 21.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow hedging | | | |
--------------------------------------------------------------------------------
| Interest rate-related | 960.0 | 41.8 | 0.8 |
--------------------------------------------------------------------------------
| Total | 960.0 | 41.8 | 0.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Derivative instruments valued through | | | |
| profit and loss | | | |
--------------------------------------------------------------------------------
| Interest rate-related *) | 7,051.0 | 107.7 | 106.2 |
--------------------------------------------------------------------------------
| Currency-related | 179.6 | 3.1 | 3.0 |
--------------------------------------------------------------------------------
| Equity-related **) | 112.7 | 0.1 | 0.1 |
--------------------------------------------------------------------------------
| Other derivative instruments **) | 8.4 | 0.5 | 0.5 |
--------------------------------------------------------------------------------
| Total | 7,351.8 | 111.4 | 109.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total derivative instruments | | | |
--------------------------------------------------------------------------------
| Interest rate-related | 10,638.5 | 206.3 | 128.5 |
--------------------------------------------------------------------------------
| Currency-related | 179.6 | 3.1 | 3.0 |
--------------------------------------------------------------------------------
| Equity-related | 112.7 | 0.1 | 0.1 |
--------------------------------------------------------------------------------
| Other derivative instruments | 8.4 | 0.5 | 0.5 |
--------------------------------------------------------------------------------
| Total | 10,939.3 | 210.0 | 132.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Hedging derivative instruments (EUR | | | |
| million) | | | |
--------------------------------------------------------------------------------
| 31.12.2008 | Total | Assets, | Liabiliti |
| | nominal | fair | es, fair |
| | amount | value | value |
--------------------------------------------------------------------------------
| Fair value hedging | | | |
--------------------------------------------------------------------------------
| Interest rate-related | 1,588.5 | 38.1 | 11.8 |
--------------------------------------------------------------------------------
| Total | 1,588.5 | 38.1 | 11.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow hedging | | | |
--------------------------------------------------------------------------------
| Interest rate-related | 960.0 | 25.4 | 1.2 |
--------------------------------------------------------------------------------
| Total | 960.0 | 25.4 | 1.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Derivative instruments valued through | | | |
| profit and loss | | | |
--------------------------------------------------------------------------------
| Interest rate-related *) | 6,662.2 | 67.0 | 65.6 |
--------------------------------------------------------------------------------
| Currency-related | 255.9 | 4.1 | 4.6 |
--------------------------------------------------------------------------------
| Equity-related **) | 192.8 | 1.8 | 0.9 |
--------------------------------------------------------------------------------
| Other derivative instruments **) | 8.6 | 0.6 | 0.6 |
--------------------------------------------------------------------------------
| Total | 7,119.6 | 73.5 | 71.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total derivative instruments | | | |
--------------------------------------------------------------------------------
| Interest rate-related | 9,210.7 | 130.5 | 78.5 |
--------------------------------------------------------------------------------
| Currency-related | 255.9 | 4.1 | 4.6 |
--------------------------------------------------------------------------------
| Equity-related | 192.8 | 1.8 | 0.9 |
--------------------------------------------------------------------------------
| Other derivative instruments | 8.6 | 0.6 | 0.6 |
--------------------------------------------------------------------------------
| Total | 9,668.1 | 137.0 | 84.7 |
--------------------------------------------------------------------------------
| *) Interest-linked derivatives include interest rate hedging provided for |
| local banks which after back-to-back hedging with third parties amounted to |
| EUR 6 744,5 (6 244,8) million. |
--------------------------------------------------------------------------------
| **) All equity-related and other derivative instruments relate to the |
| hedging of structured debt products. |
--------------------------------------------------------------------------------
Off-balance sheet commitments
--------------------------------------------------------------------------------
| (EUR million) | 31.12.200 | 31.12.2008 |
| | 9 | |
--------------------------------------------------------------------------------
| Commitments provided to a third party on behalf of | | |
| the customers | | |
--------------------------------------------------------------------------------
| Guarantees | 49.9 | 54.8 |
--------------------------------------------------------------------------------
| Other commitments provided to a third party | 7.3 | 7.5 |
--------------------------------------------------------------------------------
| Irrevocable commitments provided on behalf of | | |
| customers | | |
--------------------------------------------------------------------------------
| Unused credit arrangements | 506.6 | 454.5 |
--------------------------------------------------------------------------------
| Other commitments provided to a third party | 11.7 | 12.1 |
--------------------------------------------------------------------------------
| Off-balance sheet commitments | 575.5 | 528.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Note 4 The Group's risk exposure
The Group's capital adequacy and exposure for the banking business
--------------------------------------------------------------------------------
| (EUR million) |
--------------------------------------------------------------------------------
| Summary | 12/200 | 9/2009 | 6/2009 | 3/2009 | 12/2008 |
| | 9 | | | | |
--------------------------------------------------------------------------------
| Tier 1 capital | 329.0 | 324.5 | 312.9 | 300.5 | 309.0 |
--------------------------------------------------------------------------------
| Tier 2 capital | 222.8 | 222.2 | 185.1 | 173.6 | 143.4 |
--------------------------------------------------------------------------------
| Capital base | 551.8 | 546.7 | 498.0 | 474.1 | 452.4 |
--------------------------------------------------------------------------------
| Risk-weighted amount for | 3,147. | 3,220.7 | 3,122.2 | 3,062.8 | 3,040.5 |
| credit and counterparty | 5 | | | | |
| risks | | | | | |
--------------------------------------------------------------------------------
| Risk-weighted amount for | - | - | - | - | - |
| market risks 1) | | | | | |
--------------------------------------------------------------------------------
| Risk-weighted amount for | 312.7 | 272.7 | 272.7 | 272.7 | 272.7 |
| operational risks | | | | | |
--------------------------------------------------------------------------------
| Risk-weighted commitments | 3,460. | 3,493.4 | 3,394.8 | 3,335.5 | 3,313.2 |
| | 2 | | | | |
--------------------------------------------------------------------------------
| Capital adequacy ratio, % | 15.9 | 15.7 | 14.7 | 14.2 | 13.7 |
--------------------------------------------------------------------------------
| Tier 1 Capital ratio, % | 9.5 | 9.3 | 9.2 | 9.0 | 9.3 |
--------------------------------------------------------------------------------
| Minimum capital requirement | 276.8 | 279.5 | 271.6 | 266.8 | 265.1 |
--------------------------------------------------------------------------------
| Capital buffer (difference | 275.0 | 267.3 | 226.4 | 207.3 | 187.3 |
| between capital base and | | | | | |
| minimum requirement) | | | | | |
--------------------------------------------------------------------------------
1) No capital requirement due to minor trading book and when total of net
currency positions are less than 2% of capital base.
--------------------------------------------------------------------------------
| | | | | (EUR million) |
--------------------------------------------------------------------------------
| Capital base | 12/200 | 9/2009 | 6/2009 | 3/2009 | 12/2008 |
| | 9 | | | | |
--------------------------------------------------------------------------------
| Share capital | 163.0 | 163.0 | 163.0 | 163.0 | 163.0 |
--------------------------------------------------------------------------------
| Funds | 44.6 | 44.6 | 44.6 | 44.6 | 44.6 |
--------------------------------------------------------------------------------
| Minority share | 32.7 | 30.0 | 30.2 | 24.0 | 24.9 |
--------------------------------------------------------------------------------
| Retained earnings | 70.7 | 70.7 | 70.7 | 70.7 | 93.5 |
--------------------------------------------------------------------------------
| Profit for the period | 38.0 | 31.4 | 17.4 | 6.7 | 9.2 |
--------------------------------------------------------------------------------
| Provision for dividends to | -12.9 | -7.5 | -5.0 | - | -0.6 |
| shareholders | | | | | |
--------------------------------------------------------------------------------
| Total | 336.0 | 332.1 | 320.8 | 309.0 | 334.7 |
--------------------------------------------------------------------------------
| Intangible assets | -7.0 | -7.5 | -8.0 | -8.4 | -8.6 |
--------------------------------------------------------------------------------
| Shares in insurance | - | - | - | - | -17.1 |
| companies | | | | | |
--------------------------------------------------------------------------------
| Tier 1 capital | 329.0 | 324.5 | 312.9 | 300.5 | 309.0 |
--------------------------------------------------------------------------------
| Fund at fair value | 13.3 | 14.9 | -16.3 | -21.6 | -47.5 |
--------------------------------------------------------------------------------
| Other Tier 2 capital | 45.0 | 45.0 | 45.0 | 45.0 | 45.0 |
--------------------------------------------------------------------------------
| Risk debentures | 164.5 | 162.3 | 156.4 | 150.3 | 163.0 |
--------------------------------------------------------------------------------
| Shares in insurance | - | - | - | - | -17.1 |
| companies | | | | | |
--------------------------------------------------------------------------------
| Tier 2 capital | 222.8 | 222.2 | 185.1 | 173.6 | 143.4 |
--------------------------------------------------------------------------------
| Total capital base | 551.8 | 546.7 | 498.0 | 474.1 | 452.4 |
--------------------------------------------------------------------------------
Risk-weighted commitments, credit and counterparty risks
--------------------------------------------------------------------------------
| Total exposure 12/2009* | | | (EUR million) |
--------------------------------------------------------------------------------
| Risk-weight | Balance sheet | Off-balance | Total |
| | items | commitments | |
--------------------------------------------------------------------------------
| 0% | 1,237.9 | 33.5 | 1,271.5 |
--------------------------------------------------------------------------------
| 10% | 1,158.8 | - | 1,158.8 |
--------------------------------------------------------------------------------
| 20% | 1,205.9 | 271.0 | 1,477.0 |
--------------------------------------------------------------------------------
| 35% | 4,528.9 | 88.0 | 4,616.9 |
--------------------------------------------------------------------------------
| 50% | - | 0.6 | 0.6 |
--------------------------------------------------------------------------------
| 75% | 586.4 | 76.7 | 663.1 |
--------------------------------------------------------------------------------
| 100% | 621.9 | 97.5 | 719.4 |
--------------------------------------------------------------------------------
| 150% | 12.4 | 0.7 | 13.1 |
--------------------------------------------------------------------------------
| Total | 9,352.3 | 568.1 | 9,920.4 |
--------------------------------------------------------------------------------
| Derivatives *) | 268.4 | - | 268.4 |
--------------------------------------------------------------------------------
| Total | 9,620.7 | 568.1 | 10,188.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Risk-weighted commitments, Basel 2* | | | (EUR |
| | | | million) |
--------------------------------------------------------------------------------
| Risk-weight | 12/2009 | 9/2009 | 6/2009 | 3/2009 | 12/2008 |
--------------------------------------------------------------------------------
| 0% | - | - | - | - | - |
--------------------------------------------------------------------------------
| 10% | 115.9 | 111.3 | 101.6 | 89.7 | 80.3 |
--------------------------------------------------------------------------------
| 20% | 252.5 | 341.9 | 291.8 | 290.8 | 335.3 |
--------------------------------------------------------------------------------
| 35% | 1,596.8 | 1,567.2 | 1,516.6 | 1,470.1 | 1,421.4 |
--------------------------------------------------------------------------------
| 50% | 0.1 | 4.8 | 3.5 | 3.0 | 2.5 |
--------------------------------------------------------------------------------
| 75% | 466.1 | 457.8 | 447.2 | 439.1 | 426.7 |
--------------------------------------------------------------------------------
| 100% | 673.3 | 694.0 | 702.5 | 720.9 | 720.8 |
--------------------------------------------------------------------------------
| 150% | 19.1 | 22.4 | 32.7 | 24.0 | 11.3 |
--------------------------------------------------------------------------------
| Total | 3,123.7 | 3,199.6 | 3,096.0 | 3,037.6 | 2,998.4 |
--------------------------------------------------------------------------------
| Derivatives | 23.8 | 21.1 | 26.2 | 25.2 | 42.1 |
| *) | | | | | |
--------------------------------------------------------------------------------
| Total | 3,147.5 | 3,220.7 | 3,122.2 | 3,062.8 | 3,040.5 |
--------------------------------------------------------------------------------
| *) credit equivalents for derivatives |
--------------------------------------------------------------------------------
Risk-weighted amount for operative risks*
--------------------------------------------------------------------------------
| Year | 200 | 200 | 200 | 200 | | 12/20 | 9/200 | 6/200 | 3/200 | 12/20 |
| | 6 | 7 | 8 | 9 | | 09 | 9 | 9 | 9 | 08 |
--------------------------------------------------------------------------------
| Gross | 140 | 145 | 150 | 204 | | | | | |
|
| income | .6 | .2 | .5 | .7 | | | | | | |
--------------------------------------------------------------------------------
| - average | | | 145 | 166 | | | | | | |
| 3 years | | | .4 | .8 | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Capital | | | | | 25.0 | 21.8 | 21.8 | 21.8 | 21.8 |
| requirement for | | | | | | | | | |
| operative risk | | | | | | | | | |
--------------------------------------------------------------------------------
| Risk-weighted | | | | | 312.7 | 272.7 | 272.7 | 272.7 | 272.7 |
| amount, Basel 2 | | | | | | | | | |
--------------------------------------------------------------------------------
Capital requirement for operational risks is 15% of average gross income during
the last three years.
Capital requirement of 15% is calculated according to definition of average
gross income during the last three years x risk-weighted
factor 8%.
Conglomerate's capital adequacy
--------------------------------------------------------------------------------
| Summary | 12/2009 | 9/2009 | 6/2009 | 3/2009 | 12/2008 |
--------------------------------------------------------------------------------
| Tier 1 capital for the | 400.7 | 393.4 | 378.5 | 372.2 | 359.7 |
| group | | | | | |
--------------------------------------------------------------------------------
| Sector-specific assets | 233.2 | 232.1 | 178.2 | 143.8 | 161.4 |
--------------------------------------------------------------------------------
| Intangible assets and | -120.0 | -108.5 | -93.0 | -94.6 | -101.9 |
| other specific reductions | | | | | |
--------------------------------------------------------------------------------
| Other sector-specific not | - | - | - | - | - |
| transferrable assets | | | | | |
--------------------------------------------------------------------------------
| Conglomerate's total | 513.9 | 517.0 | 463.7 | 421.4 | 419.2 |
| capital base | | | | | |
--------------------------------------------------------------------------------
| Capital requirement for | 279.4 | 282.1 | 273.8 | 268.7 | 266.6 |
| banking business | | | | | |
--------------------------------------------------------------------------------
| Capital requirement for | 47.1 | 47.6 | 47.9 | 47.9 | 43.5 |
| insurance business | | | | | |
--------------------------------------------------------------------------------
| Minimum amount for | 326.5 | 329.6 | 321.6 | 316.5 | 310.1 |
| capital base | | | | | |
--------------------------------------------------------------------------------
| Conglomerate's capital | 187.4 | 187.4 | 142.1 | 104.8 | 109.1 |
| adequacy | | | | | |
--------------------------------------------------------------------------------
| Capital adequacy ratio, % | 157.4% | 156.9% | 144.2% | 133.1% | 135.2% |
--------------------------------------------------------------------------------
The finance and insurance conglomerate's capital adequacy is calculated
according to the consolidation method based on FICO acts and instructions issued
by the Finnish Financial Supervisory Authority.
Note 5 Businesses acquired
The merger with Veritas Non-Life Insurance was concluded on 1 January 2009 in
accordance with the merger plan drawn up. Since the merger, the insurance
business has been operated by Aktia Non-Life Insurance, a 100%-owned subsidiary
of Aktia plc.
As merger compensation, Aktia plc issued 6,800,000 new shares in accordance with
the merger agreement entered into. The value of the shares issued was determined
on the basis of business concluded at the year-end.
When drawing up the acquisition balance sheet, the presence of customer-related
intangible assets was examined. At the time of the merger, Veritas Non-Life
Insurance had a customer base of 70,000. Each customer was deemed to constitute
a value of EUR 20, with the intellectual intangible rights in the customer stock
amounting to EUR 1,400,000, which is depreciated over two years. Other
intangible assets were not deemed to have any value in the acquisition balance
sheet.
The current value of the technical provisions has been adjusted in accordance
with fair value in keeping with IFRS 4.32 and 4.31. The equalisation amount
included in the provisions has been booked to equity after the deduction of
deferred tax also in keeping with the applicable IFRS rules.
As the net assets according to the acquisition balance exceeded the total
acquisition value, a preliminary sum of negative goodwill arose at the time of
the acquisition amounting to EUR 139,856.09, all of which was posted as income
for the first quarter of 2009.
During 2009, Aktia Non-Life Insurance Ab's total operating income was EUR 14,7
(-) million and the result for the period after tax was EUR -5,7 (-) million.
--------------------------------------------------------------------------------
| (EUR million) | | 1.1.2009 | |
--------------------------------------------------------------------------------
| | Veritas Mutual | Fair value | Veritas Mutual |
| | Non-Life | adjustments | Non-Life |
| | Insurance | | Insurances' |
| | Company | | acquisition |
| | | | balance sheet |
--------------------------------------------------------------------------------
| Assets | | | |
--------------------------------------------------------------------------------
| Cash and bank | 18.0 | | 18.0 |
| balances | | | |
--------------------------------------------------------------------------------
| Interest-bearing | 75.8 | | 75.8 |
| securities | | | |
--------------------------------------------------------------------------------
| Shares and | 30.1 | 2.2 | 32.3 |
| participations | | | |
--------------------------------------------------------------------------------
| Financial assets | 105.9 | 2.2 | 108.1 |
| available for | | | |
| sale | | | |
--------------------------------------------------------------------------------
| Properties | 11.1 | 15.1 | 26.2 |
--------------------------------------------------------------------------------
| Intangible | 1.7 | 1.4 | 3.1 |
| assets | | | |
--------------------------------------------------------------------------------
| Other tangible | 0.8 | | 0.8 |
| assets | | | |
--------------------------------------------------------------------------------
| Other assets | 22.7 | | 22.7 |
--------------------------------------------------------------------------------
| Deferred tax | 1.4 | | 1.4 |
| receivables | | | |
--------------------------------------------------------------------------------
| Total assets | 161.5 | 18.7 | 180.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Liabilities | | | |
--------------------------------------------------------------------------------
| Technical | 99.1 | 12.0 | 111.1 |
| provision for | | | |
| insurance | | | |
| business | | | |
--------------------------------------------------------------------------------
| Other | 13.9 | 0.7 | 14.6 |
| liabilities | | | |
--------------------------------------------------------------------------------
| Deferred tax | 10.3 | 1.6 | 11.9 |
| liabilities | | | |
--------------------------------------------------------------------------------
| Total | 123.4 | 14.2 | 137.6 |
| liabilities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net assets | | | 42.6 |
| according to | | | |
| IFRS | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Compensation for | | | 40.8 |
| the merger | | | |
--------------------------------------------------------------------------------
| Activated | | | 1.6 |
| acquisition | | | |
| costs | | | |
--------------------------------------------------------------------------------
| Acquisition | | | 42.4 |
| price | | | |
--------------------------------------------------------------------------------
| - of which paid in cash | | 1.6 |
--------------------------------------------------------------------------------
| - of which 6,800,000 shares in Aktia plc at EUR 6 per | 40.8 |
| share have been given as compensation for the merger. | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Difference = negative goodwill | | 0,1 |
--------------------------------------------------------------------------------
Note 6 Net income from insurance business
--------------------------------------------------------------------------------
| (EUR million) | 1-12/2009 | 1-12/2008 | Change |
--------------------------------------------------------------------------------
| Income from insurance | 80.5 | 91.0 | -11.6% |
| premiums | | | |
--------------------------------------------------------------------------------
| Net income from | 0.4 | -49.1 | - |
| investments | | | |
--------------------------------------------------------------------------------
| Insurance claims paid | -79.8 | -86.7 | -8.0% |
--------------------------------------------------------------------------------
| Net change in | 12.8 | 11.0 | 15.9% |
| technical provisions | | | |
--------------------------------------------------------------------------------
| Net income from | 14.0 | -33.8 | - |
| life-insurance | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Income from insurance | 60.6 | - | - |
| premiums | | | |
--------------------------------------------------------------------------------
| Net income from | 1.6 | - | - |
| investments | | | |
--------------------------------------------------------------------------------
| Insurance claims paid | -42.2 | - | - |
--------------------------------------------------------------------------------
| Change in provisions | -4.7 | - | - |
| for outstanding claims | | | |
--------------------------------------------------------------------------------
| Net income from | 15.2 | - | - |
| non-life insurance | | | |
--------------------------------------------------------------------------------
This report has not been subject to external auditing.
Helsinki 15 February 2010
AKTIA PLC
Board of Directors
Aktia plc
PO Box 207
Mannerheimintie 14
FIN-00101 Helsinki
Tel. +358 (0)10 247 5000
Fax
+358 (0)10 247 6356
CEO Jussi Laitinen, tel. +358 01 247 5000
Deputy Managing Director, CFO Stefan Björkman,
tel. +358 01 247 5000
Investor Relations Officer Anna Gabrán,
tel.+358 10 247 6501
ir(at)aktia.fi
Business ID 0108664-3,
BIC/S.W.I.F.T. HELSFIHH
Investor Relations
PO Box 207
Mannerheimintie 14
FIN-00101 Helsinki
Website: www.aktia.fi
Contact address: aktia(at)aktia.fi
E-mail logic: first
name.surname(at)aktia.fi
Distribution:
NASDAQ OMX Helsinki Ltd
Main Media
Financial Supervisory Authority
www.aktia.fi
