Aktia Bank plc: Aktia Bank plc’s financial position and profit for the period 1 January - 31 March 2013
Aktia Bank plc
Stock Exchange Release
7 May 2013 at 8:00 a.m.
Aktia Bank plc’s financial position and profit for the period 1 January - 31 March 2013
Aktia Bank plc publishes information on the bank’s financial performance and financial position as the parent company of the bank, Aktia plc, publishes its Interim Report for the period 1 January - 31 March 2013. The information published is not an Interim Report as stipulated in the Securities Markets Act.
On 9 April 2013, the shareholder of Aktia Bank plc approved the merger of Aktia plc with Aktia Bank plc. The planned effective date of the merger is 1 July 2013.
All information concerns Aktia Bank Group unless specified otherwise.
| Key figures | ||||||
| (EUR million) | 1-3/ 2013 | 1-3/ 2012 | ∆ % | 10-12/ 2012 | ∆ % | 2012 |
| Earnings per share (EPS) | 3.9 | 2.9 | 33% | -0.6 | - | 7.8 |
| Equity per share (NAV) 1) | 134.9 | 130.9 | 3% | 141.3 | -4% | 141.3 |
| Return on equity (ROE), % | 9.8 | 8.8 | 11% | -1.4 | - | 5.6 |
| Total earnings per share | 2.7 | 14.5 | -82% | 1.4 | 98% | 31.6 |
| Number of shares at the end of the period 1) | 3 | 3 | 0% | 3 | 0% | 3 |
| Personnel (FTEs), average number of employees from the beginning of the financial year 1) | 750 | 771 | -3% | 753 | 0% | 753 |
| Banking Business | ||||||
| Cost-to-income ratio | 0.67 | 0.68 | -1% | 0.89 | -25% | 0.74 |
| Borrowing from the public 1) | 3,703.4 | 3,700.8 | 0% | 3,651.4 | 1% | 3,651.4 |
| Lending to the public 1) | 7,179.1 | 7,239.5 | -1% | 7,248.1 | -1% | 7,248.1 |
| Capital adequacy ratio, % 1) | 20.0 | 18.1 | 11% | 20.2 | -1% | 20.2 |
| Tier 1 capital ratio, % 1) | 11.7 | 11.3 | 3% | 11.8 | -1% | 11.8 |
| Risk-weighted commitments 1) | 3,683.7 | 3,767.3 | -2% | 3,611.2 | 2% | 3,611.2 |
| Asset Management (incl. Private Banking) | ||||||
| Assets under management 1) *) | 6,141.0 | 5,334.0 | 15% | 5,804.5 | 6% | 5,804.5 |
| 1) At the end of the period *) Assets under management = Aktia Fund Management Company’s assets under management and brokered mutual funds and assets managed by Aktia Invest, Aktia Asset Management and Aktia Bank’s Private Banking | ||||||
Formulas for key figures are presented in Aktia Bank plc’s Annual Report 2012 on page 9.
| Consolidated income statement for Bank Group | ||||
| (EUR million) | 1-3/2013 | 1-3/2012 | ∆ % | 2012 |
| Net interest income | 29.8 | 29.5 | 1% | 116.5 |
| Dividends | 0.0 | 0.0 | -99% | 0.1 |
| Commission income | 20.4 | 18.7 | 9% | 76.7 |
| Commission expenses | -4.6 | -4.3 | -6% | -17.1 |
| Net commission income | 15.8 | 14.4 | 10% | 59.6 |
| Net income from financial transactions | 2.2 | 0.3 | 668% | 2.9 |
| Net income from investment properties | 0.0 | 0.0 | -50% | -0.3 |
| Other operating income | 0.9 | 1.5 | -44% | 4.7 |
| Total operating income | 48.7 | 45.7 | 7% | 183.4 |
| Staff costs | -13.3 | -13.2 | 1% | -52.7 |
| IT-expenses | -4.8 | -4.9 | -2% | -26.4 |
| Depreciation of tangible and intangible assets | -0.7 | -0.8 | -21% | -3.4 |
| Other operating expenses | -13.7 | -12.4 | 11% | -53.5 |
| Total operating expenses | -32.4 | -31.3 | 4% | -136.0 |
| Write-down on other financial assets | - | - | - | -1.8 |
| Write-down on credits and other commitments | -1.1 | -1.9 | -41% | -6.4 |
| Share of profit from associated companies | 0.3 | -0.1 | - | -0.4 |
| Operating profit | 15.4 | 12.4 | 24% | 38.8 |
| Income and expenses from other activities | - | - | - | -3.1 |
| Taxes | -3.7 | -3.4 | 10% | -11.4 |
| Profit for the period | 11.7 | 9.1 | 29% | 24.3 |
| Attributable to: | ||||
| Shareholders in Aktia Bank plc | 11.7 | 8.8 | 33% | 23.4 |
| Non-controlling interest | 0.0 | 0.3 | - | 0.8 |
| Total | 11.7 | 9.1 | 29% | 24.3 |
| Earnings per share (EPS), EUR | 3,910,002.45 | 2,930,530.55 | 33% | 7,814,312.31 |
| There is no dilution effect to earnings per share | ||||
| Consolidated statement of comprehensive income for Bank Group | ||||
| (EUR million) | 1-3/2013 | 1-3/2012 | ∆ % | 2012 |
| Profit for the period | 11.7 | 9.1 | 29% | 24.3 |
| Other comprehensive income after taxes: | ||||
| Change in valuation of fair value for financial assets available for sale | -0.4 | 38.0 | - | 66.6 |
| Change in valuation of fair value for cash flow hedging | -2.9 | -3.0 | 1% | -3.3 |
| Transferred to the income statement for financial assets available for sale | - | - | - | 14.0 |
| Transferred to the income statement for cash flow hedging | - | - | - | -5.8 |
| Comprehensive income from items which can be transferred to the income statement | -3.3 | 35.1 | - | 71.6 |
| Defined benefit plan pensions | - | - | - | 0.0 |
| Comprehensive income from items which can not be transferred to the income statement | - | - | - | 0.0 |
| Total comprehensive income for the period | 8.4 | 44.1 | -81% | 95.9 |
| Total comprehensive income attributable to: | ||||
| Shareholders in Aktia Bank plc | 8.1 | 43.6 | -82% | 94.7 |
| Non-controlling interest | 0.3 | 0.5 | -41% | 1.2 |
| Total | 8.4 | 44.1 | -81% | 95.9 |
| Total earnings per share, EUR | 2,684,633.89 | 14,534,035.15 | -82% | 31,556,571.18 |
| There is no dilution effect to the total earnings per share |
| Consolidated balance sheet for Bank Group | ||||
| (EUR million) | 31.3.2013 | 31.12.2012 | ∆ % | 31.3.2012 |
| Assets | ||||
| Cash and balances with central banks | 293.7 | 585.9 | -50% | 219.6 |
| Interest-bearing securities | 1,645.4 | 1,468.0 | 12% | 2.052.1 |
| Shares and participations | 5.9 | 6.1 | -4% | 1.8 |
| Financial assets available for sale | 1,651.3 | 1,474.2 | 12% | 2.053.9 |
| Financial assets held until maturity | 362.5 | 350.0 | 4% | 19.3 |
| Derivative instruments | 270.8 | 302.2 | -10% | 309.3 |
| Lending to Bank of Finland and credit institutions | 129.0 | 158.7 | -19% | 131.0 |
| Lending to the public and public sector entities | 7,179.1 | 7,248.1 | -1% | 7.239.5 |
| Loans and other receivables | 7,308.1 | 7,406.7 | -1% | 7.370.5 |
| Investments in associated companies | 0.9 | 0.8 | 1% | 3.0 |
| Intangible assets | 2.2 | 2.0 | 11% | 2.2 |
| Investment properties | 0.5 | 0.5 | 0% | 0.7 |
| Other tangible assets | 4.2 | 4.4 | -4% | 4.9 |
| Accured income and advance payments | 61.2 | 64.2 | -5% | 74.2 |
| Other assets | 123.5 | 2.1 | - | 39.9 |
| Total other assets | 184.7 | 66.3 | 179% | 114.0 |
| Income tax receivables | 0.7 | 0.1 | 543% | 3.4 |
| Deferred tax receivables | 21.5 | 22.7 | -5% | 1.8 |
| Tax receivables | 22.2 | 22.8 | -3% | 5.2 |
| Total assets | 10,101.0 | 10,215.8 | -1% | 10.102.6 |
| Liabilities | ||||
| Liabilities to credit institutions | 983.5 | 1,057.6 | -7% | 977.1 |
| Liabilities to the public and public sector entities | 3,703.4 | 3,651.4 | 1% | 3.700.8 |
| Deposits | 4,686.9 | 4,709.0 | 0% | 4.677.9 |
| Derivative instruments | 161.6 | 186.4 | -13% | 163.2 |
| Debt securities issued | 3,559.5 | 3,547.6 | 0% | 3.770.4 |
| Subordinated liabilities | 304.2 | 298.2 | 2% | 281.6 |
| Other liabilities to credit institutions | 586.6 | 629.6 | -7% | 486.0 |
| Other liabilities to the public and public sector entities | 128.7 | 146.7 | -12% | 65.1 |
| Other financial liabilitites | 4,579.1 | 4,622.1 | -1% | 4.603.2 |
| Accured expenses and income received in advance | 98.1 | 88.6 | 11% | 116.1 |
| Other liabilities | 32.1 | 48.5 | -34% | 59.6 |
| Total other liabilities | 130.2 | 137.1 | -5% | 175.7 |
| Provisions | 6.9 | 6.9 | 0% | - |
| Income tax liabilities | 20.0 | 19.7 | 2% | 0.1 |
| Deferred tax liabilities | 46.4 | 46.1 | 1% | 31.6 |
| Tax liabilities | 66.4 | 65.7 | 1% | 31.7 |
| Total liabilities | 9,631.1 | 9,727.2 | -1% | 9.651.7 |
| Equity | ||||
| Restricted equity | 221.2 | 224.8 | -2% | 188.5 |
| Unrestricted equity | 183.7 | 198.9 | -8% | 204.3 |
| Shareholders’ share of equity | 404.8 | 423.8 | -4% | 392.7 |
| Non-controlling interest’s share of equity | 65.1 | 64.8 | 0% | 58.3 |
| Equity | 469.9 | 488.6 | -4% | 451.0 |
| Total liabilities and equity | 10,101.0 | 10,215.8 | -1% | 10.102.6 |
| Consolidated statement of changes in equity for Bank Group | ||||||||
| Shareholders' | Non-controlling | |||||||
| Fund at | Unrestricted | Retained | share of | interest's share | Total | |||
| (EUR million) | Share capital | fair value | equity reserve | earnings | equity | of equity | equity | |
| Equity as at 1January 2012 | 163,0 | -9,4 | 44,6 | 120,9 | 319,1 | 57,7 | 376,8 | |
| Profit for the period | 8,8 | 8,8 | 0,3 | 9,1 | ||||
| Financial assets available for sale | 37,9 | 37,9 | 0,2 | 38,0 | ||||
| Cash flow hedging | -3,1 | -3,1 | 0,1 | -3,0 | ||||
| Total comprehensive income for the period | 34,8 | 8,8 | 43,6 | 0,5 | 44,1 | |||
| Other change in equity | 30,0 | 30,0 | 0,0 | 30,0 | ||||
| Equity as at 31 March 2012 | 163,0 | 25,5 | 74,6 | 129,7 | 392,7 | 58,3 | 451,0 | |
| Equity as at 1January 2013 | 163,0 | 61,8 | 74,6 | 124,4 | 423,8 | 64,8 | 488,6 | |
| Dividends to shareholders | -27,0 | -27,0 | -27,0 | |||||
| Profit for the period | 11,7 | 11,7 | 0,0 | 11,7 | ||||
| Financial assets available for sale | -0,4 | -0,4 | 0,0 | -0,4 | ||||
| Cash flow hedging | -3,3 | -3,3 | 0,3 | -2,9 | ||||
| Total comprehensive income for the period | -3,7 | 11,7 | 8,1 | 0,3 | 8,4 | |||
| Other change in equity | 0,0 | 0,0 | 0,0 | |||||
| Equity as at 31 March 2013 | 163,0 | 58,2 | 74,6 | 109,1 | 404,8 | 65,1 | 469,9 | |
| Consolidated cash flow statement for Bank Group | ||||
| (EUR million) | 1-3/2013 | 1-3/2012 | ∆ % | 2012 |
| Cash flow from operating activities | ||||
| Operating profit | 15.4 | 12.4 | 24% | 38.8 |
| Adjustment items not included in cash flow for the period | -4.8 | 5.5 | - | 0.8 |
| Unwound cash flow hedging | - | 6.7 | - | 17.5 |
| Unwound fair value hedging | - | - | - | 92.1 |
| Paid income taxes | -1.3 | 16.9 | - | 13.5 |
| Cash flow from operating activities before change in receivables and liabilities | ||||
| 9.3 | 41.6 | -78% | 162.7 | |
| Increase (-) or decrease (+) in receivables from operating activities | -208.9 | -329.7 | 37% | -15.4 |
| Increase (+) or decrease (-) in liabilities from operating activities | -59.3 | 22.7 | - | -54.3 |
| Total cash flow from operating activities | -258.8 | -265.4 | 2% | 93.0 |
| Cash flow from investing activities | ||||
| Financial assets held until maturity | -14.2 | 0.7 | - | 9.9 |
| Proceeds from sale of group companies and associated companies | - | - | - | 0.0 |
| Investment in tangible and intangible assets | -0.9 | -0.3 | -165% | -2.4 |
| Disposal of tangible and intangible assets | 0.1 | 0.0 | 852% | 0.1 |
| Total cash flow from investing activities | -15.0 | 0.4 | - | 7.6 |
| Cash flow from financing activities | ||||
| Subordinated liabilities | 6.0 | -7.1 | - | 11.1 |
| Increase in unrestricted equity reserve | - | 30.0 | - | 30.0 |
| Share issue / dividend of Aktia Real Estate Mortgage Bank plc to the non-controlling interest | - | - | - | 5.9 |
| Paid dividends | -27.0 | - | - | -20.0 |
| Total cash flow from financing activities | -21.0 | 22.9 | - | 27.0 |
| Change in cash and cash equivalents | -294.8 | -242.1 | -22% | 127.6 |
| Cash and cash equivalents at the beginning of the year | 600.5 | 473.0 | 27% | 473.0 |
| Cash and cash equivalents at the end of the period | 305.7 | 230.8 | 32% | 600.5 |
| Cash and cash equivalents in the cash flow statement consist of the following items: | ||||
| Cash in hand | 6.7 | 8.1 | -18% | 8.0 |
| Bank of Finland current account | 287.0 | 211.5 | 36% | 577.9 |
| Repayable on demand claims on credit institutions | 12.1 | 11.2 | 8% | 14.6 |
| Total | 305.7 | 230.8 | 32% | 600.5 |
| Adjustment items not included in cash flow consist of: | ||||
| Impairment reversal of financial assets available for sale | - | - | - | -1.2 |
| Write-downs on other financial assets | - | - | - | 1.8 |
| Write-downs on credits and other commitments | 1.1 | 1.9 | -41% | 6.4 |
| Change in fair values | 1.2 | 2.3 | -47% | -4.6 |
| Depreciation and impairment of intangible and tangible assets | 0.7 | 0.8 | -21% | 3.4 |
| Share of profit from associated companies | 0.0 | 0.5 | - | 0.8 |
| Sales gains and losses from intangible and tangible assets | 0.1 | 0.0 | - | 0.2 |
| Unwound cash flow hedging | -3.9 | - | - | -11.7 |
| Unwound fair value hedging | -3.9 | - | - | -1.3 |
| Change in provisions | - | - | - | 6.9 |
| Change in fair values of investment properties | - | - | - | 0.3 |
| Total | -4.8 | 5.5 | - | 0.8 |
The segments’ operating profit
The Bank Group has three segments; Banking Business, Asset Management and Miscellaneous.
Banking Business comprises Aktia Bank plc’s branch office and corporate functions as well as Treasury and the subsidiaries Aktia Real Estate Mortgage Bank plc and Aktia Corporate Finance Ltd.
Asset Management comprises Aktia Bank plc’s Private Banking and the subsidiaries Aktia Asset Management Ltd, Aktia Fund Management Company Ltd and Aktia Invest Ltd.
Miscellaneous comprises administration of Aktia Bank plc and return on equity.
Aktia plc, the parent company of Aktia Bank plc, has changed its division into business segments as of 1 January 2013. Following the merger on 1 July 2013, Aktia Bank plc will, as new parent company of the Aktia Group, apply corresponding segment structure, comprising the segments Banking Business, Asset Management & Life Insurance and Miscellaneous.
Operating profit
| (EUR million) | 1-3/2013 | 1-3/2012 | ∆ % |
| Banking Business | 14.6 | 11.4 | 28% |
| Asset Management | 2.9 | 2.3 | 25% |
| Miscellaneous | -2.2 | -0.5 | -321% |
| Eliminations | 0.1 | -0.8 | - |
| Total | 15.4 | 12.4 | 24% |
Net interest income
| (EUR million) | 1-3/2013 | 1-3/2012 | ∆ % | 2012 |
| Deposits and lending | 10.4 | 15.3 | -32% | 55.1 |
| Hedging, interest rate risk management | 11.1 | 7.2 | 54% | 30.8 |
| Other | 8.3 | 7.0 | 19% | 30.6 |
| Net interets income | 29.8 | 29.5 | 1% | 116.5 |
The impact of fixed rate investment is divided into two components consisting of interest rate risk and credit risk. The interest rate risk component is included in Hedging of interest rate risk whereas the credit risk component is booked as a part of Other net interest income.
Credit stock
Chart 1. Credit stock by sector
| (EUR million) | 31.3.2013 | 31.12.2012 | ∆ | Share, % |
| Households | 6,177 | 6,222 | -45 | 86.0% |
| Corporate | 696 | 713 | -17 | 9.7% |
| Housing associations | 264 | 270 | -7 | 3.7% |
| Non-profit organisations | 39 | 39 | 0 | 0.5% |
| Public sector entities | 4 | 4 | 0 | 0.1% |
| Total | 7,179 | 7,248 | -69 | 100.0% |
| Chart 2. Cross loans and write-downs (EUR million) | 31.3.2013 | 31.12.2012 | 30.9.2012 | 30.6.2012 | 31.3.2012 |
| Gross loans | 7,245 | 7,313 | 7,365 | 7,334 | 7,303 |
| Individual write-downs | -51 | -50 | -48 | -50 | -50 |
| Of which made to non-performing loans past due at least 90 days | -41 | -40 | -39 | -42 | -43 |
| Of which made to other loans | -9 | -10 | -8 | -8 | -7 |
| Write-downs by group | -15 | -15 | -16 | -14 | -14 |
| Net loans, balance amount | 7,179 | 7,248 | 7,301 | 7,270 | 7,240 |
Total write-downs on credits amounted to 0.02 (0.03)% of total lending for the period. The corresponding impact on corporate loans amounted to
0.2 (0.2)% of the total corporate lending.
Chart 3. Undischarged debts by time overdue
| (EUR million) Days | 31.3.2013 | % of stock | 31.12.2012 | % of stock |
| 3-30 | 137 | 1.90 | 133 | 1,83 |
| of which households | 119 | 1.65 | 117 | 1,61 |
| 31-89 | 49 | 0.68 | 51 | 0,71 |
| of which households | 36 | 0.50 | 42 | 0,58 |
| 90- * | 45 | 0.63 | 50 | 0,68 |
| of which households | 30 | 0.42 | 33 | 0,45 |
* in Aktia Bank, fair value of collateral covers 96% of debts
Specification of the fund at fair value
| (EUR million) | 31.3.2013 | 31.12.2012 | ∆ | |
| Shares and participations | 3.6 | 3.6 | 0.0 | |
| Direct interest-bearing securities | 41.6 | 42.0 | -0.4 | |
| Cash flow hedging | 13.0 | 16.2 | -3.3 | |
| Fund at fair value, total | 58.2 | 61.9 | -3.7 | |
The Bank Group’s liquidity portfolio
The Bank Group’s liquidity portfolio and other interest-bearing investments
| Aktia Bank Group | Goverment and Govt. quaranteed | Covered Bonds (CB) | Financial institutions exkl. CB | Corporate bonds | Real estate | Alternative investments | Listed Equity | Total | ||||||||
| 3/13 | 2012 | 3/13 | 2012 | 3/13 | 2012 | 3/13 | 2012 | 3/13 | 2012 | 3/13 | 2012 | 3/13 | 2012 | 3/13 | 2012 | |
| EU AAA | 62 | 75 | 826 | 798 | 287 | 226 | 56 | - | - | - | - | - | - | - | 1,280 | 1,098 |
| Finland | 46 | 59 | 116 | 117 | 92 | 43 | 56 | - | - | - | - | - | - | - | 310 | 218 |
| Other AAA-countries | 16 | 16 | 710 | 681 | 244 | 182 | - | - | - | - | - | - | - | - | 971 | 880 |
| EU < AAA | - | - | 349 | 443 | 60 | 5 | - | - | - | - | - | - | - | - | 409 | 448 |
| France *) | - | - | 291 | 270 | 60 | 5 | - | - | - | - | - | - | - | - | 351 | 275 |
| Belgium | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Greece | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Ireland | - | - | 10 | 16 | - | - | - | - | - | - | - | - | - | - | 10 | 16 |
| Italy | - | - | 48 | 47 | - | - | - | - | - | - | - | - | - | - | 48 | 47 |
| Portugal | - | - | - | 56 | - | - | - | - | - | - | - | - | - | - | - | 56 |
| Spain | - | - | - | 54 | - | - | - | - | - | - | - | - | - | - | - | 54 |
| Other countries | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Europe excluding EU | - | - | 214 | 238 | 17 | 20 | - | - | - | - | - | - | - | - | 231 | 258 |
| North America | - | - | 12 | 12 | - | - | - | - | - | - | - | - | - | 12 | 12 | |
| Other OECD-countries | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | |
| Supernationals | - | - | - | - | 111 | 45 | - | - | - | - | - | - | - | - | 111 | 45 |
| Others | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Total | 62 | 75 | 1,401 | 1,490 | 524 | 297 | 56 | - | - | - | - | - | - | - | 2,043 | 1,862 |
* France fell below AAA during 2012
Rating distribution for banking business’ liquidity portfolio
| 31.3.2013 | 31.12.2012 | |
| (EUR million) | 2,043 | 1,862 |
| Aaa | 59.9% | 64.5% |
| Aa1-Aa3 | 19.5% | 19.1% |
| A1-A3 | 15.9% | 8.9% |
| Baa1-Baa3 | 0.8% | 3.7% |
| Ba1-Ba3 | 0.5% | 1.5% |
| B1-B3 | 0.0% | 0.0% |
| Caa1 or lower | 0.0% | 0.0% |
| Finnish municipalities (unrated) | 1.4% | 2.2% |
| No rating | 2.1% | 0.0% |
| Total | 100.0% | 100.0% |
The Bank Group’s capital adequacy
| Capital adequacy | 31.3.2013 | 31.12.2012 |
| Bank Group | ||
| Capital adequacy | 20.0% | 20.2% |
| Tier 1 ratio | 11.7% | 11.8% |
| Aktia Bank | ||
| Capital adequacy | 26.9% | 28.1% |
| Tier 1 ratio | 15.5% | 16.1% |
| Aktia Real Estate Mortgage Bank | ||
| Capital adequacy | 11.7% | 11.3% |
| Tier 1 ratio | 10.1% | 9.7% |
| Risk exposures for Bank Group | |||||
| Consolidated capital adequacy for Bank Group | |||||
| Summary (EUR million) | 3/2013 | 12/2012 | 9/2012 | 6/2012 | 3/2012 |
| Tier 1 capital | 432.0 | 426.4 | 440.4 | 437.9 | 427.1 |
| Tier 2 capital | 306.2 | 303.8 | 302.1 | 268.0 | 254.5 |
| Capital base | 738.2 | 730.2 | 742.5 | 705.9 | 681.6 |
| Risk-weighted amount for credit and counterpart risks | 3,321.4 | 3,248.9 | 3,355.6 | 3,369.6 | 3,395.0 |
| Risk-weighted amount for market risks 1) | - | - | - | - | - |
| Risk-weighted amount for operational risks | 362.3 | 362.3 | 372.3 | 372.3 | 372.3 |
| Risk-weighted commitments | 3,683.7 | 3,611.2 | 3,727.9 | 3,742.0 | 3,767.3 |
| Capital adequacy ratio, % | 20.0 | 20.2 | 19.9 | 18.9 | 18.1 |
| Tier 1 Capital ratio, % | 11.7 | 11.8 | 11.8 | 11.7 | 11.3 |
| Minimum capital requirement | 294.7 | 288.9 | 298.2 | 299.4 | 301.4 |
| Capital buffer (difference between capital base and minimum requirement) | 443.5 | 441.3 | 444.3 | 406.5 | 380.2 |
| 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) | 3/2013 | 12/2012 | 9/2012 | 6/2012 | 3/2012 |
| Share capital | 163.0 | 163.0 | 163.0 | 163.0 | 163.0 |
| Funds | 74.6 | 74.6 | 74.6 | 74.6 | 74.5 |
| Non-controlling interest | 65.1 | 64.8 | 64.8 | 64.0 | 58.3 |
| Retained earnings | 96.0 | 100.9 | 100.9 | 100.9 | 100.0 |
| Profit for the period | 11.7 | 23.4 | 25.3 | 18.4 | 8.8 |
| ./. provision for dividends to shareholders | -6.2 | -28.3 | -15.9 | -10.6 | -5.3 |
| Capital loan | 30.0 | 30.0 | 30.0 | 30.0 | 30.0 |
| Total | 434.2 | 428.4 | 442.8 | 440.3 | 429.3 |
| ./. intangible assets | -2.2 | -2.0 | -2.3 | -2.4 | -2.2 |
| Tier 1 capital | 432.0 | 426.4 | 440.4 | 437.9 | 427.1 |
| Fund at fair value | 45.2 | 45.6 | 36.9 | 4.4 | 2.9 |
| Upper Tier 2 loans | 45.0 | 45.0 | 45.0 | 45.0 | 45.0 |
| Lower Tier 2 loans | 216.0 | 213.2 | 220.2 | 218.6 | 206.6 |
| Tier 2 capital | 306.2 | 303.8 | 302.1 | 268.0 | 254.5 |
| Total capital base | 738.2 | 730.2 | 742.5 | 705.9 | 681.6 |
| Credit and counterparty risks | ||||||
| Total exposures 3/2013 | ||||||
| Risk-weight | Balance assets | Off-balance sheet commitments | Total | |||
| 0 % | 1,008.1 | 22.8 | 1,030.9 | |||
| 10 % | 1,188.9 | - | 1,188.9 | |||
| 20 % | 808.2 | 129.6 | 937.8 | |||
| 35 % | 5,726.0 | 54.6 | 5,780.6 | |||
| 50 % | 0.1 | - | 0.1 | |||
| 75 % | 534.5 | 87.7 | 622.2 | |||
| 100 % | 548.1 | 36.2 | 584.4 | |||
| 150 % | 13.6 | 0.6 | 14.2 | |||
| Total | 9,827.4 | 331.5 | 10,159.0 | |||
| Derivatives *) | 310.6 | - | 310.6 | |||
| Total | 10,138.0 | 331.5 | 10,469.5 | |||
| *) derivative agreements credit conversion factor | ||||||
| Risk-weighted exposures | (EUR million) | |||||
| Risk-weight | 3/2013 | 12/2012 | 9/2012 | 6/2012 | 3/2012 | |
| 0 % | - | - | - | - | - | |
| 10 % | 118.9 | 125.5 | 133.6 | 120.8 | 125.6 | |
| 20 % | 167.2 | 120.3 | 145.6 | 155.5 | 163.9 | |
| 35 % | 2,011.7 | 2,025.2 | 2,023.4 | 2,008.1 | 1,990.4 | |
| 50 % | 0.0 | 0.1 | 0.3 | 0.3 | 0.3 | |
| 75 % | 418.1 | 428.9 | 437.9 | 439.9 | 437.2 | |
| 100 % | 565.8 | 502.5 | 567.8 | 590.0 | 614.5 | |
| 150 % | 20.9 | 25.9 | 20.3 | 28.5 | 35.3 | |
| Total | 3,302.5 | 3,228.3 | 3,328.8 | 3,343.2 | 3,367.3 | |
| Derivatives *) | 19.0 | 20.6 | 26.8 | 26.5 | 27.7 | |
| Total | 3,321.4 | 3,248.9 | 3,355.6 | 3,369.6 | 3,395.0 | |
| *) derivative agreements credit conversion factor | ||||||
| In capital adequacy measurement to determine the exposure’s risk weight, Aktia applies credit rating by Moody’s Investors Service or Standard & Poor’s to receivables from central goverments and central banks, credit institutions, investment firms, corporates and covered bonds. The risk weight for bank exposures and bonds secured by real estate is determined by the credit rating of the country where the institution is located. | ||||||
| Risk-weighted amounts for operational risks | |||||||||
| 2012 | 2011 | 2010 | 3/2013 | 12/2012 | 9/2012 | 6/2012 | 3/2012 | ||
| Gross income | 183.3 | 187.8 | 208.5 | ||||||
| - average 3 years | 193.2 | ||||||||
| Capital requirement for operational risk | 29.0 | 29.0 | 29.8 | 29.8 | 29.8 | ||||
| Risk-weighted amount | 362.3 | 362.3 | 372.3 | 372.3 | 372.3 | ||||
| The capital requirement for operational risk is 15% of average gross income during the last three years. The risk-weighted amount is calculated by dividing the capital requirement by 8%. | |||||||||
| Derivatives and off-balance sheet commitments | |||
| Derivative instruments at 31 March 2013 (EUR million) | Assets, fair value | Liabilities, fair value | |
| Total nominal amount | |||
| Hedging derivative instruments | |||
| Fair value hedging | |||
| Interet rate-related | 2,760.0 | 133.2 | 25.4 |
| Total | 2,760.0 | 133.2 | 25.4 |
| Cash flow hedging | |||
| Interest rate-related | 75.0 | 0.2 | - |
| Total | 75.0 | 0.2 | - |
| Derivative instruments valued via the income statement | |||
| Interest rate-related *) | 4,003.8 | 134.3 | 133.4 |
| Currency-related | 43.9 | 0.9 | 0.5 |
| Equity-related **) | 77.5 | 2.3 | 2.3 |
| Other derivative instruments **) | 20.8 | 0.0 | 0.0 |
| Total | 4,146.0 | 137.4 | 136.2 |
| Total derivative instruments | |||
| Interest rate-related | 6,838.8 | 267.6 | 158.8 |
| Currency-related | 43.9 | 0.9 | 0.5 |
| Equity-related | 77.5 | 2.3 | 2.3 |
| Other derivative instruments | 20.8 | 0.0 | 0.0 |
| Total | 6,981.0 | 270.8 | 161.6 |
| Derivative instruments at 31 December 2012 (EUR million) | |||
| Total nominal amount | Assets, fair value | Liabilities, fair value | |
| Hedging derivative instruments | |||
| Fair value hedging | |||
| Interest rate-related | 2,837.0 | 149.8 | 34.3 |
| Total | 2,837.0 | 149.8 | 34.3 |
| Cash flow hedging | |||
| Interest rate-related | 75.0 | 0.1 | - |
| Total | 75.0 | 0.1 | - |
| Derivative instruments valued via the income statement | |||
| Interest rate-related *) | 4,280.1 | 150.0 | 149.1 |
| Currency-related | 55.6 | 0.6 | 1.3 |
| Equity-related **) | 102.2 | 1.7 | 1.7 |
| Other derivative instruments **) | 20.8 | 0.1 | 0.1 |
| Total | 4,458.6 | 152.4 | 152.1 |
| Total derivative instruments | |||
| Interest rate-related | 7,192.1 | 299.8 | 183.4 |
| Currency-related | 55.6 | 0.6 | 1.3 |
| Equity-related | 102.2 | 1.7 | 1.7 |
| Other derivative instruments | 20.8 | 0.1 | 0.1 |
| Total | 7,370.6 | 302.2 | 186.4 |
| *) Interest-linked derivatives include interest rate hedging provided for local banks which after back-to-back hedging with third parties amounted to EUR 3,934.0 (4,210.0) million. | |||
| **) All equity-related and other derivative instruments relate to the hedging of structured debt products. | |||
| Off-balance sheet commitments | |||
| (EUR million) | 31.3.2013 | 31.12.2012 | 31.3.2012 |
| Commitments provided to a third party on behalf of the customers | |||
| Guarantees | 34.0 | 34.6 | 41.2 |
| Other commitments provided to a third party | 2.5 | 3.4 | 6.2 |
| Irrevocable commitments provided on behalf of customers | |||
| Unused credit arrangements | 295.0 | 307.6 | 410.6 |
| Off-balance sheet commitments | 331.5 | 345.5 | 458.0 |
Outlook
Aktia Bank is striving to grow slightly more than the market in the sectors focusing on private customers and small companies.
Aktia’ Banks plan of action includes several individual measures and will be realised in steps with the aim of reaching the financial objectives for 2015.
Aktia Bank’s aim is to improve competitiveness and to become the Finnish champion of customer services in selected customer segments. Aktia Bank will continue to strive for efficient and customer-friendly service, and to provide financial solutions for households, business owners, small companies and institutions.
Write-downs on credits are expected to be at the same level as in 2012.
In accordance with the decision taken by the Annual General Meeting of Aktia plc on 9 April 2013, a merger of Aktia plc and Aktia Bank plc is planned on 1 July 2013. Thus Aktia Bank plc becomes the new listed parent company of Aktia Group. As new parent company of the Group Aktia Bank plc will have the same outlook as the present parent company Aktia plc. That is “despite the probably persistent low interest rate level and one-off costs from implementing the 2015 plan of action, the Group’s operating profit from continuing operations for 2013 is expected to reach approximately the 2012 level”.
In 2012, Aktia Group’s operating profit from continuing operations amounted to EUR 56.0 million.
Risks
Aktia’s financial results are affected by many factors, of which the most important are the general economic situation, fluctuations in share prices, interest rates and exchange rates, and the competitive situation. The demand for banking, insurance, asset management and real estate agency services can be changed by these factors.
Changes in interest rates, yield curves and credit margins are hard to predict and can affect Aktia’s interest margins and thus profitability. Aktia is pursuing proactive management of interest rate risks.
Any future write-downs of loans in Aktia’s loan portfolio could be due to many factors, of which the most important are the general economic situation, interest rates, the level of unemployment and changes in house prices.
The availability of liquidity on the money markets is important for Aktia’s refinancing activities. Like other banks, Aktia relies on deposits from households to service some of its liquidity needs.
The market value of Aktia’s financial and other assets can change, among other things as a result of requirements among investors for higher returns.
The financial crisis has resulted in many new initiatives for regulating banking and insurance businesses, which have brought uncertainty concerning future equity and liquidity requirements. The results of the new regulations are likely to be higher capital requirements, sharpened competition for deposits, higher demands on long-term financing, higher fixed costs and, eventually, higher credit margins.
The figures presented in this stock exchange release are unrevised.
Helsinki 7 May 2013
AKTIA BANK PLC
Board of Directors