Bank of Åland Plc
Half-Year Financial Report
July 20, 2018 9:00 am
Half-Year Financial Report for the period January - June 2018
"We performed well during the first half of 2018, achieving our long-term financial targets even though the period was largely dominated by the implementation of extensive new regulations.
"We enjoyed a good influx of new Private Banking customers, especially in Sweden. Because of Swedish housing market instability and pricing levels we are seeing in Finland that are reminiscent of those we saw in our loan portfolio in 2008 - before the financial crisis - we have been more restrictive with new lending."
Peter Wiklöf, Managing Director
January-June 2018 compared to January-June 2017
- Net operating profit increased by 21 per cent to EUR 14.9M (12.3).
- Profit for the period attributable to shareholders increased by 19 per cent to EUR 11.7 M (9.8).
- Net interest income increased by 1 per cent to EUR 27.9 M (27.5).
- Net commission income rose by 3 per cent to EUR 25.8 M (24.9).
- Total expenses decreased by 1 per cent to EUR 49.8 M (50.2).
- Net impairment losses on financial assets (including recoveries) totalled EUR 0.7 M (1.0), equivalent to a loan loss level of 0.03 (0.05) per cent.
- Return on equity after taxes (ROE) amounted to 10.2 (8.8) per cent.
- Earnings per share amounted to EUR 0.76 (0.64).
- The common equity Tier 1 ratio amounted to 12.8 per cent (12.9 on December 31, 2017).
- Unchanged future outlook: The Bank of Åland expects its net operating profit in 2018 to be at about the same level as, or better than, in 2017.
The second quarter of 2018 compared to the second quarter of 2017
- Net operating profit increased by 51 per cent to EUR 7.5 M (5.0).
- Profit for the period attributable to shareholders increased by 50 per cent to EUR 5.9 M (3.9).
- Net interest income increased by 2 per cent to EUR 13.8 M (13.6).
- Net commission income decreased by 2 per cent to EUR 12.6 M (12.8).
- Total expenses decreased by 2 per cent to EUR 24.5 M (25.1).
- Net impairment losses on financial assets (including recoveries) totalled EUR 0.5 M (0.5), equivalent to a loan loss level of 0.05 (0.05) per cent.
- Return on equity after taxes (ROE) amounted to 10.2 (7.0) per cent.
- Earnings per share amounted to EUR 0.38 (0.26).
Financial summary
| Group | Q2 2018 | Q1 2018 | % | Q2 2017 | % | Jan-Jun 2018 | Jan-Jun 2017 | % |
| EUR M | ||||||||
| Income | ||||||||
| Net interest income | 13.8 | 14.1 | -2 | 13.6 | 2 | 27.9 | 27.5 | 1 |
| Net commission income | 12.6 | 13.2 | -4 | 12.8 | -2 | 25.8 | 24.9 | 3 |
| Net income from financial items | 1.7 | 1.5 | 10 | -0.6 | 3.2 | 0.3 | ||
| Other income | 4.4 | 4.1 | 6 | 4.6 | -6 | 8.5 | 10.7 | -21 |
| Total income | 32.5 | 32.9 | -1 | 30.5 | 6 | 65.4 | 63.5 | 3 |
| Staff costs | -14.5 | -15.1 | -4 | -14.9 | -3 | -29.5 | -30.9 | -4 |
| Other expences | -8.3 | -8.4 | -1 | -8.4 | -2 | -16.6 | -16.1 | 3 |
| Depreciation/amortisation | -1.8 | -1.9 | -2 | -1.7 | 7 | -3.7 | -3.3 | 13 |
| Total expenses | -24.5 | -25.3 | -3 | -25.1 | -2 | -49.8 | -50.2 | -1 |
| Profit before impairment losses | 8.0 | 7.6 | 5 | 5.5 | 46 | 15.5 | 13.3 | 17 |
| Impairment losses on financial assets | -0.5 | -0.2 | -0.5 | -10 | -0.7 | -1.0 | -31 | |
| Net operating profit | 7.5 | 7.4 | 2 | 5.0 | 51 | 14.9 | 12.3 | 21 |
| Income taxes | -1.6 | -1.6 | 5 | -1.0 | 58 | -3.2 | -2.5 | 26 |
| Profit for the report period | 5.9 | 5.8 | 1 | 3.9 | 50 | 11.7 | 9.8 | 19 |
| Attributable to: | ||||||||
| Shareholders in Bank of Åland Plc | 5.9 | 5.8 | 1 | 3.9 | 50 | 11.7 | 9.8 | 19 |
| Volume | ||||||||
| Lending to the public | 3.963 | 4.020 | -1 | 3.915 | 1 | |||
| Deposits from the public | 3.095 | 3.098 | 0 | 3.130 | -1 | |||
| Actively managed assets 1 | 5.650 | 5.575 | 1 | 5.475 | 3 | |||
| Equity capital | 230 | 237 | -3 | 224 | 3 | |||
| Balance sheet total | 5.302 | 5.497 | -4 | 5.263 | 1 | |||
| Risk exposure amount | 1.575 | 1.611 | -2 | 1.537 | 2 | |||
| Financial ratios | ||||||||
| Return on equity after taxes, % (ROE) 2 | 10.2 | 10.1 | 7.0 | 10.2 | 8.8 | |||
| Expence/income ratio 3 | 0.75 | 0.77 | 0.82 | 0.76 | 0.79 | |||
| Loan loss level, % 4 | 0.05 | 0.02 | 0.05 | 0.03 | 0.05 | |||
| Liquidity coverage ratio (LCR), % 5 | 135 | 148 | 110 | |||||
| Loan/deposit ratio, % 6 | 128 | 130 | 125 | |||||
| Core funding ratio, % 7 | 90 | 90 | 92 | |||||
| Equity/assets ratio, % 8 | 4.3 | 4.3 | 4.3 | |||||
| Common equity Tier 1 capital ratio, % 9 | 12.8 | 12.5 | 12.5 | |||||
| Earnings per share, EUR 10 | 0.38 | 0.38 | 1 | 0.26 | 49 | 0.76 | 0.64 | 18 |
| Earnings per share after dilution, EUR | 0.38 | 0.37 | 1 | 0.25 | 49 | 0.75 | 0.63 | 19 |
| Equity capital per share, EUR 11 | 14.92 | 15.33 | -3 | 14.60 | 2 | |||
| Equity capital per share after dilution, EUR | 14.81 | 15.22 | -3 | 14.45 | 3 | |||
| Market price per Series A share, EUR | 14.50 | 15.80 | -8 | 14.40 | 1 | |||
| Market price per Series B share, EUR | 13.50 | 14.75 | -8 | 14.20 | -5 | |||
| Number of shares outstanding (not own shares), 000s | 15.448 | 15.447 | 0 | 15.335 | 1 | |||
| Number of shares outstanding (not own shares), after dilution, 000s | 15.586 | 15.585 | 0 | 15.590 | 0 | |||
| Working hours re-calculated to full-time equivalent positions | 693 | 671 | 3 | 680 | 2 | 686 | 685 | 0 |
1 Actively managed assets encompassed managed assets in the Group's own mutual funds, as well as discretionary and advisory securities volume
2 Profit for the report period attributable to shareholders / Average shareholders'portion of equity capital.
3 Expenses / Income.
4 Impaiment losses on loans and other commitments from lending to the public / Lending to the public at the beginning of the period.
5 Liquidity coverage ratio (LCR) = liquid assets, level 1 and 2 / 30-day net outflow
6 Lending to the public / Deposits from the public
7 Lending to the public / Deposits including certificates of deposit, index bonds and debentures issued to the public plus covered bonds issued
8 Equity capital / Balance sheet total.
9 (Common equity Tier 1 capital / Capital requirement) x 8%.
10 Shareholders' portion of earnings for the period / Avarage number of shares.
11 Shareholders' portion of equity capital / Number of shares less own shares on closing day.
IFRS 9 has been applied starting on January 1, 2018. Figures from historical periods have not been restated.
The Bank of Åland
Mariehamn, July 20, 2018
THE BOARD OF DIRECTORS
For more information please contact:
Peter Wiklöf, Managing Director and Chief Executive, Bank of Åland Plc, tel. + 358 (0)40 512 7505
Attachment
- Half-Year Financial Report for the period January - June 2018 (https://prlibrary-eu.nasdaq.com/Resource/Download/f566b2c1-c49e-40ef-944f-3a8358ec0997)
