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Bank of Åland Plc: Interim Report for the period January - September 2018
23 Oct 2018
Stock exchange releases
Bank of Åland Plc: Interim Report for the period January - September 2018
Bank of Åland Plc
Interim Report
October 23, 2018 9.00 am
Interim Report for the period January - September 2018
“During the first nine months of 2018 we improved our net operating profit by 12 per cent to EUR 21.9 M. We achieved this level of earnings in spite of a large-scale implementation of new regulations, a sharply increased EU Single Resolution Fund fee and a significantly weaker Swedish krona, which adversely affected both our business volume and our earnings.“
A few years ago, the Bank of Åland was the first bank in the Nordic countries to begin partnering with new fintech companies. Our first such cooperation was with the company Dreams Nordic – a partnership that has developed nicely. During the third quarter, the Bank of Åland chose to become a part-owner of the company”
Peter Wiklöf, Managing Director
January – September 2018 compared to January – September 2017
- Net operating profit increased by 12 per cent to EUR 21.9 M (19.5).
- Profit for the period attributable to shareholders increased by 11 per cent to EUR 17.2 M (15.5).
- Net interest income decreased by 1 per cent to EUR 41.2 M (41.8).
- Net commission income increased by 2 per cent to EUR 37.8 M (37.1).
- Total expenses decreased by 3 per cent to EUR 72.6 M (74.6).
- Net impairment losses on financial assets (including recoveries) totalled EUR 0.9 M (1.5), equivalent to a loan loss level of 0.03 (0.05) per cent.
- Return on equity after taxes (ROE) amounted to 9.9 (9.2 per cent).
- Earnings per share amounted to EUR 1.12 (1.01).
- The common equity Tier 1 ratio amounted to 13.2 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 third quarter of 2018 compared to the third quarter of 2017
- Net operating profit decreased by 3 per cent to EUR 7.0 M (7.2).
- Profit for the period attributable to shareholders decreased by 3 per cent to EUR 5.6 M (5.8).
- Net interest income decreased by 6 per cent to EUR 13.3 M (14.3).
- Net commission income decreased by 1 per cent to EUR 12.1 M (12.2).
- Total expenses decreased by 7 per cent to EUR 22.7 M (24.4).
- Net impairment losses (including recoveries) totalled EUR 0.3 M (0.6), equivalent to a loan loss level of 0.03 (0.06) per cent.
- Return on equity after taxes (ROE) amounted to 9.4 (10.1) per cent.
- Earnings per share amounted to EUR 0.36 (0.38).
Financial summary
| Group | Q3 2018 | Q2 2018 | % | Q3 2017 | % | Jan-Sep 2018 | Jan-Sep 2017 | % |
| EUR M | ||||||||
| Income | ||||||||
| Net interest income | 13.3 | 13.8 | -4 | 14.3 | -6 | 41.2 | 41.8 | -1 |
| Net commission income | 12.1 | 12.6 | -4 | 12.2 | -1 | 37.8 | 37.1 | 2 |
| Net income from financial items | 0.6 | 1.7 | -67 | 1.8 | -70 | 3.8 | 2.1 | 78 |
| Other income | 4.1 | 4.4 | -7 | 3.9 | 4 | 12.5 | 14.6 | -14 |
| Total income | 30.0 | 32.5 | -8 | 32.2 | -7 | 95.4 | 95.6 | 0 |
| Staff costs | -13.2 | -14.5 | -8 | -14.1 | -6 | -42.8 | -45.0 | -5 |
| Other expences | -7.7 | -8.3 | -7 | -8.3 | -8 | -24.3 | -24.4 | 0 |
| Depreciation/amortisation | -1.8 | -1.8 | 0 | -2.0 | -8 | -5.5 | -5.3 | 5 |
| Total expenses | -22.7 | -24.5 | -7 | -24.4 | -7 | -72.6 | -74.6 | -3 |
| Profit before impairment losses | 7.3 | 8.0 | -9 | 7.8 | -6 | 22.8 | 21.1 | 8 |
| Net impairment losses on financial assets | -0.3 | -0.5 | -44 | -0.6 | -55 | -0.9 | -1.5 | -40 |
| Net operating profit | 7.0 | 7.5 | -7 | 7.2 | -3 | 21.9 | 19.5 | 12 |
| Income taxes | -1.5 | -1.6 | -11 | -1.5 | 0 | -4.7 | -4.0 | 17 |
| Profit for the report period | 5.6 | 5.9 | -5 | 5.8 | -3 | 17.2 | 15.5 | 11 |
| Attributable to: | ||||||||
| Shareholders in Bank of Åland Plc | 5.6 | 5.9 | -5 | 5.8 | -3 | 17.2 | 15.5 | 11 |
| Volume | ||||||||
| Lending to the public | 3,978 | 3,963 | 0 | 3,967 | 0 | |||
| Deposits from the public | 3,085 | 3,095 | 0 | 3,230 | -4 | |||
| Actively managed assets 1 | 5,849 | 5,650 | 4 | 5,700 | 3 | |||
| Equity capital | 237 | 230 | 3 | 230 | 3 | |||
| Balance sheet total | 5,484 | 5,302 | 3 | 5,356 | 2 | |||
| Risk exposure amount | 1,565 | 1,575 | -1 | 1,553 | 1 | |||
| Financial ratios | ||||||||
| Return on equity after taxes, % (ROE) 2 | 9.4 | 10.2 | 10.1 | 9.9 | 9.2 | |||
| Expence/income ratio 3 | 0.76 | 0.75 | 0.76 | 0.76 | 0.78 | |||
| Loan loss level, % 4 | 0.03 | 0.05 | 0.06 | 0.03 | 0.05 | |||
| Liquidity coverage ratio (LCR), % 5 | 131 | 135 | 109 | |||||
| Loan/deposit ratio, % 6 | 129 | 128 | 123 | |||||
| Core funding ratio, % 7 | 91 | 90 | 91 | |||||
| Equity/assets ratio, % 8 | 4,3 | 4,3 | 4.3 | |||||
| Common equity Tier 1 capital ratio, % 9 | 13.2 | 12.8 | 12.6 | |||||
| Earnings per share, EUR 10 | 0.36 | 0.38 | -5 | 0.38 | -4 | 1.12 | 1.01 | 10 |
| Earnings per share after dilution, EUR | 0.36 | 0.38 | -5 | 0.37 | -3 | 1.11 | 1.00 | 11 |
| Equity capital per share, EUR 11 | 15.34 | 14.92 | 3 | 14.98 | 2 | |||
| Equity capital per share after dilution, EUR | 15.25 | 14.81 | 3 | 14.82 | 3 | |||
| Market price per Series A share, EUR | 14.70 | 14.50 | 1 | 14.86 | -1 | |||
| Market price per Series B share, EUR | 13.85 | 13.50 | 3 | 14.90 | -7 | |||
| Number of shares outstanding (not own shares), 000s | 15,472 | 15,448 | 0 | 15,335 | 1 | |||
| Number of shares outstanding (not own shares), after dilution, 000s | 15,580 | 15,586 | 0 | 15,588 | 0 | |||
| Working hours re-calculated to full-time equivalent positions | 702 | 693 | 1 | 702 | 0 | 689 | 691 | 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 thepublic
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 (Ålandsbanken) follows the disclosure procedure stipulated in "Disclosure obligation of the issuer (7/2013)", published by the Finnish Financial Supervisory Authority and hereby publishes its Interim Report for the period January – September 2018, which is enclosed with this stock exchange release. The Bank`s Interim Report for the period January – September 2018 is attached to this release in PDF format and is also available on the company’s web site at https://www.alandsbanken.com/uploads/pdf/result/en_resultat_jan-sep_18.pdf
Mariehamn, October 23, 2018
THE BOARD OF DIRECTORS
For more information please contact:
Peter Wiklöf, Managing Director and Chief Executive, Bank of Åland, tel. + 358 (0)40 512 7505
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23.10.2018