The report on 2021 operations for the period January 1 – December 31
January -
Compared to January -
- Net operating profit increased by 24 per cent to
EUR 49.2 M (39.7). - Net interest income increased by 6 per cent to
EUR 62.2 M (58.9). - Net commission income increased by 19 per cent to
EUR 79.0 M (66.3). - Total expenses increased by 15 per cent to
EUR 121.9 M (105.6). - Net impairment losses on financial assets (including recoveries) totalled
EUR 4.9 M (4.9), equivalent to a loan loss level of 0.12 (0.11) per cent. - Retuon equity after taxes (ROE) increased to 14.0 (11.6) per cent.
- Earnings per share increased by 26 per cent to
EUR 2.55 (2.02). - The common equity Tier 1 capital ratio decreased to 12.1 per cent (14.3 per cent on
December 31 , 2020). - Dividend: The Board of Directors proposes that the Annual General Meeting approve payment of a regular dividend of
EUR 1.55 per share for the 2021 financial year, equivalent to a 61 per cent payout ratio, plus an extra dividend ofEUR 0.45 per share. - Future outlook: The Bank of Åland expects its net operating profit in 2022 to be about the same as in 2021.
The fourth quarter of 2021
Compared to the fourth quarter of 2020
- Net operating profit decreased by 17 per cent to
EUR 10.2 M (12.3). - Net interest income increased by 9 per cent to
EUR 16.2 M (14.9). - Net commission income increased by 16 per cent to
EUR 21.5 M (18.5). - Total expenses increased by 17 per cent to
EUR 32.5 M (27.8). - Net impairment losses on financial assets (including recoveries) totalled
EUR 3.5 M (0.0), equivalent to a loan loss level of 0.30 (-0.04) per cent. - Retuon equity after taxes (ROE) decreased to 10.6 (13.6) per cent.
- Earnings per share decreased by 19 per cent to
EUR 0.51 (0.63).
"We can report yet another year of strong volume growth: deposits +13 per cent and lending +9 per cent. The investments we manage for our customers grew during the year by 32 per cent to
"Because of the improvement in earnings, combined with our new financial targets, we are proposing a 55 per cent increase in the dividend to
"We have a continued strong momentum, and during 2021 we were also pleased to be ranked as number 1 in Private Banking in
Placeringsvolym4‐quarter moving net operating profit
EUR M
50 |
||||
45 |
||||
40 |
||||
35 |
||||
30 |
||||
25 |
||||
20 |
||||
Q4 |
Q1 |
Q2 |
Q3 |
Q4 |
2020 |
2021 |
2021 |
2021 |
2021 |
4‐quarter moving ROE
Per cent |
||||
16 |
||||
14 |
||||
12 |
||||
10 |
||||
8 |
||||
6 |
||||
4 |
||||
2 |
||||
0 |
||||
Q4 |
Q1 |
Q2 |
Q3 |
Q4 |
2020 |
2021 |
2021 |
2021 |
2021 |
Common equity Tier 1 ratio
Per cent |
||||
16 |
||||
14 |
||||
12 |
||||
10 |
||||
8 |
||||
6 |
||||
4 |
||||
2 |
||||
0 |
||||
Q4 |
Q1 |
Q2 |
Q3 |
Q4 |
2020 |
2021 |
2021 |
2021 |
2021 |
Peter Wiklöf, Managing Director and Chief Executive
The Bank of Åland is a bank with strong customer relationships and personalised service. The Bank has extensive financial investment expertise and at the same time can offer good
financing services. The commercial bank was founded in 1919 and has been listed on the
The Bank of Åland's Head Office is in Mariehamn. The Bank has two offices in the Åland Islands, six offices elsewhere in
Two subsidiaries, whose operations are connected in various ways to banking, belong to the Bank of Åland Group.
Bank of Åland Plc. Registered office: Mariehamn Address: Nygatan 2, AX-22100 Mariehamn, Åland,
Business Identity Code: 0145019-3. Telephone: +358 204 29 011. Website: www.alandsbanken.fi
Financial summary
Group |
Q4 |
Q3 |
% |
Q4 |
% |
Jan-Dec |
Jan-Dec |
% |
2021 |
2021 |
2020 |
2021 |
2020 |
||||
EUR M |
||||||||
Income |
||||||||
Net interest income |
16.2 |
15.5 |
5 |
14.9 |
9 |
62.2 |
58.9 |
6 |
Net commission income |
21.5 |
19.1 |
13 |
18.5 |
16 |
79.0 |
66.3 |
19 |
Net income from financial items at fair value |
1.5 |
-1.7 |
0.4 |
-0.4 |
1.8 |
|||
Other income |
7.0 |
12.3 |
-43 |
6.3 |
11 |
35.2 |
23.1 |
52 |
Total income |
46.2 |
45.2 |
2 |
40.1 |
15 |
176.0 |
150.1 |
17 |
Staff costs |
-18.0 |
-17.1 |
5 |
-16.9 |
7 |
-71.1 |
-62.9 |
13 |
Other expenses |
-10.3 |
-8.3 |
25 |
-7.9 |
31 |
-36.5 |
-30.3 |
20 |
Depreciation/amortisation |
-4.1 |
-4.3 |
-5 |
-3.1 |
34 |
-14.3 |
-12.3 |
16 |
Total expenses |
-32.5 |
-29.8 |
9 |
-27.8 |
17 |
-121.9 |
-105.6 |
15 |
Profit before impairment losses |
13.8 |
15.4 |
-11 |
12.3 |
12 |
54.1 |
44.6 |
21 |
Impairment losses on financial assets, net |
-3.5 |
-0.8 |
0.0 |
-4.9 |
-4.9 |
1 |
||
Net operating profit |
10.2 |
14.6 |
-30 |
12.3 |
-17 |
49.2 |
39.7 |
24 |
Income taxes |
-2.3 |
-2.5 |
-9 |
-2.5 |
-10 |
-9.3 |
-8.2 |
14 |
Profit for the report period |
7.9 |
12.1 |
-34 |
9.8 |
-19 |
39.9 |
31.5 |
27 |
Attributable to: |
||||||||
Shareholders in Bank of Åland Plc |
7.9 |
12.1 |
-34 |
9.8 |
-19 |
39.8 |
31.5 |
27 |
Volume |
||||||||
Lending to the public |
4,788 |
4,591 |
4 |
4,378 |
9 |
|||
Deposits from the public |
4,070 |
3,836 |
6 |
3,605 |
13 |
|||
Actively managed assets 1 |
9,826 |
8,922 |
10 |
7,436 |
32 |
|||
Equity capital |
332 |
322 |
3 |
292 |
14 |
|||
Balance sheet total |
6,635 |
6,353 |
4 |
6,035 |
10 |
|||
Risk exposure amount |
1,976 |
1,884 |
5 |
1,671 |
18 |
|||
Financial ratios |
||||||||
Retuon equity after taxes, % (ROE) 2 |
10.6 |
16.7 |
13.6 |
14.0 |
11.6 |
|||
Retuon equity after taxes, % (ROE), moving 12- |
||||||||
month average to end of report period |
14.0 |
14.8 |
11.6 |
|||||
Expense/income ratio 3 |
0.70 |
0.66 |
0.69 |
0.69 |
0.70 |
|||
Loan loss level, % 4 |
0.30 |
0.07 |
-0.04 |
0.12 |
0.11 |
|||
Gross share of loans in Stage 3, % 5 |
1.23 |
1.19 |
0.89 |
|||||
Liquidity coverage ratio (LCR), % 6 |
152 |
149 |
159 |
|||||
Net stable funding ratio (NSFR), % 7 |
109 |
109 |
106 |
|||||
Loan/deposit ratio, % 8 |
118 |
120 |
121 |
|||||
Common equtiy Tier 1 capital ratio, % 9 |
12.1 |
13.5 |
14.3 |
|||||
Tier 1 capital ratio, % 10 |
13.6 |
15.1 |
14.3 |
|||||
Total capital ratio, % 11 |
15.4 |
16.2 |
16.5 |
|||||
Leverage ratio, % 12 |
4.3 |
4.8 |
4.2 |
|||||
Earnings per share, EUR 13 |
0.51 |
0.77 |
-34 |
0.63 |
-19 |
2.55 |
2.02 |
26 |
Earnings per share, EUR, moving 12-month average |
||||||||
to end of report period |
2.55 |
2.67 |
-4 |
2.02 |
26 |
|||
Equity capital per share, EUR 14 |
19.39 |
18.74 |
3 |
18.76 |
3 |
|||
Working hours re-calculated to full-time equivalent |
||||||||
positions |
817 |
836 |
-2 |
770 |
6 |
815 |
751 |
9 |
1 Actively managed assets encompassed managed assets in the Group's own mutual
funds, as well as discretionary and advisory securities volume plus external funds with contractual earnings
2 Profit for the report period attributable to shareholders / Average shareholders´portion of equity capital
3 Expenses / Income
4 Impairment losses on loan portfolio and other commitments / Lending to the public at the beginning of the period
5 Share of loans in Stage 3 / Gross lending to the public
6 LCR, assets at levels 1 and 2 / 30-day net cash outflow
7 Available stable funding / Stable funding requirement 8 Lending to the public / Deposits from the public
9 Common equity Tier 1 capital / Risk exposure amount
10 Tier 1 capital / Risk exposure amount
11 Own funds / Risk exposure amount
12 Tier 1 capital / Total exposure metric
13 Shareholders' portion of the profit for the period / Average number of shares 14 Shareholders' portion of equity capital / Number of shares on closing day
Bank of Åland Plc Year-end Report, January-December20212
Comments
MACRO SITUATION
The COVID-19 (coronavirus) pandemic dominated 2021 as well. The pandemic initially faded in our area of operations and most restrictions were lifted, but late in the year the Omicron variant struck with great force, with new restrictions as a consequence.
Fiscal and monetary stimulus measures have been large. The economic recovery has been strong. For the local economy in the Åland Islands, the record-strong summer tourist season represented a welcome positive injection.
During 2021 long-term market yields began to move higher, but short-term market interest rates - which are more important to the Bank of Åland's net interest income - remained at record- low levels. Central banks in
BENCHMARK INTEREST RATES, AVERAGES, PER CENT
Q4 2021 |
Q3 2021 |
Q4 2020 |
||
Euribor 3 mo |
-0.57 |
-0.55 |
-0.52 |
|
Euribor 12 mo |
-0.49 |
-0.49 |
-0.48 |
|
Stibor 3 mo |
-0.09 |
-0.02 |
-0.08 |
|
BENCHMARK INTEREST RATES, ANNUAL AVERAGES, PER CENT |
||||
2021 |
2020 |
|||
Euribor 3 mo |
-0.55 |
-0.43 |
||
Euribor 12 mo |
-0.49 |
-0.30 |
||
Stibor 3 mo |
-0.04 |
-0.03 |
During 2021 share prices according to the
The average value of the Swedish krona (SEK) in relation to the euro (EUR) was 3 per cent higher during 2021 than in the year- earlier period and 2 per cent lower than at year-end 2020. When converting the income statement of the Bank's Swedish operations into euros, the average exchange rate for the period has been used, while the balance sheet has been converted at the exchange rate prevailing on the closing day of the report period.
IMPORTANT EVENTS
On
On
The AGM also decided to authorise the Board to approve acquisitions of no more than 1,500,000 of the Bank of Åland's Series B shares. This is equivalent to about 10 per cent of all shares in the Company and about 16.4 per cent of all Series B shares in the Company. The Company's own shares may be acquired in order to change the Company's capital structure, to be used as consideration in acquisitions of companies or
sectoral reorganisations or as part of the Company's incentive programmes and may otherwise be transferred onward, be kept by the Company or be annulled. The shares may be acquired in one or more rounds.
The AGM re-elected the Board, consisting of
In March, for the first time ever the Bank of Åland issued an additional Tier 1 (AT1) capital instrument, totalling
In December, for the first time ever the Bank of Åland issued a green Tier 2 (T2) supplementary capital instrument, totalling
During the report period, the number of Series B shares outstanding increased by 16,249 as a result of the Bank's obligations within the framework of its employee incentive programmes.
During the period, the Bank of Åland opened a new office in Oulu on the Finnish mainland.
In
Together with its customers, the Bank of Åland is continuing its commitment to a cleaner
For the eighth consecutive year, the Bank of Åland (Ålandsbanken)
Bank of Åland Plc Year-end Report, January-December20213
On
In August the Bank of Åland sold its shareholding in the company Åland Index Solution as well as intellectual property (IP) rights to the Åland Index to Doconomy, a Swedish-based fintech company. The Bank of Åland still has a significant ownership in Doconomy.
EARNINGS FOR JANUARY -
Net operating profit rose by
49.2 M (39.7). About
Profit for the period attributable to shareholders increased by
Retuon equity after taxes (ROE) increased to 14.0 per
Total income rose by
Net interest income rose by
Net commission income rose by
Net income on financial items fell by
Information technology (IT) income rose by
Other income included nonrecurring positive effects related to associated companies and divestment of IP rights.
Total expenses increased by
Total net impairment losses on financial assets were unchanged and amounted to
Tax expense amounted to
EARNINGS FOR THE FOURTH QUARTER OF 2021
Net operating profit fell by
Profit for the period attributable to shareholders decreased by
Retuon equity after taxes (ROE) decreased to 10.6 per
Total income rose by
Net interest income rose by
Net commission income rose by
21.5 M (18.5), mainly due to higher income from the Bank's asset management business.
Net income on financial items rose by
IT income rose by
Other income included positive effects related to associated companies.
Total expenses increased by
Total net impairment losses on financial assets increased by EUR
3.5 M to
Tax expense amounted to
OPERATING SEGMENTS
The Group's
49.2 M was allocated as follows:
∙ |
Private Banking |
-1.3 (higher impairment provisions) |
∙ |
Premium Banking |
+5.3 (lower impairment provisions) |
∙ |
IT |
-2.6 (higher expenses and earn-out) |
∙ |
Corporate Units |
+8.1 (mainly nonrecurring effects) |
& Eliminations |
BUSINESS VOLUME
Actively managed assets on behalf of customers increased by
Deposits from the public rose by 13 per cent compared to year- end 2020 and amounted to
Lending to the public increased by 9 per cent compared to year- end 2020 and totalled
All these business volume figures were the highest recorded in the Bank of Åland's history.
Bank of Åland Plc Year-end Report, January-December20214
CREDIT QUALITY
Lending to private individuals comprised 78 per cent of the loan portfolio. Home mortgage loans accounted for 76 per cent of this. Loans for the purchase of securities, with market-listed securities as collateral, comprised the second-largest type of lending to individuals. Historically, the Bank of Åland has not had any substantial loan losses on this type of lending. The corporate portfolio has a close affinity with the retail portfolio, since many of the companies are owned by customers who, as individuals, are also Private Banking customers.
The Bank of Åland Group had
Stage 3 loans as a share of gross lending to the public totalled
1.23 per
LIQUIDITY AND BORROWING
The Bank of Åland's liquidity reserve in the form of cash and deposits with the central bank, account balances and investments with other banks, liquid interest-bearing securities plus holdings of unencumbered covered bonds issued by the Bank amounted to
In September the Bank of Åland carried out an early redemption of
In September
On
The loan/deposit ratio amounted to 118 (121) per cent.
Of the Bank of Åland's external funding sources aside from equity capital, deposits from the public accounted for 66 (64) per cent and covered bonds issued accounted for 19 (16) per cent.
The liquidity coverage ratio (LCR) amounted to 152 (159) per cent.
The net stable funding ratio (NSFR) amounted to 109 (106) per cent.
RATING
The Bank of Åland had a credit rating from the Standard & Poor's Global Ratings agency of BBB/A-2 with a positive outlook for its long- and short-term borrowing. Covered bonds issued by the Bank of Åland have a credit rating of
EQUITY AND CAPITAL ADEQUACY
During the report period, equity capital changed in the amount of profit for the period,
Other comprehensive income included re-measurements of defined-benefit pension plans by
Common equity Tier 1 capital rose by
The risk exposure amount increased by 18 per cent during the report period and totalled
The common equity Tier 1 (CET1) capital ratio decreased to 12.1 (14.3) per cent.
The Tier 1 (T1) capital ratio, which had previously always been identical with the CET1 capital ratio, rose due to the issuance of AT1 instruments totalling
The total capital ratio decreased to 15.4 (16.5) per cent.
A mitigation measure in the calculation of the leverage ratio has been introduced, exempting exposures to central banks with relevance for the transmission of monetary policy. The Bank of Åland has taken this into account in its calculation of the leverage ratio, which amounted to 4.3 (4.2) per cent on
In addition to the basic capital requirement, various buffer requirements apply. These are mainly imposed by national regulatory authorities. Due to the coronavirus crisis, several of these buffer requirements have been lowered. The capital conservation buffer requirement, 2.5 per cent of common equity Tier 1 capital, applies in all
2.5 per cent. For Finnish and Swedish exposures, the requirement remains 0.0 per cent. However, the
Bank of Åland Plc Year-end Report, January-December20215
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