Bank of Åland Plc STOCK EXCHANGE RELEASE 24.08.2009 09.00 hrs
Interim report for the period January - June 2009
The report period in brief
- Consolidated net operating profit increased by 134 per cent to 27.6 million
euros (January - June 2008: EUR 11.8 M)
- Recognition of negative goodwill from the purchase of Ålandsbanken Sverige AB
improved income by EUR 22.5 M, while operational earnings at Ålandsbanken
Sverige AB pulled down consolidated income by EUR 2.7 M
- Net interest income decreased by 8 per cent to EUR 19.2 M (20.9)
- Commission income increased by 28 per cent to EUR 13.0 M (10.2)
- Net income from securities transactions and foreign exchange dealing rose to
EUR 3.9 M (1.0)
- Total income increased by 14 per cent to EUR 42.4 M (37.1)
- Expenses rose by 39 per cent to EUR 35.3 M (25.3)
- Loan losses amounted to EUR 2.2 M (0.2)
- Lending volume increased by 14 per cent to EUR 2,428 M (June 2008: 2,127)
- Deposits increased by 14 per cent to EUR 2,401 M (June 2008: 2,110)
- Mutual fund assets under management amounted to EUR 647 M (318)
- Return on equity after taxes (ROE) was 34.3 (13.0) per cent
- The expense/income ratio including negative goodwill was 58 (68) per cent
- The total capital ratio in compliance with Basel 2 amounted to 12.7 (12.1) per
cent
- Earnings per share amounted to EUR 2.18 (0.71)
EARNINGS AND PROFITABILITY
This Interim Report has been prepared in compliance with the International
Financial Reporting Standards (IFRSs) that have been adopted by the European
Union, as well as in compliance with International Accounting Standard (IAS) 34,
“Interim Financial Reporting”.
Earnings summary for the report period
Ålandsbanken Sverige AB (encompassing Ålandsbanken Sverige AB, Ålandsbanken
Fonder AB and Alpha Management Company S.A. and based in Sweden) was
consolidated in the Bank of Åland Group on June 30, 2009, and its earnings
during the period April 1 − June 30, 2009 are included in the consolidated
financial statements. This affects comparability with the corresponding period
of last year. The allocation between the Group's Finnish and Swedish business
areas can be found in the table entitled “Earnings, newly acquired operations”
on page 9.
During January-June 2009, the consolidated net operating profit of the Bank of
Åland Group increased by 134 per cent to EUR 27.6 M (11.8 in the corresponding
period of 2008). During the report period, the Group recognised EUR 22.5 M in
negative goodwill as income, due to its purchase of Kaupthing Bank Sverige AB.
Net interest income was lower than in the corresponding period last year because
of falling interest rates. Net income from securities transactions and foreign
exchange dealing as well as other operating income were higher than last year.
Income (excluding negative goodwill) increased by 14 per cent to EUR 42.4 M
(37.1), while expenses rose by 39 per cent to EUR 35.3 M (25.3). Return on
equity after taxes (ROE) increased to 34.3 (13.0) percent, and earnings per
share to EUR 2.18 (0.71).
Net interest income
During the report period, consolidated net interest income decreased by 8 per
cent to EUR 19.2 M (20.9) due to lower interest rates, despite a higher volume
of deposits and lending. During the period, margins on lending showed a
continued positive trend. Ålandsbanken Sverige AB had net interest income of EUR
1.1 M. Lending volume rose by 14 per cent to EUR 2,428 M (2,127), while deposit
volume increased by 14 per cent to EUR 2,401 M (2,110).
Other income
Commission income rose by 28 per cent to EUR 13.0 M (10.2). Income from
securities, mutual fund and asset management commissions rose during the report
period. Commission income at Ålandsbanken Sverige AB amounted to EUR 3.3 M.
Net income from securities trading for the Bank's own account was EUR 2.9 M
(0.5). Valuation and realisation of value increases in interest rate hedging
derivatives (the Bank of Åland does not apply hedge accounting) resulted in a
positive nonrecurring effect of EUR 2.4 M during the first quarter. Net income
from dealing in the foreign exchange market increased to EUR 1.1 M (0.5). Net
income from financial assets available for sale was EUR 0.1 M (0.1), and net
income from investment properties was EUR 0.2 M (0.2). Other operating income
increased to EUR 7.3 M (5.7) as a consequence of higher income from the sale and
development of information technology (IT) systems.
During the report period, the Bank of Åland Plc bought Kaupthing Bank Sverige AB
in Sweden, now Ålandsbanken Sverige AB (encompassing Kaupthing Bank Sverige AB,
Kaupthing Fonder AB and Alpha Management Company S.A.). The acquisition analysis
showed that the net assets acquired after restructuring expenses amounted to EUR
57.2 M and the cost of the shares, including the purchase price and
acquisition-related expenses, amounted to EUR 34.7 M. Negative goodwill of EUR
22.5 M was recognised as income in the Bank of Åland Group financial statements
during the second quarter. For detailed information about the acquisition
analysis, see Note 4 under “Notes to the consolidated interim report” on page
12.
The Group's total income including negative goodwill increased by 75 per cent to
EUR 64.9 M (37.1).
Expenses
Staff costs rose by 40 per cent to EUR 20.0 M (14.2) as a consequence of the
acquisition of Ålandsbanken Sverige AB plus salary hikes as provided by
collective agreements. Staff costs at Ålandsbanken Sverige AB amounted to EUR
4.4 M. Changes in the Bank's pension fund, Ålandsbanken Abp:s Pensionsstiftelse,
according to the corridor approach affected staff costs in the amount of EUR 0.0
M (-0.1).
Other administrative expenses (office, marketing, communications and IT)
increased to EUR 7.5 M (5.5). Production for own use totalled EUR -0.3 M (-0.2)
and was related to expenses for computer software, which in accordance with
IFRSs must be capitalised. Depreciation/amortisation increased to EUR 3.2 M
(2.8). Other operating expenses amounted to EUR 5.1 M (3.0).
The Group's total expenses rose by 39 per cent to EUR 35.3 M (25.3).
Impairment losses on loans and other commitments
Loan losses amounted to EUR 2.2 M (0.2). Of these, EUR 0.7 M were individually
targeted impairment losses and EUR 1.5 M a group impairment loss targeted to the
real estate industry.
Second quarter of 2009
Compared to the second quarter of 2008, the Group's net operating profit rose by
248 per cent to EUR 21.3 M (Q II 2008: 6.1).
Income
Total income (excluding negative goodwill) increased by 16 per cent to EUR 22.1
M (19.0). Lower interest rates led to in a decrease in net interest income of 6
per cent to EUR 10.1 M (10.7), despite higher deposit and lending volume.
Commission income improved, amounting to EUR 8.1 M (5.1). Commission income on
securities and asset management improved during the period. Net income from
securities trading and foreign exchange operations increased to EUR 0.8 M (0.4).
Other operating income increased to EUR 3.9 M (3.1) as a consequence of higher
income from IT operations.
Expenses
Total expenses increased by 68 per cent to EUR 21.5 M (12.8). During the
quarter, staff costs amounted to EUR 12.3 M (7.1). The number of employees in
the Group increased as a consequence of the purchase of Ålandsbanken Sverige AB,
while salary hikes were implemented as provided by collective agreements. Other
administrative expenses increased to EUR 4.6 M (2.9) during the second quarter,
primarily because of higher external computer expenses. Due to increased
property expenses and rents, other operating expenses rose to EUR 3.0 M (1.6).
Balance sheet total and off-balance sheet obligations
At the end of the report period, the Group's balance sheet total was EUR 3,152 M
(2,768). During the period, the Group issued debenture loans 1/2009 and 2/2009
in the amount of EUR 34 M. With the permission of the Finnish Financial
Supervisory Authority and in compliance with the terms of the loan, the Group
carried out an early redemption of debenture loan 2/2004, which it had issued in
June 2004. Off-balance sheet obligations rose to EUR 298 M (176).
Personnel
Hours worked in the Group, recalculated to full-time equivalent positions,
totalled 582 (499) during January − June 2009. This represented an increase by
83 positions compared to the year-earlier period. The increase was due to the
acquisition of Ålandsbanken Sverige AB. The number of employees at Ålandsbanken
Sverige AB on June 30, 2009 was 174.
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| Bank of Åland Group | Jun 30 | Jun 30 |
| | 2009 | 2008 |
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| Bank of Åland Plc (Ålandsbanken Abp) | 308 | 328 |
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| Ab Compass Card Oy Ltd | 5 | 6 |
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| Crosskey Banking Solutions Ab Ltd | 152 | 137 |
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| Ålandsbanken Asset Management Ab | 18 | 14 |
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| Ålandsbanken Fondbolag Ab | 6 | 6 |
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| Ålandsbanken Equities Ab | 6 | 0 |
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| Ålandsbanken Sverige AB | 87 | 0 |
--------------------------------------------------------------------------------
| Ålandsbanken Veranta Ab | 0 | 8 |
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| Total number of full-time equivalent positions, | 582 | 499 |
| recalculated from hours worked | | |
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Expense/income ratio
Efficiency measured as expenses divided by income, including and excluding loan
losses, respectively:
--------------------------------------------------------------------------------
| Bank of Åland Group | Jun 30 | Jun 30 |
| | 2009 | 2008 |
--------------------------------------------------------------------------------
| Including negative goodwill | | |
--------------------------------------------------------------------------------
| Including loan losses | 0.58 | 0.68 |
--------------------------------------------------------------------------------
| Excluding loan losses | 0.54 | 0.68 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Excluding negative goodwill | | |
--------------------------------------------------------------------------------
| Including loan losses | 0.88 | 0.68 |
--------------------------------------------------------------------------------
| Excluding loan losses | 0.83 | 0.68 |
--------------------------------------------------------------------------------
Capital adequacy
The Group is reporting capital adequacy in accordance with Pillar 1 in the Basel
2 regulations. The Group's total capital ratio at the end of June 2009 was 12.7
per cent. The capital requirement for credit risks has been calculated according
to the standardised approach, and the capital requirement for operational risks
according to the basic indicator approach in the Basel 2 regulations.
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| Bank of Åland Group | Jun 30 | Jun 30 | Dec 31 |
| | 2009 | 2008 | 2008 |
--------------------------------------------------------------------------------
| Capital base, EUR M euro | | | |
--------------------------------------------------------------------------------
| Core capital 1 | 125.9 | 104.0 | 112.4 |
--------------------------------------------------------------------------------
| Supplementary capital | 70.0 | 50.0 | 53.4 |
--------------------------------------------------------------------------------
| Total capital base | 195.9 | 154.0 | 165.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Capital requirements for credit risks | 108.3 | 92.6 | 95.9 |
--------------------------------------------------------------------------------
| Capital requirement for operational risks | 14.6 | 9.3 | 9.3 |
--------------------------------------------------------------------------------
| Capital requirement for market risks | 0.5 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Total capital requirement | 123.4 | 101.9 | 105.1 |
--------------------------------------------------------------------------------
| Total capital ratio, % | 12.7 | 12.1 | 12.6 |
--------------------------------------------------------------------------------
| Core capital ratio, % | 8.2 | 8.2 | 8.6 |
--------------------------------------------------------------------------------
| 1 Profit for the period minus estimated dividends paid. |
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Deposits
Deposits from the public, including bonds and certificates of deposit issued,
continued to increase during January - June 2009. On June 30, 2009, deposits
totalled EUR 2,401 M (2,110), an increase of 14 per cent, of which EUR 261 M
consisted of deposits at Ålandsbanken Sverige AB. Deposit accounts rose by 18
per cent to EUR 2,027 M (1,720). Bonds and certificates of deposit issued to the
public decreased by 4 per cent to EUR 374 M (390).
Lending
During the 12 months to June 30, 2009, the volume of lending to the public
increased by 14 per cent to EUR 2,428 M (2,127). The volume of lending at
Ålandsbanken Sverige AB was EUR 158 M. Lending to households increased by 12 per
cent to EUR 1,648 M (1,474). Households accounted for 68 (69) per cent of the
Group's total lending volume. Lending to companies rose by 20 per cent to EUR
756 M (628).
Ab Compass Card Oy Ltd
Ab Compass Card Oy Ltd is a subsidiary of the Bank of Åland Plc. The mission of
the company is to issue credit and debit cards to private and institutional
customers. The company is in its start-up phase and did not have operating
income during the report period. The company currently has 6 employees and
offices in Mariehamn and Helsinki.
Crosskey Banking Solutions Ab Ltd
Crosskey Banking Solutions Ab Ltd is a wholly-owned subsidiary of the Bank of
Åland Plc. The mission of the company is to develop, sell and maintain banking
computer systems to financial market players in Northern Europe, focusing on
comprehensive solutions and efficient banking processes. Among Crosskey's
current customers are DnB NOR, S-Bank, Tapiola Bank, the Bank of Åland, eQ Bank
and Ålands Penningautomatförening. The earnings trend was good in the first
half, and company earnings were above budget. Crosskey currently has 174
employees and offices in Mariehamn, Turku, Helsinki and Stockholm.
Ålandsbanken Asset Management Ab
Ålandsbanken Asset Management Ab is a subsidiary of the Bank of Åland Plc. The
company offers asset management services to institutions and private
individuals. The company also manages all of the Bank of Åland's mutual funds.
The company currently has about 500 customers and EUR 800 M in managed assets.
Earnings in the first six months of 2009 were lower than in the same period of
last year, but full-year earnings are expected to exceed 2008 earnings.
Ålandsbanken Equities Ab
Ålandsbanken Equities Ab is a subsidiary of the Bank of Åland Plc. The company
offers equity analysis and stock brokerage services to institutional investors.
The company has an office in Helsinki. In July, the subsidiary Ålandsbanken
Equities Research Ab was established; it will take charge of equity analysis.
Ålandsbanken Fondbolag Ab
Ålandsbanken Fondbolag Ab is a wholly-owned subsidiary of the Bank of Åland Plc.
The company carries out mutual fund (unit trust) operations and at present
manages 11 mutual funds, which are registered in Finland. Its strategy is to
ensure that its mutual funds are competitive and tailored to the investment
needs of Bank of Åland customers. The performance of its mutual fund assets in
the first half of 2009 was divided. From January to March, managed assets shrank
due to a negative trend for both the equity and fixed income investments of the
funds, as well as some net outflow of assets. In April to June, a strong
recovery occurred in both the equities and fixed income markets. Prices rose
rapidly. Combined with a return influx of investors with assets, the outcome was
that total managed assets in the Bank of Åland's mutual funds rose by 6.9 per
cent to EUR 251.9 M (from EUR 235.7 M on Dec. 31, 2008). During the first half
of 2009, the total number of unit holders also increased by 9.4 per cent to
15,421 (from 14,097 on Dec. 31, 2008).
Ålandsbanken Sverige AB
Ålandsbanken Sverige AB is a wholly-owned subsidiary of the Bank of Åland Plc.
The company has operations in private banking, asset management, stock brokerage
and institutional equities trading. Ålandsbanken Sverige AB has EUR 261 M in
deposits from the public, EUR 158 M in lending volume and EUR 396 M in managed
mutual fund assets. Ålandsbanken Sverige AB currently has 174 employees and
offices in Stockholm, Gothenburg and Malmö, Sweden.
Important events after the close of the report period
Ålandsbanken Equities Research Ab was established as a subsidiary of
Ålandsbanken Equities Ab.
Outlook for 2009
Two thousand nine will be very challenging for all financial market players. The
Bank of Åland expects its operating earnings in Finland to fall as a consequence
of further weakening of net interest income, due to very low interest rates and
continued low activity in capital markets.
The acquisition of Kaupthing Bank Sverige AB will have a significant positive
nonrecurring effect on the Group's earnings during the year. Operational
activities in Sweden will pull down 2009 earnings, however.
Overall, we expect consolidated earnings to be substantially better than in
2008.
It should again be emphasised that great uncertainty prevails in the global
financial system. Combined with the acquisition of Kaupthing Bank Sverige, this
means that the outlook for the future is burdened with greater uncertainty than
normal.
The Group's assessment of the outlook for 2009 is based on its assumptions about
future developments in the fixed income and financial markets. However, general
interest rates, the demand for lending, the trend of the capital and financial
markets and the competitive situation, as well as the general economic
situation, are factors that the Group cannot influence.
Financial information in 2009
Interim reports will be published as follows in 2009
January-September 2009 Monday, October 26, 2009
Mariehamn, August 21, 2009
THE BOARD OF DIRECTORS
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| FINANCIAL RATIOS ETC. |
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| Bank of Åland Group | Jan-Jun | Jan-Jun | Full year |
| | 2009 | 2008 | 2008 |
--------------------------------------------------------------------------------
| Earnings per share before dilution, | 2.18 | 0.71 | 1.22 |
| EUR 1 | | | |
--------------------------------------------------------------------------------
| Earnings per share after dilution, | 2.18 | 0.71 | 1.22 |
| EUR 2 | | | |
--------------------------------------------------------------------------------
| Market price per share, end of | | | |
| period, EUR | | | |
--------------------------------------------------------------------------------
| Series A | 28.50 | 29.50 | 26.60 |
--------------------------------------------------------------------------------
| Series B | 22.00 | 25.00 | 17.24 |
--------------------------------------------------------------------------------
| Equity capital per share, EUR 3 | 13.63 | 11.18 | 11.87 |
--------------------------------------------------------------------------------
| Return on equity after taxes, % (ROE) | 34.3 | 13.0 | 10.7 |
| 4 | | | |
--------------------------------------------------------------------------------
| Return on total assets, % (ROA) 5 | 1.7 | 0.6 | 0.5 |
--------------------------------------------------------------------------------
| Equity/assets ratio, % 6 | 5.0 | 4.7 | 5.0 |
--------------------------------------------------------------------------------
| Total lending volume, EUR M | 2,428 | 2,127 | 2,193 |
--------------------------------------------------------------------------------
| Total deposits from the public, EUR M | 2,401 | 2,110 | 2,126 |
--------------------------------------------------------------------------------
| Equity capital, EUR M | 158 | 130 | 138 |
--------------------------------------------------------------------------------
| Balance sheet total, EUR M | 3,152 | 2,768 | 2,770 |
--------------------------------------------------------------------------------
| Expense/income ratio | | | |
--------------------------------------------------------------------------------
| Including loan losses | 0.88 | 0.68 | 0.73 |
--------------------------------------------------------------------------------
| Excluding loan losses | 0.83 | 0.68 | 0.70 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1 Profit for the period before dilution / Average number of shares |
--------------------------------------------------------------------------------
| 2 Profit for the period after dilution / (Average number of shares + shares |
| outstanding) |
--------------------------------------------------------------------------------
| 3 Equity capital − minority share of capital / Number of shares on balance |
| sheet date |
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| 4 (Net operating profit - taxes) / Average equity capital |
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| 5 (Net operating profit - taxes) / Average balance sheet total |
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| 6 Equity capital / Balance sheet total |
--------------------------------------------------------------------------------
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| SUMMARY STATEMENT OF FINANCIAL POSITION |
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| Bank of Åland Group | Jun 30 | Jun 30 | Dec 31 |
| | 2009 | 2008 | 2008 |
--------------------------------------------------------------------------------
| EUR M | | | |
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| ASSETS | | | |
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| Cash | 87 | 60 | 79 |
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| Debt securities eligible for | 144 | 131 | 146 |
| refinancing with central banks | | | |
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| Claims on credit institutions | 198 | 202 | 123 |
--------------------------------------------------------------------------------
| Claims on the public and public sector | 2,428 | 2,127 | 2,193 |
| entities | | | |
--------------------------------------------------------------------------------
| Debt securities | 126 | 131 | 131 |
--------------------------------------------------------------------------------
| Shares and participations | 23 | 3 | 3 |
--------------------------------------------------------------------------------
| Shares and participations in | 1 | 2 | 1 |
| associated companies | | | |
--------------------------------------------------------------------------------
| Derivative instruments | 17 | 22 | 15 |
--------------------------------------------------------------------------------
| Intangible assets | 5 | 6 | 5 |
--------------------------------------------------------------------------------
| Tangible assets | 36 | 29 | 36 |
--------------------------------------------------------------------------------
| Other assets | 57 | 31 | 11 |
--------------------------------------------------------------------------------
| Accrued income and prepayments | 27 | 24 | 25 |
--------------------------------------------------------------------------------
| Deferred tax assets | 2 | 1 | 1 |
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| | | | |
--------------------------------------------------------------------------------
| TOTAL ASSETS | 3,152 | 2,768 | 2,770 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| LIABILITIES | | | |
--------------------------------------------------------------------------------
| Liabilities to credit institutions | 119 | 82 | 71 |
--------------------------------------------------------------------------------
| Liabilities to the public and public | 2,028 | 1,722 | 1,758 |
| sector entities | | | |
--------------------------------------------------------------------------------
| Debt securities issued to the public | 661 | 683 | 665 |
--------------------------------------------------------------------------------
| Derivative instruments | 9 | 4 | 6 |
--------------------------------------------------------------------------------
| Other liabilities | 62 | 53 | 41 |
--------------------------------------------------------------------------------
| Accrued expenses and prepaid income | 37 | 25 | 18 |
--------------------------------------------------------------------------------
| Subordinated liabilities | 59 | 52 | 53 |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 20 | 16 | 19 |
--------------------------------------------------------------------------------
| TOTAL LIABILITIES | 2,994 | 2,637 | 2,631 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| EQUITY CAPITAL AND MINORITY INTERESTS | | | |
--------------------------------------------------------------------------------
| Share capital | 23 | 23 | 23 |
--------------------------------------------------------------------------------
| Share premium account | 33 | 33 | 33 |
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| Reserve fund | 25 | 25 | 25 |
--------------------------------------------------------------------------------
| Fair value reserve | 3 | 0 | 2 |
--------------------------------------------------------------------------------
| Retained earnings | 73 | 48 | 54 |
--------------------------------------------------------------------------------
| Equity capital attributable to the | 157 | 129 | 137 |
| owners of the parent | | | |
--------------------------------------------------------------------------------
| Equity capital attributable to | 1 | 1 | 2 |
| minority interests | | | |
--------------------------------------------------------------------------------
| TOTAL EQUITY CAPITAL | 158 | 130 | 138 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL LIABILITIES AND EQUITY CAPITAL | 3,152 | 2,768 | 2,770 |
--------------------------------------------------------------------------------
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| SUMMARY STATEMENT OF COMPREHENSIVE INCOME |
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| Bank of Åland Group | Jan-Jun | Jan-Jun | Full year |
| | 2009 | 2008 | 2008 |
--------------------------------------------------------------------------------
| EUR M | | | |
--------------------------------------------------------------------------------
| Net interest income | 19.2 | 20.9 | 42.1 |
--------------------------------------------------------------------------------
| Income from equity investments | 0.0 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Commission income | 13.0 | 10.2 | 18.6 |
--------------------------------------------------------------------------------
| Commission expenses | -1.4 | -1.1 | -2.2 |
--------------------------------------------------------------------------------
| Net income from securities transactions | 3.9 | 1.0 | 3.3 |
| and foreign exchange dealing | | | |
--------------------------------------------------------------------------------
| Net income from financial assets | 0.1 | 0.1 | -0.1 |
| available for sale | | | |
--------------------------------------------------------------------------------
| Net income from investment properties | 0.2 | 0.2 | 0.1 |
--------------------------------------------------------------------------------
| Other operating income | 7.3 | 5.7 | 12.4 |
--------------------------------------------------------------------------------
| Total income | 42.4 | 37.1 | 74.2 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Staff costs | -20.0 | -14.2 | -28.3 |
--------------------------------------------------------------------------------
| Other administrative expenses | -7.5 | -5.5 | -11.0 |
--------------------------------------------------------------------------------
| Production for own use | 0.3 | 0.2 | 0.5 |
--------------------------------------------------------------------------------
| Depreciation/amortisation | -3.2 | -2.8 | -5.9 |
--------------------------------------------------------------------------------
| Other operating expenses | -5.1 | -3.0 | -7.4 |
--------------------------------------------------------------------------------
| Total expenses | -35.3 | -25.3 | -52.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Impairment losses on loans and other | -2.2 | -0.2 | -2.3 |
| commitments | | | |
--------------------------------------------------------------------------------
| Share of profit/loss in associated | 0.2 | 0.2 | 0.2 |
| companies | | | |
--------------------------------------------------------------------------------
| Negative goodwill | 22.5 | 0.0 | |
--------------------------------------------------------------------------------
| Net operating profit | 27.6 | 11.8 | 20.0 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Income taxes | -2.2 | -3.1 | -5.4 |
--------------------------------------------------------------------------------
| Profit for the period | 25.4 | 8.6 | 14.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other comprehensive income | | | |
--------------------------------------------------------------------------------
| Assets available for sale | 0.4 | -1.1 | 1.8 |
--------------------------------------------------------------------------------
| Valuation differences | 0.7 | 0.0 | 2.8 |
--------------------------------------------------------------------------------
| Income tax on other comprehensive | -0.1 | 0.3 | -0.5 |
| income | | | |
--------------------------------------------------------------------------------
| Total comprehensive income for the | 26.4 | 7.8 | 15.9 |
| period | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Profit for the period attributable to | 25.1 | 8.2 | 14.0 |
| owners of the parent | | | |
--------------------------------------------------------------------------------
| Profit for the period attributable to | 0.3 | 0.5 | 0.6 |
| minority interests | | | |
--------------------------------------------------------------------------------
| Total | 25.4 | 8.6 | 14.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total comprehensive income for the | 26.1 | 7.4 | 15.3 |
| period attributable to owners of the | | | |
| parent | | | |
--------------------------------------------------------------------------------
| Total comprehensive income for the | 0.3 | 0.4 | 0.6 |
| period attributable to minority | | | |
| interests | | | |
--------------------------------------------------------------------------------
| Total | 26.4 | 7.8 | 15.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share |
--------------------------------------------------------------------------------
| Earnings per share before dilution, | 2.18 | 0.71 | 1.22 |
| EUR1 | | | |
--------------------------------------------------------------------------------
| Earnings per share after dilution, EUR2 | 2.18 | 0.71 | 1.22 |
--------------------------------------------------------------------------------
| 1 Profit for the period before dilution / Average number of shares |
--------------------------------------------------------------------------------
| 2 Profit for the period after dilution / (Average number of shares + shares |
| outstanding) |
--------------------------------------------------------------------------------
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| QUARTERLY DATA, EARNINGS |
--------------------------------------------------------------------------------
| Bank of Åland Group | Q II | Q I | Q IV | Q III | Q II |
| | 2009 | 2009 | 2008 | 2008 | 2008 |
--------------------------------------------------------------------------------
| EUR M | | | | | |
--------------------------------------------------------------------------------
| Net interest income | 10.1 | 9.1 | 10.7 | 10.5 | 10.7 |
--------------------------------------------------------------------------------
| Income from equity investments | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Commission income | 8.1 | 5.0 | 4.6 | 3.8 | 5.1 |
--------------------------------------------------------------------------------
| Commission expenses | -0.9 | -0.5 | -0.6 | -0.5 | -0.6 |
--------------------------------------------------------------------------------
| Net income from securities | 0.8 | 3.1 | 2.4 | -0.1 | 0.4 |
| transactions and foreign | | | | | |
| exchange dealing | | | | | |
--------------------------------------------------------------------------------
| Net income from financial assets | 0.1 | 0.0 | -0.3 | 0.0 | 0.1 |
| available for sale | | | | | |
--------------------------------------------------------------------------------
| Net income from investment | 0.0 | 0.2 | 0.0 | 0.0 | 0.1 |
| properties | | | | | |
--------------------------------------------------------------------------------
| Other operating income | 3.9 | 3.4 | 3.4 | 3.2 | 3.1 |
--------------------------------------------------------------------------------
| Total income | 22.1 | 20.4 | 20.3 | 16.9 | 19.0 |
--------------------------------------------------------------------------------
| |
--------------------------------------------------------------------------------
| Staff costs | -12.3 | -7.6 | -7.4 | -6.8 | -7.1 |
--------------------------------------------------------------------------------
| Other administrative expenses | -4.6 | -2.9 | -3.1 | -2.3 | -2.9 |
--------------------------------------------------------------------------------
| Production for own use | 0.2 | 0.2 | 0.2 | 0.1 | 0.1 |
--------------------------------------------------------------------------------
| Depreciation/amortisation | -1.7 | -1.4 | -1.5 | -1.6 | -1.3 |
--------------------------------------------------------------------------------
| Other operating expenses | -3.0 | -2.0 | -2.9 | -1.5 | -1.6 |
--------------------------------------------------------------------------------
| Total expenses | -21.5 | -13.8 | -14.6 | -12.2 | -12.8 |
--------------------------------------------------------------------------------
| |
--------------------------------------------------------------------------------
| Impairment losses on loans and | -1.8 | -0.4 | -1.9 | -0.2 | -0.2 |
| other commitments | | | | | |
--------------------------------------------------------------------------------
| Share of profit/loss in | 0.1 | 0.1 | -0.1 | 0.0 | 0.1 |
| associated companies | | | | | |
--------------------------------------------------------------------------------
| Negative goodwill | 22.5 | 0.0 | 0.0 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Net operating profit | 21.3 | 6.3 | 3.7 | 4.5 | 6.1 |
--------------------------------------------------------------------------------
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| EARNINGS, NEWLY ACQUIRED OPERATIONS |
--------------------------------------------------------------------------------
| Bank of Åland Group | Apr-Jun | Jan-Jun | Jan-Jun | Jan-Jun |
| | 2009 | 2009 | 2009 | 2008 |
--------------------------------------------------------------------------------
| EUR M | Sweden | Finland | Total | Total |
--------------------------------------------------------------------------------
| Net interest income | 1.1 | 18.1 | 19.2 | 20.9 |
| | | | | |
--------------------------------------------------------------------------------
| Income from equity investments | 0.0 | 0.0 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Commission income | 3.3 | 9.7 | 13.0 | 10.2 |
| | | | | |
--------------------------------------------------------------------------------
| Commission expenses | -0.4 | -1.1 | -1.4 | -1.1 |
--------------------------------------------------------------------------------
| Net income from securities | 0.3 | 3.6 | 3.9 | 1.0 |
| transactions and foreign exchange | | | | |
| dealing | | | | |
--------------------------------------------------------------------------------
| Net income from financial assets | 0.0 | 0.1 | 0.1 | 0.1 |
| available for sale | | | | |
--------------------------------------------------------------------------------
| Net income from investment | 0.0 | 0.2 | 0.2 | 0.2 |
| properties | | | | |
--------------------------------------------------------------------------------
| Other operating income | 0.8 | 6.5 | 7.3 | 5.7 |
| | | | | |
--------------------------------------------------------------------------------
| Total income | 5.1 | 37.3 | 42.4 | 37.1 |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| Staff costs | -4.4 | -15.5 | -20.0 | -14.2 |
| | | | | |
--------------------------------------------------------------------------------
| Other administrative expenses | -2.0 | -5.5 | -7.5 | -5.5 |
| | | | | |
--------------------------------------------------------------------------------
| Production for own use | 0.0 | 0.3 | 0.3 | 0.2 |
--------------------------------------------------------------------------------
| Depreciation/amortisation | -0.2 | -2.9 | -3.2 | -2.8 |
| | | | | |
--------------------------------------------------------------------------------
| Other operating expenses | -1.0 | -4.1 | -5.1 | -3.0 |
| | | | | |
--------------------------------------------------------------------------------
| Total expenses | -7.6 | -27.7 | -35.3 | -25.3 |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| Impairment losses on loans and | -0.3 | -1.9 | -2.2 | -0.2 |
| other commitments | | | | |
--------------------------------------------------------------------------------
| Share of profit/loss in associated | 0.0 | 0.2 | 0.2 | 0.2 |
| companies | | | | |
--------------------------------------------------------------------------------
| Negative goodwill | 0.0 | 22.5 | 22.5 | 0.0 |
--------------------------------------------------------------------------------
| Net operating profit | -2.7 | 30.4 | 27.6 | 11.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| SUMMARY CASH FLOW STATEMENT |
--------------------------------------------------------------------------------
| Bank of Åland Group | Jan-Jun | Jan-Jun |
| | 2009 | 2008 |
--------------------------------------------------------------------------------
| EUR M | | | | |
--------------------------------------------------------------------------------
| Cash flow from operating activities | | | | |
--------------------------------------------------------------------------------
| Net operating profit | 27.6 | | 11.8 | |
--------------------------------------------------------------------------------
| Adjustment for net operating profit | 7.3 | | 4.0 | |
| items not affecting cash flow | | | | |
--------------------------------------------------------------------------------
| Gains/losses from investing activities | -0.3 | | -0.1 | |
--------------------------------------------------------------------------------
| Income taxes paid | -2.0 | | -1.2 | |
--------------------------------------------------------------------------------
| Changes in assets and liabilities in | -87.7 | -55.4 | 115.2 | 129.7 |
| operating activities | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from investing activities1 | | 28.9 | | -5.5 |
--------------------------------------------------------------------------------
| Cash flow from financing activities | | -14.4 | | -31.3 |
--------------------------------------------------------------------------------
| Change in cash and cash equivalents | | -40.9 | | 92.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash and cash equivalents, January 1 | | 323.5 | | 255.0 |
--------------------------------------------------------------------------------
| Cash and cash equivalents, June 30 | | 282.6 | | 347.9 |
--------------------------------------------------------------------------------
| 1 Disbursed for the purchase of Kaupthing Bank Sverige AB, EUR 38.9 M. Cash |
| and cash equivalents in Kaupthing Bank Sverige AB amounted to EUR 63.5 M. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| STATEMENT OF CHANGES IN EQUITY | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Bank of Åland Group |
--------------------------------------------------------------------------------
| EUR M |
--------------------------------------------------------------------------------
| | Shar | Shar | Rese | Fair | Trans | Reta | Total | Mino | Total |
| | e | e | rve | valu | latio | ined | befor | rity | |
| | capi | prem | fund | e | n | earn | e | inte | |
| | tal | ium | | rese | diffe | ings | minor | rest | |
| | | acco | | rve | rence | | ity | s | |
| | | unt | | | | | inter | | |
| | | | | | | | ests | | |
--------------------------------------------------------------------------------
| Equity | 23.3 | 33.3 | 25.1 | 0.4 | 0.0 | 51.1 | 133.1 | 1.8 | 135.0 |
| capital, | | | | | | | | | |
| Dec 31, | | | | | | | | | |
| 2007 | | | | | | | | | |
--------------------------------------------------------------------------------
| Comprehens | | | | -0.8 | | 8.2 | 7.4 | 0.5 | 7.8 |
| ive income | | | | | | | | | |
| for the | | | | | | | | | |
| period | | | | | | | | | |
--------------------------------------------------------------------------------
| Dividend | | | | | | -11. | -11.5 | -1.0 | -12.5 |
| paid | | | | | | 5 | | | |
--------------------------------------------------------------------------------
| Equity | 23.3 | 33.3 | 25.1 | -0.5 | 0.0 | 47.7 | 128.9 | 1.3 | 130.3 |
| capital, | | | | | | | | | |
| Jun 30, | | | | | | | | | |
| 2008 | | | | | | | | | |
--------------------------------------------------------------------------------
| Comprehens | | | | 2.2 | | 5.8 | 8.0 | 0.2 | 8.2 |
| ive income | | | | | | | | | |
| for the | | | | | | | | | |
| period | | | | | | | | | |
--------------------------------------------------------------------------------
| Dividend | | | | | | 0.0 | 0.0 | 0.0 | 0.0 |
| paid | | | | | | | | | |
--------------------------------------------------------------------------------
| Other | | | | | | | 0.0 | 0.1 | 0.1 |
| changes in | | | | | | | | | |
| equity | | | | | | | | | |
| capital | | | | | | | | | |
| attributab | | | | | | | | | |
| le to | | | | | | | | | |
| minority | | | | | | | | | |
| interests | | | | | | | | | |
--------------------------------------------------------------------------------
| Equity | 23.3 | 33.3 | 25.1 | 1.7 | 0.0 | 53.6 | 137.0 | 1.6 | 138.6 |
| capital, | | | | | | | | | |
| Dec 31, | | | | | | | | | |
| 2008 | | | | | | | | | |
--------------------------------------------------------------------------------
| Comprehens | | | | 0.3 | 0.7 | 25.1 | 26.1 | 0.3 | 26.4 |
| ive income | | | | | | | | | |
| for the | | | | | | | | | |
| period | | | | | | | | | |
--------------------------------------------------------------------------------
| Dividend | | | | | | -5.8 | -5.8 | -0.9 | -6.7 |
| paid | | | | | | | | | |
--------------------------------------------------------------------------------
| Equity | 23.3 | 33.3 | 25.1 | 2.0 | 0.7 | 72.9 | 157.3 | 1.0 | 158.3 |
| capital, | | | | | | | | | |
| June 30, | | | | | | | | | |
| 2009 | | | | | | | | | |
--------------------------------------------------------------------------------
NOTES TO THE CONSOLIDATED INTERIM REPORT
1. CORPORATE INFORMATION
The Bank of Åland Plc (Ålandsbanken Abp) is a Finnish public company, organised
in compliance with Finnish legislation and with its Head Office in Mariehamn.
The Bank of Åland Plc is a commercial bank with a total of 27 offices. Through
its subsidiary Crosskey Banking Solutions Ab Ltd, the Bank of Åland Group is
also a supplier of modern banking computer systems for small and medium-sized
banks.
The Head Office has the following address:
Bank of Åland Plc
Nygatan 2
AX-22100 Mariehamn, Åland, Finland
The shares of the Bank of Åland Plc are traded on the Nasdaq OMX Helsinki Oy
(Helsinki Stock Exchange).
The Interim Report for the financial period January 1-June 30, 2009 was approved
by the Board of Directors on August 21, 2009.
2. BASIS FOR PREPARATION AND ESSENTIAL ACCOUNTING PRINCIPLES
Basis for preparation
This Interim Report for the period January 1-June 30, 2009 has been prepared in
compliance with the International Financial Reporting Standards (IFRSs) that
have been adopted by the European Union, as well as in compliance with
International Accounting Standard (IAS) 34, “Interim Financial Reporting”.
The Interim Report does not contain all information and notes required in annual
financial statements and should be read together with the consolidated financial
statements for the year ending December 31, 2008.
Essential accounting principles
The essential accounting principles used in preparing the Interim Report are the
same as the essential accounting principles used in preparing the financial
statements for the year ending December 31, 2008, except for the introduction of
new standards and interpretations, which are described below. The introduction
of new standards and interpretations has not materially affected the Group's
results or financial position.
Subsidiaries outside Finland
In the consolidated financial statements, the income statements and cash flow
statements of subsidiaries outside Finland have been translated to euros
according to the average exchange rates for the report period. The translation
of balance sheet items to euros is performed using the exchange rates on the
balance sheet date. The translation differences that arise are recognised in the
equity capital of the Group.
New accounting standards and norms in effect starting in 2009:
IAS 1, “Presentation of Financial Statements”
The standard has been revised in order to provide better information for
analysis and comparison of companies. The Group is presenting its financial
statements in compliance with the revised IAS 1 for the financial period that
begins on January 1, 2009.
IFRS 8, “Operating Segments”
The standard requires that a company provide financial and descriptive
disclosures about its operating segments. IFRS 8 replaces IAS 14, “Segment
Reporting”. The Group is presenting its financial statements in compliance with
IFRS 8 for the financial period that begins on January 1, 2009.
3. ESTIMATES AND JUDGEMENTS
Preparation of financial statements in compliance with IFRSs requires the
company's Executive Team to make estimates and judgements that affect the
recognised amounts of assets and liabilities, income and expenses as well as
disclosures and commitments. Although these estimates are based on the best
knowledge of the Executive Team on current events and measures, the actual
outcome may diverge from the estimates.
--------------------------------------------------------------------------------
| 4. BUSINESS COMBINATIONS |
| During the report period, the Bank of Åland Group made the following |
| acquisitions of companies, which are reported in compliance with IFRS 3, |
| “Business Combinations”. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Names of companies | Sector | Date of | Share of | Cost |
| | | acquisition | equity | |
| | | | capital | |
--------------------------------------------------------------------------------
| EUR M |
--------------------------------------------------------------------------------
| Kaupthing Bank | Asset manager | March 27, | 100% | |
| Sverige AB | | 2009 | | |
--------------------------------------------------------------------------------
| Kaupthing Fonder | Mutual fund | March 27, | 100% | |
| AB | manager | 2009 | | |
--------------------------------------------------------------------------------
| Alpha Management | Mutual fund | March 27, | 100% | |
| Company S.A. | manager | 2009 | | |
--------------------------------------------------------------------------------
| Kaupthing Bank | | | | 34.7 |
| Sverige | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Allocation of cost |
--------------------------------------------------------------------------------
| EUR M | Kaupthing Bank |
| | Sverige |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash | 35.2 |
--------------------------------------------------------------------------------
| Direct acquisition-related expenses | 3.7 |
--------------------------------------------------------------------------------
| Purchase price settlement | -4.2 |
--------------------------------------------------------------------------------
| | 34.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net assets acquired |
--------------------------------------------------------------------------------
| EUR M | Kaupthing Bank Sverige |
--------------------------------------------------------------------------------
| | Fair value | Carrying |
| | | amount |
--------------------------------------------------------------------------------
| Claims on credit institutions | 84.9 | 84.9 |
--------------------------------------------------------------------------------
| Claims on the public | 208.4 | 208.9 |
--------------------------------------------------------------------------------
| Shares and participations | 24.6 | 24.6 |
--------------------------------------------------------------------------------
| Other assets | 42.2 | 42.2 |
--------------------------------------------------------------------------------
| Liabilities | 303.0 | 303.0 |
--------------------------------------------------------------------------------
| Net assets acquired | 57.2 | |
--------------------------------------------------------------------------------
| Negative goodwill | 22.5 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Ålandsbanken Sverige AB earned income of EUR -2.7 M after being acquired. |
| The negative goodwill that arose was reported as income in the |
| Bank of Åland Group's income statement on the line ”Negative goodwill”. The |
| Bank of Åland was contacted in 2008 concerning the purchase of Kaupthing |
| Bank Sverige AB. As a result of the situation surrounding the purchase, |
| negative goodwill arose at the Bank of Åland. |
--------------------------------------------------------------------------------
| During Q2, a more exact acquisition analysis has been completed, primarily |
| concerning the need for the provisions that have been made. Settlement is |
| being negotiated and may be adjusted. If Ålandsbanken Sverige AB had been |
| part of the Bank of Åland Group from January 1, 2009, the Group's Earnings |
| would have been EUR 5.1 M lower. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Restructuring reserve | |
--------------------------------------------------------------------------------
| Bank of Åland Group | Mar 31 | Utilise | Withdraw | Jun 30 |
| | | d | n | |
--------------------------------------------------------------------------------
| EUR M | 2009 | | | 2009 |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| Staff costs | 6.2 | -1.5 | 0.0 | 4.6 |
--------------------------------------------------------------------------------
| Rent for premises | 2.7 | -0.4 | -0.7 | 1.7 |
--------------------------------------------------------------------------------
| IT | 0.7 | -0.1 | 0.0 | 0.7 |
--------------------------------------------------------------------------------
| Total | 9.7 | -2.0 | -0.7 | 7.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Goodwill |
--------------------------------------------------------------------------------
| EUR | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Opening balance |
--------------------------------------------------------------------------------
| Gross | 1,372,988 | 1,405,260 |
--------------------------------------------------------------------------------
| | 1,372,988 | 1,405,260 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Goodwill recognised during the report period | 0 | 34,373 |
--------------------------------------------------------------------------------
| Impairment | 0 | -66,645 |
--------------------------------------------------------------------------------
| Closing balance | 1,372,988 | 1,372,988 |
--------------------------------------------------------------------------------
5. OPERATING SEGMENTS
The Bank of Åland Group reports operating segments in compliance with IFRS 8,
which means that operating segments reflect the information that the Group's
Executive Team receives. The Finland segment includes the Bank of Åland Plc, Ab
Compass Card Oy Ltd, Ålandsbanken Asset Management Ab, Ålandsbanken Equities Ab,
Ålandsbanken Fondbolag Ab and Veranta Ab. The Sweden segment includes
Ålandsbanken Sverige AB, Ålandsbanken Fonder AB and Alpha Management Company
S.A. In each operating segment, “Other staff costs” are recognised as staff
costs while in the external financial statements they are recognised as “Other
administrative expenses” and IT depreciation/amortisation is recognised as
“Other expenses” while in the external financial statements they are recognised
as “Depreciation/amortisation”.
--------------------------------------------------------------------------------
| Bank of Åland Group | Jan-Jun 2009 |
--------------------------------------------------------------------------------
| EUR M | Finland | Sweden | Crosskey | Eliminat | Total |
| | | | | ions | |
--------------------------------------------------------------------------------
| Deposits, lending | 19.3 | 0.5 | 0.0 | 0.0 | 19.7 |
| and portfolio | | | | | |
| management | | | | | |
--------------------------------------------------------------------------------
| Of which impairment | -1.9 | -0.3 | 0.0 | 0.0 | -2.2 |
| losses, loans | | | | | |
--------------------------------------------------------------------------------
| Capital market | 7.3 | 3.0 | 0.0 | 0.0 | 10.3 |
| products/services | | | | | |
--------------------------------------------------------------------------------
| Other income | 2.8 | 1.4 | 12.8 | -6.6 | 10.3 |
--------------------------------------------------------------------------------
| Staff costs | -10.5 | -4.7 | -5.6 | 0.0 | -20.8 |
--------------------------------------------------------------------------------
| Other expenses | -8.9 | -2.7 | -4.9 | 4.8 | -11.7 |
--------------------------------------------------------------------------------
| Depreciation/amortis | -2.5 | -0.2 | -0.4 | 0.4 | -2.8 |
| ation | | | | | |
--------------------------------------------------------------------------------
| Negative goodwill | 22.5 | 0.0 | 0.0 | 0.0 | 22.5 |
--------------------------------------------------------------------------------
| NET OPERATING PROFIT | 30.0 | -2.7 | 1.8 | -1.5 | 27.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Assets | 2,812.9 | 374.6 | 12.3 | -47.3 | 3,152.4 |
--------------------------------------------------------------------------------
| Liabilities | 2,673.8 | 319.0 | 7.3 | -6.0 | 2,994.1 |
--------------------------------------------------------------------------------
| Equity capital | 139.1 | 55.6 | 5.0 | -41.4 | 158.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
6. INCOME TAXES
--------------------------------------------------------------------------------
| Bank of Åland Group | Jun 30 | Jun 30 |
| | 2009 | 2008 |
--------------------------------------------------------------------------------
| EUR M | | |
--------------------------------------------------------------------------------
| Taxes for the report period and earlier report | 2.5 | 3.3 |
| periods | | |
--------------------------------------------------------------------------------
| Change in deferred tax assets and liabilities | -0.3 | -0.2 |
--------------------------------------------------------------------------------
| Income taxes | 2.2 | 3.1 |
--------------------------------------------------------------------------------
7. DIVIDEND
--------------------------------------------------------------------------------
| Bank of Åland Group | 2008 | 2007 |
| | | |
--------------------------------------------------------------------------------
| EUR | | |
--------------------------------------------------------------------------------
| Final dividend for 2008: EUR 0.50 per share | 5,768,061 | |
--------------------------------------------------------------------------------
| Final dividend for 2007: EUR 1.00 per share | | 11,536,122 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| The dividend for 2008 was adopted by the Annual General Meeting on March 26, |
| 2009. The record date was March 31 and the distribution date was April 7. |
--------------------------------------------------------------------------------
8. DEPOSITS FROM THE PUBLIC AND PUBLIC SECTOR,
--------------------------------------------------------------------------------
| Including bonds and certificates of deposit issued |
--------------------------------------------------------------------------------
| Bank of Åland Group | Jun 30 | Jun 30 | Dec 31 |
| | 2009 | 2008 | 2008 |
--------------------------------------------------------------------------------
| EUR M | | | |
--------------------------------------------------------------------------------
| Deposit accounts from the public and public | | | |
| sector | | | |
--------------------------------------------------------------------------------
| Demand deposit accounts | 333 | 170 | 127 |
--------------------------------------------------------------------------------
| Current accounts | 319 | 238 | 233 |
--------------------------------------------------------------------------------
| Environmental and Savings Accounts | 81 | 77 | 73 |
--------------------------------------------------------------------------------
| Prime Accounts | 784 | 518 | 652 |
--------------------------------------------------------------------------------
| Time deposits | 417 | 642 | 578 |
--------------------------------------------------------------------------------
| Total deposit accounts in euros | 1,933 | 1,644 | 1,661 |
--------------------------------------------------------------------------------
| Deposit accounts in other currencies | 94 | 76 | 95 |
--------------------------------------------------------------------------------
| Total deposit accounts | 2,027 | 1,720 | 1,757 |
--------------------------------------------------------------------------------
| Bonds and subordinated debentures* | 224 | 221 | 224 |
--------------------------------------------------------------------------------
| Certificates of deposit issued to the public* | 150 | 168 | 145 |
--------------------------------------------------------------------------------
| Total bonds and certificates of deposit | 374 | 390 | 369 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total deposits | 2,401 | 2,110 | 2,126 |
--------------------------------------------------------------------------------
| * This item does not include debt securities subscribed by credit |
| institutions. |
--------------------------------------------------------------------------------
9. LENDING TO THE PUBLIC AND PUBLIC SECTOR BY PURPOSE
--------------------------------------------------------------------------------
| Bank of Åland Group | Jun 30 | Jun 30 | Dec 31 |
| | 2009 | 2008 | 2008 |
--------------------------------------------------------------------------------
| EUR M | | | |
--------------------------------------------------------------------------------
| COMPANIES | | | |
--------------------------------------------------------------------------------
| Shipping | 84 | 85 | 79 |
--------------------------------------------------------------------------------
| Wholesale and retail trade | 63 | 58 | 59 |
--------------------------------------------------------------------------------
| Housing operations | 67 | 64 | 64 |
--------------------------------------------------------------------------------
| Other real estate operations | 163 | 112 | 113 |
--------------------------------------------------------------------------------
| Financial and insurance operations | 182 | 162 | 190 |
--------------------------------------------------------------------------------
| Hotel and restaurant operations | 16 | 15 | 14 |
--------------------------------------------------------------------------------
| Other service operations | 95 | 74 | 79 |
--------------------------------------------------------------------------------
| Agriculture, forestry and fishing | 9 | 6 | 7 |
--------------------------------------------------------------------------------
| Construction | 32 | 22 | 23 |
--------------------------------------------------------------------------------
| Other industry and crafts | 44 | 30 | 31 |
--------------------------------------------------------------------------------
| | 756 | 628 | 661 |
--------------------------------------------------------------------------------
| PRIVATE INDIVIDUALS | | | |
--------------------------------------------------------------------------------
| Home loans | 1,099 | 1,054 | 1,083 |
--------------------------------------------------------------------------------
| Securities and other investments | 277 | 246 | 249 |
--------------------------------------------------------------------------------
| Business operations | 185 | 91 | 92 |
--------------------------------------------------------------------------------
| Other household purposes | 88 | 83 | 84 |
--------------------------------------------------------------------------------
| | 1,648 | 1,474 | 1,508 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| PUBLIC SECTOR AND NON-PROFIT ORGANISATIONS | 24 | 25 | 25 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| TOTAL LENDING | 2,428 | 2,127 | 2,193 |
--------------------------------------------------------------------------------
10. OFF-BALANCE SHEET COMMITMENTS
--------------------------------------------------------------------------------
| Bank of Åland Group | Jun 30 | Jun 30 | Dec 31 |
| | 2009 | 2008 | 2008 |
--------------------------------------------------------------------------------
| EUR M | | | |
--------------------------------------------------------------------------------
| Guarantees and pledges | 39 | 18 | 16 |
--------------------------------------------------------------------------------
| Other commitments | 259 | 158 | 149 |
--------------------------------------------------------------------------------
| | 298 | 176 | 165 |
--------------------------------------------------------------------------------
11. DERIVATIVE CONTRACTS
--------------------------------------------------------------------------------
| Bank of Åland Group | Jun 30, 2009 | Jun 30, 2008 |
--------------------------------------------------------------------------------
| | For | | For | |
| EUR M | hedging | Other | hedging | Other |
| | purposes | | purposes | |
--------------------------------------------------------------------------------
| Value of underlying | | | | |
| property | | | | |
--------------------------------------------------------------------------------
| Interest rate derivatives | | | | |
--------------------------------------------------------------------------------
| Swap contracts | 553 | 7 | 333 | 7 |
--------------------------------------------------------------------------------
| Option contracts | | | | |
--------------------------------------------------------------------------------
| Purchased | 68 | 25 | 0 | 0 |
--------------------------------------------------------------------------------
| Exercised | 25 | 68 | 0 | 0 |
--------------------------------------------------------------------------------
| Currency derivatives | | | | |
--------------------------------------------------------------------------------
| Forward contracts | 23 | 8 | 32 | 23 |
--------------------------------------------------------------------------------
| Interest rate and currency | 0 | 5 | 0 | 0 |
| swap contracts | | | | |
--------------------------------------------------------------------------------
| Equity derivatives | | | | |
--------------------------------------------------------------------------------
| Option contracts | | | | |
--------------------------------------------------------------------------------
| Purchased | 148 | 6 | 171 | 0 |
--------------------------------------------------------------------------------
| | 817 | 118 | 536 | 30 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equivalent credit value of | | | | |
| the contract | | | | |
--------------------------------------------------------------------------------
| Interest rate derivatives | 9 | | 8 | |
--------------------------------------------------------------------------------
| Currency derivatives | 1 | | 1 | |
--------------------------------------------------------------------------------
| Equity derivatives | 18 | | 28 | |
--------------------------------------------------------------------------------
| | 28 | | 38 | |
--------------------------------------------------------------------------------
| The equity derivatives that were purchased mainly hedge option structures |
| that are embedded in bonds issued to the public. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 12. MATURITY BREAKDOWN OF CLAIMS AND LIABILITIES |
--------------------------------------------------------------------------------
| Bank of Åland Group | Jun 30, 2009 |
--------------------------------------------------------------------------------
| EUR M | < 3 mo | 3 - 12 | 1 - 5 yrs | 5 - yrs | Total |
| | | mo | | | |
--------------------------------------------------------------------------------
| Claims | | | | | |
--------------------------------------------------------------------------------
| Debt securities | | | | | |
| eligible for | | | | | |
--------------------------------------------------------------------------------
| refinancing in | 1 | 1 | 143 | 0 | 144 |
| central banks | | | | | |
--------------------------------------------------------------------------------
| Credit institutions | 275 | 0 | 0 | 0 | 275 |
| and central banks | | | | | |
--------------------------------------------------------------------------------
| The public and public | 322 | 272 | 959 | 875 | 2,428 |
| sector entities | | | | | |
--------------------------------------------------------------------------------
| Other debt securities | 57 | 39 | 30 | 0 | 126 |
--------------------------------------------------------------------------------
| | 655 | 312 | 1,132 | 875 | 2,973 |
--------------------------------------------------------------------------------
| Liabilities | | | | | |
--------------------------------------------------------------------------------
| Credit institutions | 47 | 52 | 20 | 0 | 119 |
| and central banks | | | | | |
--------------------------------------------------------------------------------
| The public and public | 1,892 | 121 | 15 | 0 | 2,028 |
| sector entities | | | | | |
--------------------------------------------------------------------------------
| Debt securities | 89 | 295 | 277 | 0 | 661 |
| issued to the public | | | | | |
--------------------------------------------------------------------------------
| Subordinated | 0 | 15 | 44 | 0 | 59 |
| liabilities | | | | | |
--------------------------------------------------------------------------------
| | 2,029 | 482 | 35 | 0 | 2,866 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
No estimates of maturity dates have been made. Spot deposits, for example, are
found in the category < 3 months.
--------------------------------------------------------------------------------
| 13. INTEREST RATE REFIXING PERIODS |
--------------------------------------------------------------------------------
| Bank of Åland Group | Jun 30, 2009 |
--------------------------------------------------------------------------------
| EUR M | < 3 mo | 3-6 mo | 6-12 | 1-5 | > 5 yrs | Total |
| | | | mo | yrs | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Assets | 2,347 | 370 | 275 | 529 | 56 | 3,578 |
--------------------------------------------------------------------------------
| Liabilities | 2,464 | 531 | 114 | 383 | 50 | 3,543 |
--------------------------------------------------------------------------------
| Difference between | -117 | -161 | 161 | 146 | 6 | 34 |
| assets and | | | | | | |
| liabilities | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shows the Bank's interest-rate related assets and liabilities, including |
| derivatives, according to the interest rate refixing date as of June 30, |
| 2009. Volume that falls due for new interest rate refixing in each |
| respective time interval. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Bank of Åland Group | Jun 30, 2008 |
--------------------------------------------------------------------------------
| EUR M | < 3 mo | 3-6 mo | 6-12 | 1-5 | > 5 yrs | Total |
| | | | mo | yrs | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Assets | 1,885 | 365 | 382 | 339 | 41 | 3,011 |
--------------------------------------------------------------------------------
| Liabilities | 2,188 | 331 | 139 | 199 | 40 | 2,898 |
--------------------------------------------------------------------------------
| Difference between | -303 | 33 | 242 | 140 | 1 | 114 |
| assets and | | | | | | |
| liabilities | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Review Report, Bank of Åland Plc Interim Report for January 1 - June 30, 2009
To the Board of Directors of the Bank of Åland Plc
Introduction
We have reviewed the consolidated summary statement of financial position of the
Bank of Åland Plc on June 30, 2009, the consolidated summary statement of
comprehensive income, the summary statement showing changes in consolidated
equity capital and the consolidated summary cash flow statements for the
six-month period ending on the above-mentioned date, as well as the summary of
essential accounting principles and other disclosures in the notes. The Board of
Directors and the Managing Director are responsible for preparing the Interim
Report and for providing accurate and sufficient information in compliance with
International Financial Reporting Standards (IFRSs) as adopted by the European
Union as well as in compliance with the other prevailing laws and regulations in
Finland concerning the preparation of interim reports. Based on the review we
have performed, we are issuing our statement of opinion on the Interim Report in
compliance with the Finnish Securities Markets Act. Chapter 2, Section 5a,
Paragraph 7.
Scope of a review
This review was conducted in compliance with the standard on review engagements.
Standard 2410, “Review of Interim Financial Information Performed by the
Independent Auditor of the Company”. A review consists of making inquiries,
primarily of persons chiefly responsible for financial and accounting matters,
and applying analytical and other review procedures. A review is substantially
more limited in scope than an audit, which must be conducted in accordance with
generally accepted auditing standards and recommendations. It is consequently
not possible for us to gain confirmation that we are obtaining information about
all those significant circumstances that might be identified in an audit. We are
thus not issuing an audit report.
Statement of opinion
On the basis of our review, to our knowledge no circumstances have emerged that
would give us reason to believe that the Interim Report does not provide
accurate and sufficient disclosures about the financial position of the Bank of
Åland Group on June 30, 2009 and its operating results and cash flows during the
six-month period ending on that date, in compliance with IFRSs as adopted by the
EU and in compliance with the other prevailing laws and regulations in Finland
concerning the preparation of interim reports.
Mariehamn/Helsinki. August 21, 2009
Leif Hermans Authorised Public Accountant
Terhi Mäkinen Authorised Public Accountant
Bengt Nyholm Authorised Public Accountant
