Bank of Åland Plc INTERIM REPORT 25.08.2008 09.00 hrs
Interim Report for the period January - June 2008
The report period in brief
Consolidated net operating profit decreased by 24 per cent to 11.8 million euros
(January - June 2007: EUR 15.6 M)
Net interest income increased by 11 per cent to EUR 20.9 M (18.9)
Commission income decreased by 4 per cent to EUR 10.2 M (10.6)
Total income decreased by 2 per cent to EUR 37.1 M (37.8)
Expenses increased by 15 per cent to EUR 25.3 M (22.1)
Loan losses amounted to EUR 0.2 M (0.4)
Lending volume increased by 7 per cent to EUR 2,127 M (June 2007: 1,956)
Deposits increased by 24 per cent to EUR 2,110 M (June 2007: 1,695)
Mutual fund capital under management decreased by 25 per cent to EUR 318 M (425)
Return on equity after taxes (ROE) was 13.0 (18.6) per cent
The expense/income ratio deteriorated to 68 (59) per cent
The total capital ratio in compliance with Basel 2 amounted to 12.1 (12.7)per
cent
Earnings per share after taxes amounted to EUR 0.71 (0.95)
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 with International Accounting Standard (IAS) 34, “Interim
Financial Reporting”.
Earnings summary for the report period
During January-June 2008, the consolidated net operating profit of the Bank of
Åland Group decreased by 24 per cent to EUR 11.8 M (15.6). During the report
period, the Group's net interest income showed positive growth, while earnings
were adversely affected by lower commission income and higher operating
expenses.
Income decreased by 2 per cent to EUR 37.1 M (37.8), while expenses increased by
15 per cent to EUR 25.3 M (22.1). Return on equity after taxes (ROE) fell to
13.0 (18.6) per cent, and earnings per share to EUR 0.71 (0.95).
Net interest income
Due to higher interest rates and larger volume of both deposits and lending,
consolidated net interest income rose by 11 per cent to EUR 20.9 M (18.9) during
the report period. Margins on deposits decreased compared to the year-earlier
period, while margins on lending were stable. Lending volume increased by 7 per
cent to EUR 2,127 M (1,996), and deposit volume increased by 24 per cent to EUR
2,110 M (1,695).
Other income
Commission income fell by 4 per cent to EUR 10.2 M (10.6). Income on securities
brokerage rose, while decreased managed assets meant lower income on mutual fund
and asset management.
Net income from securities trading for the Bank's own account was EUR 0.5 M
(2.1). Net income from dealing in the foreign exchange market was unchanged at
EUR 0.5 M (0.5). Net income from financial assets available for sale was EUR 0.1
M (0.8), and net income from investment properties was EUR 0.2 M (0.6).
Other operating income increased to EUR 5.7 M (5.3), however, as a consequence
of higher income from the sale and development of information technology (IT)
systems.
The Group's total income decreased by 2 per cent to EUR 37.1 M (37.8).
Expenses
Staff costs rose by 12 per cent to EUR 14.2 M (12.7), due to employee
recruitment and salary hikes as provided by collective agreements. Changes in
the Bank's pension fund, Ålandsbanken Abp:s Pensionsstiftelse, according to the
corridor approach, affected staff costs in the amount of EUR -0.1 M (-0.2).
Other administrative expenses (office, marketing, communications and IT)
increased to EUR 5.5 M (4.3).This was mainly because of higher IT expenses due
to increased customer volume at Crosskey. Production for own use totalled EUR
-0.2 M (-0.2) and was related to expenses for computer software, which in
accordance with IFRSs must be capitalised. Depreciation/amortisation increased
to EUR 2.8 M (2.4). Other operating expenses amounted to EUR 3.0 M (2.9).
The Group's total expenses rose by 15 per cent to EUR 25.3 M (22.1).
Impairment losses on loans and other commitments
Loan losses amounted to EUR 0.2 M (0.4).
Second quarter of 2008
Compared to the second quarter of 2007, the Group's net operating profit fell by
18 per cent to EUR 6.1 M (Q II 2007: 7.5).
Income
Total income decreased by 2 per cent to EUR 19.0 M (19.3). Higher deposit and
lending volume and higher interest rates resulted in an increase in net interest
income of 11 per cent to EUR 10.7 M (9.7).
Commission income deteriorated slightly, amounting to EUR 5.1 M (5.2). The
decrease consisted of lower commissions on mutual funds and asset management.
However, commissions on securities brokerage rose somewhat. Net income from
securities trading and foreign exchange operations fell to EUR 0.4 M (1.7).
Other operating income increased to EUR 3.1 M (2.5) as a consequence of higher
income from IT operations.
Expenses
Total expenses during the quarter increased by 9 per cent to EUR 12.8 M (11.7).
During the quarter, staff costs amounted to EUR 7.1 M (6.7). The number of
employees in the Group increased, and salary hikes were implemented as provided
by collective agreements. Other administrative expenses increased to EUR 2.9 M
(2.4) during the second quarter, primarily caused by higher computer expenses.
Due to increased property expenses and rents, other operating expenses rose to
EUR 1.6 M (1.5).
Balance sheet total and off-balance sheet obligations
At the end of the report period, the Group's balance sheet total was EUR 2,768 M
(2,432). During the period, the Group issued bond loans to the public in the
nominal amount of EUR 16 M.
Off-balance sheet obligations decreased to EUR 176 M (191).
Personnel
Hours worked in the Group, recalculated to full-time equivalent positions,
totalled 499 (451) during January-June 2008. This represented an increase of 48
positions compared to the year-earlier period.
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| Bank of Åland Group | Jun 30 | Jun 30 |
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| | 2008 | 2007 |
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| Bank of Åland Plc | 328 | 300 |
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| Ab Compass Card Oy Ltd | 6 | 3 |
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| Crosskey Banking Solutions Ab Ltd | 137 | 122 |
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| Ålandsbanken Asset Management Ab | 14 | 12 |
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| Ålandsbanken Fondbolag Ab | 6 | 8 |
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| Ålandsbanken Kapitalmarknadstjänster Ab, until | 0 | 5 |
| September 30, 2007 | | |
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| Ålandsbanken Veranta Ab | 8 | 0 |
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| Total number of full-time equivalent positions, | 499 | 451 |
| recalculated from hours worked | | |
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Expense/income ratio
Efficiency measured as expenses divided by income, including and excluding loan
losses, respectively:
--------------------------------------------------------------------------------
| | Jun 30 | Jun 30 |
--------------------------------------------------------------------------------
| Bank of Åland Group | 2008 | 2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Including loan losses | 0.68 | 0.59 |
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| Excluding loan losses | 0.68 | 0.58 |
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Capital adequacy
The Group is reporting capital adequacy in accordance with Pillar 1 in the Basel
2 regulations. According to Pillar 1 of Basel 2, the Group's total capital ratio
at the end of June 2008 was 12.1 per cent. The capital requirement for credit
risks has been calculated according to the standardised approach, and the
capital requirement for operational risks has been calculated according to the
basic indicator approach in the Basel 2 regulations.
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| Capital adequacy | | |
--------------------------------------------------------------------------------
| Bank of Åland Group | Jun 30 | Jun 30 | Dec 31 |
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| | 2008 | 2007 | 2007 |
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| | | | |
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| Capital base, EUR M | | | |
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| Core capital | 104.0 | 92.7 | 103.3 |
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| Supplementary capital | 50.0 | 51.7 | 51.3 |
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| Total capital base | 154.0 | 144.4 | 154.6 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Capital requirement for credit risks | 92.6 | 83.2 | 88.5 |
--------------------------------------------------------------------------------
| Capital requirement for operational risks | 9.3 | 8.0 | 8.0 |
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| Total capital requirement | 101.9 | 91.1 | 96.5 |
--------------------------------------------------------------------------------
| Total capital ratio, % | 12.1 | 12.7 | 12.8 |
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| Core capital ratio, % | 8.2 | 8.1 | 8.6 |
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Deposits
Deposits from the public, including bonds and certificates of deposit issued,
increased during the 12 months to June 30, 2008 by 24 per cent to EUR 2,110 M
(1,695). Deposit accounts increased by 25 per cent to EUR 1,720 M (1,379). Bonds
and certificates of deposit issued to the public increased by 23 per cent to EUR
390 M (316).
Lending
The volume of lending to the public increased during the 12 months to June 30,
2008 by 7 per cent to SEK 2,127 M (1,996). Lending to households increased by 4
per cent to EUR 1,453 M (1,399). Households accounted for 68 (70) per cent of
the Group's total lending. Lending to the service sector rose by 16 per cent to
EUR 593 M (510), while lending to the production sector fell by 7 per cent to
EUR 57 M (61).
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 the start-up phase and is expected to begin its
operations during 2009. 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 − either as whole systems or in modules − to small and
medium-sized banks in Europe, as well as sell operational services. Among
Crosskey's current customers are DnB NOR, S-Bank, Tapiola Bank, the Bank of
Åland, eQ Bank and EGET. Crosskey currently has 155 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 year 2008 began in the shadow of the global financial market crisis. The
influx of new customers slowed significantly, and it was challenging to maintain
portfolio values. However, due to the company's conservative investment
strategy, disruptions in the investment environment primarily represented
opportunities for buyers to take advantage of bargains in the markets. Despite
the market situation, the company maintained the same level of profitability as
the year before. The company currently has about 350 customers and EUR 900 M in
managed assets. Assets of private individuals available for financial investment
continue to grow. When the trend towards putting these assets under management
also increases, the company will enjoy good future prospects.
Ålandsbanken Fondbolag Ab
Ålandsbanken Fondbolag Ab is a wholly-owned subsidiary of the Bank of Åland Plc.
All the mutual funds (unit trusts) that the company manages are registered in
Finland. On June 30, 2008, the total number of unit holders was 14,236 (14,232
on June 30, 2007). Assets under management totalled EUR 318 M (425), a decrease
of 25 per cent.
Ålandsbanken Veranta Ab
Ålandsbanken Veranta Ab is a subsidiary of the Bank of Åland Plc. Its operations
include estate agency, appraisal and consulting business. The company currently
has 10 employees and offices in Helsinki, Espoo and Tampere.
Changes in Group structure
On June 30, 2008 the Bank of Åland Plc subscribed for shares issued by
Ålandsbanken Veranta Ab. As a result of payment the Bank of Åland's ownership
stake is rising to 92.9 per cent.
Important events after the close of the report period
No important events have occurred after the close of the report period.
Outlook for 2008
The Group's financial planning assumes unchanged interest rates, a continued
positive trend in business volume at low margins, especially on deposits, stable
earnings in asset management operations and good growth in the Group's IT
operations. Income from IT operations during the rest of the year is expected to
be substantially better than during the first half. The cost level in the Group
is expected to rise, due to increased regulatory requirements as well as
investments in new skills. Competition in the banking market is expected to
remain tough and to be affected by international financial market instability.
However, the Bank is not expected to be affected by significant loan losses
during 2008. Based on these factors, and taking into account that 2007 earnings
included large nonrecurring items, the Group's operating income is expected to
be lower than in 2007.
It should be added that at present there is great uncertainty in the global
financial system. The Bank of Åland is not directly affected by this, but if the
situation should deteriorate further the Bank may be affected indirectly, for
example in case of a generally poorer economic situation. The outlook the future
is thus fraught with greater uncertainty than normal.
The Group's assessment of the outlook for 2008 is based on its assumptions about
future developments in the fixed income and financial markets. General interest
rates, the demand for lending, the trend of the capital and financial markets
and the competitive situation are factors that the Group cannot influence.
Financial information in 2008
The Interim Report for the period January 1-September 30, 2008 will be published
on October 27, 2008 3.00 p.m. Finnish time.
Mariehamn, August 25, 2008
THE BOARD OF DIRECTORS
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| FINANCIAL RATIOS ETC |
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| Bank of Åland Group | Jan-Jun | Jan-Jun | Jan-Dec |
--------------------------------------------------------------------------------
| | 2008 | 2007 | 2007 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Earnings per share before dilution, | 0.71 | 0.95 | 1.75 |
| EUR 1 | | | |
--------------------------------------------------------------------------------
| Earnings per share after dilution, | 0.71 | 0.95 | 1.75 |
| EUR 2 | | | |
--------------------------------------------------------------------------------
| Market price per share, end of | | | |
| period, EUR | | | |
--------------------------------------------------------------------------------
| Series A | 29.50 | 29.00 | 37.00 |
--------------------------------------------------------------------------------
| Series B | 25.00 | 25.00 | 27.80 |
--------------------------------------------------------------------------------
| Equity capital per share, EUR 3 | 11.18 | 10.90 | 11.54 |
--------------------------------------------------------------------------------
| Return on equity after taxes, % (ROE) | 13.0 | 18.6 | 16.4 |
| 4 | | | |
--------------------------------------------------------------------------------
| Return on total assets, % (ROA) 5 | 0.6 | 1.0 | 0.9 |
--------------------------------------------------------------------------------
| Equity/assets ratio, % 6 | 4.7 | 5.2 | 5.2 |
--------------------------------------------------------------------------------
| Total lending volume, EUR M | 2,127 | 1,996 | 2,104 |
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| Total deposits from the public, EUR M | 2,110 | 1,695 | 1,921 |
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| Equity capital, EUR M | 130 | 126 | 135 |
--------------------------------------------------------------------------------
| Balance sheet total, EUR M | 2,768 | 2,432 | 2,592 |
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| Expense/income ratio | | | |
--------------------------------------------------------------------------------
| Including loan losses | 0.68 | 0.59 | 0.62 |
--------------------------------------------------------------------------------
| Excluding loan losses | 0.68 | 0.58 | 0.61 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1 Profit for the period before dilution / Average number of shares |
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| 2 Profit for the period after dilution / Average number of shares + shares |
| outstanding |
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| 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 BALANCE SHEET |
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| Bank of Åland Group | Jun 30 | Jun 30 | Dec 31 |
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| EUR M | 2008 | 2007 | 2007 |
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| | | | |
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| ASSETS | | | |
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| Cash | 60 | 47 | 39 |
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| Debt securities eligible for | 131 | 102 | 132 |
| refinancing with central banks | | | |
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| Claims on credit institutions | 202 | 173 | 153 |
--------------------------------------------------------------------------------
| Claims on the public and public sector | 2,127 | 1,996 | 2,104 |
| entities | | | |
--------------------------------------------------------------------------------
| Debt securities | 131 | 4 | 50 |
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| Shares and participations | 3 | 4 | 3 |
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| Shares and participations in | 2 | 2 | 2 |
| associated companies | | | |
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| Derivative instruments | 22 | 36 | 34 |
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| Intangible assets | 6 | 5 | 6 |
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| Tangible assets | 29 | 25 | 26 |
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| Other assets | 31 | 17 | 21 |
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| Accrued income and prepayments | 24 | 20 | 21 |
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| Deferred tax assets | 1 | 1 | 1 |
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| | | | |
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| TOTAL ASSETS | 2,768 | 2,432 | 2,592 |
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--------------------------------------------------------------------------------
| LIABILITIES | | | |
--------------------------------------------------------------------------------
| Liabilities to credit institutions | 82 | 67 | 53 |
--------------------------------------------------------------------------------
| Liabilities to the public and public | 1,722 | 1,381 | 1,534 |
| sector entities | | | |
--------------------------------------------------------------------------------
| Debt securities issued to the public | 683 | 730 | 739 |
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| Derivative instruments | 4 | 4 | 3 |
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| Other liabilities | 53 | 40 | 39 |
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| Accrued expenses and prepaid income | 26 | 21 | 21 |
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| Subordinated liabilities | 52 | 52 | 52 |
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| Deferred tax liabilities | 16 | 13 | 16 |
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| TOTAL LIABILITIES | 2,637 | 2,307 | 2,457 |
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| | | | |
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| EQUITY CAPITAL AND MINORITY INTEREST | | | |
--------------------------------------------------------------------------------
| Share capital | 23 | 23 | 23 |
--------------------------------------------------------------------------------
| Share premium account | 33 | 33 | 33 |
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| Reserve fund | 25 | 25 | 25 |
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| Fair value reserve | 0 | 1 | 0 |
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| Retained earnings | 48 | 42 | 51 |
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| Shareholders' interest in equity | 129 | 124 | 133 |
| capital | | | |
--------------------------------------------------------------------------------
| Minority interest in capital | 1 | 2 | 2 |
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| TOTAL EQUITY CAPITAL | 130 | 126 | 135 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL LIABILITIES AND EQUITY CAPITAL | 2,768 | 2,432 | 2,592 |
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--------------------------------------------------------------------------------
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| SUMMARY INCOME STATEMENT |
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| Bank of Åland Group | Jan-Jun | Jan-Jun | Jan-Dec |
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| EUR M | 2008 | 2007 | 2007 |
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| | | | |
--------------------------------------------------------------------------------
| Net interest income | 20.9 | 18.9 | 39.3 |
--------------------------------------------------------------------------------
| Income from equity instruments | 0.0 | 0.0 | 0.0 |
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| Commission income | 10.2 | 10.6 | 20.3 |
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| Commission expenses | -1.1 | -1.0 | -2.0 |
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| Net income from securities transactions | 1.0 | 2.6 | 4.2 |
| and foreign exchange dealing | | | |
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| Net income from financial assets | 0.1 | 0.8 | 1.1 |
| available for sale | | | |
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| Net income from investment properties | 0.2 | 0.6 | 0.6 |
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| Other operating income | 5.7 | 5.3 | 11.9 |
--------------------------------------------------------------------------------
| Total income | 37.1 | 37.8 | 75.4 |
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| | | | |
--------------------------------------------------------------------------------
| Staff costs | -14.2 | -12.7 | -26.2 |
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| Other administrative expenses | -5.5 | -4.3 | -10.3 |
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| Production for own use | 0.2 | 0.2 | 1.0 |
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| Depreciation/amortisation | -2.8 | -2.4 | -4.9 |
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| Other operating expenses | -3.0 | -2.9 | -5.6 |
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| Total expenses | -25.3 | -22.1 | -46.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Loan and guarantee losses | -0.2 | -0.4 | -1.0 |
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| Share of profit/loss in companies | | | |
| consolidated | | | |
--------------------------------------------------------------------------------
| According to the equity method | 0.2 | 0.2 | 0.2 |
--------------------------------------------------------------------------------
| Net operating profit | 11.8 | 15.6 | 28.6 |
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| | | | |
--------------------------------------------------------------------------------
| Income taxes | -3.1 | -4.1 | -7.6 |
--------------------------------------------------------------------------------
| Profit for the period | 8.6 | 11.5 | 21.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders' interest in profit for | 8.2 | 11.0 | 20.2 |
| the period | | | |
--------------------------------------------------------------------------------
| Minority interest in profit for the | 0.5 | 0.6 | 0.8 |
| period | | | |
--------------------------------------------------------------------------------
| Total | 8.6 | 11.5 | 21.0 |
--------------------------------------------------------------------------------
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| Earnings per share |
--------------------------------------------------------------------------------
| Earnings per share before dilution, EUR | 0.71 | 0.95 | 1.75 |
| 1 | | | |
--------------------------------------------------------------------------------
| Earnings per share after dilution, EUR | 0.71 | 0.95 | 1.75 |
| 2 | | | |
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| 1 Profit for the period before dilution / Average number of shares |
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| 2 Profit for the period / Average number of shares + shares outstanding |
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| INCOME STATEMENT BY QUARTER |
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| Bank of Åland Group | Q II | Q I | Q IV | Q III | Q II |
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| EUR M | 2008 | 2008 | 2007 | 2007 | 2007 |
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| | | | | | |
--------------------------------------------------------------------------------
| Net interest income | 10.7 | 10.1 | 10.5 | 9.9 | 9.7 |
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| Income from equity instruments | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
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| Commission income | 5.1 | 5.1 | 5.1 | 4.6 | 5.2 |
--------------------------------------------------------------------------------
| Commission expenses | -0.6 | -0.5 | -0.5 | -0.5 | -0.6 |
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| Net income from securities | 0.4 | 0.7 | 1.5 | 0.1 | 1.7 |
| transactions and foreign | | | | | |
| exchange dealing | | | | | |
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| Net income from financial assets | 0.1 | 0.0 | 0.2 | 0.0 | 0.3 |
| available for sale | | | | | |
--------------------------------------------------------------------------------
| Net income from investment | 0.1 | 0.1 | 0.1 | 0.0 | 0.5 |
| properties | | | | | |
--------------------------------------------------------------------------------
| Other operating income | 3.1 | 2.6 | 4.2 | 2.3 | 2.5 |
--------------------------------------------------------------------------------
| Total income | 19.0 | 18.1 | 21.0 | 16.5 | 19.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Staff costs | -7.1 | -7.1 | -7.0 | -6.5 | -6.7 |
--------------------------------------------------------------------------------
| Other administrative expenses | -2.9 | -2.7 | -3.9 | -2.1 | -2.4 |
--------------------------------------------------------------------------------
| Production for own use | 0.1 | 0.2 | 0.7 | 0.1 | 0.1 |
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| Depreciation/amortisation | -1.3 | -1.5 | -1.3 | -1.3 | -1.1 |
--------------------------------------------------------------------------------
| Other operating expenses | -1.6 | -1.4 | -1.4 | -1.4 | -1.5 |
--------------------------------------------------------------------------------
| Total expenses | -12.8 | -12.5 | -12.8 | -11.1 | -11.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Impairment losses on loans and | -0.2 | 0.0 | -0.1 | -0.6 | -0.3 |
| other commitments | | | | | |
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| Share of profit/loss in | 0.1 | 0.1 | 0.0 | 0.0 | 0.1 |
| associated companies | | | | | |
--------------------------------------------------------------------------------
| Net operating profit | 6.1 | 5.7 | 8.1 | 4.9 | 7.5 |
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CASH FLOW STATEMENT
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| Bank of Åland Group | Jan-Jun | Jan-Jun |
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| EUR M | 2008 | 2007 |
--------------------------------------------------------------------------------
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| Cash flow from operating activities | | | | |
--------------------------------------------------------------------------------
| | Net operating profit | 11.8 | | 15.6 | |
--------------------------------------------------------------------------------
| | Adjustment for net operating profit | 4.0 | | 2.4 | |
| | items not affecting cash flow | | | | |
--------------------------------------------------------------------------------
| | Gains/losses from investing | -0.1 | | -0.9 | |
| | activities | | | | |
--------------------------------------------------------------------------------
| | Income taxes paid | -1.2 | | -2.6 | |
--------------------------------------------------------------------------------
| | Changes in assets and liabilities in | 115.2 | 129.7 | -2.0 | 12,4 |
| | operating activities | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from investing activities | | -5.5 | | -4.6 |
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| Cash flow from financing activities | | -31.3 | | 102.0 |
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| Change in cash and cash equivalents | | 92,9 | | 109,8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash and cash equivalents, January 1 | | 255.0 | | 130.2 |
--------------------------------------------------------------------------------
| Cash and cash equivalents, June 30 | | 347.9 | | 240.1 |
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| CHANGES IN EQUITY CAPITAL |
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| Bank of Åland Group |
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| EUR M |
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| | Share| Share| Share| Rese | Fair | Reta | Total| Mino | Total |
| | capi | issue| prem | rve | value| ined |before| rity | |
| | tal | | ium | fund | rese | earn | mino | inte | |
| | | | acco | | rve | ings | rity | rest | |
| | | | unt | | | | inte | | |
| | | | | | | | rest | | |
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| | | | | | | | | | |
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| Equity | 22.7 | 0.3 | 29.2 | 25.1 | 0.4 | 42.4 | 120. | 2.1 | 122.2 |
| capital, Dec | | | | | | | 1 | | |
| 31, 2006 | | | | | | | | | |
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| Financial | | | | | | | | | |
| assets | | | | | | | | | |
| available | | | | | | | | | |
| for sale: | | | | | | | | | |
--------------------------------------------------------------------------------
| -changes in | | | | | -0.2 | | -0.2 | | -0.2 |
| fair value | | | | | | | | | |
--------------------------------------------------------------------------------
| -transferred | | | | | 0.4 | | 0.4 | | 0.4 |
| to income | | | | | | | | | |
| statement | | | | | | | | | |
--------------------------------------------------------------------------------
| Profit for | | | | | | 11.0 | 11.0 | 0.6 | 11.5 |
| the period | | | | | | | | | |
--------------------------------------------------------------------------------
| Total | | | | | 0.3 | 11.0 | 11.3 | 0.6 | 11.8 |
| recognised | | | | | | | | | |
| income and | | | | | | | | | |
| expenses | | | | | | | | | |
| during the | | | | | | | | | |
| period | | | | | | | | | |
--------------------------------------------------------------------------------
| Dividend to | | | | | | -11. | -11. | -0.8 | -12.3 |
| shareholders | | | | | | 5 | 5 | | |
| 1 | | | | | | | | | |
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| Conversion | 0.6 | -0.3 | 4.1 | | | | 4.4 | | 4.4 |
| of capital | | | | | | | | | |
| loan | | | | | | | | | |
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| Other change | | | | | | | | | |
| in minority | | | | | | | | | |
| share | | | | | | | | | |
--------------------------------------------------------------------------------
| of equity | | | | | | | | -0.3 | -0.3 |
| capital | | | | | | | | | |
--------------------------------------------------------------------------------
| Equity | 23.3 | 0.0 | 33.3 | 25.1 | 0.7 | 41.9 | 124. | 1.6 | 125.8 |
| capital, Jun | | | | | | | 2 | | |
| 30, 2007 | | | | | | | | | |
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| Financial | | | | | | | | | |
| assets | | | | | | | | | |
| available | | | | | | | | | |
| for sale: | | | | | | | | | |
--------------------------------------------------------------------------------
| -changes in | | | | | 0.3 | | 0.3 | | 0.3 |
| fair value | | | | | | | | | |
--------------------------------------------------------------------------------
| -transferred | | | | | -0.6 | | -0.6 | | -0.6 |
| to income | | | | | | | | | |
| statement | | | | | | | | | |
--------------------------------------------------------------------------------
| Profit for | | | | | | 9.2 | 9.2 | 0.3 | 9.5 |
| the period | | | | | | | | | |
--------------------------------------------------------------------------------
| Total | 0.0 | 0.0 | 0.0 | 0.0 | -0.3 | 9.2 | 8.9 | 0.3 | 9.2 |
| recognised | | | | | | | | | |
| income and | | | | | | | | | |
| expenses | | | | | | | | | |
| during the | | | | | | | | | |
| period | | | | | | | | | |
--------------------------------------------------------------------------------
| Dividend to | | | | | | | | | |
| shareholders | | | | | | | | | |
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| Other change | | | | | | | | | |
| in minority | | | | | | | | | |
| share | | | | | | | | | |
--------------------------------------------------------------------------------
| of equity | | | | | | | | | |
| capital | | | | | | | | | |
--------------------------------------------------------------------------------
| Equity | 23.3 | 0.0 | 33.3 | 25.1 | 0.4 | 51.1 | 133. | 1.8 | 135.0 |
| capital, Dec | | | | | | | 1 | | |
| 31, 2007 | | | | | | | | | |
--------------------------------------------------------------------------------
| Financial | | | | | | | | | |
| assets | | | | | | | | | |
| available | | | | | | | | | |
| for sale: | | | | | | | | | |
--------------------------------------------------------------------------------
| -changes in | | | | | -1.2 | | -1.2 | | -1.2 |
| fair value | | | | | | | | | |
--------------------------------------------------------------------------------
| -transferred | | | | | 0.3 | | 0.3 | | 0.3 |
| to income | | | | | | | | | |
| statement | | | | | | | | | |
--------------------------------------------------------------------------------
| Profit for | | | | | | 8.2 | 8.2 | 0.5 | 8.6 |
| the period | | | | | | | | | |
--------------------------------------------------------------------------------
| Total | | | | | -0.8 | 8.2 | 7.3 | 0.5 | 7.8 |
| recognised | | | | | | | | | |
| income and | | | | | | | | | |
| expenses | | | | | | | | | |
| during the | | | | | | | | | |
| period | | | | | | | | | |
--------------------------------------------------------------------------------
| Dividend to | | | | | | -11. | -11. | -1.0 | -12.5 |
| shareholders | | | | | | 5 | 5 | | |
--------------------------------------------------------------------------------
| Other | | | | | | | | | |
| changes in | | | | | | | | | |
| minority | | | | | | | | | |
| share | | | | | | | | | |
--------------------------------------------------------------------------------
| of equity | | | | | | | 0.0 | | 0.0 |
| capital | | | | | | | | | |
--------------------------------------------------------------------------------
| Equity | 23.3 | 0.0 | 33.3 | 25.1 | -0.5 | 47.7 | 128. | 1.3 | 130.3 |
| capital, Jun | | | | | | | 9 | | |
| 30, 2008 | | | | | | | | | |
--------------------------------------------------------------------------------
| 1 Dividend payment for Series A shares EUR 5.2 M and for Series B shares EUR |
| 6.3 M. |
--------------------------------------------------------------------------------
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 25 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 Bank of Åland Plc is listed on the OMX Nordic Exchange Helsinki.
This Interim Report for the financial period January 1-June 30, 2008 was
approved by the Board of Directors on August 22, 2008.
2. BASIS FOR PREPARATION AND ESSENTIAL ACCOUNTING PRINCIPLES
Basis for preparation
The Interim Report for the period January 1-June 30, 2008 has been prepared in
compliance with the International Financial Reporting Standards (IFRSs) that
have been adopted by the European Union, as well as 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, 2007.
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, 2007, 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.
New accounting standards and interpretations in effect starting in 2008:
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 will present its financial
statements in compliance with the revised IAS 1 no later than 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 replaces IAS 14, “Segment
Reporting”. The Group will present its financial statements in compliance with
IFRS 8 no later than for the financial period that begins on January 1, 2009.
IFRIC 14, “The Limit on a Defined Benefit Asset, Minimum Funding Requirements
and their Interaction”
This interpretation clarifies the limit on asset value in case of a pension plan
surplus, as well as how minimum pension plan funding requirements affect this
value. The Group is applying IFRIC 14 beginning on January 1, 2008.
The Group is not affected by amendments to the following:
IAS 23, “Borrowing Costs”
IFRIC 12, “Service Concession Arrangement”
IFRIC 13, “Customer Loyalty Programmes”
3. ESTIMATES AND JUDGEMENTS
Preparation of financial statements in compliance with IFRSs requirements 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 about 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 these estimates.
4. SEGMENT REPORT
The Bank of Åland Group reports the various business segments as primary
segments. A business segment is a group of departments and companies that supply
products or services that have risks and returns that diverge from other
business segments. Intra-Group transactions occur at market prices. The Bank of
Åland Group does not report geographic segments as secondary segments, since all
operations occur in Finland.
--------------------------------------------------------------------------------
| Bank of Åland | Jan-Jun 2008 |
| Group | |
--------------------------------------------------------------------------------
| EUR M | Banking | Informat | Other | Eliminati | Total |
| | operations| ion | | ons | |
| | |technology| | | |
| | |operations| | | |
--------------------------------------------------------------------------------
| |
--------------------------------------------------------------------------------
| External income | 28.0 | 5.6 | 3.5 | | 37.1 |
--------------------------------------------------------------------------------
| Internal income | -0.2 | 4.8 | | -4.5 | 0.0 |
--------------------------------------------------------------------------------
| Total income | 27.8 | 10.4 | 3.5 | -4.5 | 37.1 |
--------------------------------------------------------------------------------
| Costs including | -18.1 | -9.7 | -2.1 | 4.5 | -25.3 |
| depreciation etc. | | | | | |
--------------------------------------------------------------------------------
| Loan losses | -0.2 | | | | -0.2 |
--------------------------------------------------------------------------------
| Share of profit in | | | 0.2 | | 0.2 |
| associated | | | | | |
| companies | | | | | |
--------------------------------------------------------------------------------
| Net operating | 9.4 | 0.7 | 1.6 | 0.0 | 11.8 |
| profit | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Assets | 2,130.3 | 8.9 | 628.9 | -0.5 | 2,767.7 |
--------------------------------------------------------------------------------
| Liabilities | -2,405.0 | -7.7 | -226.3 | 1.5 | -2,637.4 |
--------------------------------------------------------------------------------
| Equity capital | | | | | 130.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Bank of Åland | Jan-Jun 2007 |
| Group | |
--------------------------------------------------------------------------------
EUR M | Banking | Informat | Other | Eliminati | Total |
| | operations| ion | | ons | |
| | |technology| | | |
| | |operations| | | |
--------------------------------------------------------------------------------
| |
--------------------------------------------------------------------------------
| External income | 29.1 | 5.1 | 3.6 | | 37.8 |
--------------------------------------------------------------------------------
| Internal income | 0.4 | 5.1 | | -5.5 | 0.0 |
--------------------------------------------------------------------------------
| Total income | 29.5 | 10.2 | 3.6 | -5.5 | 37.8 |
--------------------------------------------------------------------------------
| Costs including | -17.4 | -7.9 | -2.3 | 5.5 | -22.1 |
| depreciation etc. | | | | | |
--------------------------------------------------------------------------------
| Loan losses | -0.4 | | | | -0.4 |
--------------------------------------------------------------------------------
| Share of profit in | | | 0.2 | | 0.2 |
| associated | | | | | |
| companies | | | | | |
--------------------------------------------------------------------------------
| Net operating | 11.8 | 2.3 | 1.5 | 0.0 | 15.6 |
| profit | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Assets | 1 998.8 | 8.4 | 425.6 | -0.5 | 2 432.3 |
--------------------------------------------------------------------------------
| Liabilities | -2 079.7 | -6.4 | -221.7 | 1.2 | -2 306.5 |
--------------------------------------------------------------------------------
| Equity capital | | | | | 125.8 |
--------------------------------------------------------------------------------
The “Banking operations” segment includes banking and investment operations
carried out at 25 bank offices plus the subsidiaries Ab Compass Card Oy Ltd,
Ålandsbanken Asset Management Ab, Ålandsbanken Fondbolag Ab, Ålandsbanken
Kapitalmarknadstjänster Ab Until Sep 30, 2007) and Ålandsbanken Veranta Ab.
Reported in “IT operations” are Crosskey Banking Solutions Ab Ltd and S-Crosskey
Ab, which supply modern banking computer systems to small and medium-sized
banks. Reported in “Other” are the results of Treasury and portfolio management
as well as the Group's management and related corporate expenses.
5. INCOME TAXES
--------------------------------------------------------------------------------
| Bank of Åland Group | Jun 30 | Jun 30 |
--------------------------------------------------------------------------------
| EUR K | 2008 | 2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Taxes for the report period and earlier report | 3,333 | 4,097 |
| periods | | |
--------------------------------------------------------------------------------
| Change in deferred tax assets/liabilities | -189 | -34 |
--------------------------------------------------------------------------------
| Income taxes | 3,144 | 4,063 |
--------------------------------------------------------------------------------
6. DIVIDEND
--------------------------------------------------------------------------------
| Bank of Åland Group | 2007 | 2006 |
--------------------------------------------------------------------------------
| EUR | | |
--------------------------------------------------------------------------------
| | | |
--------------------------------------------------------------------------------
| Final dividend for 2007: EUR 1.00 per share | 11,536,122 | |
--------------------------------------------------------------------------------
| Final dividend for 2006: EUR 1.00 per share | | 11,536,122 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| The dividend for 2007 was adopted by the Annual General Meeting on April 10, |
| 2008. |
| The record date was April 15 and the payment date was April 22. |
--------------------------------------------------------------------------------
7. DEPOSITS FROM THE PUBLIC AND PUBLIC SECTOR
--------------------------------------------------------------------------------
| Including bonds and certificates of deposit issued |
--------------------------------------------------------------------------------
| Bank of Åland Group | Jun 30 | Jun 30 | Dec 31 |
--------------------------------------------------------------------------------
| EUR M | 2008 | 2007 | 2007 |
--------------------------------------------------------------------------------
| Deposit accounts from the public and public | | | |
| sector | | | |
--------------------------------------------------------------------------------
| Demand deposit accounts | 170 | 171 | 153 |
--------------------------------------------------------------------------------
| Cheque accounts | 238 | 217 | 213 |
--------------------------------------------------------------------------------
| Environmental and Savings Accounts | 77 | 90 | 84 |
--------------------------------------------------------------------------------
| Prime Accounts | 518 | 472 | 566 |
--------------------------------------------------------------------------------
| Time deposits | 642 | 360 | 449 |
--------------------------------------------------------------------------------
| Total deposit accounts in euros | 1,644 | 1,311 | 1,465 |
--------------------------------------------------------------------------------
| Deposit accounts in other currencies | 76 | 68 | 67 |
--------------------------------------------------------------------------------
| Total deposit accounts | 1,720 | 1,379 | 1,532 |
--------------------------------------------------------------------------------
| Bonds and subordinated debentures * | 221 | 156 | 226 |
--------------------------------------------------------------------------------
| Certificates of deposit issued to the public * | 168 | 160 | 163 |
--------------------------------------------------------------------------------
| Total bonds and certificates of deposit | 390 | 316 | 389 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total deposits | 2,110 | 1,695 | |
| | | | 1,921 |
--------------------------------------------------------------------------------
| * This item does not include debt securities subscribed by credit |
| institutions. |
--------------------------------------------------------------------------------
8. LENDING TO THE PUBLIC AND PUBLIC SECTOR BY PURPOSE
--------------------------------------------------------------------------------
| Bank of Åland Group | Jun 30 | Jun 30 | Dec 31 |
--------------------------------------------------------------------------------
| EUR M | 2008 | 2007 | 2007 |
--------------------------------------------------------------------------------
| BUSINESS AND PROFESSIONAL ACTIVITIES | | | |
--------------------------------------------------------------------------------
| Service sector | | | |
--------------------------------------------------------------------------------
| Shipping | 85 | 69 | 97 |
--------------------------------------------------------------------------------
| Hotels, restaurants, tourist cottages etc. | 15 | 13 | 12 |
--------------------------------------------------------------------------------
| Wholesale and retail trade | 59 | 52 | 57 |
--------------------------------------------------------------------------------
| Housing corporations | 64 | 50 | 56 |
--------------------------------------------------------------------------------
| Real estate operations | 114 | 102 | 113 |
--------------------------------------------------------------------------------
| Financial operations | 162 | 146 | 169 |
--------------------------------------------------------------------------------
| Other service business | 94 | 78 | 86 |
--------------------------------------------------------------------------------
| | 593 | 510 | 589 |
--------------------------------------------------------------------------------
| Production sector | | | |
--------------------------------------------------------------------------------
| Agriculture, forestry and fishing | 17 | 19 | 20 |
--------------------------------------------------------------------------------
| Food processing etc. | 7 | 7 | 6 |
--------------------------------------------------------------------------------
| Construction | 22 | 25 | 20 |
--------------------------------------------------------------------------------
| Other industry and crafts | 10 | 10 | 10 |
--------------------------------------------------------------------------------
| | 57 | 61 | 55 |
--------------------------------------------------------------------------------
| HOUSEHOLDS | | | |
--------------------------------------------------------------------------------
| Home loans | 1,112 | 1,093 | 1,113 |
--------------------------------------------------------------------------------
| Studies | 13 | 14 | 13 |
--------------------------------------------------------------------------------
| Other household purposes | 328 | 292 | 308 |
--------------------------------------------------------------------------------
| | 1,453 | 1,399 | 1,434 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| PUBLIC SECTOR AND NON-PROFIT ORGANISATIONS | 24 | 27 | 25 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| TOTAL LENDING | 2,127 | 1,996 | 2,104 |
--------------------------------------------------------------------------------
9. OFF-BALANCE SHEET COMMITMENTS
--------------------------------------------------------------------------------
| Bank of Åland Group | Jun 30 | Jun 30 | Dec 31 |
--------------------------------------------------------------------------------
| EUR M | 2008 | 2007 | 2007 |
--------------------------------------------------------------------------------
| Guarantees and pledges | 18 | 29 | 25 |
--------------------------------------------------------------------------------
| Other commitments | 158 | 163 | 143 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | 176 | 191 | 168 |
--------------------------------------------------------------------------------
10. DERIVATIVE CONTRACTS
--------------------------------------------------------------------------------
| Bank of Åland Group | Jun 30, | | Jun 30, | |
| | 2008 | | 2007 | |
--------------------------------------------------------------------------------
| EUR M | For | | For | |
| | hedging | | hedging | |
| | purpose | Other | purposes | Other |
--------------------------------------------------------------------------------
| Value of underlying | | | | |
| property | | | | |
--------------------------------------------------------------------------------
| Interest rate derivatives | | | | |
--------------------------------------------------------------------------------
| Interest rate swap | 333 | 7 | 340 | 9 |
| contracts | | | | |
--------------------------------------------------------------------------------
| Currency derivatives | | | | |
--------------------------------------------------------------------------------
| Forward contracts | 32 | 23 | 3 | 3 |
--------------------------------------------------------------------------------
| Interest rate and currency | 0 | 0 | 0 | 0 |
| swap contracts | | | | |
--------------------------------------------------------------------------------
| Equity derivatives | | | | |
--------------------------------------------------------------------------------
| Option contracts | | | | |
--------------------------------------------------------------------------------
| Purchased | 171 | 0 | 149 | 0 |
--------------------------------------------------------------------------------
| | 536 | 30 | 493 | 12 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equivalent credit values of | | | | |
| the contracts | | | | |
--------------------------------------------------------------------------------
| Interest rate derivatives | 8 | | 7 | |
--------------------------------------------------------------------------------
| Currency derivatives | 1 | | 0 | |
--------------------------------------------------------------------------------
| Equity derivatives | 28 | | 44 | |
--------------------------------------------------------------------------------
| | 38 | | 51 | |
--------------------------------------------------------------------------------
| The Group does not apply hedge accounting to derivative contracts. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 11. MATURITY BREAKDOWN OF CLAIMS AND LIABILITIES |
--------------------------------------------------------------------------------
| Bank of Åland Group | Jun 30, 2008 |
--------------------------------------------------------------------------------
| EUR M | < 3 mo | 3 - 12 | 1 - 5 | 5 - 10 | Over 10 | Total |
| | | mo | yrs | yrs | yrs | |
--------------------------------------------------------------------------------
| Claims | | | | | | |
--------------------------------------------------------------------------------
| Debt securities | | | | | | |
| eligible for | | | | | | |
--------------------------------------------------------------------------------
| Refinancing in | 115 | 6 | 55 | 0 | | 177 |
| central banks | | | | | | |
--------------------------------------------------------------------------------
| Credit institutions | 214 | | | | | 214 |
| and central banks | | | | | | |
--------------------------------------------------------------------------------
| The public and | 196 | 207 | 766 | 904 | 36 | 2,109 |
| public sector | | | | | | |
| entities | | | | | | |
--------------------------------------------------------------------------------
| Other debt | 87 | | | | | 87 |
| securities | | | | | | |
--------------------------------------------------------------------------------
| | 613 | 213 | 821 | 904 | 36 | 2,588 |
--------------------------------------------------------------------------------
| Liabilities | | | | | | |
--------------------------------------------------------------------------------
| Credit institutions | 22 | | 30 | | | 52 |
| and central banks | | | | | | |
--------------------------------------------------------------------------------
| The public and | 1,455 | 107 | 5 | 0 | | 1,567 |
| public sector | | | | | | |
| entities | | | | | | |
--------------------------------------------------------------------------------
| Debt securities | 436 | 240 | 135 | | | 811 |
| issued to the public | | | | | | |
--------------------------------------------------------------------------------
| Subordinated | 2 | 10 | 7 | 33 | | 52 |
| liabilities | | | | | | |
--------------------------------------------------------------------------------
| | 1,915 | 357 | 177 | 33 | | 2,483 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
No estimates of maturity dates have been made. Spot deposits, for example, are
found in the category < 3 months.
--------------------------------------------------------------------------------
| Bank of Åland Group | Jun 30, 2007 |
--------------------------------------------------------------------------------
| EUR M | < 3 mo | 3 - 12 | 1 - 5 | 5 - 10 | Over 1o | Total |
| | | mo | yrs | yrs | yrs | |
--------------------------------------------------------------------------------
| Claims | | | | | | |
--------------------------------------------------------------------------------
| Debt securities | | | | | | |
| eligible for | | | | | | |
--------------------------------------------------------------------------------
| refinancing in | 48 | 39 | 14 | 0 | 0 | 102 |
| central banks | | | | | | |
--------------------------------------------------------------------------------
| Credit institutions | 173 | 0 | 0 | 0 | 0 | 173 |
| and central banks | | | | | | |
--------------------------------------------------------------------------------
| The public and | 182 | 223 | 704 | 863 | 23 | 1,996 |
| public sector | | | | | | |
| entities | | | | | | |
--------------------------------------------------------------------------------
| Other debt | 4 | 0 | 0 | 0 | 0 | 4 |
| securities | | | | | | |
--------------------------------------------------------------------------------
| | 407 | 263 | 718 | 864 | 23 | 2 275 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Liabilities | | | | | | |
--------------------------------------------------------------------------------
| Credit institutions | 67 | 0 | 0 | 0 | 0 | 67 |
| and central banks | | | | | | |
--------------------------------------------------------------------------------
| The public and | 1,277 | 90 | 13 | 1 | 0 | 1,381 |
| public sector | | | | | | |
| entities | | | | | | |
--------------------------------------------------------------------------------
| Debt securities | 288 | 292 | 118 | 0 | 0 | 699 |
| issued to the public | | | | | | |
--------------------------------------------------------------------------------
| Subordinated | 0 | 2 | 17 | 33 | 0 | 52 |
| liabilities | | | | | | |
--------------------------------------------------------------------------------
| | 1,632 | 384 | 148 | 33 | 0 | 2,198 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 12. INTEREST RATE REFIXING PERIODS |
--------------------------------------------------------------------------------
| 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 | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shows the Bank's interest rate-related assets and liabilities, including |
| derivatives, according to the interest rate refixing date as of June 30, |
| 2008. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Bank of Åland Group | Jun 30, 2007 |
--------------------------------------------------------------------------------
| EUR M | < 3 mo | 3-6 mo | 6-12 | 1-5 | > 5 yrs | Total |
| | | | mo | yrs | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Assets | 1,159 | 663 | 441 | 218 | 34 | 2,515 |
--------------------------------------------------------------------------------
| Liabilities | 1,302 | 623 | 134 | 236 | 34 | 2,329 |
--------------------------------------------------------------------------------
| Difference between | -143 | 40 | 307 | -18 | 0 | 186 |
| assets and | | | | | | |
| liabilities | | | | | | |
--------------------------------------------------------------------------------
Review Report, Bank of Åland Plc Interim Report for January 1 - June 30, 2008
To the Board of Directors of the Bank of Åland Plc
Introduction
We have reviewed the consolidated summary balance sheet of the Bank of Åland Plc
on June 30, 2008, the consolidated summary income statement, the summary
statement showing changes in consolidated equity capital and the consolidated
summary cash flow statements for the three-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 and Chief Executive are responsible for preparing the Interim Report
and for providing accurate and sufficient information in compliance with the
prevailing laws and regulations in Finland concerning the preparation of interim
reports. On the basis of the review we have performed, at the request of the
Board 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. On the basis of a
review, 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, 2008 and its operating results and cash flows during the
three-month period ending on that date, in accordance with the prevailing laws
and regulations in Finland concerning the preparation of interim reports.
Mariehamn/Helsinki, August 25, 2008
Ernst & Young Ab
Authorised Public Accountants
Leif Hermans Marja Tikka Terhi Mäkinen
Authorised Authorised Authorised
Public Public Public
Accountant Accountant Accountant
