Aktia Bank Plc
Insider information
10 September 2019 at 8.00 a.m.
Aktia updates its strategy and long-term financial targets – the growth strategy focuses on asset management and new customers in growing cities in Finland
Aktia has updated its strategy and its financial targets. According to the strategy update, extending to 2023, Aktia is seeking an even stronger growth in asset management and new customers in the growing cities in Finland, and continues to further intensify its operations. The aim of the strategy is to support Aktia’s growth targets and to lead the company towards the new vision of being “The good bank. And a great asset manager”.
Long-term financial targets for 2023:
The company’s Board has confirmed the long-term financial targets as follows:
- a comparable operating profit of EUR 100 million (previously 80 million)
- a return on equity (ROE) of more than 11 per cent (previously 9.7 per cent)
- a comparable cost-to-income ratio of under 0.60 (previously 0.61), and
- a Common Equity Tier 1 capital ratio (CET1) 1.5-3.0 percentage points over regulatory requirements (unchanged).
Aktia’s dividend policy will remain unchanged. The goal is to pay out 60-80 per cent of the profit for the reporting period to the shareholders.
Aktia initiates co-operation negotiations as a part of the planned service entity renewal
As a part of the strategy update and its implementation a renewal of Aktia’s service entity is also planned. Aktia’s branch network and its possible adjustment will also be assessed. The change in customer behaviour and the demand for services regardless of place, as well as the increasing demand for personal financial advice, will lead to even less frequent visits to the bank branch. Due to these changes Aktia is seeking growth especially in growing cities in Finland and initiates co-operation negotiations. The co-operation negotiations will affect about 380 persons. Possible shifting to part-time work and lay-offs will affect 110 employees at the most.
The preliminary estimate is that the planned measures will bring annual savings of about EUR 3 million starting from 2020. The planned measures will have no effect on the company’s outlook for 2019, according to which the comparable operating profit 2019 is expected to be approximately on the same level as for 2018.
Aktia’s updated strategy
“Aktia’s new strategy update is a natural step forward from the company’s strategy defined in 2017. We are now even more determined in seeking growth in asset management. We will extend our offering in asset management and make our expertise available to an even more extended customer base in Finland as well as internationally. Our goal is to grow in the growing cities in Finland where the major part of our current and new customers are”, says Mikko Ayub, CEO of Aktia.
“Aktia is known as a bank providing asset management services. We now want to change this image by presenting the Aktia of the future, which is known to be a great asset manager, and the good bank close to its customers. Through the strategy update our goal is to appear as an agile and responsible player in a rapidly changing environment and to show that we can serve our customers in all situations in life”, says Ayub.
After the update Aktia’s strategy consists of three main themes:
- THE BEST ASSET MANAGEMENT
Aktia’s goal is to further extend its competitive offering within asset management through its own product development as well as carefully chosen partnerships. Aktia is putting emphasis on increasing private customers’ saving and investment activities. The bank will make its high-quality investment products and its rewarded asset management available to its extensive private customer network and institutional investors to a larger extent than previously. Aktia’s goal is also to continue the strong internationalisation of institutional asset management to new market areas.
- ATTAINING GROWTH IN NEW PRIVATE AND CORPORATE CUSTOMERS IN THE GROWING CITIES IN FINLAND
Aktia seeks growth in the growing cities in Finland and invests further in developing its offering for the customers’ different stages in life. Digital banking, investment and personal insurance services combined with personal visits to the bank branch enable value creation in new manners that take better into account each customer’s individual needs, and enable the provision of services regardless of time and place. Aktia will still focus on serving also especially small and medium-sized companies.
Aktia invests also further in the offering of life insurance products and will set up a new sales company for this purpose. The new sales company will cooperate with Veritas Pension Insurance Company Ltd and operate as Veritas’ agent.
- EFFICIENT OPERATIONS
Aktia will continue the standardisation and automation of its operations as an extension to its previous strategy. The goal is to renew and intensify operation methods in order to swiftly meet the changing customer needs in an even more agile manner and thus produce the customers with a better customer experience. At the same time Aktia is aiming at improving the profitability of operations as well as at freeing resources for growth investments in focus areas in accordance with the strategy.
Capital Markets Day
Aktia’s Capital Markets Day takes place in Helsinki today 10 September 2019 at 9.15 a.m. (EET). A more detailed account on the strategy update and how Aktia intends to reach the new financial targets will be provided during the Capital Markets Day. The presentations at the Capital Markets Day can be seen in a live webcast or as a recording after the event at the address https://aktia.videosync.fi/2019-09-10-cmd. The presentation material is available at Aktia’s website www.aktia.com at the start of the event. Presentations are held in English.
Aktia Bank Plc
Further information:
Mikko Ayub, CEO, tel. +358 10 247 6250
Outi Henriksson, CFO, tel. +358 10 247 6236
Lotta Borgström, Head of Investor Relations, tel. +358 10 247 6838, lotta.borgstrom@aktia.fi
Distribution:
Nasdaq Helsinki Ltd
Mass media
www.aktia.com
Aktia provides an extensive range of banking and asset management services as well as personal insurance. Aktia operates mainly in coastal areas and inland growth areas. Aktia provides services to its customers at branch offices, online, through mobile interfaces and telephone services. Aktia’s share is listed on Nasdaq Helsinki Ltd. For more information about Aktia see www.aktia.com.