Evli Bank Plc’s Half Year Financial Report January-June 2021

Helsinki, FINLAND


Record first half

Financial performance January-June 2021

  • Operating income was EUR 55.8 million (1-6/2020: EUR 33.0 million)
  • Operating profit was EUR 24.9 million (EUR 8.6 million)
  • Operating result of the Wealth Management and Investor Clients segment increased to EUR 19.1 million (EUR 10.1 million)
  • Operating result of the Advisory and Corporate Clients segment increased to EUR 5.7 million (EUR 0.9 million)
  • Revenue from own balance sheet developed positively and amounted to EUR 1.8 million (EUR -0.8 million)
  • At the end of June, assets under management amounted to EUR 16.1 billion (EUR 12.9 billion) on net basis.
  • Diluted earnings per share were EUR 0.63 (EUR 0.25) and return on equity was 37.7 percent (17.3%)
  • The ratio of recurring revenues to operational costs was 127 percent (121%).

Financial performance April-June 2021

  • The Group's net revenue was EUR 28.7 million (EUR 18.8 million)
  • The Group's operating profit was EUR 13.1 million (EUR 6.5 million)
  • Earnings per share amounted to EUR 0.29 (EUR 0.18).

Outlook for 2021 revised

The current year has started business-strong, supported by strong customer demand and favorable stock market developments.

Demand for advisory services has developed positively and its outlook for 2021 is stable. Evli's investment activities through its own balance sheet account for a limited share of Evli's business, but nevertheless it can have a significant impact on the development of profit in sudden market movements. Seasonal and annual variations in advisory activities and own investment returns are possible.

However, there are always risks associated with the overall development of the stock and interest rate markets. Any fall in prices or a reduction in investors' willingness to take risks would have a negative impact on the company's profit development. The group's assets under management reached a new record level at the end of the current quarter, and the product range has expanded especially to alternative investment products, mitigating the negative impact of a possible market turn.

Demand for advisory services has developed positively and its outlook for 2021 is stable. Evli's investment activities through its own balance sheet account for a limited share of Evli's business, but nevertheless it can have a significant impact on the development of profit in sudden market movements. Seasonal and annual variations in advisory activities and own investment returns are possible.

Taking into account the above considerations, and with the accumulated operating profit being almost at the level of the entire comparison year, we estimate that the operating profit in 2021 will clearly exceed the level of the previous year.

Key figures describing the Group’s financial performance

Income statement key figures   
Operating income, M€55.833.079.7
Operating profit/loss, M€24.98.629.1
Operating profit margin, %44.626.036.5
Profit/loss for the financial year, M€19.86.723.2
Profitability key figures   
Return on equity (ROE), %37.717.326.2
Return on assets (ROA), %
Balance sheet key figures   
Equity-to-assets ratio, %15.67.912.3
Group capital adequacy ratio, %15.915.315.2
Key figures per share   
Earnings per Share (EPS), fully diluted, €0.630.250.87
Comprehensive Earnings per Share (EPS), fully diluted, €0.640.250.88
Dividend per share, €  0.73*
Equity per share, €4.633.053.86
Share price at the end of the period, €18.808.5812.20
Other key figures   
Expense ratio (operating costs to net revenue)0.550.740.63
Recurring revenue ratio, %127121124
Personnel at the end of the period281248261
Market value, M€453.3205.1294.1

*Approved by the Annual General Meeting. The time of payment of the dividend has not yet been determined

Maunu Lehtimäki, CEO

Like in the first quarter, the development of the capital markets has continued on a positive note. Demand for shares and other risky asset classes has been strong and prices have been rising. Broad economic and monetary policy support measures, advances in coronavirus vaccination, signs of a recovery in the global economy and strong growth in business results have maintained investor optimism, as in the first half of the year. However, concerns about overheating of the economy and the development of inflationary pressures have increased in the USA and to a lesser extent in Europe.

Evli's operations developed excellently during the second quarter. Our client activity was at a high level and we are happy to have been able to meet our clients again physically during the late spring, in addition to over-the-network communication.

Evli's operating income for the second grew by 53 percent compared to the comparison period and totaled EUR 28.7 million. The Group's operating profit doubled to EUR 13.1 million. The result for the comparison period was improved by revenues of nearly EUR 3 million from securities trading and foreign exchange operations after the prices rebounded from the collapse that followed the start of the coronavirus crisis. Evli's return on equity increased to nearly 38 percent (17.3%) in the first half, and the ratio of recurring returns to operating expenses was 127 percent (121%).

Operating income for the second quarter in the Wealth Management and Investor Clients segment increased by 51 percent to EUR 28.7 million. At the end of June, the managed client assets amounted to a record EUR 16.1 billion (EUR 12.9 billion) and Evli's fund capital was EUR 10.3 billion (EUR 8 billion). The funds collected net entries of EUR 611 million, mainly for short-term fixed income investments, Nordic corporate bonds and European and American shares. The growth in segment returns was positively impacted by commission income from traditional and alternative funds, asset management fees and commissions for brokerage activities. Evli's position as a leading asset manager for wealthy individuals and Institutions was further strengthened, as evidenced by the new customers won and the client funds to be managed, as well as Evli's selection in Kantar Prospera's recent client survey as Finland's best and most widely used institutional asset manager. Evli's brand was again ranked the strongest in asset management services in the survey, and Evli received excellent assessments in portfolio management expertise, product quality, expertise in sustainable investment and sales personnel competence, among other things. Evli has previously ranked first in the study for five years in a row (2015-2019) and second place in 2020.

Operating income for the second quarter in the Advisory and Corporate Clients segment increased by 236 percent to EUR 7.6 million. Corporate Finance's invoicing recovered from the low level of the comparison period and was EUR 5.6 million (EUR 0.8 million). The incentive business grew as in previous years, and the invoicing of the unit was EUR 2.1 million (EUR 1.3 million). Last year's share swap, in which Evli Awards Management Oy and Alexander Incentives Oy merged into the new Evli Alexander Incentives Oy, was officially completed during the quarter. The new company's operations have developed excellently, and at the beginning of the year the company has won significant new incentive planning and management clients in both Finland and Sweden.

The key drivers for Evli's strategy, international sales and alternative investment products, have developed according to plan in the first half of the year. Despite travel restrictions, international sales have gone well. Since the beginning of the year, net subscriptions amount to approximately EUR 380 million and the share of international clients in Evli's total fund capital, including alternative investment products, has already risen to 25 percent.

Evli sold alternative investment products in the second quarter with a total of EUR 110 million, of which Evli Private Debt Fund, launched in May, raised EUR 59 million in its first closing as other investments went to Evli Infrastructure, Evli Impact Forest and Evli Rental Yield funds. The Evli Infrastructure Fund had its last closing, and the final size of the fund was more than EUR 150 million in line with the original target.

Responsibility is one of our strategic priorities and we have continued to develop it according to our plans. During the second quarter, we announced Evli's climate targets, and we aim to be a net zero asset manager by 2050 at the latest. Evli sets a target to be net zero in terms of emissions from its own operations (Scope 1 and 2) by 2025 at the latest and aims to halve the carbon emissions of its investments by 2030, provided that the investment environment allows for it. In addition, we will establish a Working Committee for the years 2021-2022 in order to assess how the investment-related interim target can be reached through real world carbon emission reductions and to ensure that it will be in line with the Paris Agreement.

The evaluation on the future of banking services announced at the end of January was completed and, accordingly, Evli has decided to exit the banking business. The exit will take place through an arrangement, by which Evli will demerge through a partial demerger into a new asset management group that will be listed and a company that will carry on Evli’s banking services and into which Fellow Finance will merge. In my opinion, the negotiated solution is the best possible one from the perspective of Evli's customers, shareholders and other key stakeholders and creates a solvent bank of a new era that specializes in providing consumer and corporate finance based on digital service concept. It will also free up financial and human resources to develop existing and new products and services to strengthen Evli's market position. Evli's customers' services will thus be further strengthened and we will be able to offer our clients a more comprehensive service package in cooperation with Fellow Bank and other key banking partners.

For additional information, please contact:

Maunu Lehtimäki, CEO, Evli Bank Plc, tel. +358 (0)50 553 3000, maunu.lehtimaki@evli.com 
Juho Mikola, CFO, Evli Bank Plc, tel. +358 (0)40 717 8888, juho.mikola@evli.com 

Evli Bank Plc

Evli is a bank specialized in investments that helps institutions, corporations and private persons increase their wealth sustainably. The product and service offering includes mutual funds, asset management and capital markets services, alternative investment products, equity research, incentive plan design and administration as well as Corporate Finance services. The company also offers banking services that support clients' investment operations. Evli is Finland´s most widely used institutional asset manager* and offers Finland's best Private Banking service**.

Evli has a total of EUR 16.1 billion in client assets under management (net 6/2021). Evli Group's equity capital totals EUR 115.1 million and its BIS capital adequacy ratio is 15.9 percent (June 30, 2021). The company has around 280 employees. Evli Bank Plc's B shares are listed on Nasdaq Helsinki Ltd.

*Kantar Prospera External Asset Management Finland 2017, 2018, 2019, 2020, 2021 surveys.
**Kantar Prospera Private Banking 2019 and 2020 Finland surveys.

Distribution: Nasdaq Helsinki Ltd, main media, www.evli.com