AKTIA BANK HALF-YEAR REPORT 1-6/2017

CEO Martin Backman 8.8.2017

• Total income amounted to EUR 107.3 (109.8) million

• Net commission income increased by 16 % to EUR 45.7 (39.6) million.

• In the reference period, Aktia received EUR 5.9 million from the sale of Visa Europe.

• Net interest income from borrowing and lending continued to increase, while returns from the bank’s liquidity portfolio continued to decrease and net interest income fell by appr. 4 % to EUR 46.2 (48.7) million.

• The new core banking system was implemented successfully in the first week of July

• Total expenditure rose to EUR 77.0 (73.3) million

• EUR 3.1 (0.4) million were costs for restructuring related to personnel, and also IT expenses increased by 14 % due to the final implementation of the core banking system.

• The ongoing organisation changes and the new core banking system are expected to improve efficiency and the cost structure from 2018 onwards.

• The comparable operating profit amounted to EUR 32.8 (32.2) million.

2

THE FIRST HALF-YEAR

OUTLOOK FOR 2017 (UNCHANGED)

The continued low interest rates have a negative impact on the return from Aktia’s liquidity portfolio, resulting in lower net interest income than in 2016.

Write-downs on credits are expected to remain low in 2017.

The operating profit for 2017 is estimated to be lower than in 2016, as no larger one-time gains are expected.

3

4

EURm 1-6/2017 1-6/2016 CHANGE %

Total operating income 107.3 109.8 -2 %

Net interest income 46.2 48.7 -5 %

Net commission income 45.7 39.6 +16 %

Net income from life insurance 12.8 12.8 0 %

Other income 2.6 8.8 -71 %

Total operating expenses -77.0 -73.3 +5 %

Operating profit 30.8 37.0 -17 %

Comparable operating profit* 32.8 32.2 +2 %

Earnings per share (EPS), EUR 0.37 0.45 -18 %

Return on Equity (ROE), % 8.2% 9.8% -16 %

JANUARY - JUNE 2017

* Excluding e.g. gains from sale of Visa Europe 2016 and restructuring costs 2017

5

EURm 4-6/2017 4-6/2016 CHANGE %

Total operating income 54.2 59.4 -9 %

Net interest income 22.9 24.1 -5 %

Net commission income 24.6 20.7 +19 %

Net income from life insurance 5.8 6.9 -16 %

Other income 1.0 7.8 -87 %

Total operating expenses -39.7 -36.8 +8 %

Operating profit 14.4 22.4 -36 %

Comparable operating profit* 16.9 16.6 +2 %

Earnings per share (EPS), EUR 0.17 0.27 -36 %

Return on Equity (ROE), % 7.4% 11.6% -36 %

APRIL- JUNE 2017 – ASSET MGMT CONTINUED STRONGLY

* Excluding e.g. gains from sale of Visa Europe 2016 and restructuring costs 2017

BANKING BUSINESS

ASSET

MANAGEMENT

• Strong increase in commission

income

• NII decreased y-o-y

• Lower yield from liquidity portfolio

• Continued NII improvement from borrowing & lending

• Core banking system implemented

• Higher IT expenses increased total costs

• Increased new lending to households

• Continued growth in Private Banking client base and AuM

• Transformational actions led to changes of organisation and new areas of responsibility

• Strong market development and sales boosted commission income

• Net inflow increased, mutual funds AuM at all-time high EUR >4,8bn

• Transformational actions led to changes of organisation and new areas of responsibility

BUSINESS HIGHLIGHTS 1-6/2017

INSURANCE

• Life Insurance net investment income decreased

• Yield from Life Insurance portfolio was 0.1 (2.0)%

• Life insurance premiums written increased

• Transformational actions led to changes of organisation and new areas of responsibility

6

CORE BANKING SYSTEM SUCCESSFULLY IMPLEMENTED

• The total investment, including migration costs, was EUR 67 million, and the total activated investment costs for the project amounted to approximately EUR 61 million.

• The cost savings brought by the new core banking platform will materialise gradually from H2 2017 onwards.

• Depreciation of the project is planned to take place during 10 years corresponding to an annual depreciation of EUR 6 million.

7

CUSTOMER SEGMENTS

DIGITALITY

INSTITUTIONS

PRIVATE BANKING

RETAIL BANKING

CORPORATES, FOUNDATIONS, FAMILY OFFICES PREMIUM

BANKING

8

RESULT HIGHLIGHTS & OUTLOOK

2 SEGMENT OVERVIEW

3 BALANCE SHEET

9

1

MARKET DEVELOPMENT

10

milj. € %

117 113

103

97 96

46,2

-0,4

-0,2

0

0,2

0,4

0,6

0,8

0

20

40

60

80

100

120

140

2012 2013 2014 2015 2016 2017

% EURm

NII progress

4 978 5 192

5 525

5 788 6 523

7 328

0

500

1000

1500

2000

2500

3000

3500

4000

4500

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

2012 2013 2014 2015 2016 2017

Index EURm

Assets under management (AuM)

NII Euribor 3-m HEX 25 AuM

1-6/2017 1-6/2017

105,4 106,6

48.7

39.6

12.8 8.8

109.8

46.2 45.7

12.8

2.6

107.3

0

20

40

60

80

100

120

1-6/2016

1-6/2017

-2%

+16% -5%

0 % -71%

11

INCOME 1-6/2017

Net interest income

Net commission income

Net income from life insurance

Other operating income

Group total

EU

R m

illion

EXPENSES 1-6/2017

105,4 106,6

36.3

13.8

4.2

19.0

73.3

39.1

15.7

3.4

18.9

77.0

0,0

15,0

30,0

45,0

60,0

75,0

90,0

1-6/2016

1-6/2017

-20%

+14%

+8%

-1%

+5%

12

Personnel IT expenses Depreciations Other operating expenses

Group total

EU

R m

illion

50,4

59,4

50,9 50,6 53,1 54,2

14,6

22,4

15,8

8,6

16,4 14,4

15,6 16,6 16,9

8,5

15,9 16,9

0

20

40

60

80

1-3/2016 4-6/2016 7-9/2016 10-12/2016 1-3/2017 4-6/2017

Total operating income Operating profit Comparable operating profit

OPERATING INCOME & OPERATING PROFIT

EU

R m

illio

n

13

AKTIA GROUP COST-INCOME RATIO

105,4 106,6

0.70 0.68 0.69 0.70 0.72

2013 2014 2015 2016 1-6/2017

14

15

24.2

10.5

1.5 0.7

37.0

32.2

21.0

12.8

-3.6

0.6

30.8 32.8

-10

0

10

20

30

40

THE SEGMENTS' CONTRIBUTION TO THE OPERATING PROFIT 1-6/2017

1-6/2016

1-6/2017

Banking Business

Asset Management

& Life Insurance

Miscellaneous Eliminations Group total

-13%

+21%

-17%

-

-19%

EU

R m

illio

n

+2%

Group excl items affecting

comparability

1

3

16

2

RESULT HIGHLIGHTS

SEGMENT OVERVIEW

BALANCE SHEET

LENDING VS. ASSETS UNDER MANAGEMENT

17

E

UR

mil

lio

n 5,192

5,525 5,788

6,523

7,328

6,802 6,416

5,856 5,717 5,746

0

1000

2000

3000

4000

5000

6000

7000

8000

2013 2014 2015 2016 6/2017

AuM

Credit stock

18,715,9

13,0 13,6 14,812,8 13,3 13,8 14,9 15,8 16,4 15,9 15,3 15,0

13,311,5 10,4 10,0 9,6

11,2 10,211,5 12,4 13,0

14,6 14,1 14,3 14,4 14,8 15,3 15,8 14,817,117,9

5,811,3

12,9 14,8 15,115,9 14,6 12,6 11,0 9,6 7,3 7,0 7,2 7,2

7,49,0 11,1 10,9 11,1

10,8 9,49,1 8,4 8,1

7,8 7,8 7,7 8,9 9,0 8,9 8,8 8,78,1 7,4

7,9

12,2 14,6 11,48,6 9,5

8,7 9,58,3 7,7

7,3 7,4 7,1 7,4 7,9 8,9 8,67,4

6,2 5,35,8 5,3 5,3 4,2 3,1 2,4 1,8 0,4 0,8

-0,2 -0,6 -0,6 -1,8 -2,4

32,5

39,4

40,5

39,8

38,5

38,2

36,6

35,9

34,2

33,0

31,1

30,3

29,6

29,7

28,7

29,3

30,1

28,3

26,9

27,3

25,4

25,9

26,1

25,3

25,5

24,3

23,8

23,7

24,6

24,1

23,9

23,0 23,4

22,9

1-3

/09

4-6

/09

7-9

/09

10-1

2/

09

1-3

/10

4-6

/10

7-9

/10

10-1

2/

10

1-3

/11

4-6

/11

7-9

/11

10-1

2/

11

1-3

/12

4-6

/12

7-9

/12

10-1

2/

12

1-3

/13

4-6

/13

7-9

/13

10-1

2/

13

1-3

/14

4-6

/14

7-9

/14

10-1

2/

14

1-3

/15

4-6

/15

7-9

/15

10-1

2/

15

1-3

/16

4-6

/16

7-9

/16

10-1

2/

16

1-3

/17

4-6

/17

Axis TitleBorrowing and lending Hedging of interest rate risk Other

EU

R m

illio

n

18

NET INTEREST INCOME (QUARTERLY)

55,1

41,2 47,2

57,4 60,8

30,1 34,9

30,8

44,0 35,0

32,3 35,4

17,9 15,5

31,4 27,5

20,5 7,7

-0,6

0,6

-4,2

117,3 112,6

102,8 97,3 95,6

48,7 46,2

-10

30

70

110

150

2012 2013 2014 2015 2016 1-6/2016 1-6/2017

Borrowing- and lending Hedging Other

NET INTEREST INCOME (ANNUAL)

19

-5%

EU

R m

illio

n

AUM & NET INFLOW IN AKTIA’S MUTUAL FUNDS

20

EU

R m

illio

n

3 3 3 3 2 1 1

29 33

37 42 41

20 24

9

9

9

10 10

5

6

3

4

4

4 4

2

3

8

7

6

7 7

3

4

13

15

16

14 15

8

8

0

20

40

60

80

100

2012 2013 2014 2015 2016 1-6/2016 1-6/2017

Payments

Real Estate

Insurance

Lending

Saving

Other

NET COMMISSION INCOME

21

+16% y-o-y

EU

R m

illio

n

65.3

70.7

74.9 80.0

79.7

39.6

45.7

1

2

22

3

RESULT HIGHLIGHTS & OUTLOOK

SEGMENT OVERVIEW

BALANCE SHEET

ASSETS & LIABILITIES

23

19.5

22.2*

18.0

Aktia 2016 Banks in Finlandaverage 2016

Aktia 6/2017

• Aktia’s Common Equity Tier 1 Capital (CET1 %) on a good level

• Aktia’s Common Equity Tier 1 Capital decreased due to

• New core banking system increased intangible assets and other deductibles

• Growth in corporate lending increased risk-weighted assets by EUR 125m

CAPITAL ADEQUACY

Common Equity Tier 1 capital ratio, %

24

Change in CET1%

CET1 % 31.12.2016 19.5%

Increased intangible assets and other deductibles

-0.3 percentage points

Risk-weighted assets +EUR 125m

-1.2 percentage points

CET1 % 30.6.2017 18.0%

* Source: FSA 8.6.2017

8.67 9.39 9.26 9.24

8.84

31.12.2013 31.12.2014 31.12.2015 31.12.2016 30.6.2017

EUR/share

EQUITY PER SHARE (NAV)

25

26