Bank of Åland Plc STOCK EXCHANGE RELEASE 3.5.2010 09.00 hrs
Interim report for the period January - March 2010
The report period in brief
Ålandsbanken Sverige AB was consolidated for the first time on March 31, 2009,
which means that the company's balance sheet was included in the Bank of Åland
Group, while its earnings for Q1 2009 were not. The Group's earnings and
financial ratios for Q1 2010 are thus not comparable to the corresponding data
for Q1 2009.
• Consolidated net operating profit decreased by 66 per cent to 2.2 million
euros (January-March 2009: EUR 6.3 M). Ålandsbanken Sverige AB pulled down
earnings for the report period by EUR 3.0 M.
• Net interest income increased by 6 per cent to EUR 9.7 M (9.1)
• Commission income increased by 83 per cent to EUR 9.1 M (5.0)
• Total income increased by 15 per cent to EUR 23.5 M (20.4)
• Expenses rose by 54 per cent to EUR 21.3 M (13.8)
• Impairment losses on loans amounted to EUR 0.1 M (0.4)
• Lending volume increased by 6 per cent to EUR 2,549 M (March 2009: 2,416)
• Deposits increased by 2 per cent to EUR 2,408 M (March 2009: 2,354)
• Mutual fund assets under management increased by 71 per cent to EUR 927 M
(542)
• Return on equity after taxes (ROE) was 1.9 per cent (13.1)
• The expense/income ratio amounted to 91 (69) per cent
• The total capital ratio in compliance with Basel 2 amounted to 12.6 per cent
(12.4)
• Earnings per share amounted to EUR 0.06 (1.37)
• Taking into consideration that the Group's earnings in 2009 included a
sizeable nonrecurring income item, earnings in 2010 are expected to be
substantially lower than in 2009
• The Group's operational earnings, excluding non-recurring income, are expected
to be at least at the same level as in 2009
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
Early 2010 represented a continued improvement of income from asset management
and private banking operations, while low marginal interest rates and depressed
deposit margins pulled down net interest income in traditional banking
operations. The Bank of Åland Group's managed assets showed very encouraging
growth as a consequence of both net influx and an upturn in values, while
lending and deposit volume increased moderately. Crosskey Banking Solutions Ab
Ltd's operations expanded during the period, contributing to higher “Other
operating income”. During the period, the operations of Ålandsbanken Sverige AB
were loss-making, even though managed assets showed very positive growth.
During January-March 2010, the consolidated net operating profit of the Bank of
Åland Group decreased by 66 per cent to EUR 2.2 M (Jan-Mar 2009: 6.3).
Income increased by 15 per cent to EUR 23.5 M (20.4), while expenses rose by 54
per cent to EUR 21.3 M (13.8). Return on equity after taxes (ROE) decreased to
1.9 (13.1) per cent, and earnings per share to EUR 0.06 (0.37).
Ålandsbanken Sverige AB (encompassing Ålandsbanken Sverige AB, Ålandsbanken
Fonder AB and Alpha Management Company S.A.) was consolidated in the Bank of
Åland Group for the first time on March 31, 2009. This meant that the company
was included in the statement of financial position, while earnings for the
first quarter of 2009 did not include effects generated in Ålandsbanken Sverige
AB. This affects comparability between the periods. The allocation between the
Group's Finnish and Swedish business areas can be found in the table entitled
“Earnings, newly acquired operations”.
Net interest income
During the report period, consolidated net interest income increased by 6 per
cent to EUR 9.7 M (9.1). Ålandsbanken Sverige AB had net interest income of EUR
1.9 M. Despite increasing lending volume, low interest rates depressed net
interest income during the period. Margins on lending showed a rising trend
during the period, while the prevailing market situation led to depressed
deposit margins and higher refinancing costs. Lending volume rose by 6 per cent
to EUR 2,549 M (2,416). Deposit volume increased by 2 per cent to EUR 2,408 M
(2,354).
Other income
Commission income rose by 83 per cent to EUR 9.1 M (5.0). The Group's focus on
private banking and the good stock market trend increased income from securities
and mutual funds as well as asset management. Commission income at Ålandsbanken
Sverige AB amounted to EUR 3.9 M.
Net income from securities trading for the Bank's own account was EUR 1.7 M
(2.7). Valuation and realisation of value increases in interest rate hedging
derivatives (the Bank of Åland does not apply hedge accounting) resulted in a
positive effect of EUR 1.6 M. Net income from dealing in the foreign exchange
market decreased to EUR 0.3 M (0.5). Net income from financial assets available
for sale was EUR 0.1 M (0.0), and net income from investment properties
decreased to 0.1 M (0.2). Other operating income increased to EUR 4.2 M (3.4) as
a consequence of higher income from the sale and development of information
technology (IT) systems.
The Group's total income increased by 15 percent to EUR 23.5 M (20.4).
Expenses
Staff costs rose by 69 per cent to EUR 12.9 M (7.6) as a consequence of the
acquisition of Ålandsbanken Sverige AB, employee recruitments at Crosskey
Banking Solutions Ab Ltd plus salary hikes as provided by collective agreements.
Staff costs at Ålandsbanken Sverige AB amounted to EUR 4.4 M. Changes in the
Bank's pension fund, Ålandsbanken Abp:s Pensionsstiftelse, according to the
corridor approach reduced staff costs by EUR 0.1 M (0.0).
Other administrative expenses (office, marketing, communications and IT)
increased to EUR 3.8 M (2.9). Production for own use totalled EUR 1.0 M (0.2)
and was related to expenses for computer software, which in accordance with
IFRSs must be capitalised. Depreciation/amortisation increased to EUR 2.0 M
(1.4). Other operating expenses amounted to EUR 3.6 M (2.0), of which EUR 1.8 M
arose at Ålandsbanken Sverige AB.
The Group's total expenses rose by 54 per cent to EUR 21.3 M (13.8).
Impairment losses on loans and other commitments
Impairment losses on loans amounted to EUR 0.1 M (0.4). All of these were
individually targeted impairment losses.
Balance sheet total and off-balance sheet obligations
At the end of the report period, the Group's balance sheet total was EUR 3,572 M
(3,104). During the period, the Group issued debenture loan 1/2010 in the amount
of EUR 11 M. Off-balance sheet obligations rose to EUR 296 M (257).
ASsets under management
The Group's managed assets rose to EUR 3,604 M (2,036) during the report period.
Management of mutual fund units rose by 71 per cent to EUR 927 M (542), while
assets under discretionary management increased by 71 per cent to EUR 1,408 M
(822).
Personnel
Hours worked in the Group, recalculated to full-time equivalent positions,
totalled 683 (492) positions, which represented an increase by 201 positions
compared to the preceding year. The increase was due to the acquisition of
Ålandsbanken Sverige AB as well as continued expansion of Crosskey Banking
Solutions Ab Ltd.
--------------------------------------------------------------------------------
| Bank of Åland Group | Mar 31, 2010 | Mar 31, 2009 |
--------------------------------------------------------------------------------
| Bank of Åland Plc | 303 | 305 |
--------------------------------------------------------------------------------
| Ab Compass Card Oy Ltd | 6 | 6 |
--------------------------------------------------------------------------------
| Crosskey Banking Solutions Ab Ltd | 188 | 154 |
--------------------------------------------------------------------------------
| Ålandsbanken Asset | 22 | 16 |
| Management Ab | | |
--------------------------------------------------------------------------------
| Ålandsbanken Fondbolag Ab | 6 | 6 |
--------------------------------------------------------------------------------
| Ålandsbanken Equities Ab | 10 | 5 |
--------------------------------------------------------------------------------
| Ålandsbanken Sverige Ab | 151 | 0 |
--------------------------------------------------------------------------------
| Total number of full-time equivalent | 683 | 492 |
| positions, recalculated from hours worked | | |
--------------------------------------------------------------------------------
Expense/income ratio
Efficiency measured as expenses divided by income, including and excluding loan
losses, respectively:
--------------------------------------------------------------------------------
| Bank of Åland Group | Mar 31, 2010 | Mar 31, 2009 |
--------------------------------------------------------------------------------
| Including loan losses | 0.91 | 0.69 |
--------------------------------------------------------------------------------
| Excluding loan losses | 0.91 | 0.67 |
--------------------------------------------------------------------------------
Capital adequacy
The Group is reporting capital adequacy in accordance with Pillar 1 in the Basel
2 regulations. The Group's total capital ratio at the end of March 2010 was 12.6
per cent. The capital requirement for credit risks has been calculated according
to the standardised approach, and the capital requirement for operational risks
according to the basic indicator approach in the Basel 2 regulations. Risk
management under Pillar 2 will be reported in the Annual Report for 2009.
The Bank of Åland will endeavour to begin applying an Internal Ratings Based
(IRB) approach in compliance with Basel
2 to calculate its capital adequacy requirement for credit risk, starting on
January 1, 2011. An application requesting approval for the use of Basel 2's
Internal Ratings Based (IRB) approach for calculating the capital adequacy
requirement for credit risk was submitted to the Finnish Financial Supervision
Authority during the report period.
Our assessment, according to the current regulations, is that this will
substantially improve the Bank of Åland's capital adequacy.
Capital adequacy
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Bank of Åland Group |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | Mar 31, | Mar 31, | Dec 31, 2009 |
| | 2010 | 2009 | |
--------------------------------------------------------------------------------
| Capital base, EUR M | | | |
--------------------------------------------------------------------------------
| Core capital | 127.8 | 127.0 | 129.3 |
--------------------------------------------------------------------------------
| Supplementary capital | 80.9 1 | 70.2 2 | 72.4 |
--------------------------------------------------------------------------------
| Total capital base | 208.7 | 197.2 | 201.7 |
--------------------------------------------------------------------------------
| Capital requirement for credit | 113.2 | 109.7 | 113.9 |
| risks | | | |
--------------------------------------------------------------------------------
| Capital requirement for | 2.9 | 0.5 | 2.2 |
| operational risks | | | |
--------------------------------------------------------------------------------
| Capital requirement for market | 16.4 | 16.7 | 14.9 |
| risks | | | |
--------------------------------------------------------------------------------
| Total capital requirement | 132.5 | 126.9 | 130.9 |
--------------------------------------------------------------------------------
| Total capital ratio, % | 12.6 | 12.4 | 12,3 |
--------------------------------------------------------------------------------
| Core capital ratio, % | 7.7 | 8.0 | 7.9 |
--------------------------------------------------------------------------------
1 Profit for the period is not included.
2 Includes preliminary negative goodwill and profit for the period minus
estimated dividend paid to shareholders.
The main reasons for the difference between the capital base and recognised
equity capital are that subordinated liabilities may be counted in the capital
base and that the proposed dividend may not be included in the capital base.
Deposits
Deposits from the public, including bonds and certificates of deposit issued,
increased by 2 per cent to EUR 2,408 M (2,354), of which EUR 328 M consisted of
deposits at Ålandsbanken Sverige AB. Deposit accounts rose by 4 per cent to EUR
2,023 M (1,946). Bonds and certificates of deposit issued to the public
decreased by 5 per cent to EUR 385 M (407).
Lending
The volume of lending to the public increased by 6 per cent and amounted to EUR
2,549 M (2,416). The volume of lending at
Ålandsbanken Sverige AB was EUR 204 M. Lending to households increased by 4 per
cent to EUR 1,733 M (1,663). Households accounted for 68 (69) per cent of the
Group's total lending volume. Lending to companies rose by 8 per cent to EUR
788M (727).
Corporate governance report
The Corporate Governance Report has been published in Swedish and Finnish on the
Bank of Åland website, www.alandsbanken.fi.
Annual general meeting
The Annual General Meeting of the Bank of Åland on April 19, 2010 approved the
proposal of the Board of Directors for a dividend to the shareholders of EUR
0.50 per share plus an anniversary dividend of EUR 0.20 per share. The dividend
was paid on April 29, 2010.
The Meeting unanimously elected Sven-Harry Boman, Kent Janér, Agneta Karlsson,
Göran Lindholm, Leif Nordlund, Teppo Taberman and Anders Wiklöf as members of
the Board of Directors.
Important events after the close of the report period
No important events have occurred after the close of the report period.
Outlook for 2010
Most observers expect a continued gradual recovery in the general economy and in
the financial system during 2010, but the economic situation will remain
uncertain and there is thus great sensitivity.
The Bank of Åland plans to implement a streamlining of its organisation. The
Bank has convened co-determination negotiations in Finland concerning a need to
reduce by 24 the number of positions on the Finnish mainland and in Group units
in Åland.
A review is being made of the cost structure at Ålandsbanken Sverige AB for the
purpose of increasing efficiency while continuing to offer customers the same
capacity and service.
The Executive Team has identified potential efficiency improvements equivalent
to an annual cost reduction of about EUR 3 M, of which half the potential is
found at Ålandsbanken Sverige AB. Nonrecurring costs associated with these
measures are expected to total about EUR 0.5 M during 2010.
The Group's assessment of the outlook for 2010 is based on its assumptions about
future developments in the fixed income and financial markets. However, general
interest rates, the demand for lending, the trend of the capital and financial
markets and the competitive situation, as well as the general economic situation
are factors that the Group cannot influence.
Based on this assessment and taking into account that the Group's earnings in
2009 included sizeable non-recurring income attributable to negative goodwill
from the acquisition of Kaupthing Bank Sverige AB, earnings in 2010 are expected
to be substantially lower than in 2009.
The Group's operational earnings, excluding nonrecurring income, are expected to
be at least at the same level as in 2009.
Interim reports will be published as follows during 2010.
January-June 2010 Monday, August 2, 2010
January-September 2010 Monday, November 1, 2010
Mariehamn, April 30, 2010
THE BOARD OF DIRECTORS
--------------------------------------------------------------------------------
| Financial ratios etc. | | | |
--------------------------------------------------------------------------------
| Bank of Åland Group | Jan-Mar | Jan-Mar | Full year |
| | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
| Earnings per share before | 0.06 | 0.37 | 2.27 |
| dilution, EUR 1 | | | |
--------------------------------------------------------------------------------
| Earnings per share after | 0.06 | 0.37 | 2.27 |
| dilution, EUR 2 | | | |
--------------------------------------------------------------------------------
| Market price per share at end | | | |
| of period, EUR | | | |
--------------------------------------------------------------------------------
| Series A shares | 32.40 | 25.00 | 33.90 |
--------------------------------------------------------------------------------
| Series B shares | 24.78 | 19.00 | 24.50 |
--------------------------------------------------------------------------------
| Equity capital per share, EUR 3 | 14.32 | 11.78 | 13.97 |
--------------------------------------------------------------------------------
| Return on equity after taxes, % | 1.9 | 13.1 | 17.8 |
| (ROE) 4 | | | |
--------------------------------------------------------------------------------
| Return on total assets, % (ROA) | 0.1 | 0.6 | 0.9 |
| 5 | | | |
--------------------------------------------------------------------------------
| Equity/assets ratio, % 6 | 4.7 | 4.4 | 4.8 |
--------------------------------------------------------------------------------
| Total lending volume, EUR M | 2,549 | 2,416 | 2,546 |
--------------------------------------------------------------------------------
| Total deposits from the public, | 2,408 | 2,354 | 2,411 |
| EUR M | | | |
--------------------------------------------------------------------------------
| Equity capital, EUR M | 166 | 137 | 162 |
--------------------------------------------------------------------------------
| Balance sheet total, EUR M | 3,572 | 3,104 | 3,379 |
--------------------------------------------------------------------------------
| Expense/income ratio | | | |
--------------------------------------------------------------------------------
| Including loan losses | 0.91 | 0.69 | 0.72 |
--------------------------------------------------------------------------------
| Excluding loan losses | 0.91 | 0.67 | 0.70 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1 Profit for the period before dilution / Average number of | |
| shares | |
| 2 Profit for the period after dilution / (Average number of | |
| shares + shares outstanding) | |
| 3 Equity capital − minority interest in capital / Number of | |
| shares on balance sheet date | |
| 4 (Net operating profit − taxes) / Average equity capital | |
| 5 (Net operating profit − taxes) / Average balance sheet | |
| total | |
| 6 Equity capital / Balance sheet total | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Summary statement of financial position | |
--------------------------------------------------------------------------------
| Bank of Åland Group | Mar 31,2010 | Mar 31, 2009 | Dec 31, 2009 |
--------------------------------------------------------------------------------
| EUR M | | | |
--------------------------------------------------------------------------------
| Assets | | | |
--------------------------------------------------------------------------------
| Cash | 139 | 44 | 33 |
--------------------------------------------------------------------------------
| Debt securities eligible for | 177 | 132 | 186 |
| refinancing with central banks | | | |
--------------------------------------------------------------------------------
| Claims on credit institutions | 214 | 246 | 264 |
--------------------------------------------------------------------------------
| Claims on the public and public | 2,549 | 2,416 | 2,545 |
| sector entities | | | |
--------------------------------------------------------------------------------
| Debt securities | 303 | 97 | 188 |
--------------------------------------------------------------------------------
| Shares and participations | 23 | 27 | 23 |
--------------------------------------------------------------------------------
| Shares and participations in | 2 | 1 | 1 |
| associated companies | | | |
--------------------------------------------------------------------------------
| Derivative instruments | 27 | 17 | 20 |
--------------------------------------------------------------------------------
| Intangible assets | 8 | 5 | 6 |
--------------------------------------------------------------------------------
| Tangible assets | 37 | 36 | 38 |
--------------------------------------------------------------------------------
| Other assets | 70 | 57 | 50 |
--------------------------------------------------------------------------------
| Accrued income and prepayments | 22 | 24 | 22 |
--------------------------------------------------------------------------------
| Deferred tax assets | 2 | 1 | 2 |
--------------------------------------------------------------------------------
| Total assets | 3,572 | 3,104 | 3,379 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| LIABILITIES AND EQUITY CAPITAL | | | |
--------------------------------------------------------------------------------
| Liabilities to credit | 371 | 89 | 263 |
| institutions | | | |
--------------------------------------------------------------------------------
| Liabilities to the public and | 2024 | 1947 | 2,040 |
| public sector entities | | | |
--------------------------------------------------------------------------------
| Debt securities issued to the | 787 | 692 | 743 |
| public | | | |
--------------------------------------------------------------------------------
| Derivative instruments | 9 | 12 | 8 |
--------------------------------------------------------------------------------
| Other liabilities | 94 | 81 | 57 |
--------------------------------------------------------------------------------
| Accrued expenses and prepaid | 30 | 68 | 27 |
| income | | | |
--------------------------------------------------------------------------------
| Subordinated liabilities | 69 | 60 | 59 |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 22 | 20 | 21 |
--------------------------------------------------------------------------------
| Total liabilities | 3,406 | 2,967 | 3,217 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Equity capital and minority | | | |
| interest | | | |
--------------------------------------------------------------------------------
| Share capital | 23 | 23 | 23 |
--------------------------------------------------------------------------------
| Share premium account | 33 | 33 | 33 |
--------------------------------------------------------------------------------
| Reserve fund | 25 | 25 | 25 |
--------------------------------------------------------------------------------
| Fair value reserve | 9 | 2 | 6 |
--------------------------------------------------------------------------------
| Retained earnings | 75 | 52 | 74 |
--------------------------------------------------------------------------------
| Shareholders' interest in | 165 | 136 | 161 |
| equity capital | | | |
--------------------------------------------------------------------------------
| Minority interest in capital | 1 | 1 | 1 |
--------------------------------------------------------------------------------
| Total equity capital | 166 | 137 | 162 |
--------------------------------------------------------------------------------
| Total liabilities and equity | 3,572 | 3,104 | 3,379 |
| capital | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Summary statement of comprehensive income | |
--------------------------------------------------------------------------------
| Bank of Åland Group | Jan-Mar 2010 | Jan-Mar 2010 | Full year |
| | | | 2009 |
--------------------------------------------------------------------------------
| EUR M | | | |
--------------------------------------------------------------------------------
| Net interest income | 9.7 | 9.1 | 39.1 |
--------------------------------------------------------------------------------
| Income from equity instruments | 0.0 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Commission income | 9.1 | 5.0 | 32.5 |
--------------------------------------------------------------------------------
| Commission expenses | -1.7 | -0.5 | -4.4 |
--------------------------------------------------------------------------------
| Net income from securities | 2.0 | 3.1 | 4.0 |
| transactions and foreign | | | |
| exchange dealing | | | |
--------------------------------------------------------------------------------
| Net income from financial | 0.1 | 0.0 | 0.5 |
| assets available for sale | | | |
--------------------------------------------------------------------------------
| Net income from investment | 0.1 | 0.2 | 0.2 |
| properties | | | |
--------------------------------------------------------------------------------
| Other operating income | 4.2 | 3.4 | 15.4 |
--------------------------------------------------------------------------------
| Total income | 23.5 | 20.4 | 87.2 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Staff costs | -12.9 | -7.6 | -44.6 |
--------------------------------------------------------------------------------
| Other administrative expenses | -3.8 | -2.9 | -16.7 |
--------------------------------------------------------------------------------
| Production for own use | 1.0 | 0.2 | 1.9 |
--------------------------------------------------------------------------------
| Depreciation/amortisation | -2.0 | -1.4 | -6.4 |
--------------------------------------------------------------------------------
| Other operating expenses | -3.6 | -2.0 | -11.4 |
--------------------------------------------------------------------------------
| Total expenses | -21.3 | -13.8 | -77.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Impairment losses on loans and | -0.1 | -0.4 | -2.9 |
| other commitments | | | |
--------------------------------------------------------------------------------
| Share of profit/loss in | 0.0 | 0.1 | 0.2 |
| associated companies | | | |
--------------------------------------------------------------------------------
| Negative goodwill | 0.0 | 0.0 | 23.1 |
--------------------------------------------------------------------------------
| Net operating profit | 2.2 | 6.3 | 30.5 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Income taxes | -1.4 | -1.8 | -3.7 |
--------------------------------------------------------------------------------
| Profit for the period | 0.8 | 4.5 | 26.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other comprehensive income | | | |
--------------------------------------------------------------------------------
| Assets available for sale | 0.4 | 0.6 | 0.2 |
--------------------------------------------------------------------------------
| Valuation differences | 2.9 | 0.0 | 3.7 |
--------------------------------------------------------------------------------
| Income tax on other | -0.1 | -0.2 | -0.1 |
| comprehensive income | | | |
--------------------------------------------------------------------------------
| Total comprehensive income for | 4.0 | 5.0 | 30.7 |
| the period | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit for the period | 0.7 | 4.3 | 26.2 |
| attributable to owners of the | | | |
| parent | | | |
--------------------------------------------------------------------------------
| Profit for the period | 0.0 | 0.2 | 0.7 |
| attributable to minority | | | |
| interests | | | |
--------------------------------------------------------------------------------
| Total | 0.8 | 4.5 | 26.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total comprehensive income for | 4.0 | 4.7 | 30,0 |
| the period attributable to | | | |
| owners of the parent | | | |
--------------------------------------------------------------------------------
| Total comprehensive income for | 0.0 | 0.2 | 0,7 |
| the period attributable to | | | |
| minority interests | | | |
--------------------------------------------------------------------------------
| Total | 4.0 | 5.0 | 30,7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share | | | |
--------------------------------------------------------------------------------
| Earnings per share before | 0.06 | 0.37 | 2.27 |
| dilution, EUR 1 | | | |
--------------------------------------------------------------------------------
| Earnings per share after | 0.06 | 0.37 | 2.27 |
| dilution, EUR 2 | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1 Profit for the period before dilution / Average number of shares |
| 2 Profit for the period after dilution / (Average number of shares + shares
| |outstanding)
|
|-------------------------------------------------------------------------------
-
--------------------------------------------------------------------------------
| Income statement by quarter |
--------------------------------------------------------------------------------
| Bank of Åland Group | Q1 2010 | Q4 2009 | Q3 2009 | Q2 2009 | Q1 2009 |
--------------------------------------------------------------------------------
| EUR M | | | | | |
--------------------------------------------------------------------------------
| Net interest income | 9.7 | 9.7 | 10.2 | 10.1 | 9.1 |
--------------------------------------------------------------------------------
| Income from equity | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| instruments | | | | | |
--------------------------------------------------------------------------------
| Commission income | 9.1 | 10.0 | 9.4 | 8.1 | 5.0 |
--------------------------------------------------------------------------------
| Commission expenses | -1.7 | -1.3 | -1.7 | -0.9 | -0.5 |
--------------------------------------------------------------------------------
| Net income from securities | 2.0 | -0.4 | 0.4 | 0.8 | 3.1 |
| transactions and foreign | | | | | |
| exchange dealing | | | | | |
--------------------------------------------------------------------------------
| Net income from financial | 0.1 | 0.1 | 0.2 | 0.1 | 0.0 |
| assets available for sale | | | | | |
--------------------------------------------------------------------------------
| Net income from investment | 0.1 | 0.0 | 0.0 | 0.0 | 0.2 |
| properties | | | | | |
--------------------------------------------------------------------------------
| Other operating income | 4.2 | 5.0 | 3.1 | 3.9 | 3.4 |
--------------------------------------------------------------------------------
| Total income | 23.5 | 23.2 | 21.5 | 22.1 | 20.4 |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Staff costs | -12.9 | -13.4 | -11.3 | -12.3 | -7.6 |
--------------------------------------------------------------------------------
| Other administrative | -3.8 | -5.0 | -4.2 | -4.6 | -2.9 |
| expenses | | | | | |
--------------------------------------------------------------------------------
| Production for own use | 1.0 | 0.8 | 0.8 | 0.2 | 0.2 |
--------------------------------------------------------------------------------
| Depreciation/amortisation | -2.0 | -1.6 | -1.6 | -1.7 | -1.4 |
--------------------------------------------------------------------------------
| Other operating expenses | -3.6 | -3.8 | -2.5 | -3.0 | -2.0 |
--------------------------------------------------------------------------------
| Total expenses | -21.3 | -23.0 | -18.9 | -21.5 | -13.8 |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Impairment losses on loans | -0.1 | -0.6 | -0.2 | -1.8 | -0.4 |
| and other commitments | | | | | |
--------------------------------------------------------------------------------
| Share of profit/loss in | 0.0 | 0.0 | 0.1 | 0.1 | 0.1 |
| associated companies | | | | | |
--------------------------------------------------------------------------------
| Negative goodwill | 0.0 | 0.0 | 0.0 | 23.1 | 0.0 |
--------------------------------------------------------------------------------
| Net operating profit | 2.2 | -0.4 | 2.7 | 22.0 | 6.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings, newly acquired operations |
--------------------------------------------------------------------------------
| Bank of Åland Group | Jan-Mar| Jan-Mar | Jan-Mar | Jan-Mar | Jan-Dec |
| | 2010 | 2010 | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
| EUR M | Sweden | Finland | Total | Total | Total |
--------------------------------------------------------------------------------
| Net interest income | 1.9 | 7.9 | 9.7 | 9.1 | 39.1 |
--------------------------------------------------------------------------------
| Income from equity | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| investments | | | | | |
--------------------------------------------------------------------------------
| Commission income | 3.9 | 5.2 | 9.1 | 5.0 | 32.5 |
--------------------------------------------------------------------------------
| Commission expenses | -1.1 | -0.6 | -1.7 | -0.5 | -4.4 |
--------------------------------------------------------------------------------
| Net income from | 0.0 | 2.0 | 2.0 | 3.1 | 4.0 |
| securities transactions | | | | | |
| and foreign currency | | | | | |
| dealing | | | | | |
--------------------------------------------------------------------------------
| Net income from financial | 0.0 | 0.1 | 0.1 | 0.0 | 0.5 |
| assets available for sale | | | | | |
--------------------------------------------------------------------------------
| Net income from | 0.2 | -0.1 | 0.1 | 0.2 | 0.2 |
| investment properties | | | | | |
--------------------------------------------------------------------------------
| Other operating income | 0.6 | 3.7 | 4.2 | 3.4 | 15.4 |
--------------------------------------------------------------------------------
| Total income | 5.5 | 18.0 | 23.5 | 20.4 | 87.2 |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Staff costs | -4.4 | -8.5 | -12.9 | -7.6 | -44.6 |
--------------------------------------------------------------------------------
| Other administrative | -2.3 | -1.5 | -3.8 | -2.9 | -16.7 |
| expenses | | | | | |
--------------------------------------------------------------------------------
| Production for own use | 0.0 | 1.0 | 1.0 | 0.2 | 1.9 |
--------------------------------------------------------------------------------
| Depreciation/amortisation | 0.0 | -2.0 | -2.0 | -1.4 | -6.4 |
--------------------------------------------------------------------------------
| Other operating expenses | -1.8 | -1.8 | -3.6 | -2.0 | -11.4 |
--------------------------------------------------------------------------------
| Total expenses | -8.5 | -12.7 | -21.3 | -13.8 | -77.2 |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Impairment losses on | 0.1 | -0.2 | -0.1 | -0.4 | -2.9 |
| loans and other | | | | | |
| commitments | | | | | |
--------------------------------------------------------------------------------
| Share of profit/loss in | 0.0 | 0.0 | 0.0 | 0.1 | 0.2 |
| associated companies | | | | | |
--------------------------------------------------------------------------------
| Negative goodwill | 0.0 | 0.0 | 0.0 | 0.0 | 23.1 |
--------------------------------------------------------------------------------
| Net operating profit | -3.0 | 5.1 | 2.2 | 6.3 | 30.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Statement of changes in equity capital |
--------------------------------------------------------------------------------
| Bank of Åland | | | | | | | | | |
| Group | | | | | | | | | |
--------------------------------------------------------------------------------
| EUR M |Share|Share| Res | Fair | Trans | Reta | Total| Minor | Total|
| |capi-|prem-|erve | value| lation| ined |before| ity | |
| | tal | ium |fund |reser | diffe- earn |minor-| inter | |
| | |acco-| ´ | ve | erence| ings | ity | est | |
| | | unt | | | | |inter | | |
| | | | | | | | est | | |
--------------------------------------------------------------------------------
| Equity | 23. | 33. | 25. | 1.7 | 0.0 | 53.6 | 136. | 1.6 | 138. |
| capital, Dec | 3 | 3 | 1 | | | | 9 | | 5 |
| 31, 2008 | | | | | | | | | |
--------------------------------------------------------------------------------
| Comprehensive | | | | 0.4 | | 4.3 | 4.7 | 0.2 | 4.9 |
| income for the | | | | | | | | | |
| period | | | | | | | | | |
--------------------------------------------------------------------------------
| Dividend paid | | | | 0.0 | | -5.8 | -5.8 | -0.8 | -6.6 |
--------------------------------------------------------------------------------
| Equity | 23. | 33. | 25. | 2.1 | 0.0 | 52.1 | 135. | 1.0 | 136. |
| capital, Mar | 3 | 3 | 1 | | | | 8 | | 8 |
| 31, 2009 | | | | | | | | | |
--------------------------------------------------------------------------------
| Comprehensive | | | | -0.2 | 3.7 | 21.9 | 25.3 | 0.5 | 25.8 |
| income for the | | | | | | | | | |
| period | | | | | | | | | |
--------------------------------------------------------------------------------
| Dividend paid | | | | | 0.0 | 0.0 | 0.0 | -0.8 | -0.8 |
--------------------------------------------------------------------------------
| Other changes | | | | | | | | 0.4 | 0.4 |
| in equity | | | | | | | | | |
| capital | | | | | | | | | |
| attributable | | | | | | | | | |
| to minority | | | | | | | | | |
| interests | | | | | | | | | |
--------------------------------------------------------------------------------
| Equity | 23. | 33. | 25. | 1.8 | 3.7 | 74.0 | 161. | 1.0 | 162. |
| capital, Dec | 3 | 3 | 1 | | | | 2 | | 2 |
| 31, 2009 | | | | | | | | | |
--------------------------------------------------------------------------------
| Comprehensive | | | | 0.3 | 2.9 | 0.7 | 4.0 | 0.0 | 4.0 |
| income for the | | | | | | | | | |
| period | | | | | | | | | |
--------------------------------------------------------------------------------
| Equity | 23. | 33. | 25. | 2.2 | 6.6 | 74.7 | 165. | 1.0 | 166. |
| capital, Mar | 3 | 3 | 1 | | | | 2 | | 2 |
| 31, 2010 | | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow statement | | |
--------------------------------------------------------------------------------
| Bank of Åland Group | Jan-Mar 2010 | Jan-Mar 2009 |
--------------------------------------------------------------------------------
| EUR M | | | | |
--------------------------------------------------------------------------------
| Cash flow from operating | | | | |
| activities | | | | |
--------------------------------------------------------------------------------
| Net operating profit | 2.2 | | 6.3 | |
--------------------------------------------------------------------------------
| Adjustment for net operating | -3.8 | | 3.7 | |
| profit items not affecting cash | | | | |
| flow | | | | |
--------------------------------------------------------------------------------
| Gains/losses from investing | -0.2 | | -0.2 | |
| activities | | | | |
--------------------------------------------------------------------------------
| Income taxes paid | -0.2 | | -1.1 | |
--------------------------------------------------------------------------------
| Changes in assets and liabilities | -15.6 | -17.6 | -8.7 | -0.1 |
| in operating activities | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from investing | | -2.2 | | 30.0 1 |
| activities | | | | |
--------------------------------------------------------------------------------
| Cash flow from financing | | 59.3 | | -17.3 |
| activities | | | | |
--------------------------------------------------------------------------------
| Exchange rate differences in cash | | 7.5 | | 0.0 |
| and cash equivalents | | | | |
--------------------------------------------------------------------------------
| Change in cash and cash | | 46.9 | | 12.6 |
| equivalents | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash and cash equivalents, | | 331.1 | | 323.5 |
| January 1 | | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents, March | | 378.0 | | 336.1 |
| 31 | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1 Disbursement for the purchase of Kaupthing Bank Sverige AB: EUR 34.1 M. |
| Cash and cash equivalents in Kaupthing amounted to EUR 63.5 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 28 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 of the Parent Company has the following address:
Bank of Åland Plc
Nygatan 2
AX-22100 Mariehamn, Åland, Finland
The shares of the Bank of Åland Plc are traded on the Nasdaq OMX Helsinki Oy
(Helsinki Stock Exchange).
The Interim Report for the financial period January 1-March 31, 2010 was
approved by the Board of Directors on April 30 , 2010.
2. Basis for preparation and essential accounting principles
Basis for preparation
The Interim Report for the period January 1-March 31, 2010 has been prepared in
compliance with the International Financial
Reporting Standards (IFRSs) and IAS 34, “Interim Financial Reporting,” that have
been adopted by the European Union.
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, 2009.
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, 2009, 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 norms and standards that will apply starting in 2010:
Improvements to International Financial Reporting Standards (2009)
IFRS 2, “Share-based Payments”
IFRS 3, “Business Combinations”
IAS 27, “Consolidated and Separate Financial Statements”
IAS 39 Financial instrument: Recognition and Measurement” - Eligible Hedged
Items
IFRIC 12, “Service Concession Arrangements”
IFRIC 15, “Agreements for the Construction of Real Estate”
IFRIC 16, “Hedges of a Net Investment in a Foreign Operation”
IFRIC 17, “Distributions of Non-cash Assets to Owners”
IFRIC 18, “Transfers of Assets from Customers”
3. Estimates and judgements
Preparation of financial statements in compliance with IFRSs requires the
company's Executive Team to make estimates and judgements that affect the
recognised amounts of assets and liabilities, income and expenses as well as
disclosures 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 the estimates.
4. Segment report
The Bank of Åland Group reports operating segments in compliance with IFRS 8,
which means that operating segments reflect the information that the Group's
Executive Team receives. The Finland segment includes the Bank of Åland Plc, Ab
Compass Card Oy Ltd, Ålandsbanken Asset Management Ab, Ålandsbanken Equities Ab,
Ålandsbanken Fondbolag Ab and Ålandsbanken Veranta Ab. The Sweden segment
includes Ålandsbanken Sverige AB, Ålandsbanken Fonder AB and Alpha Management
Company S.A. The Crosskey segment includes Crosskey Banking Solutions Ab and
S-Crosskey Ab.
--------------------------------------------------------------------------------
| Bank of Åland Group | Jan-Mar 2010 |
--------------------------------------------------------------------------------
| EUR M | Finland | Sweden | Crosskey| Elimina | Total |
| | | | | tions | |
--------------------------------------------------------------------------------
| Deposits, lending and | 9.1 | 2.3 | 0.0 | 0.0 | 11.4 |
| portfolio management | | | | | |
--------------------------------------------------------------------------------
| of which impairment losses, | -0.2 | 0.1 | 0.0 | 0.0 | -0.1 |
| loans | | | | | |
--------------------------------------------------------------------------------
| Capital market | 3.9 | 2.5 | 0.0 | 0.0 | 6.4 |
| products/services | | | | | |
--------------------------------------------------------------------------------
| Other income | 1.4 | 0.8 | 7.9 | -4.5 | 5.6 |
--------------------------------------------------------------------------------
| Staff costs | -5.5 | -4.6 | -3.3 | 0.0 | -13.4 |
--------------------------------------------------------------------------------
| Other expenses | -3.5 | -3.9 | -2.7 | 4.1 | -6.0 |
--------------------------------------------------------------------------------
| Depreciation/amortisation | -1.7 | 0.0 | -0.3 | 0.2 | -1.9 |
--------------------------------------------------------------------------------
| NET OPERATING PROFIT | 3.6 | -3.0 | 1.6 | -0.1 | 2.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Assets | 2,948.3 | 662.6 | 19.8 | -58.9 | 3,571.8 |
--------------------------------------------------------------------------------
| Liabilities | 2,800.6 | 608.3 | 13.9 | -17.2 | 3,405.6 |
--------------------------------------------------------------------------------
| Equity capital | 147.7 | 54.3 | 5.9 | -41.8 | 166.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Bank of Åland Group | Jan-Mar 2009 |
--------------------------------------------------------------------------------
| EUR M | Finland | Sweden | Crosskey| Elimina | Total |
| | | | | tions | |
--------------------------------------------------------------------------------
| Deposits, lending and | 11.3 | 0.0 | 0.0 | 0.0 | 11.3 |
| portfolio management | | | | | |
--------------------------------------------------------------------------------
| of which impairment losses, | -0.4 | 0.0 | 0.0 | 0.0 | -0.4 |
| loans | | | | | |
--------------------------------------------------------------------------------
| Capital market | 4.2 | 0.0 | 0.0 | 0.0 | 4.2 |
| products/services | | | | | |
--------------------------------------------------------------------------------
| Other income | 1.0 | 0.0 | 6.6 | -3.3 | 4.4 |
--------------------------------------------------------------------------------
| Staff costs | -5.2 | 0.0 | -2.7 | 0.0 | -7.9 |
--------------------------------------------------------------------------------
| Other expenses | -4.3 | 0.0 | -2.7 | 2.3 | -4.8 |
--------------------------------------------------------------------------------
| Depreciation/amortisation | -0.9 | 0.0 | -0.2 | 0.2 | -1.0 |
--------------------------------------------------------------------------------
| NET OPERATING PROFIT | 6.1 | 0.0 | 1.0 | -0.8 | 6.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Assets | 2,720.0 | 360.6 | 13.0 | 10.7 | 3,104.3 |
--------------------------------------------------------------------------------
| Liabilities | 2,697.3 | 303.0 | 9.2 | -42.0 | 2,967.4 |
--------------------------------------------------------------------------------
| Equity capital | 41.8 | 57.6 | 3.8 | 33.6 | 136.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| In the segment report, “Other staff costs” are recognised as staff costs |
| while in the external financial statements they are recognised as “Other |
| administrative expenses”, and IT depreciation/amortisation is recognised as |
| “Other expenses” while in the external financial statements it is recognised |
| as “Depreciation/amortisation” |
--------------------------------------------------------------------------------
5. Restructuring reserve
--------------------------------------------------------------------------------
| Bank of Åland group | Mar 31, | Utilised | Withdrawn | Mar 31, |
| | 2009 | | | 2010 |
--------------------------------------------------------------------------------
| EUR M | | | | |
--------------------------------------------------------------------------------
| Staff costs | 6.2 | -5.0 | -0.2 | 0.9 |
--------------------------------------------------------------------------------
| Rent for premises | 2.7 | -1.0 | -1.2 | 0.6 |
--------------------------------------------------------------------------------
| IT | 0.7 | -0.4 | 0.0 | 0.3 |
--------------------------------------------------------------------------------
| Total | 9.7 | -6.4 | -1.4 | 1.8 |
--------------------------------------------------------------------------------
6. Goodwill
--------------------------------------------------------------------------------
| Bank of Åland Group | Mar 31, 2010 | Mar 31, 2009 |
--------------------------------------------------------------------------------
| EUR M | | | | |
--------------------------------------------------------------------------------
| Opening balance | | 1.4 | | 1.4 |
--------------------------------------------------------------------------------
| Closing balance | | 1.4 | | 1.4 |
--------------------------------------------------------------------------------
7. Income taxes
--------------------------------------------------------------------------------
| Bank of Åland Group | Mar 31, | Mar 31, |
| | 2010 | 2009 |
--------------------------------------------------------------------------------
| EUR M | | |
--------------------------------------------------------------------------------
| Taxes for the period and prior periods | 1.2 | 1.8 |
--------------------------------------------------------------------------------
| Change in deferred tax assets/liabilities | 0.2 | 0.0 |
--------------------------------------------------------------------------------
| Income taxes | 1.4 | 1.8 |
--------------------------------------------------------------------------------
8. Dividend
--------------------------------------------------------------------------------
| Bank of Åland Group | 2009 | 2008 |
--------------------------------------------------------------------------------
| EUR | | |
--------------------------------------------------------------------------------
| Final dividend for 2009: EUR 0.50 per share | 5,768,061 | |
--------------------------------------------------------------------------------
| Final anniversary dividend for 2009: EUR 0.20 per | 2,307,224 | |
| share | | |
--------------------------------------------------------------------------------
| Final dividend for 2008: EUR 0.50 per share | | 5,768,061 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| The dividend for 2009 was adopted by the Annual General Meeting on April 19, |
| 2010. The record date was April 22, 2010 and the distribution date was April |
| 29, 2010. |
--------------------------------------------------------------------------------
9. Deposits from the public and public sector, including bonds and certificates
of deposit issued
--------------------------------------------------------------------------------
| Bank of Åland Group | Mar 31, | Mar 31, | Dec 31, |
| | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
| EUR M | | | |
--------------------------------------------------------------------------------
| Deposit accounts from the public and public | | | |
| sector | | | |
--------------------------------------------------------------------------------
| Demand deposit accounts | 307 | 378 | 385 |
--------------------------------------------------------------------------------
| Cheque accounts | 400 | 251 | 397 |
--------------------------------------------------------------------------------
| Environmental and Savings Accounts | 86 | 74 | 89 |
--------------------------------------------------------------------------------
| Prime Accounts | 693 | 723 | 763 |
--------------------------------------------------------------------------------
| Time deposits | 537 | 520 | 405 |
--------------------------------------------------------------------------------
| Total deposit accounts | 2,023 | 1,946 | 2,039 |
--------------------------------------------------------------------------------
| Bonds and subordinated debentures1 | 247 | 226 | 231 |
--------------------------------------------------------------------------------
| Certificates of deposit issued to the | 139 | 181 | 140 |
| public1 | | | |
--------------------------------------------------------------------------------
| Total bonds and certificates of deposit | 385 | 407 | 372 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Total deposits | 2,408 | 2,354 | 2,411 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1 This item does not include debt | | | |
| securities subscribed by credit | | | |
| institutions. | | | |
--------------------------------------------------------------------------------
10. Lending to the public and public sector by purpose
--------------------------------------------------------------------------------
| Bank of Åland Group | Mar 31, | Mar 31, | Dec 31, |
| | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
| EUR M | | | |
--------------------------------------------------------------------------------
| COMPANIES | | | |
--------------------------------------------------------------------------------
| Shipping | 76 | 83 | 76 |
--------------------------------------------------------------------------------
| Wholesale and retail trade | 63 | 61 | 64 |
--------------------------------------------------------------------------------
| Housing operations | 71 | 65 | 72 |
--------------------------------------------------------------------------------
| Other real estate operations | 154 | 138 | 154 |
--------------------------------------------------------------------------------
| Financial and insurance operations | 189 | 214 | 200 |
--------------------------------------------------------------------------------
| Hotel and restaurant operations | 17 | 15 | 16 |
--------------------------------------------------------------------------------
| Other service operations | 139 | 85 | 128 |
--------------------------------------------------------------------------------
| Agriculture, forestry and fishing | 10 | 7 | 11 |
--------------------------------------------------------------------------------
| Construction | 29 | 29 | 27 |
--------------------------------------------------------------------------------
| Other industry and crafts | 39 | 32 | 39 |
--------------------------------------------------------------------------------
| | 788 | 727 | 787 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| PRIVATE INDIVIDUALS | | | |
--------------------------------------------------------------------------------
| Home loans | 1,152 | 1 103 | 1,151 |
--------------------------------------------------------------------------------
| Securities and other investments | 336 | 324 | 340 |
--------------------------------------------------------------------------------
| Business operations | 118 | 111 | 119 |
--------------------------------------------------------------------------------
| Other household purposes | 127 | 126 | 124 |
--------------------------------------------------------------------------------
| | 1,733 | 1,663 | 1,734 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| PUBLIC SECTOR AND NON-PROFIT ORGANISATIONS | 28 | 25 | 25 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| TOTAL LENDING | 2,549 | 2,416 | 2,546 |
--------------------------------------------------------------------------------
11. Off-balance sheet commitments
--------------------------------------------------------------------------------
| Bank of Åland Group | Mar 31, | Mar 31, | Dec 31, |
| | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
| EUR M | | | |
--------------------------------------------------------------------------------
| Guarantees and pledges | 23 | 32 | 19 |
--------------------------------------------------------------------------------
| Other commitments | 273 | 225 | 287 |
--------------------------------------------------------------------------------
| | 296 | 257 | 306 |
--------------------------------------------------------------------------------
12. Derivative contracts
--------------------------------------------------------------------------------
| Bank of Åland Group | Mar 31, 2010 | Mar 31, 2009 |
--------------------------------------------------------------------------------
| EUR M | For | Other | For | Other |
| | hedging | | hedging | |
| | purposes | | purposes | |
--------------------------------------------------------------------------------
| Value of underlying | | | | |
| property | | | | |
--------------------------------------------------------------------------------
| Interest rate derivatives | | | | |
--------------------------------------------------------------------------------
| Forward contracts | 0 | 0 | 3 | 0 |
--------------------------------------------------------------------------------
| Swap contracts | 521 | 11 | 592 | 7 |
--------------------------------------------------------------------------------
| Option contracts | | | | |
--------------------------------------------------------------------------------
| Purchased | 1,558 | 6 | 67 | 24 |
--------------------------------------------------------------------------------
| Exercised | 6 | 58 | 24 | 67 |
--------------------------------------------------------------------------------
| Currency derivatives | | | | |
--------------------------------------------------------------------------------
| Forward contracts | 162 | 10 | 93 | 12 |
--------------------------------------------------------------------------------
| Interest rate and currency | 1 | 1 | 0 | 4 |
| swap contracts | | | | |
--------------------------------------------------------------------------------
| Equity derivatives | | | | |
--------------------------------------------------------------------------------
| Option contracts | | | | |
--------------------------------------------------------------------------------
| Purchased | 179 | 7 | 149 | 0 |
--------------------------------------------------------------------------------
| | 2,428 | 94 | 928 | 114 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| The equity derivatives that were purchased hedge option structures that are |
| embedded in bonds issued to the public. |
--------------------------------------------------------------------------------
13. Maturity breakdown of claims and liabilities
--------------------------------------------------------------------------------
| Bank of Åland Group | Mar 31, 2010 |
--------------------------------------------------------------------------------
| EUR M | < 3 | 3 -12 | 1- 5 | > 5 | Total |
| | months | months | years | years | |
--------------------------------------------------------------------------------
| Claims | | | | | |
--------------------------------------------------------------------------------
| Debt securities eligible for | 0 | 50 | 127 | 1 | 177 |
| refinancing in central banks | | | | | |
--------------------------------------------------------------------------------
| Credit institutions and | 343 | 0 | 0 | 0 | 343 |
| central banks | | | | | |
--------------------------------------------------------------------------------
| The public and public sector | 327 | 374 | 990 | 857 | 2,549 |
| entities | | | | | |
--------------------------------------------------------------------------------
| Other debt securities | 92 | 181 | 30 | 0 | 303 |
--------------------------------------------------------------------------------
| | 763 | 604 | 1,148 | 858 | 3,373 |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Liabilities | | | | | |
--------------------------------------------------------------------------------
| Credit institutions and | 44 | 297 | 12 | 18 | 371 |
| central banks | | | | | |
--------------------------------------------------------------------------------
| The public and public sector | 1,783 | 221 | 19 | 0 | 2,024 |
| entities | | | | | |
--------------------------------------------------------------------------------
| Debt securities issued to | 193 | 232 | 362 | 0 | 787 |
| the public | | | | | |
--------------------------------------------------------------------------------
| Subordinated liabilities | 6 | 2 | 24 | 37 | 69 |
--------------------------------------------------------------------------------
| | 2,026 | 752 | 417 | 55 | 3,251 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Bank of Åland Group | Mar 31, 2009 |
--------------------------------------------------------------------------------
| EUR M | < 3 | 3 -12 | 1- 5 | > 5 | Total |
| | months | months | years | years | |
--------------------------------------------------------------------------------
| Claims | | | | | |
--------------------------------------------------------------------------------
| Debt securities eligible for | 6 | 13 | 113 | 0 | 131 |
| refinancing in central banks | | | | | |
--------------------------------------------------------------------------------
| Credit institutions and | 246 | 0 | 0 | 0 | 246 |
| central banks | | | | | |
--------------------------------------------------------------------------------
| The public and public sector | 304 | 245 | 909 | 957 | 2,416 |
| entities | | | | | |
--------------------------------------------------------------------------------
| Other debt securities | 70 | 22 | 6 | 0 | 97 |
--------------------------------------------------------------------------------
| | 626 | 280 | 1,028 | 957 | 2,891 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Liabilities | | | | | |
--------------------------------------------------------------------------------
| Credit institutions and | 58 | 21 | 10 | 0 | 89 |
| central banks | | | | | |
--------------------------------------------------------------------------------
| The public and public sector | 1,789 | 156 | 1 | 0 | 1,947 |
| entities | | | | | |
--------------------------------------------------------------------------------
| Debt securities issued to | 91 | 265 | 336 | 0 | 692 |
| the public | | | | | |
--------------------------------------------------------------------------------
| Subordinated liabilities | 18 | 12 | 31 | -1 | 60 |
--------------------------------------------------------------------------------
| | 1,956 | 454 | 378 | -1 | 2,787 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| No estimates of maturity dates have been made. Spot deposits, for example, |
| are found in the category < 3 months. |
--------------------------------------------------------------------------------
14. Interest rate refixing periods
--------------------------------------------------------------------------------
| Bank of Åland Group | Mar 31, 2010 |
--------------------------------------------------------------------------------
| EUR M | < 3 | 3-6 | 6-12 | 1-5 | > 5 | Total |
| | months | months | months | years | years | |
--------------------------------------------------------------------------------
| Assets | 2,215 | 215 | 459 | 342 | 52 | 3,283 |
--------------------------------------------------------------------------------
| Liabilities | 2,397 | 194 | 352 | 208 | 53 | 3,204 |
--------------------------------------------------------------------------------
| Difference between | -182 | 20 | 107 | 134 | 0 | 79 |
| assets and | | | | | | |
| liabilities | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shows the Bank's interest rate-related assets and liabilities, including |
| derivatives at underlying value, according to the interest rate refixing |
| date as of March 31, 2010. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Bank of Åland Group | Mar 31, 2009 |
--------------------------------------------------------------------------------
| EUR M | < 3 | 3-6 | 6-12 | 1-5 | > 5 | Total |
| | months | months | months | years | years | |
--------------------------------------------------------------------------------
| Assets | 2,497 | 214 | 334 | 528 | 50 | 3,623 |
--------------------------------------------------------------------------------
| Liabilities | 2,536 | 273 | 292 | 361 | 51 | 2,513 |
--------------------------------------------------------------------------------
| Difference between | -40 | -58 | 42 | 167 | -1 | 110 |
| assets and | | | | | | |
| liabilities | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shows the Bank's interest rate-related assets and liabilities, including |
| derivatives at underlying value, according to the interest rate refixing |
| date as of March 31, 2009. |
--------------------------------------------------------------------------------
Review Report, Bank of Åland Plc Interim Report for January 1 - March 31, 2010
To the Board of Directors of the Bank of Åland Plc
INTRODUCTION
We have reviewed the consolidated summary statement of financial position of the
Bank of Åland Plc on March 31, 2010, the consolidated summary statement of
comprehensive income, the summary statement showing changes in consolidated
equity capital and the consolidated summary cash flow statements for the
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 are responsible for preparing the Interim
Report and for providing accurate and sufficient information in compliance with
International Financial Reporting Standards (IFRSs) as adopted by the European
Union (EU) as well as in accordance with the other 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. 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 March 31, 2010 and its operating results and cash flows during
the three-month period ending on that date, in compliance with IFRSs as adopted
by the EU and in accordance with the other prevailing laws and regulations in
Finland concerning the preparation of interim reports.
Mariehamn/Helsinki, May 3, 2010
Leif Hermans
Authorised Public Accountant
Terhi Mäkinen
Authorised Public Accountant
Bengt Nyholm
Authorised Public Accountant
