Aktia Q2'25 flash comment: Report with no surprises

Translation: Original published in Finnish on 8/5/2025 at 9:18 am EEST.

Aktia released its Q2 results in the morning, which met our expectations. Revenue decreased along with net interest income, which also dragged comparable EBIT down as expected. Wealth management sales were a slight positive surprise in the report, as new sales were turned positive, contrary to our expectations. Of course, one quarter does not a summer make, so the trend should continue and further strengthen to give the asset management turnaround the credibility it needs. As expected, the company did not adjust its guidance and still expects comparable EBIT to be lower than last year.

Income decreased as expected along with net interest income

Aktia's operating income developed in Q2 very much in line with our forecast. As expected, net interest income decreased by around 11% year-on-year due to lower market interest rates. The loan portfolio, on the other hand, grew by 1.4% from the previous quarter, which is quite a good figure. Thus, loan demand seems to have recovered slightly faster than we expected. The development of demand was encouraging, especially in corporate customer loans, but also personal customer volumes continued on a positive trend.

Net commission income was slightly below the comparison period, but the positively developed life insurance result compensated for this effect. Assets under management increased by 1.3% to 15.9 BNEUR, which was a small positive surprise. Although subscriptions to investment funds were negative during the quarter, other product categories compensated for this. Positive sales development was seen in the bank's private customers and Finnish institutions, while international institutional clients continued their net redemptions. Overall, Aktia's net subscriptions were positive at 67 MEUR in Q2.

Aktia's total income for Q2 was 73.3 MEUR, which was fully in line with our expectations.

Decline in revenue still pressures earnings development

Aktia's comparable operating expenses in Q2 were also in line with our expectations, but larger-than-expected one-off items increased reported expenses. Our initial interpretation is that this is due to the ongoing transformation program, with costs being booked somewhat more front-loaded than anticipated. The company commented on the development of its transformation program, stating that the measures already taken are estimated to have an annual positive earnings impact of around 4 MEUR. However, comparable expenses decreased year-on-year due to a lower level of depreciation

Credit losses were well in line with our estimates, at 3.2 MEUR (0.16% of the loan portfolio). The level has thus remained quite high compared to the bank's historical level, which is likely explained by increased payment delays in corporate customer accounts. No significant deterioration in the quality of the loan portfolio was observed in Q2.

Adjusted earnings per share were EUR 0.29 and the comparable return on equity was around 12%. The year-on-year deterioration was significant, which means that, as expected, Aktia's results, like those of the rest of the banking sector, have also taken a hit from the decline in interest rates.

The outlook for commission income is more cautious than before

Aktia did not revise its guidance in connection with its Q2 report but still expects a decreasing comparable operating profit (124.5 MEUR in 2024). This was expected, as there are no immediate means to turn earnings to growth due to declining net interest income. However, the outlook for commission income development was lowered by one notch in the underlying assumptions. Aktia now expects its net commission income for the current year to be roughly at the same level as the previous year, whereas previously it had anticipated moderate growth.

Aktia also announced that the current head of wealth management, Kati Eriksson, will not continue in her position. Recruitment for the wealth management chief will begin immediately. Finding a suitable person would be particularly important for Aktia, as in a bank focused on asset management, the position plays a prominent role.