Translation: Original published in Finnish on 11/1/2026 at 8:57 pm EET.

Aktia's Q3 earnings were clearly below our expectations, as both income and expenses developed more weakly than we had anticipated. Bright spots included positive new sales in asset management, which continued for the sixth consecutive quarter, and strengthened solvency, which supports profit-sharing capacity. Although we lowered our earnings forecasts for the coming years, we believe the share price reaction on the day of the earnings release was exaggerated because rising interest rates will support earnings growth and profitability in the future. We therefore reiterate our Accumulate recommendation but review our target price to EUR 12.5 (was EUR 13.0) following estimate cuts and an increased required return. 

Q3 result below our expectations

Aktia’s comparable EBIT fell to 22.5 MEUR (27.4 MEUR) in Q3, significantly missing our 26.6 MEUR estimate. Contrary to our expectations, net interest income turned into a decline from the previous quarter as the cost of market funding rose rapidly with interest rates, and interest rate hedges are delaying the benefits of rising interest rates. Net commission income missed our estimate, mainly due to greater commission expenses from changes in the card business, and comparable expenses were higher than we expected. Additionally, the company recorded 4.4 MEUR of one-off expenses related to restructuring. New sales in asset management remained positive for the sixth consecutive quarter (124 MEUR), and Private Banking client satisfaction improved notably. Solvency strengthened to the upper end of the target range (CET1 12.6%), and the company reiterated its earnings guidance.

Estimates decreased for the coming years

We lowered our earnings estimates for the coming years to reflect the decline in asset management commission margins and the sluggish loan demand outlook. Our estimate for the development of the NII margin remains almost unchanged, as we attribute the Q3 disappointment largely to timing factors. We also slightly increased our cost estimates. Overall, our comparable EBIT estimates decreased by 4–7% in the coming years, with the greatest impact on the years 2026–2027.

In 2027, our estimates show that comparable earnings will remain largely unchanged, which can be explained by the normalization of credit losses (in 2026, there was a one-time positive entry). Following this, earnings will return to moderate growth as interest rates rise and loan demand recovers. The main forecasting risk at this time relates not only to changes in interest rates but also to the extent of the positive impact that rising interest rates will have on net interest income over the next year.

Although we expect Aktia’s payout ratio to still stay at just over 60% this year, it should gradually rise to around 80%, in line with the rest of the industry.

Valuation is moderate

We have examined Aktia's valuation through balance sheet multiples, Nordic bank peers and the dividend model. The methods indicate a per-share value of EUR 11.2-14.0 (was EUR 11.9-14.6), with a midpoint of around EUR 12.6. We raised our required return on equity to 10% due to the increase in the risk-free rate while revising our long-term growth factor assumption upward, as higher interest rates reflect higher economic growth expectations.

Aktia's stock is currently trading at a P/B multiple of 1.2x and a P/E multiple of 10x, based on our current-year forecasts, which we consider to be moderate levels relative to our forecast of a return on equity of just over 12%. The upside in valuation multiples, supported by gradually starting earnings growth, and the strong dividend yield (6–7%), provide, in our view, a good expected annual return. According to our estimates, rising required returns in the Nordic banking sector have weighed on valuations across the entire sector over the past month, so a reduction in risks related to economic growth would likely boost Aktia’s stock price as well. At the same time, investors bear the risk of interest rates falling, as this would weaken the profitability of the entire industry.