Aktia extensive report: Asset Management determines success of strategy period

Translation: Original published in Finnish on 12/15/2025 at 8:35 am EET.

Aktia's earnings have risen significantly with interest rates, and the recovery in loan demand and steady growth in Asset Management should keep profitability relatively stable in the coming years. We believe the stock is moderately priced given the outlook, making the investor's expected return attractive. We reiterate our Accumulate recommendation and revise our target price to EUR 12 (was EUR 11.0) in line with our estimate changes.

A bank focused on asset management

Aktia is a Finnish bank that offers its customers tailored solutions from its wide range of banking, wealth management, and life insurance services. Aktia differs from its domestic peers particularly due to the high proportion of asset management, and the bank's assets under management are more than double its loan portfolio. A significant factor in the growth of asset management has been the acquisition of Taaleri's wealth management operations in 2021. However, development has been subdued since then, as changes in investment teams have led to significant redemptions from the bank's flagship funds.

The company responded to the sluggish new sales by launching an acceleration program aimed at increasing revenues in 2025. In its updated growth strategy, Aktia seeks growth in asset management particularly from wealthy private individuals, a segment in which its market position in Finland is already quite strong. In the banking sector, SMEs represent a key growth segment.

A return to earnings growth is on the horizon

We have made only minor adjustments to Aktia's forecasts in connection with the update, and overall, our earnings forecasts for the coming years increased by around 1-4%.

In recent years, Aktia's earnings and profitability, as well as those of the rest of the banking sector, have clearly improved due to rising interest rates. However, the trend has temporarily reversed with interest rate levels, and in 2025, we expect Aktia's comparable EBIT to decrease by 15%, and by another 2% in 2026. After this, we estimate that earnings will return to steady but moderate growth in line with business volumes. We estimate that the recovering loan demand will turn Aktia's loan portfolio to clearer growth starting in 2026. Our growth forecasts for asset management, on the other hand, are quite moderate, reflecting the challenges in institutional sales. Achieving the ambitious growth targets (over 15% return on equity and 5% organic annual growth in commission income), which largely rest on asset management, would require a significantly more favorable development than this. However, Aktia's reported earnings and EPS are expected to continue growing in our forecasts for 2025-2026, as one-off expenses significantly burdened the 2024 and 2025 results.

We expect Aktia's profit distribution to be quite robust going forward, as the bank's solvency is already above the target level. In our estimates, the average payout ratio will be around 80% in the coming years.

Expected return is attractive

We have examined Aktia's valuation through balance sheet multiples, the dividend model, and Nordic banking peers.  The methods indicate a share value of EUR 11–14. Our target price is bit closer to the lower end of the fair value range, as we estimate that a significantly higher share price than the current one would require a clear increase in asset management sales, as performance has been subdued in recent years and AUM have stagnated. In any case, the stock is moderately priced relative to our profitability forecasts, and we believe the upside in multiples and a strong dividend yield (~7-8%) offer investors a good annual return of 10-15%.