AKTIA BANK PLC DEBT INVESTOR PRESENTATION March/April 2014
Executive Summary Aktia Bank Plc Retail bank with focus on growth areas in Finland Provides services mainly to private customers, small-sized companies and institutional investors Prudent lending policy and low loan losses Write-downs EUR 2.7 million (0.04 %) in 2013, non performing loans 0.66 % Solid and stable profitability over time NII EUR 112,6 million, Return on Equity (ROE) 8.1 % in 2013 Strong Capital Ratio Tier 1 Capital Ratio 12.3 %, expected to improve approx. 4 %-pts. by IRBA High Quality Covered Bonds Prime residential mortgages as collateral, located only in Finland Credit ratings Moody's: A3 / P-2, neg Covered Bonds: Aaa S&P: A- / A-2, neg 2
Presentation outline 1 Overview Aktia Group 2 Financial key figures Aktia Bank plc 3 Credit ratings 4 The Finnish economy 5 Summary and Contacts 3
Aktia s long history Helsinki Savings Bank is founded 1825 1987 1990 Helsinki Savings Banks and other savings banks found the first Mutual Fund company in Finland (Sp- Rahasto) 1991-1997 2000 1991: Aktia Savings Bank is founded through a merger of 8 Savings Banks 1992: Aktia Mutual Fund company is founded Vaasan Savings Bank and Porvoon Savings Banks are merged into Aktia 1993: Aktia acquires Sp-Rahasto Ltd 1995: First larger equity issue 1996: Aktia becomes central financial Credit Institute to Savings Banks and POP Banks (1997) 1997: Aktia Mutual Fund Ltd is founded 2001-2009 2010 2001: Aktia decides to remain independent and co-operation with Pohjola is ended Aktia Real Estate Mortgage Bank is founded 2005: Aktia Real Estate Agency and Aktia Card & Finance are founded 2007: Aktia acquires Veritas Life Insurance Ltd 2008: Aktia acquires Kaupthing s Asset Mgmt. business in Finland 2009: Veritas Mutual Non-life Insurance company is merged into Aktia Aktia is listed on the Nasdaq OMX Helsinki Stock Exchange 2012-2013 2012: Aktia sells 66% of Nonlife Insurance Co to Folksam Non-life and Pension Insurance Co Veritas 2013: Aktia decides to discontinue the services as Central Financial Credit Institute and the build-up of a new core banking system starts Aktia acquires the Savings Banks Vöyrin Säästöpankki and Saaristosäästöpankki Net bank is launched
Banking, Asset Management and Insurance services to 300,000 customers Focus on households, small-sized companies and institutional investors Solid capital base, liquidity and funding position Market cap EUR 540 million,~46,000 shareholders The majority of shares held by committed long-term owners Aktia Bank Plc (2013) Operating income EUR 224.2 million Operating profit EUR 65.4 million Assets EUR 10,934 million Banking, Operating profit EUR 50.5 million Market share in mortgages 4.1% and in deposits 3.7% Asset Management & Life Insurance, Operating profit EUR 23.9 million Market share in mutual funds 6.4% Market share in life insurances 2.4% Other services include; Non- life Insurance, Real Estate Services Sources: Bank of Finland and Federation of Finnish Financial Services 5
Group structure 1 st Feb 2014 Aktia Bank plc (listed on NASDAQ OMX Helsinki) 100% Aktia Life Insurance Ltd 100% 50.9%* Aktia Fund Management Company Ltd Aktia Real Estate Mortgage Bank plc 49.1%* POP Banks and savings banks 75% Aktia Asset Management Ltd** 100% Aktia Invest Ltd 100% Aktia Corporate Finance Ltd 100% Aktia Real Estate Agency 100% Saaristosäästöpankki Ltd *of share capital Aktia Bank holds 70% of votes. **Minority shares used as incentives for key personnel 6
Aktia Bank Plc Focus on retail banking and institutional investors Aktia Bank is the 4th largest bank in the Finnish retail market with focus on growth areas in Finland such as the Helsinki Metropolitan Area, the coastal area and selected inland growth centres. The majority of Finland's population lives in this area. Business strongly supported by own branch network. Aktia has 57 branch offices. Households accounts for 88 % of the loan portfolio and 78 % of the deposit stock. Strategic partnership with Veritas Pension Insurance. 7
Aktia Asset & Fund Management Assets under management at an all time high Aktia has established a position as one of the leading asset & fund management companies in Finland: Morningstar Awards 2013, Finland: Best Fund House: Fixed Income 2012&2013 EUR million 31.12.2013 31.12.2012 change % Assets under mgmt Group financial assets 6,341 5,877 8% 3,114 2,955 5% Total 9,456 8,832 7% 8
Aktia Life Insurance Producer of customer friendly life insurance services Key numbers Technical provisions EUR 965 million (EUR 462m unit-linked and EUR 503m interest rate related) Solvency ratio healthy 17.5% Several co-operation partners in the finance trade Aktia Bank, Folksam Non-Life Insurance Company, POP Bank Group, Pohjantähti Mutual Insurance Company, Alandia Insurance, Veritas Pension Insurance Customers Approximately 108,000 customers of which 102,000 are private customers and 6,000 corporate customers 11% 2.4% 8% 22% Market share 25% 31% Nordea Life Mandatum Life OP-Pohjola Group LocalTapiola Mutual Life Aktia Life Insurance Others Focusing sales on more profitable, less capital intensive products Premium income increased 27% to EUR 140 million y/y Life Insurances Loan Insurances Aktia Profile Policy 9
EUR million Life Insurance, premiums written 160 140.0 140 120 100 80 110.7 15.5 21.5 Interest-linked savings + pension Risk insurance 13.3 21.0 26.3 Aktia Profile accounts for more than 60% of total premiums written. 60 25.5 Unit-linked savings + pension 40 Unit-linked Aktia Profile 79.5 20 48.2 0 1-12/2012 1-12/2013 10
Action plan 2015 Focus resources on core business Utilise credit capacity to own customers Aktia terminates its services as central credit institution for local POP and Savings banks in 2015 Simplified group structure and modern systems to allow for lower costs Aktia invest in new core banking system Big one-off investment of approx. EUR 25 million Reduces running IT costs from 2015 onwards by EUR 5 million p.a. and allows for similar savings in processes Minimise costs from Basel III 11
Objectives for 2014 2015 Growth Increase the cross-selling index by 20% Increase commission income by 5% p.a. Profitability Expenses -5 % p.a. Capital adequacy Tier 1 capital ratio at least 13 % over an economic cycle (post IRBA) Dividend pay-out Dividend pay-out 40 60% of profit after taxes Best customer service in Finland Increased customer proximity and further improved customer service 12
Presentation outline 1 Overview Aktia Group 2 Financial key figures Aktia Bank plc 3 Credit ratings 4 The Finnish economy 5 Summary and Contacts 13
Results 2013 EUR million 2013 2012 change % Net Interest Income 112.6 117.3-4% Net Commission Income 70.7 65.3 8% Total Operating Income 224.2 217.9 3% Total Operating Expenses -157.2-154.2 2% Write-Downs -2.7-8.2-67% Operating Profit 65.4 56.0 17% Profit for the period 52.4 40.3 30% KEY FIGURES Banking Business, EUR million 2013 2012 2011 Cost-to-Income Ratio 0.72 0.74 0.73 Return on Equity (ROE) % 8.1 8.5 7.1 Borrowing from the public 3,797 3,632 3,645 Lending to the public 6,802 7,202 7,063 Mortgage Loans 5,521 5,850 5,607 Capital Adequacy Ratio % 19.3 20.2 16.2 Tier 1 Capital Ratio % 12.3 11.8 10.6 Risk-Weighted Commitments 3,464 3,611 3,694 14
Income (EUR million) Net commission income continued to increase +3% EUR 2.8 (1.9) million in dividends from Suomen Luottokunta 217.9 224.2-4% Result effect from Treasury reallocation EUR 4.6 (2.0) million 117.3 112.6 +8% 65.3 70.7 +3% 27.3 28.1 8.0 +58% 12.7 Net interest income Net commission income Net income from life insurance Other operating income Group total 1-12/2013 1-12/2012 15
WHOLESALE MARKET RETAIL Assets and liabilities Aktia Group 31.12.2013, EUR million ASSETS LIABILITIES Loans to public 6,802 62% Demand deposits 3,215 29% Mortgage loans granted by Aktia Bank 2,753 Time deposits 582 5% Other loans granted by Aktia Bank 1,167 Long-term issues to retail market 287 3% Senior debt 61 AKTIA REMB loans distributed by Aktia Bank 1,233 Subordinated debt 226 AKTIA REMB loans distributed by Local Banks 1,649 Long-term funding 3,614 33% Covered bonds 2,541 Treasury and money markets 722 7% Senior debt 1,066 Liquidity credits to Local Banks 0 Subordinated debt 6 Current account at Bank of Finland 405 Local Banks, Transaction Acc. & Deposits 665 6% Other 317 Savings Banks 361 POP Banks 305 Liquidity portfolio 2,191 20% Short-term funding 578 5% Government bonds / Municipal bonds 146 Repos + ECB 0 Government guaranteed bonds / Supra 188 CDs & wholesale MM deposits 405 Covered Bonds 1,464 Received cash collateral 173 Senior bonds issued by banks 390 Other bonds 3 Investment portfolio in Life Insurance 650 6% Technical prov. for unit-linked insurances 965 9% Invest. for unit-linked provisions, Life Insurance 466 4% Other Liabilities 385 4% Other assets 103 1% Equity 642 6% Total assets 10,934 100% Total liabilities and equity 10,934 100% 16
Structure of lending and deposits Business strongly supported by households through own retail network Lending 2013, EUR 6,802 million (2012, EUR 7,202 million) Deposits 2013, EUR 3,797 million (2012, EUR 3,631 million) 17
Prudent and low risk lending policy Aktia Bank operates under strict origination criteria: Identification of the customer mandatory Responsible lending: customer ability to pay stress tested Credit personnel internally educated and examined Rating based credit risk valuation Collateral only in Finland 100 80 60 40 20 0 Non-performing loans over 90 days due EUR million 0.56 0.55 0.59 34.0 36.4 39.6 0.85 0.80 0.84 58.1 56.1 60.0 0.93 66.9 0.85 61.0 0.73 0.69 0.63 0.68 0.68 0.66 53.2 50.0 45.0 48.0 47.0 45.0 31.12.2009 31.12.2010 31.3.2011 30.6.2011 30.9.2011 31.12.2011 31.3.2012 30.6.2012 30.9.2012 31.12.2012 31.3.2013 30.6.2013 30.9.2013 31.12.2013 Non-performing loans more than 90 days overdue As a percentage of stock incl commitments Total write-downs on credits and other commitments amounted to EUR 2.7 (6.4) million (EUR 1.8 (4.4) million is attributed to households and EUR 0.9 (2.0) to companies.) 1.00 0.80 0.60 % 0.40 0.20 0.00 18
High quality liquidity portfolio Buffer covering at least 12 months liquidity need 0 % 14 % 16 % 70 % Gvmt and gvmt guar. bonds Covered bonds Financial sector excl CB Corporate bonds 31.12.2013 31.12.2012 (EUR million) 2,424 1,862 Aaa 52.9 % 64.5 % Aa1 Aa3 27.5 % 19.1 % A1 A3 15.2 % 8.9 % Baa1 Baa3 1.3 % 3.7 % Ba1 Ba3 0.0 % 1.5 % Finnish municip. (no rating) 3.0 % 2.2 % No rating 0.1 % 0.0 % Total 100.0 % 100.0 % 19
The Bank's capital adequacy Solid capital base with Basel II standard approach method IRBA is reviewed by Financial Supervisory Authority. IRBA is expected to increase Tier 1 capital ratio by at least 4%-pts 15 16% IRBA at least 4%-pts 10.6 % 11.8 % 12.3 % 31.12.2013 31.12.2012 Capital buffer 395.1 441.3 Minimum capital requirements Capital adequacy ratio,% 274.2 288.9 19.3 20.2 Tier 1 capital ratio, % 12.3 11.8 2011 2012 2013 2014E 20
The Bank's capital base with Basel III Basel III entered into force 1 January 2014 Temporary exceptional permit concerning holdings in Aktia Life Insurance, risk weight 280% Principles for Group internal capital allocation adjusted Total effect on Core Tier 1 ratio -0.5%-pts 21
Sound funding profile Deposits and Covered bonds dominate 2013, EUR 8,767 million (2012, EUR 8,911 million) Wholesale Funding, EUR million * EIB, NIB etc. Current Outstanding Covered Bonds 2,541 EMTN Program 520 Domestic Program 294 Schuldschein 184 Other Funding * 362 22
Aktia Bank Plc, Covered Bond Issuer Aktia Bank operates under the current legislation as mortgage bank (Act on Mortgage Credit Bank Operations, MCBA 688/2010) and issues the covered bonds directly from the bank s balance sheet. The Bank has replaced the old co-owned Aktia Real Estate Mortgage Bank Plc as the active issuer on the EUR covered bond market. The Aktia Bank mortgage loan portfolio is very high quality: Only prime residential mortgage loans Collateral located in Finland Low average LTV The Bank issued successfully it s inaugural covered bond in June 2013. Aktia Bank covered bonds are CRR & UCITS and ECB repo eligible Banks aims to comply the ECBC covered bond label transparency initiative 23
Covered Bond funding 3500 3000 2500 2000 1500 1000 Aktia REMB CB Aktia Bank CB 500 0 Mar-13 Apr-13 Jun-13 Nov-13 Jun-14 Jan-15 Mar-15 May-15 Jun-16 Apr-19 Jun-21 Stable access to the covered bond market is in high priority Aktia Bank will focus at EUR 500m public benchmark Covered Bond issues 24
Aktia Bank Cover Pool March 2014 Asset Pool Total EUR 1,263m (no substitute assets) No of loans / average loan balance 21,442 / EUR 58,900 Types of loans First ranking residential mortgages and pledges of shares in housing companies Geography Finland only, well diversified with concentration on growth areas Non-performing loans (> 90 days in arrears) 0.0 WA LTV 57.69% WA indexed LTV 56.93% Maximum LTV LTV limit: 70% Interest base Floating 90%, fixed 10% WA seasoning 27.5 months % of largest 10 borrowers 0.66% Overcollateralisation (%) 52.6% (Committed OC 10%) Moody s Collateral Score 6,2% 25
Thousands Thousands Aktia Bank Cover Pool March 2014 400 000 300 000 200 000 100 000 0 EUR t Loans by size Loan balance Geographical distribution 1% 0% 0% 0% Southern Finland 28% Western Finland Eastern Finland Oulu area 70% Lapland Åland Loans by LTV 400 000 300 000 200 000 100 000 0 LTV % Loan balance Indexed loan balance 26
Presentation outline 1 Overview Aktia Group 2 Financial key figures Aktia Bank plc 3 Credit ratings 4 The Finnish economy 5 Summary and Contacts 27
Aktia Bank Credit Ratings Senior: Covered Bonds: A3 / P-2, Outlook Negative Aaa Senior: A- / A-2, Outlook Negative For full rating reports please see: http://www.aktia.com/en/velkasijoittajat/luottoluokitus 28
Presentation outline 1 Overview Aktia Group 2 Financial key figures Aktia Bank plc 3 Credit ratings 4 The Finnish economy 5 Summary and Contacts 29
The Finnish economy Population: 5,4 million Area: 338,430 km 2 GDP per capita EUR 35,928 (2012) Finland is rated Aaa / AAA / AAA by Moody s, S&P and Fitch, all with stable outlook National balance of supply and demand Supply 2012 * billion % GDP 194.5 71.3 Imports 78.4 28.7 Total supply 272.9 100 Demand 2012 * billion % Exports 77.3 28.4 Macroeconomic Indicators 2012 2013 2014f 2015f GDP (%) YoY -0.8-0.6 0.6 1.6 CPI (%) YoY 3.2 2.2 1.9 1.8 Unemployment Rate (%) 7.7 8.2 8.3 8.1 Government Gross Debt (% GDP) 53.6 58.4 61.0 62.5 Current Account Balance (% GDP) -1.8-1.2-1.3-1.1 Source: EU Economic Forecast, Autumn 2013 Consumption expenditure 157.8 58.1 - private 109.5 40.3 - government 48.3 17.8 Gross fixed capital formation 37.8 13.9 - private 32.7 12.1 - government 5.0 1.8 Changes in inventories, acquisition of valuables -1.2-0.5 Total demand 271.6 100 Statistical discrepancy 1.3 * preliminary data Source: Statistics Finland 1.3.2013 30
The Finnish economy Substantial part of exports outside the EU Exports by country (2012) Exports by product group (2012) Source: National Board of Customs, Statistics Finland 31
Some macroeconomic data Unemployment Rate Housing Prices in various countries Source: EU Economic Forecast, Autumn 2013 Source: Macrobond Annual GDP Y/Y Source: Danmarks Nationalbank, Eurostat, OECD and Nordea bank Source: EU Economic Forecast, Autumn 2013 32
Housing Market Development of prices of old dwellings, index 2010=100 Housing loans in household vs. dwelling units' annual income in 2002 to 2012 Indices of owner-occupied housing prices 2010=100 Source: Statistics Finland 33
Presentation outline 1 Overview Aktia Group 2 Financial key figures Aktia Bank plc 3 Credit ratings 4 The Finnish economy 5 Summary and Contacts 34
Summary Aktia Bank Plc Retail bank with focus on growth areas in Finland Provides services mainly to private customers, small-sized companies and institutional investors Prudent lending policy and low loan losses Write-downs EUR 2.7 million (0.04 %) in 2013, non performing loans 0.66 % Solid and stable profitability over time NII EUR 112,6 million, Return on Equity (ROE) 8.1 % in 2013 Strong Capital Ratio Tier 1 Capital Ratio 12.3 %, expected to improve approx. 4 %-pts. by IRBA High Quality Covered Bonds Prime residential mortgages as collateral, located only in Finland Credit ratings Moody's: A3 / P-2, neg Covered Bonds: Aaa S&P: A- / A-2, neg 35
Contacts and additional information Contacts Timo Ruotsalainen Anna Gabrán Head of Treasury Head of IR Managing Director, Aktia REMB Tel. +358 10 247 6501 Tel. +358 10 247 7211 anna.gabran@aktia.fi timo.ruotsalainen@aktia.fi Debt investor information: http://www.aktia.com/en/velkasijoittajat (website) http://www.aktia.com/en/esitykset (Presentations) 36
Balance sheet, assets (EUR million) 31.12.2013 31.12.2012 Assets Cash and balances with central banks 414.3 587.6-29 % Financial assets reported at fair value via the income statement 0.1 0.1 100 % Interest-bearing securities 2,157.0 2,011.7 7 % Shares and participations 99.5 95.0 5 % Financial assets available for sale 2,256.5 2,106.7 7 % Financial assets held until maturity 499.3 350.0 43 % Derivative instruments 197.6 302.2-35 % Lending to Bank of Finland and credit institutions 95.1 158.7-40 % Lending to the public and public sector entities 6,802.2 7,201.6-6 % Loans and other receivables 6,897.3 7,360.2-6 % Investments for unit-linked provisions 465.9 360.9 29 % Investments in associated companies 19.3 21.1-9 % Intangible assets 20.3 14.2 44 % Investment properties 60.4 28.3 114 % Other tangible assets 6.6 5.7 17 % Accrued income and advance payments 66.2 75.0-12 % Other assets 8.8 3.3 169 % Total other assets 75.0 78.3-4 % Income tax receivables 3.7 0.1 - Deferred tax receivables 16.2 23.5-31 % Tax receivables 19.9 23.6-16 % Assets classified as held for sale 1.2 1.5-21 % Total assets 10,933.8 11,240.2-3 % 37
Balance sheet, liabilities (EUR million) 31.12.2013 31.12.2012 Liabilities Liabilities to credit institutions 1,095.5 1,057.6 4 % Liabilities to the public and public sector entities 3,797.5 3,631.5 5 % Deposits 4,893.0 4,689.0 4 % Derivative instruments 128.6 186.4-31 % Debt securities issued 3,657.9 3,878.9-6 % Subordinated liabilities 232.2 268.2-13 % Other liabilities to credit institutions 123.5 290.9-58 % Other liabilities to the public and public sector entities 92.4 146.7-37 % Other financial liabilities 4,106.0 4,584.7-10 % Technical provisions for interest-related insurances 503.5 519.9-3 % Technical provisions for unit-linked insurances 461.9 358.5 29 % Technical provisions 965.4 878.5 10 % Accrued expenses and income received in advance 96.5 93.1 4 % Other liabilities 40.5 55.2-27 % Total other liabilities 137.0 148.3-8 % Provisions 6.4 6.9-7 % Income tax liabilities 5.2 23.3-78 % Deferred tax liabilities 50.4 65.5-23 % Tax liabilities 55.6 88.8-37 % Liabilities for assets classified as held for sale 0.2 0.2-21 % Total liabilities 10,292.1 10,582.8-3 % Equity Restricted equity 244.5 220.2 11 % Unrestricted equity 332.7 372.4-11 % Shareholders' share of equity 577.1 592.6-3 % Non-controlling interest's share of equity 64.6 64.8 0 % Equity 641.7 657.4-2 % Total liabilities and equity 10,933.8 11,240.2-3 % 38
Summary: Capital Adequacy 31 December 2013 Capital adequacy The Bank Group's capital adequacy amounted to 19.3 (20.2)%. The Tier 1 capital ratio was 12.3 (11.8)%. Estimated total impact 2014 on Core Tier 1: -0.5% Basel III, exceptional permit concerning Aktia Life Insurance, and Group internal capital allocation The life insurance company's solvency margin The solvency margin was EUR 99.0 (158.6) million. Solvency ratio 17.5 (27.4)%. 39
Share capital and ownership 12.2.2014 4 0 20 largest shareholders Series A shares Series R shares Shares total Shares % Votes, % Stiftelsen Tre Smeder 2,571,925 4,280,216 6,852,141 10.29 19.85 Life Annuity Institution Hereditas 4,648,114 2,066,106 6,714,220 10.08 10.35 Pension Insurance Co Veritas 4,027,469 2,134,397 6,161,866 9.25 10.52 The Society of Swedish Litterature in Finland 2,139,832 789,229 2,929,061 4.40 4.04 Oy Hammarén & Co Ab 1,905,000 950,000 2,855,000 4.29 4.71 Stiftelsen för Åbo Akademi 1,595,640 751,000 2,346,640 3.52 3.74 Aktiafoundation in Porvoo 1,303,370 651,525 1,954,895 2.94 3.23 Aktiafoundation in Vaasa 978,525 547,262 1,525,787 2.29 2.68 Sampo Oyj 1,435,000 1,435,000 2.16 0.32 Aktiafoundation in Espoo-Kauniainen 1,338,708 1,338,708 2.01 6.03 Savingsbank s foundation in Kirkkonummi 876,529 438,264 1,314,793 1.97 2.17 Savingsbank s foundation in Karjaa-Pohja 787,350 393,675 1,181,025 1.77 1.95 Föreningen Konstsamfundet rf 1,176,173 1,176,173 1.77 0.26 Varma Mutual Pension Insurance Company 1,175,000 1,175,000 1.76 0.26 Aktiafoundation in Vantaa 28,541 1,138,588 1,167,129 1.75 5.13 Ab Kelonia Oy 549,417 308,662 858,079 1.29 1.51 Savingsbank s foundation in Inkoo 512,669 336,818 849,487 1.28 1.63 Savingsbank s foundation in Sipoo 462,002 232,001 694,003 1.04 1.15 Savingsbank s foundation in Siuntio 317,057 237,188 554,245 0.83 1.14 Savingsbank s foundation in Maalahti 361,138 177,600 538,738 0.81 0.88 The 20 largest owners 28,189,459 15,432,531 43,621,990 65.52 81.57 Other 18,517,261 4,439,557 22,956,818 34.48 18.43 Total 46,706,720 19,872,088 66,578,808 100.00 100.00 40
Aktia REMB The co-owned Aktia Real Estate Mortgage Bank has ceased to provide new mortgage loans from the beginning of Q4 2012 onwards Aktia REMB focuses on the maintenance and refinancing of the current loan portfolio All owners (Aktia bank, POP and Savings banks) are fully committed to safeguard the high quality of the existing cover pool and make sure that Aktia MB meets the agreed capital and liquidity targets also in the future. Aktia REBM has maintained the ability to issue covered bonds if necessary Rating for existing covered bonds is Aa3 41
Aktia REMB Combined pools 4Q2013 Asset Pool Total EUR 2,866m (EUR 2,856m mortgages + EUR 10m substitute assets) No of loans / average loan balance 38,943 / EUR 73,300 Types of loans First ranking residential mortgages and pledges of shares in housing companies Geography Finland only, well diversified with concentration on growth areas Non-performing loans 0.0 (> 3 months in arrears) WA LTV 52.99% WA indexed LTV 51,27% Maximum LTV Max LTV limit: 70% 1) WA seasoning 46.1 months Overcollateralisation (%) 26.9% Moody s Collateral Score 5,0% * Pool 0 managed under the Finnish Act on Mortgage Credit Banks 1240/1999, Pool1 managed under the Finnish Act on Mortgage Credit Bank Operations 688/2010 1) Except where the exceeding loan amount is covered by a state guarantee 2) covered by a state guarantee 42
The Finnish Legislation in Context Structure of the Issuer Eligible Cover Assets Finland Universal bank with license Mortgage bank Public sector assets Mortgages EEA countries Commercial real estate limited to 10% Germany Universal bank with special license Public sector assets Mortgages Ship mortgages EU, EEA, CH, US, CAN, JP France (OFs) Denmark (SDOs) Sweden Norway Specialized banking principle Public sector assets Mortgages Senior MBS EEA (mortgages) plus USA, CAN, JP, NZ, AUS (public) Universal bank with license Mortgage bank Public sector assets Mortgages Ship mortgages (universal bank only) Restricted to Domestic, EEA, OECD, NZ, AUS Universal bank with special license Public sector assets Mortgages Domestic, EEA (mortgages) plus OECD (public) Commercial real estate limited to 10% Specialized banking principle Public sector assets Mortgages 5% single exposure limit Maximum LTV 70% residential 60% commercial 60% 80% 80%/75% residential 60% commercial 75% residential 60% commercial 75% residential 60% commercial Minimum overcollateralisation / Any OC protected by 2% - on Net Present Value basis yes 2% - on Net Present Value basis yes 2% yes Universal: 0% Not defined Special: 8% of RWA by law yes yes Not defined by law Yes Matching requirements Nominal value, Net present Value, Duration, Income/period, Currency Nominal value, Net present Value, PV, interest, currency Nominal value Balance principle Nominal value Net present value By interest Nominal value Interest / currency risk By Net present value and after stress test scenario Nominal value Net Present Value No nonperforming loans UCITS / CRD compliant Risk Weighting Part of Eurozone Covered Bond Program Yes 10% Yes 10% Yes 10% Yes 10% Yes 10% Yes Yes Yes No No No Yes 10% 43