Evli Bank Plc’s Financial Statements Bulletin January-December 2021
EVLI BANK PLC STOCK EXCHANGE RELEASE JANUARY 25, 2022 AT 12.30
PM (EET/EEST)
RECORD RESULT ̶ OPERATING PROFIT INCREASED
BY MORE THAN 80 PERCENT
Financial performance January-December 2021
- Operating income was EUR 115.6 million (1-12/2020: EUR 79.7
million)
- Operating profit was EUR 53.0 million (EUR 29.1 million)
- Operating result of the Wealth Management and Investor Clients
segment increased to EUR 44.8 million (EUR 27.7 million)
- Operating result of the Advisory and Corporate Clients segment
increased to EUR 7.4 million (EUR 1.8 million)
- Revenue from own balance sheet developed positively and
amounted to EUR 3.5 million (EUR 2.4 million)
- At the end of December, assets under management amounted to EUR
17.5 billion (EUR 14.1 billion) on net basis.
- Diluted earnings per share were EUR 1.47 (EUR 0.87) and return
on equity was 40.3 percent (23.4%)
- The ratio of recurring revenues to operational costs was 130
percent (128%).
- The Board of Directors proposes that a dividend of EUR 1.06 per
share (EUR 0.73) be paid for the financial year 2021. The company
estimates that capital committed to the current business will be
freed up through the demerger and the concentration on the asset
management business. With regard to the capital released, the
company will assess the possibility of investing it or distributing
it to shareholders at a later stage.
- In the partial demerger, Evli Bank's shareholders will also
retain ownership of shares in Fellow Bank created by the
arrangement. In the merger with Fellow Bank, Evli Bank will retain
an amount of own funds equivalent to approximately EUR 0.27 per
share.
Financial performance October-December 2021
- The Group's net revenue was EUR 35.0 million (EUR 28.1
million)
- The Group's operating profit was EUR 16.1 million (EUR 13.6
million)
- Diluted earnings per share amounted to EUR 0.46 (EUR
0.42).
Outlook for 2022
The year 2022 has started on a challenging note for markets,
with heightened interest rate and inflation fears, increased
geopolitical risks and a drop in the markets.
With the demerger planned for 2022, Evli will be able to better
focus on developing both its wealth management and banking
businesses. Growth prospects for the asset management business,
which includes products and services for investors and corporates,
are stable. However, there are always risks associated with the
general development of the equity and fixed income markets. A
possible fall in share prices or a reduction in investors' risk
appetites would have a negative impact on the company's
performance. The Group's assets under management reached a new
record level at the end of 2021 and the product range has expanded,
in particular in alternative investment products, which will
mitigate the negative impact on results from a possible market
turnaround.
The banking business will be clearly strengthened by the merger
of Fellow Finance Plc with Evli Bank Plc, which will result in
positive growth prospects for this business. However, there is
considerable uncertainty about the development of the loan and
deposit portfolio, which is critical for the business. These will
have a direct impact on the company's short-term performance.
In view of the above, the outlook for the banking operations
will become clearer once the demerger and merger are completed. For
the asset management business, we expect the operating result to be
at a good level. The outlook for asset management will be further
specified after the completion of the demerger and during the year
as the outlook for market developments becomes clearer.
Key figures describing the Group´s financial
performance
|
1-12/2021 |
1-12/2020 |
Income statement key figures |
|
|
Operating income, M€ |
115.6 |
79.7 |
Operating profit/loss, M€ |
53.0 |
29.1 |
Operating profit margin, % |
45.9 |
36.5 |
Profit/loss for the financial year, M€ |
43.0 |
23.2 |
|
|
|
Profitability key figures |
|
|
Return on equity (ROE), % |
40.3 |
26.2 |
Return on assets (ROA), % |
5.6 |
2.7 |
|
|
|
Balance sheet key figures |
|
|
Equity-to-assets ratio, % |
15.6 |
12.3 |
Group capital adequacy ratio, % |
15.4 |
15.2 |
|
|
|
Key figures per share |
|
|
Earnings per Share (EPS), fully diluted, € |
1.47 |
0.87 |
Comprehensive Earnings per Share (EPS), fully diluted, € |
1.48 |
0.88 |
Dividend proposal per share, €* |
1.06 |
0.73 |
Equity per share, € |
4.73 |
3.86 |
Share price at the end of the period, € |
26.20 |
12.20 |
|
|
|
Other key figures |
|
|
Expense ratio (operating costs to net revenue) |
0.54 |
0.63 |
Recurring revenue ratio, % |
130 |
128 |
Personnel at the end of the period |
290 |
261 |
Market value, M€ |
631.7 |
294.1 |
|
|
|
|
|
|
*The board's proposal for the annual general
meeting.
Maunu Lehtimäki, CEO
In the fourth quarter, capital markets continued to develop
positively, and stock prices rose globally. The positive
performance of equity markets was supported by strong global
economic growth, improved corporate earnings, accommodative fiscal
policies and easy monetary policy by central banks, and the gradual
easing of the coronavirus pandemic as vaccination coverage
increased.
The emergence of the omicron variant at the end of the year
reversed the downward trend in infection rates. The milder symptoms
of the variant have so far helped avoid large-scale restriction
measures that would have crippled society and the economy. However,
high valuation levels, prevailing inflationary pressures and rising
interest rate expectations do not leave room for any disappointment
in economic growth prospects. China's strict zero-covid policy will
contribute to the risk of disruptions to global flows and supply
chains, which, if they materialise, will also affect corporate
earnings prospects.
In the fourth quarter, Evli's business developed excellently.
Operating income grew by 25 percent year-on-year to EUR 35 million,
while Group operating profit increased by 18 percent to EUR 16.1
million, driven by revenue growth in all key business areas and the
accrual of performance fees on the back of strong portfolio
management performance. The result was negatively impacted by
external expert expenses related to the merger announced in the
summer, as a result of which Evli Bank Plc will be split into a new
listed asset management company and a company continuing its
banking operations, to which Fellow Finance Plc will be merged.
For the full year, Evli's turnover increased by 45 percent to
EUR 116 million and operating profit almost doubled to EUR 53
million. Evli's return on equity was 40 percent (26%) and the ratio
of recurring income to operating expenses was 130% (128%). The
strong growth in returns is the result of investments in new
product development, active client acquisition both at home and
abroad, increased demand for business services and excellent
portfolio management performance across the board.
Operating income in the Wealth Management and Investor Clients
segment increased by 23 percent compared to the last quarter of the
previous year and amounted to EUR 28.8 million. Client assets under
management reached a new record of EUR 17.5 billion (EUR 14.1
billion) and Evli Fund Management Company’s mutual fund capital
amounted to EUR 10.6 billion (EUR 8.7 billion). Net subscriptions
amounted to almost EUR 1.2 billion, mainly in Nordic and European
corporate bonds. The segment's income growth was positively
influenced by higher fee income from traditional and alternative
funds and increased brokerage fees. New client wins, additional
investments from existing clients and the positive market impact
increased the assets under management in private and institutional
mandates to a new record. The segment's positive performance was
underpinned by good portfolio management results and success in
independent competitor benchmarking in both wealth management and
fund management.
Operating income in the Advisory and Corporate Clients segment
increased by 65 percent in the fourth quarter to EUR 5.4 million.
Invoicing in the Corporate Finance unit increased clearly from the
comparison period to EUR 2.8 million (EUR 1.2 million). The unit's
mandate base is at a good level and the outlook for the year ahead
is favourable. As in the first half of the year, income from the
Incentives business increased to EUR 2.8 million (EUR 2.1 million).
The company has continued to win new incentive plan design and
administration clients during the latter part of the year and the
outlook is also good. New demand for the company's services has
been created by the active Finnish IPO market, the change in the
law on the tax treatment of employee shareholdings in unlisted
companies and marketing to Swedish listed companies.
The key drivers of Evli's strategy, international sales and
alternative investment products, developed as planned during the
quarter and throughout the year. International sales have performed
well despite travel restrictions, with net subscriptions since the
beginning of the year totalling EUR 737 million and international
clients accounting for more than 27% of total Evli assets under
management, including alternative investment products.
Alternative investment products were sold for a total of EUR 171
million in the last quarter and EUR 498 million for the full year.
New products launched in the last quarter were Evli Private Equity
III and Evli Residential II, for which a total of EUR 92 million
was raised for the first closing. A total of five new alternative
investment products were launched during 2021. The expertise and
ability to create new alternative investment products is key to our
objective of offering our clients a comprehensive and
well-diversified wealth management strategy, combining both
traditional and alternative asset classes.
Evli Bank's Extraordinary General Meeting held on December 22,
2021, confirmed the demerger of Evli Bank Plc and the merger of the
remaining part of Evli Bank with Fellow Finance Plc. The result of
the arrangement will be a new Fellow Bank Plc based on a scalable
and digital service concept and an Evli Plc that has an even
stronger focus than before on asset management and advisory
services. The arrangement creates the conditions to grow both the
banking and asset management businesses as independent entities.
The transaction is expected to be completed at the beginning of the
second quarter. Evli Plc aims to become the leading Nordic asset
manager with a broader international business footprint. Growth,
profitability, and responsibility will be the guiding themes of its
operations. The company aims to achieve a return on equity of more
than 25% and an operating profit margin of more than 30% over the
business cycle and to increase the assets under management to 30
billion in the long term.. In addition, the company aims to
increase the ratio of recurring income to operating costs to over
130%. The Board of Directors of the new Evli will further specify
its financial objectives after the implementation of the split.
In the area of responsible investing, work in the last quarter
of the year was largely focused on influencing climate goals.
Climate advocacy is part of Evli's roadmap for climate targets and,
in the first phase, targets high emitting companies that, for
example, do not have emission reduction or climate targets. Evli's
sustainability work was also praised by clients, who rated the
company as the best in Finland for responsible investing in an
institutional asset management client survey by SFR Scandinavian
Financial Research.
I would like to thank our clients and shareholders for their
trust in Evli, and our employees for their great and successful
work in 2021.
EVLI BANK PLC
For additional information, please contact:
Maunu Lehtimäki, CEO, Evli Bank Plc, tel. +358 (0)50 553
3000, maunu.lehtimaki@evli.comJuho Mikola, CFO, Evli Bank Plc,
tel. +358 (0)40 717 8888, juho.mikola@evli.com
Evli Bank Plc
Evli is a bank specialized in investments that helps
institutions, corporations and private persons increase their
wealth. The product and service offering includes mutual funds,
asset management and capital markets services, alternative
investment products, equity research, incentive plan design and
administration as well as Corporate Finance services. The company
also offers banking services that support clients' investment
operations. Evli is ranked as the best* and most used**
institutional asset manager in Finland. Evli also has Finland's
best expertise in responsible investment.***
Evli has a total of EUR 17.5 billion in client assets under
management (net 12/2021). Evli Group's equity capital totals EUR
118.1 million and its BIS capital adequacy ratio is 15.4 percent
(December 31, 2021). The company has around 290 employees. Evli
Bank Plc’s B shares are listed on Nasdaq Helsinki Ltd.
*Kantar Prospera External Asset Management Finland 2015, 2016,
2017, 2018, 2019, 2021, Kantar Prospera Private Banking 2019, 2020
Finland **Kantar Prospera External Asset Management Finland 2017,
2018, 2019, 2020, 2021 ***SFR Scandinavian Financial Research
Institutional Investment Services Finland 2021
Distribution: Nasdaq Helsinki Ltd, main
media, www.evli.com
- Evli Bank Plc Financial Statements Bulletin 2021
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