Even though Aktia reported strong trends already in Q2, we expect to see a continued improvement in Q3. Revenues should benefit from continued volume growth and recovering equity markets. At the same time, we expect loan loss provisions to come down, as we see no need for further macro-driven provisions. As costs disappointed in Q2, we will focus on this line also in Q3.
Recovering assets under management. Aktia is one of the least NII-sensitive Nordic banks. With saving fees making up 60% of total fees, Aktia is more exposed to asset management than other Nordic banks. The equity portion in its fund mix is lower, which limits the upside, but Q3 should be strong and we also expect inflow in Q3.
Asset quality strength expected. We expect Q3 loan losses to fall by 33% from Q2, as we
do not expect further macro-driven model-based provisions that in Q2 amounted to EUR1.2m of the reported EUR1.8m, as the underlying economy has improved since Q2. As for all banks, we do see a risk that Stage 3 loans increase, which could drive specific provisions in the quarter.
Revised estimates. We have left our estimates broadly unchanged with a reduction in Q3
and Q4 loan loss provisions as the only change.
Valuation. Aktia has been one of the best performing banks in Europe over the past year
and year-to-date and at 9.7x 2022E earnings, Aktia is not cheap on a relative basis. However, the higher ROE and growth potential in its asset management operations warrant a premium in our view. We raise our fair value range to EUR9.5-10.5. //
Lähde: Finwire News