Outlook
Aktia expects the Group’s operating profit for 2010 to exceed the level in 2009 and write-downs on credit to remain clearly lower than last year (updated 12 August 2010).
In 2010, Aktia’s focus will be on strengthening customer relations, increasing sales, developing Internet services, managing costs, risks and capital in order to strengthen profitability. Aktia is endeavouring to grow above the market, particularly in the sectors of retail customers and small companies.
Aktia’s financial results are affected by many factors, the most important of which are the general economic situation, fluctuations in share prices, interest rates and exchange rates and the competitive situation. Changes in these factors can have an impact on demand for banking, insurance, asset management- and real estate agency services.
Changes in interest rates, yield curves and credit margins are hard to predict and can affect Aktia’s interest rate margins and therefore profitability. Aktia pursues to effectively manage interest rate risks.
Any future write-downs of loans in Aktia’s loan portfolio could be due to many factors, the most important of which are the general economic situation, interest rate levels, the level of unemployment and changes in house prices. Aktia expects write-downs on credits to be clearly lower in 2010 than in 2009.
The availability of liquidity on the money markets is of important for Aktia’s refinancing activities. Like other banks, Aktia relies on deposits from households in order to service some of its liquidity needs.
The market value of Aktia’s financial and other assets can change as a result of, among other things, a requirement for higher returns among investors.
The financial crisis has resulted in many new initiatives for regulating banking and insurance businesses, which has brought about uncertainty concerning future capital requirements. A change in capital requirements could actualise both capitalisation needs and need for changes in Aktia Group’s structure.