Investor Presentaiton
6
Stable Outlook on BBB+ Issuer Credit Rating by Standard & Poor's
Issuer Credit Rating
Stand-alone credit profile
Anchor
Business operations in economically robust regions in Finland and
Sweden
Business position
Despite some geographic and business diversification, concentrated
focus on retail and private banking increases vulnerability to cyclical
swings
Capital and earnings
Strong risk-adjusted capitalization, earnings growth and low credit
losses
Geographic and business focus create some concentration risk
Risk position
•
Funding
Funding position supported by stable customer deposits
Liquidity
Comparable ratings analysis
Support
Additional loss-absorbing capacity support
Government-related entity support
Group support
Sovereign support
Additional factors
Source: S&P Global Ratings Research Update Jan 13, 2023
ÅLANDSBANKEN
BBB+/Stable/A-2
BBB+
On July 13, 2022, S&P Global Ratings raised its long-term issuer credit rating on Bank of
Åland to BBB+ from BBB
A-
Constrained -2
Very Strong +2
Moderate -1
Adequate 0
Adequate 0
The rationale behind the upgrade was forecasted strengthened capitalization,
expectations of a significant improvement of the RAC ratio to 16 % by 2024, improved
return on average common equity just below 15 % over 2022-2024 and a steady
earnings generation supporting capital build-up
In S&P Global Ratings' latest research update on January 13, 2023, the outlook remained
stable and reflects Standard & Poor's expectations that the Bank will maintain a sound
financial profile and continue to make progress in building its capital base through
earnings
"Bank of Åland's retail private banking services will be the primary revenue driver,
complemented by fees from asset management operations, and Crosskey"
"We project Bank of Åland's risk-adjusted capital (RAC) to be 15-16 % over the next two
to three years following the carve-out of the Swedish mortgage portfolio to Borgo"
"We expect core customer deposits to be the primary funding source for the bank"
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