Evli Bank Plc’s Financial Statements Bulletin January-December 2020 - Seite 2

*Dividend for 2020, proposal by the Board of Directors

Maunu Lehtimäki, CEO

The positive development of the capital markets continued in the final quarter, and equity prices rose globally by around ten percent, ending up at a higher level than in the previous year. Market optimism was supported, as in previous quarters, by the extensive economic and monetary policy support measures undertaken by governments as well as the commencement of Covid-19 vaccinations. Investor confidence was also strengthened by expectations of the acceleration of global economic growth as the coronavirus pandemic gradually would slow down, and inflation expectations and thus interest rates remained at a low level. 

Evli's operations continued without disruption in the final quarter and we were able to maintain our client activity almost at the level of previous years despite broad remote working. Our determined efforts to develop our information systems and to renew our processes carried out over recent years have improved our capacity to operate in conditions such as the prolonged exceptional circumstances that we are currently experiencing.

In the final quarter, the return from Evli's operations rose by almost a quarter to EUR 28.1 million and operating profit rose by as much as 56 percent to EUR 13.6 million. Full-year revenue amounted to almost EUR 80 million and operating profit was EUR 29.1 million. I believe this is an excellent achievement, considering the dramatic equity price decline that was triggered by the coronavirus crisis in the spring. Net commission income grew by nearly one fifth during the fourth quarter, driven by alternative investment products as well as asset management and mutual fund fees. Evli's return on equity rose to 26.2 percent and the ratio of recurring revenue to operating expenses was 124 percent.

The return from the Wealth Management and Investor Clients segment’s operations increased nine percent and was EUR 67.1 million at the end of the year. At the end of December, client assets under management were EUR 14.1 billion (EUR 14.3 billion) and Evli Fund Management Company's fund capital was EUR 8.7 billion (EUR 9.6 billion). Net subscriptions totalled EUR -1,071 million, mainly due to redemptions from short-duration fixed income fund. Alternative investment products, asset management fees, funds' performance-based fees and brokerage income all had a positive impact on the growth in the segment's earnings. However, the price decline at the beginning of the year and fund redemptions reduced the commission income of traditional funds. Evli's position as the leading asset manager of high-net-worth individuals and institutions in Finland strengthened further, as exemplified by gaining new client relationships.