Monday, February 23, 2015

Analysis of Aktia Bank


Aktia Bank, a Finnish financial institute

Company: Aktia Bank

ISIN FI4000058870 | WKN A1W1T4

Business: A Finnish financial group that are standing on six pillars: Aktia Life Insurance, Aktia Fund Management, Aktia Corporate Finance and Aktia Real Estate Agency. All of which they own to 100% and then additionally they have Aktia Asset Management Ltd to 75% and finally Aktia Real Estate Mortgage Bank that they own to almost 51%. To find out more about the different parts please click here.

Active: Finland only with focus in coastal areas, in the Helsinki region, and in inland growth areas. They have around 350,000 customers, 55 locations and 1,000 employees.

P/E: 14.6

This analysis was made due to a request that can be found on the page: Analysis Requests.

contrarian values of P/E, P/B, ROE as well as dividend of Aktia Bank

The P/E of Aktia Bank is ok with 14.6 and the P/B is very good with 1.3 which gives us a buy signal from Grahams formula. The earnings to sales are good with 26% but the ROE is not so good since it is down at 8.8%. the book to debt ratio is, as with every bank, no fun to look at with its ratio of 0.06.
In the last five years they have had a negative yearly revenue growth of -1.4% which is bad and then this gives us a motivated P/E of 8 to 10 which means that Aktia Bank is today slightly overvalued on the market.
They pay a very nice dividend of 4% which on the other hand represents as much as 58% of their earnings so they better start pushing up the earnings to keep paying out or even to increase the dividends.

Conclusion: Graham says yes to Aktia Bank and I am less interested in it. The P/E is indeed acceptable and so is the P/B but I do not like the ROE and I do not like that they pay out so much of their earnings in dividends. I would prefer to see that Aktia improves their earnings and especially get some revenue growth before I would like to step in. Still... the company is neither expensive nor is it cheap at the moment so if one intends to buy and hold for life then now will be an as good moment as any to buy them.

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3 comments:

Anonymous said...

Just wanted to thank you for the work you put in. Thanks!
/H

Anonymous said...

You are welcome!

/Fredrik von Oberhausen

Fredrik von Oberhausen said...

and thank you for letting me know, I appreciate that very much!