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. //
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