Capital adequacy
Borrowing and liquidity
Aktia Bank concentrates on serving private customers and small enterprises. About 80% of lending is to private households, and most of the loans have residential property as collateral. The most significant of Aktia's fundraising channels, covered bonds, uses these loans guaranteed by residential property as collateral. Covered bonds are targeted at international investors. Benchmark size volume of issues is chosen in order to secure the secondary market liquidity. The intention is to denominate all issues in euro. Aktia Bank aims to be a regular issuer on the wholesale market for covered bonds.
In addition to covered bonds, Aktia issues also senior unsecured bonds. With the senior unsecured issues the bank supplements and diversifies its funding options and makes it possible to respond to the tailored needs of institutional investors. Due to the banks strong presence in the deposit market the senior unsecured issue volume is limited. Issuance is targeted to the wholesale market and particularly to the private placement market with tailored issues.
From time to time, Aktia Bank is an issuer of private placements which complement the financial plan.
Aktia Bank constantly monitors its liquidity position, measuring the sufficiency of financing for the needs of normal operations without new funding or new deposits. The amount of liquidity is subjected to stress tests using different assumptions. The Board of Directors of Aktia Bank has set a minimum target for available liquidity.
The Treasury of Aktia Bank is responsible for the bank's short- and long-term funding, for interest hedging the bank's balance sheet and for currency trading.
Aktia Bank has credit ratings from two credit rating agencies:
Moody's: A1/P-1 (negative outlook) and for covered bonds: Aaa
Standard & Poors: A-/A-2 (stable outlook)