Evli Oyj — Earnings Release 2018

Jan 23, 2019

Evli Bank Plc's Financial Statements Bulletin January-December 2018

Evli Bank Plc's Financial Statements Bulletin January-December 2018

EVLI BANK PLC STOCK EXCHANGE RELEASE JANUARY 23, 2019, AT 11.00 AM

GOOD RESULT IN A CHALLENGING MARKET ENVIRONMENT

* In the Wealth Management and Investor Clients segment operating profit
increased and was EUR 17.4 million (1-12/2017: EUR 16.2 million)
* The operating profit in the Advisory and Corporate Clients segment declined
and was EUR 2.2 million (EUR 2.4 million)
* The revenues from the trading activities through the own balance sheet
declined by EUR 4.2 million compared to the previous year, which led to a
decrease of the operating profit in the Group Operations segment.
January-December 2018

* The net revenue was EUR 68.5 million (EUR 71.4 million)
* The operating profit was EUR 18.9 million (EUR 21.3 million). The result was
weakened by non-recurring costs of EUR 0.6 million related to operational
efficiency actions
* The profit for the financial year was EUR 17.3 million (EUR 17.5 million)
* Evli's diluted earnings per share were EUR 0.68 (EUR 0.72) and return on
equity was 23.0 percent (25.5%)
* A dividend of EUR 0.61 per share is proposed (EUR 0.52 per share)
* Net assets under management grew year on year and totaled EUR 11.4 billion
(EUR 11.2 billion) at the end of December
* The proportion of recurring revenue to operating costs was 113 percent
(113%).
October-December 2018

* The net revenue was EUR 17.5 million (EUR 21.0 million). The revenue was
affected by EUR 1.5 million lower performance-based fees than in the
comparison period and the lower return from the own balance sheet investment
activities
* The operating profit was EUR 3.6 million (EUR 6.5 million). The result was
weakened by non-recurring costs of EUR 0.6 million related to operational
efficiency actions
* Earnings per share amounted to EUR 0.07 (EUR 0.21).

Outlook for 2019

The risks associated with the general trend in the equity and fixed income
markets are high due to the prevailing uncertainty on the markets. A possible
continued decline in equity prices or a reduction in investors' risk appetite
would have a negative impact on the company's profit performance. Evli Group's
assets under management have grown substantially in recent years, which softens
the result-impact of any reversal of the market. Sales of alternative investment
products, in particular, have brought new, stable revenue. Evli has initiated a
series of internal, strategy-based actions and cost savings, leading to
improvements in the company's cost effectiveness.

There has been positive development in the demand for advisory services, and its
outlook for 2019 is stable. Own balance sheet investments share of Evli's
business decreased during 2018. Nevertheless, it may have a significant impact
on the company's result performance. In the advisory business and in own
investment activities, fluctuations in quarterly and annual returns are
possible. Customer's demand for Evli's products and services has continued to be
good, which has also led to a systematic increase in lending.

Because of profitable and stable development, we estimate that the result for
the 2019 financial year, will be clearly positive.

Key Figures
  1-12/2018 1-12/2017

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Income statement key figures

Operating income, M€ 68.5 71.4

Operating profit/loss, M€ 18.9 21.3

Operating profit margin, % 27.6 29.8

Profit/loss for the financial year, M€ 17.3 17.5

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Profitability key figures

Return on equity (ROE), % 23.0 25.5

Return on assets (ROA), % 1.9 2.0

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Balance sheet key figures

Equity-to-assets ratio, % 9.5 7.6

Group capital adequacy ratio, % 16.2 15.0

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Key figures per share

Earnings per Share (EPS), fully diluted, € 0.68 0.72

Comprehensive Earnings per Share (EPS), fully diluted, € 0.67 0.69

Dividend per share, €* 0.61 0.52

Equity per share, € 3.27 3.10

Share price at the end of the period, € 7.28 9.60

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Other key figures

Expense ratio (operating costs to net revenue) 0.72 0.70

Recurring revenue ratio, % 113 113

Personnel at the end of the period 254 240

Market value, M€ 172.5 224.9

*Dividend for 2018, proposal by the Board of Directors.

Maunu Lehtimäki, CEO

Despite the challenging market environment, we succeeded in increasing the sales
of our strategic focus areas in 2018. Our international fund capital grew to EUR
1.9 billion and foreign customers' share of Evli's fund capital grew to 25
percent. Correspondingly over EUR 300 million in investments were raised for
alternative investment products. In addition, we signed an agreement in December
on buying Ab Kelonia Placering Oy. With this deal, the management of the private
equity fund investments of nine important Finnish foundations, totaling some EUR
210 million, are transferred to the Evli Group.

In Finland, the sales of fund products and wealth management services also
developed favorably. Although the total net subscriptions of Finnish fund
management companies were clearly negative in 2018, the net subscriptions of
Evli funds increased by about EUR 0.5 billion. At the end of the year, our fund
capital stood at EUR 7.8 billion, which makes Evli Finland's fourth largest fund
management company. The assets under management grew to EUR 11.4 billion.

In the Advisory and Corporate Clients-segment, Corporate Finance business
improved sales after the weaker third quarter of the year. The company's mandate
base has remained good, resulting in a favorable outlook for the future. The
business of incentive system management continued its steady development, driven
by new client relationships and broader incentive programs of existing clients.
The sale of analysis services to listed companies launched a couple of years ago
also developed favorably and increased their client base.

However, our operating profit was eleven percent lower than in 2017, largely
because of two factors. Due to the decline in the stock market our performance-
based fees declined substantially from last year's EUR 2.5 million. In addition,
the returns from our treasury operations and market-making fell well short of
2017 due to a challenging market environment.

During the end of the year, we continued to develop our digital services and the
unique client experience, and to enhance our cost structure. Our projects to
improve client experience in 2018 were among others improving the features of
the My Evli online service, transitioning to a fully paperless office and
focusing on collecting client feedback in asset management. The several projects
aiming at cost reductions included among others the decision to discontinue our
market-making operations, and bond and stock brokerage in Sweden. In addition to
their impact on costs, these measures will reduce our risks and reinforce our
focus on asset management operations that accumulate recurring commission
income. In 2019, we will continue our strategy-based actions and cost saving
implementations.

Due to the weakening of market conditions, the outlook for 2019 has become
challenging. However, we estimate that by continuing to invest in our strategic
focus areas and concentrating on achieving stable and profitable growth, the
result for 2019 will be clearly positive.

EVLI BANK PLC

For additional information, please contact:

Maunu Lehtimäki, CEO, Evli Bank Plc, tel. +358 (0)50 553 3000,
maunu.lehtimaki@evli.com
Juho Mikola, CFO, Evli Bank Plc, tel. +358 (0)40 717 8888, juho.mikola@evli.com

Evli Bank Plc

Evli is a bank specialized in investments that helps institutions, corporations
and private persons increase their wealth. The product and service offering
includes mutual funds, asset management and capital markets services,
alternative investment products, investment research, administration of
incentive programs and Corporate Finance services. The company also offers
banking services that support clients' investment operations. Evli is the
highest ranked and most used institutional asset manager in Finland*.

Evli has a total of EUR 11.4 billion in client assets under management (net
12/2018). The Evli Group's equity capital totals EUR 77.4 million and its BIS
capital adequacy ratio is 16.2 percent (December 31, 2018). The company has more
than 250 employees. Evli Bank Plc's B shares are listed on Nasdaq Helsinki Ltd.

*KANTAR SIFO Prospera External Asset Management Finland 2015, 2016, 2017, 2018,
SFR Scandinavian Financial Research Institutional Investment Services, Finland
2015, 2016 ,2017, 2018.

Distribution:
Nasdaq Helsinki Ltd, main media, www.evli.com

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