Evli Oyj — Interim / Quarterly Report 2018

Oct 30, 2018

Evli Bank Plc's Interim Report January-September 2018

Evli Bank Plc's Interim Report January-September 2018

EVLI BANK PLC STOCK EXCHANGE RELEASE OCTOBER 30, 2018, AT 10.00 AM

GROWTH IN SALES AND PROFITABILITY

* In the Wealth Management and Investor Clients segment operating profit
increased by 20 percent and was EUR 13.5 million (1-9/2017: EUR 11.2
million)
* The operating profit in the Advisory and Corporate Clients segment increased
by over 30 percent and was EUR 0.8 million (EUR 0.6 million)
* The revenues from the trading activities through the own balance sheet
declined in the Group Operations segment.
January-September 2018

* The Group's net revenue increased to EUR 51.0 million (EUR 50.4 million)
* The Group's operating profit was EUR 15.3 million (EUR 14.8 million)
* The Group's profit for the financial year was EUR 14.8 million (EUR 11.8
million). Profit for the full year 2017 was EUR 17.5 million
* Evli's diluted earnings per share were EUR 0.59 (EUR 0.49) and return on
equity was 26.8 percent (23.9%)
* Net assets under management grew year on year and totaled EUR 12.3 billion
(EUR 11.1 billion) at the end of September, which is historically the
highest amount for Evli. Respectively from the beginning of the year, growth
was EUR 1.2 billion
* The proportion of recurring revenue to operating costs was 118 percent
(116%).
July-September 2018

* The Group's net revenue was EUR 16.1 million (EUR 16.3 million)
* The Group's operating profit was EUR 4.9 million (EUR 5.0 million)
* Earnings per share amounted to EUR 0.20 (EUR 0.18).

Outlook for 2018 specified

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 continued
decline in equity prices or a reduction in investors' risk appetite would have a
negative impact on the company's profit performance. Demand for Evli's products
has remained stable and assets under the Group's management have grown
substantially in recent years, which would soften the result-impact of any
reversal of the market. The company has initiated a series of internal,
strategy-based actions, where Evli among others is considering terminating
brokerage operations in Sweden. This may lead to non-recurring costs already for
the current year.

There has been positive development in the demand for advisory services, and its
outlook for 2018 is stable. Customer's demand for Evli's products and services
has developed positively, which has also led to a systematic increase in
lending. In the advisory business and in own investment activities, fluctuations
in quarterly and annual returns are possible. The result for the beginning of
the year was affected positively by the performance of Evli's associated company
Northern Horizon Capital that had clearly improved on the previous year due to
the exit fees received by the company.

Because of successful and stable performance at the beginning of the year, we
estimate that our profit for the 2018 financial year, excluding non-recurring
costs from restructuring, will be at the same level as in the previous year.

Earlier we said that, because of successful and stable development at the
beginning of the year, we estimate that our result for the 2018 financial year
will be clearly positive.

Key Figures
  1-9/2018 1-9/2017 1-12/2017

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Income statement key figures

Operating income, M€ 51.0 50.4 71.4

Operating profit/loss, M€ 15.3 14.8 21.3

Operating profit margin, % 30.0 29.3 29.8

Profit/loss for the financial year, M€ 14.8 11.8 17.5

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Profitability key figures

Return on equity (ROE), % 26.8 23.9 25.5

Return on assets (ROA), % 2.1 1.8 2.0

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Balance sheet key figures

Equity-to-assets ratio, % 8.2 7.0 7.6

Group capital adequacy ratio, % 15.3 14.1 15.0

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Key figures per share

Earnings per Share (EPS), fully diluted, € 0.61 0.51 0.72

Comprehensive Earnings per Share (EPS), fully 0.59 0.49
diluted, € 0.69

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Dividend per share, €*     0.52

Equity per share, € 3.17 2.87 3.10

Share price at the end of the period, € 9.40 7.55 9.60

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Other key figures

Expense ratio (operating costs to net revenue) 0.70 0.71 0.70

Recurring revenue ratio, % 118 116 113

Personnel at the end of the period 260 248 240

Market value, M€ 222.7 176.1 224.9

*Dividend from 2017 approved by the Annual General Meeting. The dividend was
paid on March 21, 2018.

Maunu Lehtimäki, CEO

In the third quarter, the growth of commission income continued as in previous
quarters. This was largely the result of the client assets under management
increasing to a record EUR 12.3 billion. Evli's funds collected net
subscriptions of nearly EUR 1 billion during the review period and, measured
with fund subscriptions, Evli again collected the highest amount of assets out
of all fund management companies in Finland. The increase in client assets was
boosted by successful customer acquisition activities, strong sales of asset
management mandates and positive net subscriptions to funds, including sales of
strategically important alternative investment products. Despite a substantial
increase in fund sales and client assets under management, third-quarter revenue
and operating profit remained at the level of the previous year. The result was
weakened by a decrease in net revenue from securities transactions and foreign
exchange dealing.

In the area of corporate clients, positive performance was slowed by delays in
some Corporate Finance orders. The unit's most significant event during the
period was the successfully executed IPO of Fellow Finance Oy. Despite the delay
of the Corporate Finance orders, Evli managed to grow its business activities in
corporate finance, investment research and incentive systems management.

In accordance with its strategy, Evli continued to focus on increasing
international fund sales and selling and developing alternative investment
products. During the third quarter, the proportion of foreign clients in Evli's
fund capital continued to grow, and the capital rose above EUR 2 billion. Nearly
EUR 200 million were accumulated in alternative investment products during the
review period. Evli aims to continue collecting capital in the current
alternative investment products and present new products this year and next
year.

Another strategic objective is to streamline operations and focus on the client
experience. These projects have progressed according to plan. In addition, we
have launched a number of new projects intended to further boost Evli's cost
competitiveness.

Evli's operations were strong during the third quarter measured in terms of both
operating margin and return on equity, and the strategically important ratio of
recurring revenue in relation to the Group's total costs was 118 percent during
the first nine months. In accordance with plans, we are increasingly moving the
focus of the business model to the client segments and to commission income
obtained by that means and away from market making and trading operations, which
are based on own risk-taking. We expect this to balance Evli's profit
fluctuation in the future and reduce the Group's overall risk level.

Because of our success during the beginning of the year, the outlook for 2018 is
promising. We will continue to focus on our strategic priorities and concentrate
on achieving stable and profitable growth. We expect that based on this, the
profit for the current financial year, before any non-recurring restructuring
costs, will be at the same level as in the previous year.

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 12.3 billion in client assets under management (net
9/2018). The Evli Group's equity capital totals EUR 74.3 million and its BIS
capital adequacy ratio is 15.3 percent (September 30, 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 2018, SFR Scandinavian
Financial Research Institutional Investment Services, Finland 2018.

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

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